Hagh v Kong

reasons for decision Introduction 1Mr Hagh (the applicant) leased residential premises at Pyrmont from Mr Kong (the respondent). On 14 May 2014 Member F Holles made orders terminating that residential tenancy agreement and granting possession. Mr Hagh then had an injured knee and did not attend the hearing. He now applies for leave to appeal from the decision below, under s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) ('the Act'). 2On 26 August, the matter came before the Appeal Panel. As described below, to the extent necessary, the Panel granted leave to appeal because of the absence of any or any sufficient reasons by Member Holles, and then proceeded to hear the substantive question as to whether there was a breach of the residential tenancy agreement between the parties which justified orders for termination. The appeal Panel found in favour of the respondent on both questions, and so ordered. These are the reasons for those orders. Background 3As there was almost no evidence in the Tribunal's hearing file, we received evidence on the appeal under s 80(3)(b) of the Act which established the following. 4The applicant and respondent entered into a residential tenancy agreement on 11 December 2013 in relation to property at Pyrmont. The residential tenancy agreement provided that: Clause 44: The tenant agrees not to keep animals on the residential premises without obtaining the landlord's consent. ... Clause 54.2: Where the premises are subject to the Strata Schemes Management Act [which they were]... to observe and comply with any applicable by-laws. 5The by-laws made by the Body Corporate under the Strata Schemes Management Act 1996 (NSW) at the residential premises relevantly provided: 16 Keeping of animals (1) Subject to section 49(4) [which relates to guide dogs and is irrelevant] an owner or occupier of a lot must not keep any animal (except one domestic cat or a small caged bird) on the lot or the common property. 6The schedule to the agreement contained special conditions also called 'by-laws'. That special condition 'by-law' also numbered 16 provided 'the tenant must not, without the approval in writing of the landlord, keep any animal on the flat or the common area.' 7At all times the applicant has and continues to have a small dog on the premises. He asked for permission to keep the dog on the premises. Consent was refused by the landlord, who pointed to the provisions of by-law 16 made by the Body Corporate. 8There was some evidence that an owner of long standing in another lot in the premises kept a dog and had done so continuously from a time before the current by-law was made. The standard by-law to be found in Schedule 1 of the Strata Schemes Management Act provides that: (1) Subject to section 49(4), an owner or occupier of a lot must not, without the approval in writing of the owners corporation, keep any animal on the lot or the common property. (2) The owners corporation must not unreasonably withhold its approval of the keeping of an animal on a lot or the common property. 9 However, as noted the Body Corporate of the relevant premises had, pursuant to s 48 of the Strata Schemes Management Act, altered the by law to the form noted above, at least by the time the applicant entered into his residential tenancy agreement. 10On 1 April 2014, the landlord issued a notice of termination based on a breach of by-law 16 contained in Schedule 1 to the residential tenancy agreement. The inadequate medical certificate 11The matter came before the Tribunal for hearing on 14 May. The applicant did not attend. It appears from the Tribunal's hearing file that he provided a medical certificate shortly before the hearing which was in very general terms, and stated that, for a considerable period of time, the applicant would be unfit to 'walk'. There was no explanation at the hearing or on the appeal as to why the applicant in fact could not have attended or could not have sent someone else, namely his wife, who lived with him at the premises, or could not have provided a more detailed and probative medical certificate. 12Although it was ultimately unnecessary for us to deal with this issue, we respectfully adopt what the Court of Appeal said in AHB v NSW Trustee and Guardian [2014] NSWCA 40 at [4] and [5]. Although the statements by the Court of Appeal refer to the requirements in court, generally speaking, we consider them appropriate to apply equally in the Tribunal. The Court said: [4] ... The Court will not ordinarily act on... a formulaic document [being a medical certificate] and will require an explanation on oath from the medical practitioner of the illness and the reasons for the applicant's inability to attend Court. [5] ... To obtain an adjournment a party is ordinarily required to attend Court and explain precisely why that adjournment is warranted. 13But for the absence of reasons below, we would have dismissed the appeal on this ground. The absence of reasons 14The hearing file relevantly contains orders as follows: 1.The Residential Tenancy Agreement is terminated and possession is given to the landlord on 26 May 2014. 2.The tenant shall pay the landlord a daily occupation fee at the rate $107.13 per day from 13 May 2014 until the date vacant possession is given to the landlord. 3.Within 60 days of the date of possession of the premises specified in these orders the landlord may relist the relisting of the application to determine the amount of the occupation fee owing. 4.The landlord's agent is to advise the tenant in writing by the delivery of a letter to the premises by 6pm on 12 May 2014 of the orders made today. 5.Application for adjournment by respondent is dismissed. 15The hearing file contains a 'hearing notes' document, which is incomplete. There are also copies of some medical certificates and a ledger setting out the amounts of rent payable. 16There is no copy of the notice of termination, which is an essential prerequisite to the termination of the lease. There is nothing from which we can glean what were the reasons for the decision to proceed in the absence of the applicant and to reject his application for an adjournment based on his injured knee, nor, equally importantly, the evidence on which the Member was satisfied that orders for termination and for possession were justified. 17Section 62 of the Act provides: (1) The Tribunal (including when constituted as an Appeal Panel) is to ensure that each party to proceedings is given notice of any decision that it makes in the proceedings. (2) Any party may, within 28 days of being given notice of a decision of the Tribunal, request the Tribunal to provide a written statement of reasons for its decision if a written statement of reasons has not already been provided to the party. The statement must be provided within 28 days after the request is made. (3) A written statement of reasons for the purposes of this section must set out the following: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made. (4) Nothing in this section prevents the Tribunal from giving oral reasons or a written statement of reasons for a decision it makes even if it has not been requested to do so by a party. 18Although there was apparently no request for reasons under s 62(2), that is not the end of the matter. 19On 9 April 2014, a month prior to the hearing below, the Appeal Panel (which included the President) published Collins v Urban [2014] NSWCATAP 17. 20It is appropriate to set out in full the following extracts from that decision: Reasons at First Instance [43] Although it was not a matter relied upon or raised by the parties, the Appeal Panel believes it is appropriate and may be of assistance to make some observations on the duty to give or prepare reasons for decisions in the light of the approach taken in the present case. [44] The Tribunal below decided the matter and made orders on 27 February 2014. At that time, it appears no reasons for decision were delivered apart from the notation to the effect that the rent from 2 January 2014 to 27 February 2014 which was owing amounted to $3,248.57. From the orders made, the Hearing Notes and the other material referred to above, it is possible to discern what determinations were made by the Member as to the amount of rent unpaid, whether the residential tenancy agreement had been breached and whether an order for termination and possession should be made. [45] Neither the appellants nor the respondents apparently requested the Tribunal at first instance to provide a written statement of reasons for its decision notwithstanding that such a course was available under s 62(2) of the Act. Since the appellants did not request reasons, it is not surprising that failure to give reasons was not relied upon as a ground of appeal. [46] Section 62 provides: (1) The Tribunal (including when constituted as an Appeal Panel) is to ensure that each party to proceedings is given notice of any decision that it makes in the proceedings. (2) Any party may, within 28 days of being given notice of a decision of the Tribunal, request the Tribunal to provide a written statement of reasons for its decision if a written statement of reasons has not already been provided to the party. The statement must be provided within 28 days after the request is made. (3) A written statement of reasons for the purposes of this section must set out the following: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made. (4) Nothing in this section prevents the Tribunal from giving oral reasons or a written statement of reasons for a decision it makes even if it has not been requested to do so by a party. [47] Section 62 establishes a regime under which the Tribunal is not under an express statutory obligation to provide reasons for a decision unless a party makes a request for reasons under s 62(2) but the Tribunal may and in many cases does prepare and give reasons for decision, whether oral or written, without a request to do so from the parties, consistently with s 62(4). [48] A provision such as s 62 of the Act does not, however, define exhaustively when there is a duty to give reasons or the extent of that duty. [49] One reason why reasons are generally required, notwithstanding a provision such as s 62, is that if reasons for decision are neither sought nor prepared and an appeal or application for leave to appeal is lodged, the findings of fact and legal reasoning of the decision maker at first instance would not be available to the appellate body by way of written reasons. In many instances not having findings of fact and legal reasoning explicitly available may render effectively worthless any appeal right because the appellate body does not have a statement of the findings of fact, the relevant law and explanation of how the law was applied to the facts as found, by the decision maker at first instance. [50] It was held in Pettitt v Dunkley [1971] 1 NSWLR 376 at 387 (per Moffitt JA, Manning JA agreeing) that: The force of the authorities, which in various ways say that the judge or magistrate at first instance in particular cases ought to have given reasons, is that, as part of his judicial duty and apart from any express requirement of any statute, he ought to have given reasons for the decision in question. I think there is duty upon a judge or magistrate, at least at first instance, in an appropriate case and in appropriate circumstances to give reasons for decision such as will facilitate a litigant, who may be aggrieved, exercising rights he may have to appeal. In Carlson v King [(1947) 64 WN (NSW) 6] Jordan CJ in delivering the decision of the Full Court said: "It has long been established that it is the duty of a court of first instance, from which an appeal lies to a higher court, to make, or cause to be made, a note of everything necessary to enable the case to be laid properly and sufficiently before the appellate court if there should be an appeal. This includes not only the evidence, and the decision arrived at, but also the reasons for arriving at the decision. [...]" The judgment otherwise makes it clear that this statement is directed to the general judicial duty of a judge of a court from which an appeal lies, whether or not a provision such as s. 144(3) [which in effect required a judge upon request to provide reasons] exists or not. [51] It can be observed that Jordon CJ in the passage quoted contemplates that the relevant duty may be discharged not only by giving oral or written reasons for a decision but also by preparing a suitable record of the evidence, law and reasoning so that an appellate body is properly informed if it is required to consider the matter on appeal. [52] The duty in relation to reasons endorsed in Pettit has been held to apply not only to Courts but also to other judicial or quasi-judicial tribunals or bodies - see for example Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 NSWLR 372. [53] The other basis upon which it has been held that reasons are generally required to be given was recently reiterated by the Court of Appeal in Keith v Gal [2013] NSWCA 339 (per Gleeson JA at [109]) as being that failure to provide sufficient reasons promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice, citing Mifsud v Campbell (1991) 21 NSWLR 725 at 728; Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430 at 442 per Meagher JA. If, however, the parties have the right to request written reasons but do not do so, this basis for generally requiring reasons to be given may be of less significance but it continues to apply. Further, in proceedings that are uncontested by the respondent, this consideration may also carry less weight. [54] In relation to one of the principal predecessors of the present Tribunal, the Appeal Panel of the Administrative Decisions Tribunal (ADT) held that the principles identified above applied to that Tribunal. In Sydney Supermarkets Pty Limited v Xu [2009] NSWADTAP 28 the Appeal Panel of the ADT said at [56] - [60]: 56 The Tribunal is obliged to give adequate reasons. Appeal Panels of the Tribunal have routinely accepted the principles enunciated in the line of cases that include Soulemezis v Dudley (1987) 10 NSWLR 247, Mifsud v Campbell (1991) 21 NSWLR 725 and Beale v Government Insurance Office of New South Wales (1997) 48 NSWLR 430. The Tribunal is a deliberative body engaged in the exercise of a judicial function when hearing and determining applications, giving reasons for decision and making final orders. See recently, Campbelltown City Council v Vegan [2006] NSWCA 284; (2006) 67 NSWLR 372, esp at [109] ff per Basten JA. The Commonwealth authorities relating to Commonwealth tribunals are to similar effect. See, for example, Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321 at 366; Dornan v Riordan (1990) 24 FCR 564 at 568; Edwards v Guidice [1999] FCA 1836; (1999) 169 ALR 89 at [10], [43]. 57 In our view, s 89(5) of the ADT Act, to which counsel for the appellant gave emphasis, does no more than confirm the law as it would in any event have applied to the Tribunal. 58 Section 89(5) states that the Tribunal must in reasons published under s 89 set out: '(a) the findings on material questions of fact, referring to the evidence or other material on which these findings are based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made.' 59 (In that regard we note that strictly interpreted s 89 is not applicable to this case. Section 89 is concerned with the circumstance where the Tribunal does not publish written reasons at the time it makes its final orders.) 60 A trier of fact is not obliged to address, and reconcile, every contradiction or inconsistency in the evidence. The law does 'not require lengthy or elaborate reasons' but it is 'necessary that the essential ground or grounds upon which the decision rests should be articulated': Soulemezis v Dudley (Holdings) Pty Ltd per McHugh JA at 280. [55] Section 89 of the Administrative Decisions Tribunal Act 1997 was in similar terms to s 62 of the Act, although there was no equivalent of s 62(4). [56] The Appeal Panel accepts that these principles should also be applied in relation to decisions in proceedings before the Consumer and Commercial Division of the Tribunal, which are judicial in nature. An appeal lies from the Consumer and Commercial Division to the Appeal Panel as of right from a final or ancillary decision on a question of law and by leave on other grounds or from interlocutory decisions. As a result, there is generally a duty on Members sitting in the Consumer and Commercial Division to give oral or written reasons for their decisions or, at least in uncontested proceedings, "to make... a note of everything necessary to enable the case to be laid properly and sufficiently before the [Appeal Panel] if there should be an appeal", to quote the words of Sir Frederick Jordan in Carlson v King (1947) 64 WN (NSW) 6. [57] A number of propositions can be derived from the authorities concerning the nature and extent of the duty to give of reasons as follows: (1) notwithstanding that there have been many cases (some of which are collected in De Iacovo v Lacanale [1957] VicRp 78; (1957) VR 553, at pp 558-559) in which it has been held that it is the duty of a judge, magistrate or other relevant decision maker to state reasons, that does not mean that a decision maker must give his or her reasons in every case. There is no "inflexible rule of universal application" that reasons should be given for judicial decisions. Whilst it is no doubt right to describe the requirement to give reasons as "an incident of the judicial process", it is subject to the qualification that it is a normal but not a universal incident - Public Service Board of New South Wales v Osmond (1986) 159 CLR 656 at 667 per Gibbs CJ; (2) the content and detail of the reasons for decisions to be provided will vary according to the nature of the jurisdiction which the body in question is exercising and the particular matter the subject of the decision - Wainohu v New South Wales (2011) 243 CLR 181 at [56] per French CJ and Kiefel J; (3) the administration of justice in this regard requires a pragmatic and functional approach to the obligations imposed upon decision makers at first instance - Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [46] per Basten JA; (4) not only is the obligation not universal in nature, but it is variable in its content and whilst transparency in decision-making is an important value, it is not cost free, and may involve separate parameters of quantity and quality - Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] per Basten JA. [58] In the Consumer and Commercial Division, and particularly in relation to uncontested residential tenancy matters, detailed reasons for decision are often not given, unless a s 62(2) request is made. This is, at least in part, a consequence of the volume of applications and the time available. It is not unusual for the Tribunal to be required to deal with 45,000 to 50,000 residential tenancy applications in a year. For example, in the period from 1 July 2012 to 30 June 2013, 49,396 residential tenancy applications were lodged in the Consumer, Trader and Tenancy Tribunal, the predecessor of the Consumer and Commercial Division of the Tribunal. In most cases, these applications are listed for conciliation and hearing within 21 to 28 days of lodgment. Most are disposed of at this first hearing in a group list of matters in which each application is allocated between 7 and 20 minutes of hearing time (depending on the nature of the application). This time allocation has been found to be workable because most applications are not contested. [59] To require the Tribunal in uncontested residential tenancy matters, absent a request under s 62(2), to give detailed reasons setting out specific findings of fact and the evidence supporting those findings, the applicable law and the reasoning processes leading to the conclusions reached by the Tribunal would involve time, effort and expense that could often be disproportionate to the nature and extent of the subject matter of a claim for termination of a tenancy for non-payment of rent or a similar claim arising under the RT Act. It would be likely to have the consequence that fewer residential tenancy matters could be listed for hearing on any one day and hearings would therefore be delayed unless funds were available to the Tribunal to pay more Members to sit and additional hearing rooms could be found and paid for. The most likely outcome would be generalised delay in resolution of residential tenancy matters. Furthermore and in any event, the average cost to the Tribunal of conducting residential tenancy hearings would be increased for the Tribunal, if not for the parties. In a significant number of residential tenancy proceedings the outstanding rent or other amount in issue might be anticipated to be less than the cost to the Tribunal of conducting the proceedings. [60] The obligation of the Tribunal is to resolve proceedings in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject matter of the proceedings as required by s 36(4) of the Act. [61] The Tribunal is also required to facilitate the resolution of the real issue between residential landlords and tenants justly, quickly and cheaply, under s 36(1) and (2)(a) of the Act. Landlords' and tenants' disputes concerning residential tenancies in many cases require resolution within weeks rather than months or years as might occur in other judicial bodies in relation to other types of matters. [62] In these circumstances and taking into account the nature of the jurisdiction being exercised, the particular subject matter of the decision in many residential tenancy disputes and the fact that giving detailed reasons is not cost free, the Appeal Panel concludes that in uncontested residential tenancy matters involving relatively small amounts of unpaid rent or other similarly small claims, while Members are required to prepare or record reasons for their decision that duty may be discharged by utilising a suitably drafted form to record (whether by written statements, circling options or ticking responses or a combination of methods): (1) the appearances for the parties; (2) the evidence given by the witness or witnesses and the resolution of any conflicts in the evidence; (3) the relevant details of the residential tenancy agreement, notice of termination and other documents provided to the Tribunal; (4) the elements of any relevant cause of action and whether the Member is satisfied that each element has been made out; (5) the elements of any relevant defence raised and whether the Members is satisfied that it has or has not been made out; and (6) any other relevant matter which would be necessary to allow the Appeal Panel to hear and determine any appeal on a question of law or, if leave were granted, on other grounds. [63] Such an approach is consistent with the position articulated by Sir Frederick Jordan in Carlson v King, taking into account in an appropriate manner the nature of uncontested residential tenancy proceedings, the requirements of ss 36 and 38 of the Act and the matters raised by Basten JA in Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [46] and [48]. [64] The views expressed in the previous paragraphs should not be taken as precluding or discouraging the giving of oral reasons in uncontested tenancy matters at the time orders are made. This is the preferable course if time and circumstances permit. Moreover, if a request for a written statement of reasons for a decision is made under s 62(2) of the Act, it goes without saying that the Member is required to provide such a statement complying with s 62(3) within the 28 day period specified by the statute. 21It follows that even if the matter below was treated as uncontested (which, strictly it was not) the Tribunal fell short of what was required of it. 22Insofar as Collins v Urban [2014] NSWCATAP 17 sets out mandatory requirements for reasons, breach of which amounts to an error of law, a question of law is raised. If a question of law is not so raised because there is a question of fact and degree, we would further grant leave for the appeal on the basis that the decision below 'was not fair and equitable' within the meaning of Sch 4, Cl 12(1)(a) of the Act, because the lack of reasons deprived the losing party of any means of determining why he lost and, on the question of discretion, because this raises, to use again the language of Collins v Urban at [84(2)] '(a) issues of principle; [or] (b) matters of administration or policy which might have general application'. 23In theory we could have adjourned the matter and required the member below to now give reasons, or remitted the matter to him for reconsideration according to law, however we have decided to determine the matter ourselves, to the extent necessary, by receiving additional evidence. We do so by reference to the following provisions of the Act: (a)s 36(1) which provides that the guiding principle for the Act in their application to the proceedings in the Tribunal 'is to facilitate the just, quick and cheap resolution of the real issues in the proceedings'; (b)s 36(4) which provides that the practice and procedure of the Tribunal 'should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost of the parties and the Tribunal is proportionate to the importance and complexity of the subject matter of the proceedings'; and (c)s 38(4) which provides that the Tribunal 'is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case...'. Consideration 24Section 87 of the Residential Tenancies Act states: Breach of agreement (1) A landlord may give a termination notice on the ground that the tenant has breached the residential tenancy agreement. (2) The termination notice must specify a termination date that is not earlier than 14 days after the day on which the notice is given. (3) The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement. (4) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that: (a) the tenant has breached the residential tenancy agreement, and (b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement, and (c) the termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice. (5) In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the breach, (b) any previous breaches, (c) any steps taken by the tenant to remedy the breach, (d) any steps taken by the landlord about the breach, (e) the previous history of the tenancy. (6) The Tribunal may refuse to make a termination order if it is satisfied that the tenant has remedied the breach. 25It was not in dispute on the appeal that a valid notice complying with s 87 had been issued on 1 April and received by the tenant on 2 April so ensuring that at least 14 days clear notice was provided. We also had in evidence the terms of the residential tenancy agreement and the applicable by-laws made under the Strata Schemes Management Act, the terms of which have been recited above. 26Not only did the notice and the terms of the contract and the strata scheme by-laws make it clear that it was not possible for consent to be given to have a dog on these premises, by either the landlord or the owners' corporation, but in any event, the landlord had not given that permission. 27It matters not, for the purposes of this application, that the Body Corporate of the premises may have declined to enforce particular by-laws in relation to pets for one other owner whose possession seems to have predated the making of the amended strata by-law 16; the fact is, there was a breach. That breach continued, the tenant admitting that the dog continued to be kept, and he had not complied with the earlier orders, and, as he said to us, he would rather leave the premises than remove the dog, thus making clear he had no intention of complying with the orders previously made by the Tribunal. 28The Tribunal specifically brought to the parties' attention the terms of s 87, and the appellant addressed on those issues, in effect stating that: (a)The dog was small; (b)The dog was not noisy - in this regard he produced brief common form statements from three neighbours to that effect; (c)He and his wife were emotionally attached to the dog; (d)He believed he had a right to obtain permission - when asked what he meant by this, he referred to the standard strata by-law, which however, had been varied for the premises in question as noted above, and is thus irrelevant. 29We thus find that there was compliance with s 87(1), (2) and (3) of the RT Act. We have considered all the grounds in s 87(4) and (5). We observe that: (a)Permission was not, and could not have been given by the landlord; (b)The reasons given by the tenant above are insufficient, given that he had agreed to the terms of the lease which incorporate a requirement to comply with the strata scheme by-laws. 30In the circumstances, we made the orders set out above. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar