This is an appeal from a decision which ordered the appellant, Mr Hand, to pay the respondent, Ms Brown, the sum of $2,900 on or before 27 May 2021.
That sum was the amount of a rental bond paid out to the appellant in October 2020. It was the amount of a bond that had been paid in July 2016 in respect of residential premises in Sydney rented by the appellant and respondent as a then married couple, as co-tenants (the premises). However, in the context of an acrimonious breakdown in their relationship, the respondent left the premises with their young child in November 2017. Thereafter, the appellant continued to live at the premises until late 2020.
The appellant and the respondent are now divorced.
When the respondent learnt that the bond had been paid out to the appellant, she commenced proceedings in the Tribunal against the appellant on 15 October 2020 seeking an order that the whole of the amount of the bond be paid to her. In her application she claimed that the payment of the bond had been sourced from her money that she had used to pay rental bonds in respect of two earlier properties which she and the appellant had rented. She said in her application that after she left the premises she raised the issue about the bond with the Department of Fair Trading and the Rental Bond Board and was advised to make a claim for the bond when the property was vacated.
The reasons of the Tribunal indicate that it saw itself as exercising the power contained in s 175(2) of the Residential Tenancies Act 2010 (NSW) (RTA) in conjunction with giving consideration to s 174 of that Act.
Those sections, relevantly, provide:
175 Powers of Tribunal
(1) The Tribunal may, on application by a landlord or tenant or any other person (including a former co-tenant) who has an interest in the payment of a rental bond, make an order as to the payment of the amount of the rental bond.
(2) The Tribunal may make an order whether or not the amount of a rental bond has been paid by the Secretary.
…
174 Repayment of bond to former co-tenant
(1) This section applies if the tenancy of a co-tenant is terminated and the residential tenancy agreement continues in force in relation to one or more other co-tenants.
(2) The remaining co-tenant or co-tenants must, within 14 days of a request by a former co-tenant, pay to the former co-tenant an amount equal to the rental bond (if any) paid by the former co-tenant for the residential tenancy agreement.
(3) The remaining co-tenant or co-tenants may deduct from that amount any amount owed to them by the former co-tenant for rent or other reasonable costs associated with the residential premises.
…
(6) This section does not apply if the liabilities of the former co-tenant under the residential tenancy agreement exceed the amount of rental bond paid by the former co-tenant.
Section 175(1) confers power on the Tribunal to award monetary relief in the form of "an order as to the payment of the amount of the rental bond". As we see it, in accordance with principle, this power should be exercised having regard to the legally recognised rights and obligations of the parties in respect of the bond. We do not interpret the section as conferring a broad power upon the Tribunal to alter rights according to what the Tribunal may see fit to do.
A rental bond is a security deposit required to be paid in order to obtain a tenancy agreement and thereby benefits the tenants, being, in this case, the appellant and respondent as then husband and wife.
Under the RTA, a landlord or agent of the landlord that receives a rental bond must pay the bond to the Secretary of the Department of Fair Trading. A regime is provided for in Part 8 of the RTA concerning claims made in respect of the bond and release of the bond. Section 175 is part of that regime.
We do not understand how s 174 of the RTA was relevant. There was no suggestion on the material before the Tribunal (or before us) that the circumstances referred to in s 174(1) had occurred, namely that the tenancy of the respondent as a co-tenant had terminated, with the residential tenancy agreement continuing in force in relation to the appellant. That could only occur in accordance with s 101 of the RTA.
The Tribunal made no findings concerning the termination of the appellant and respondent's co-tenancy of the premises, but it was uncontroversial that it had terminated and that the rental bond that had been released to the appellant was the bond that had been paid in respect of that tenancy.
The Tribunal's reasons indicate that the matters that led to the exercise of the power in s 175(2) in favour of the respondent were twofold, namely:
1. The Tribunal was satisfied that the funds making up the bond were, originally, sourced from a personal account of the respondent with the Bendigo Bank, which funds she paid into a joint account of the parties and from this joint account the bond was paid. It appears that in these circumstances the Tribunal viewed the bond as having been paid from the respondent's money.
2. The Tribunal rejected the appellant's position that the respondent should receive half of the bond after deducting various lease vacation expenses. The Tribunal concluded that because these were expenses incurred over three years after the respondent had left the premises these should be borne by the appellant.
[2]
Grounds of appeal
The appellant put forward four grounds of appeal which we summarise as follows:
1. The respondent did not provide the appellant with all the material she relied upon in support of her claim in advance of the hearing, in particular, 10 annexures to her statement of claim as a result of which the appellant did not know the case he had to meet (Ground 1).
2. The Tribunal erred by concluding that the bond was paid from personal money belonging to the respondent and by not concluding that it was paid from the joint money of the appellant and the respondent for their joint benefit (Ground 2).
3. The Tribunal erred by failing to conclude that the respondent should be held accountable for cleaning fees on vacation of the premises paid by the appellant because of the circumstances in which she left the premises (Ground 3).
4. The Tribunal erred by failing to take into account value that passed to the respondent for her share of the bond after she left the premises and hardship and cost that the appellant suffered because of the behaviour of the respondent (Ground 4).
Under s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), a party may appeal as of right to the Appeal Panel in an internal appeal on any question of law. In respect of any other grounds, in the case of an appeal from the Consumer and Commercial Division of the Tribunal, the appellant must satisfy the Appeal Panel that leave to appeal should be granted under cl 12 of Sch 4 to the NCAT Act on the basis that:
…the appellant may have suffered a substantial miscarriage of justice because:
(a) the decision of the Tribunal under appeal was not fair and equitable, or
(b) the decision of the Tribunal under appeal was against the weight of evidence, or
(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
[3]
Extension of time for appeal
The appellant seeks an extension of time in which to lodge his appeal. Because this is a residential tenancy matter, the appellant had 14 days from notice of the decision in which to lodge an appeal: r 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW). The appellant's Notice of Appeal was lodged on 21 May 2021. This was eight days late.
The appellant's solicitor provided some explanation for the delay. It was said that although the appellant approached their office within time it took some time to discover and research the nature of the "problem".
In view of the shortness of the delay, the provision of an explanation (albeit somewhat vague) and the merits of the appeal (as to which see below) we are prepared to grant the necessary extension of time: see Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [22].
[4]
Consideration
Grounds 3 and 4 can be quickly disposed of. This is because they each relied upon evidence that the appellant sought to adduce at the hearing but which the appellant had deliberately not provided to the respondent in advance of the hearing. For that reason, the Tribunal refused to admit the evidence (as appears from its reasons) and no appeal has been brought by the appellant from that decision.
In respect of Ground 3, at the hearing of the appeal, Mr Lewis, who appeared for the appellant, submitted that the Tribunal should have inferred that a cleaning fee would have been incurred when the residential tenancy terminated after the respondent's departure from the premises and this should be deducted from the bond. However, leaving aside the unresolved issue as to when and how the tenancy terminated, there was no evidence before the Tribunal about any such cleaning expense, let alone how such an expense had arisen and there was no basis upon which the appellant could be permitted to adduce new evidence about this on appeal.
We also do not accept Ground 1 of the appeal. The respondent accepts that the annexures to her statement of claim were not provided to the appellant. However, the appellant was aware, well in advance of the hearing, that the respondent relied upon these documents and the respondent asked him on a number of occasions to provide a place where she could deliver the documents to him but he did not take up that request. Nor did he raise any issue about this at the Tribunal hearing. The material was received by the Tribunal without objection. In these circumstances, we do not think it can be said that the appellant has not had a reasonable opportunity to be heard.
We do, however, agree with Ground 2 of the appeal. In our opinion, the Tribunal made an error of law in failing to recognise and appreciate the significance of the fact that the rental bond was not paid from the respondent's money, effectively or otherwise. It was paid from the joint property of the parties and for their joint benefit. In these circumstances, as will, frequently, be the case, the ultimate source of the funds paid into the joint account is of no consequence. In our opinion, there are no circumstances that displace the inference that the joint account moneys from which the rental bond was paid were the joint property of the appellant and the respondent and their claim in respect of the money in the future remained a claim to which they were jointly entitled for their joint benefit.
If, albeit somewhat unusually, this was not the intention, one might have expected a different arrangement under which the rental bond was paid by the respondent from her personal money in conjunction with some specification to the landlord's agent that, as between the tenants, it was to remain her money.
Furthermore, there was nothing in the facts as presented to the Tribunal to suggest the joint account was used as a mere vehicle to transfer the respondent's personal money to the landlord's agent and in respect of which she retained sole interest. On the contrary, the respondent's money from the Bendigo Bank account was first used to pay a rental bond on premises rented by the parties as husband and wife in July 2014. Thereafter, the relevant bond monies (both receipt and payment out) were dealt with through the joint accounts of the parties, including by the use of funds from a joint credit card account.
Accordingly, the respondent should only receive one half of the bond.
[5]
Orders
For the above reasons, we make the following orders:
1. The appeal is allowed.
2. Set aside order 1 made by the Tribunal on 29 April 2021.
3. The appellant is to pay the respondent the sum of $1,450.00 within 14 days of the date these orders are published.
[6]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 27 July 2021