Hernady v Raccani

NCAT Appeal Panel|2016-02-22|Before: Wright J

APPEAL - Civil and Administrative Tribunal (NSW) - Consumer and Commercial Division - internal appeal - question of law - whether Tribunal failed to exercise its jurisdiction properly invoked - appeal upheld (in part) - issues remitted for redetermination. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), ss 29, 32, 36(4), 62(2), 80, Sch 4 cl 12 Civil and Administrative Tribunal Rules 2014 (NSW), r 25(4)(b) Residential Tenancies Act 2010 (NSW) Residential Tenancies Regulation 2010 (NSW), cl 22 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Khan v Kang [2014] NSWCATAP 48 Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Wainohu v New South Wales (2011) 243 CLR 181 Category: Principal judgment Parties: Alex Hernady and Christina Hernady (Appellants) Karen Raccani (Respondent) File Number(s): AP 15/61341 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 12 October 2015 Before: S Smith, General Member File Number(s): RT15/47006

Introduction

The appellants, Mr and Mrs Hernady, were tenants of a residential property at Kings Langley, New South Wales, under a residential tenancy agreement with the landlady, Ms Raccani, who was the respondent on this appeal.

Background

It was apparently not in dispute in these proceedings that the Hernadys had originally entered into a written, six months' tenancy agreement with Ms Raccani on 2 June 2009 and had continued in occupation after the expiration of the initial term on 11 December 2009. Nor was there any dispute that the Hernadys occupied the property under a residential tenancy agreement within the meaning of s 13 of the Residential Tenancies Act 2010 (NSW) (the RT Act).
On 10 August 2015 the Hernadys lodged a tenancy application form in the Consumer and Commercial Division of the Tribunal, seeking a number of orders based upon alleged failures to effect repairs or take other action which were said to amount to breaches of the residential tenancy agreement. The repairs and breaches generally concerned dampness and mould in the property. In all, there were 14 orders sought under various sections of the RT Act including ss 45, 65(1)(a), (b) and (5), 187(1)(b) and (d).
At a hearing in the Consumer and Commercial Division on 18 August 2015, the proceedings were stood over to a date to be fixed by the Registrar and orders were made by consent. These orders included a number of procedural orders as well as the following: "2. By consent, the Tribunal orders that the respondent(s): KAREN RACCANI … is to carry out the following work on or before 28-Aug-2015 in a proper and workmanlike manner. Details of work order: Cause Dr Damp to inspect the premises to ascertain the cause of the mould and to report on what steps are to be undertaken to remedy the mould. Provide a copy of the report to the applicants immediately after it becomes available. The respondent is to arrange for cleaning the mould from the possessions (including furniture) of the applicant. The applicant agrees to provide access to the premises to allow the above works to be carried out provided at least one days notice is given. Access can not be provided on Tuesday, Wednesday or Thursday. Leave is granted to both parties to have the matter relisted for further orders if the above orders are not complied with. As to the claim for compensation: 3. The applicant has leave to amend the claim by 04-Sep-2015 by sending a copy of the amended claim to the Divisional Registrar and the other party, and including: A list of each item claimed, specifying the monetary amount of each claim; A copy of all invoices, quotes, statements and other documents which will be relied upon at the hearing. …. '
Dr Damp carried out an inspection on 22 August 2015 and produced a report. This report was eventually provided to the Hernadys and was before the Tribunal at first instance.
Relying on the leave to amend granted by order 3 made on 18 August 2015, the Hernadys filed a document entitled "Amended NCAT Orders - File No: RT15/47006" which claimed 20 orders under various provisions of the RT Act. The 20 claims were as follows: "1. Section 65(5) - Repairs An order for the tenants to pay future rent directly to the tribunal … 2. Section 187(1)(b) An order to waive the tenant's 21 days' notice period should they find and be approved for suitable premises before rectification has been achieved … 3. Section 187(1)(b) An order for the tenant to appoint their own cleaners … 4. Section 65(1)(a) - Repairs An order to appoint a qualified inspector/s to: i. Assess and determine the cause of the leaking shower … ii. Assess and determine the extent of the termites under bathroom/house … iii. Assess the safety of the crack in the wall at the front of the house. Also determine if this is an access point for channelling the overflowing water from the front gutter in to walls where the mould is growing … 5. Section 65(1)(a) - Repairs An order to rectify the leaking shower … 6. Section 187(1)(b) An order for a follow up report deeming that the property has been rectified from mould and water leakage … 7. Section 187(1)(b) An order to relocate the tenants and their necessary belongings to a suitable residence should the water leakage repairs cause the tenants to be without a bathroom for more than 1 day, at the landlord's expense and in an amount to be determined. … 8. Section 187(1)(b) An order to put into storage, the tenant's valuables (that they do not need to take with them) to ensure their security, in the instance that they are relocated as per order 7 above … 9. Section 44 (1) (b)- Rent Reduction Current rent $430.00 per week. An order for a rent reduction of $215.00 per week, dating back to the 1/5/15 to when rectified … 10. Section 65(1)(a) An order for roof ventilation (whirly bird) to be installed … 11. Section 65(1)(a) An order for a front corner gutter down pipe to be installed … 12. Section 187(1)(d) An order to refund an amount of $430 per week as compensation, for non-economic losses to the tenants for breach of the agreement for failing to act, dating back to 1/5/15 … 13. Section 187(1)(d) Compensation An order for compensation to the tenant for the ATO fine … in an amount to be determined, should the tenant's application for an objection to the fine not be successful … 14. Section 65(1)(b) An order to reimburse an amount of $180 for professional costs, due to having to clean the mould out of the air conditioner by a qualified tradesman; appointed by the tenants … 15. Section 187(1)(c) An order that the agent/owner pay the tenant an amount of $308.00, as compensation for the tenant's time cleaning mouldy walls, windows, curtains and blinds in bedroom 1 and lounge room (taking 8 hours), while sick with mould related symptoms … 16. Section 187(1)(d) An order that the agent/owner, pay an amount of $411.12, to replace damaged property due to mould growth on the below items. Being for: i. One white King size 100% mattress protector = $122.99 ii. One white King size Koo brand, 100% cotton, 1000 thread count fitted sheet = $99.99 iii. One microfiber pillow as found in Bedroom two on 8/8/15 = $18.19 iv. One pair of Rockport leather shoes = $169.95 … 17. Section 65(1)(a) - Repairs An order to appoint a pest inspection for the roof cavity to investigate the wet patches on the ceilings in Bedroom 1, the lounge room and dining area for "animal presence" as per Dr Damp's report … 18. Section 65(1)(a) - Repairs An order to repair and rectify the side gate … 19. Section 65(1)(a) - Repairs An order to repair and rectify the broken railing to the stairs from the pergola … 20. Section 187(1)(d) Compensation An order to reimburse the tenant $364.80 for 2 days lost wages (15.2 hours @ $24 per hour), for 23/9/15 and 24/9/15 …. "

The Decision at First Instance

On 12 October 2015 the Consumer and Commercial Division of the Tribunal heard the matter and orders were made on that day with written reasons for decision provided on 14 October 2015. Since this appeal concerns the adequacy of the reasons of the Tribunal below and those reasons have not been published in addition to having been made available to the parties, it is appropriate to set the reasons out in full at this point: "Application This was an application by a tenant for various orders relating to the presence of mould in a dwelling at Kings Langley. Parties Mrs Hernady appeared for herself and her husband as tenants. The landlord Karen Raccani was represented by Sharron Pike of Century 21 Seven Hills. Evidence The applicant had served and filed a large volume of evidence which included copies of correspondence, medical reports, photos, a lengthy narrative/rhetorical account and two expert reports from mould contractors, namely Dr Damp and AntiDamp. The respondent landlord also filed evidence the main thrust of which dealt with the course of conduct with the tenants over many months. The applicants' case Mrs Hernady is an anxious person who is vitally concerned with her health and that of her family. She and her husband have occupied the premises in Kings Langley for some years. In about May [the Hernadys] complained to the landlord's agent about mould and its effect. There seemed to be several problems including mould inside some rooms in the house, a leaking shower and gutters requiring attention. There was dispute before me about whether or not the tenants had refused access to the landlords' tradesmen. Nevertheless it seems that by the time the matter came on for hearing the landlord had addressed all of the original concerns of the tenants. The tenants were seeking a reduction of rent for non-availability of services due to the mould. They also sought a work order for various appliances and works suggested by the Dr Damp report. At the hearing the parties were not able to reach agreement on the quantum of compensation. Mrs Hearnady [sic] was concerned that the air conditioner was distributing spores throughout the dwelling and that this was causing health problems for herself and her family. One of the difficulties in the case for the tenants was the low quality of the expert reports. Both were from contractors who sold damp beating products and services and thus had an interest in finding a mould problem. Even so the Anti Damp letter frankly states that the mould/dampness issue was 'greatly exaggerated'. For me the chief issue was the extent to which the mould was a result of the state of the premises and failure of the landlord to act. Mould is a frequent complaint in tenancy matters and the common finding is that it is a lifestyle issue resulting from the use of the premises by the tenant. In this case the tenants conceded that they had all doors and windows closed at night but were mindful of the need for ventilation during the day. Miss Pike for the landlord said that on periodic inspection she had noted that all doors and windows were closed. Landlord's case It was put to me by the agent that the complaints made by the tenants had been quickly dealt with in each case. As at the hearing date work had been done on the guttering, the shower leak had been fixed and a cleaner had attended to clean up the mould although it must be said that this was not to the complete satisfaction of Mrs Hearnady [sic]. I note at this stage that the landlord served a 90 day 'no grounds' notice requiring vacant possession in late December 2015. Also to be noted is that the landlord had offered to reimburse the tenants for the cost of having the air conditioner serviced some $186. Conclusion. I think it is likely that wet weather together with a shower leak and damaged guttering at least contributed to the mould problem within the house. As a result I find that he [sic] landlord should compensate the tenant for loss of amenity over a 6 week period from June 2015. The rent reduction should be $50 per week as the tenants were able to use almost all of the rooms and facilities of the premises. That amounts $300 to which should be added the air conditioner servicing as agreed of $186."
The orders made on 12 October 2015 were as follows: 1. Having regard to the reduction by the landlord of the following goods, services or facilities, for the following period: ●dampness and mould from 1-Jul-2015 to 14-Aug-2015. It is determined by the Tribunal that the rent was excessive in accordance with the Residential Tenancies Act, 2010. 2. Further Orders (eg. Rent arrears, refund of payment, repairs) rent should be reduced by $50 per week for the above period. Landlord to pay for air conditioner servicing $186.00 a total of $486.00 to be paid by abetment of rent or otherwise as parties agree.
The Hernadys have appealed against those orders, although they apparently do not challenge the orders to the extent that Ms Raccani was ordered to pay $186.00 for the servicing of the air conditioner.
As the claims in these proceedings were made under the RT Act, the decision of the Tribunal below was a general decision, within the meaning of s 29 of the Civil and Administrative Tribunal Act 2013 (NSW) (the Act), and an internally appealable decision, under s 32 of the Act.
Before turning to consider the notice of appeal and grounds of appeal, it should also be noted that, by the time of the hearing of the appeal, Ms Raccani had paid $486 to the Hernadys and they had vacated the property.

The Appeal

On 28 October 2015, the Hernadys lodged a notice of appeal under s 80 of the Act at Service NSW and the notice was received by the Tribunal on 9 November 2015. The notice of appeal was accepted by the parties as having been lodged within the 14 day appeal period for residential proceedings established by r 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (the Rules). The Appeal Panel was content to proceed on that basis. Further, if an extension of time under s 41 of the Act were required, we would in any event grant the extension, in the circumstances of this case and in the effective absence of any opposition from the respondent.

Grounds of Appeal and Orders Sought on Appeal

The Hernadys identified three grounds of appeal in their notice of appeal namely: 1. Failure to make certain findings of material fact; 2. Adequacy of reasons; and 3. Denial of procedural fairness.
These were elaborated upon in the notice of appeal as follows: "1. For a failure to make a finding in material fact for: a. Rent reduction and issue dates - Tenants sought orders for a rent reduction and/ or compensation from the 1/5/15 when mould was first reported until the mould problem was proven to be rectified. The tenant sought rent reduction/ compensation for: a. Storage costs incurred due to mould $130.00 per month b. Cleaning costs due to mould $308.00 c. Loss of possessions due to mould $411.12 f. Increased electricity costs for loss of heating service, tenants had to use alternate heating. Costs as compared to useage [sic] same for the time last year 2014 - May quarter 2015 increased by 50% = $358.02 August quarter 2015 increased by 40% = $332.05 g. Health issues and inconvenience due to mould $430 per week The tenants also alleged that the landlord breached Order 2 of the Tribunal's orders dated 18 August 2015 by failing to rectify the mould problem and also by failing to properly clean the tenant's possessions. The appellant alleges that the Tribunal failed to consider the tenant's written and oral evidence in relation to these issues. 2. Adequacy of reasons: The Tribunal did not provide adequate reasons as to why the dates for the rent reduction period was chosen from 01-Jul-2015 to 14-Aug-2015 when we were seeking from 1/5/15 until it was proven to be rectified, or why the amount was set at $50 per week when we were seeking rent reduction and/ or compensation of $215 per week. The Tribunal did not provide adequate reasons as to why the remaining orders sought by the tenants in relation to compensation, the rectification of mould and the failure to properly clean the tenants' possessions of mould was not addressed in the reasons. 3. Denial of procedural fairness The tenants sought orders and provided oral and written evidence to the Tribunal about a numbers of matters which the Tribunal failed to properly consider, namely. a) compensation for storage costs b) compensation for loss and/ or damage of personal possessions c) compensation for cleaning costs d) compensation for increased electricity costs e) compensation for inconvenience of living in a property with mould f) remediation of mould from premises as per Order 2 made on 18 August 2015; and, g) failure to properly clean possessions as per Order 2 made on 18 August 2015."
The Hernadys' notice of appeal challenged both of the orders made by the Tribunal below and sought the following orders from the Appeal Panel: "1. Leave to appeal granted. 2. Appeal allowed. 3. The orders made by the Tribunal on 12 October 2015 be set aside. 4. Remit the proceedings to the Consumer and Commercial Division for rehearing before a differently constituted Tribunal with both parties to be given the opportunity to rely on further or new evidence and submissions."
The Hernadys also sought leave to appeal, to the extent that their grounds of appeal did not raise a question of law, because of the operation of s 80(2)(b) of the Act. Section 80 of the Act provides, in part: "80 Making of internal appeals (1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made. Note : Internal appeals are required to be heard by the Tribunal constituted as an Appeal Panel. See section 27 (1). (2) Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. …
The orders appealed against in this matter were final, and not interlocutory, orders of the Tribunal and thus, under s 80(2)(b), the Hernadys were entitled to appeal as of right on any question of law and by leave on other grounds.
Since the decision appealed against was a decision of the Consumer and Commercial Division, the granting of leave to appeal, if required, is governed by cl 12 of Sch 4 to the Act. Under cl 12(1), the ability of the Appeal Panel to grant leave is limited to situations in which the Appeal Panel is satisfied 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)."
The principles that apply in relation to the granting of leave to appeal under cl 12 of Sch 4 were summarised in Collins v Urban [2014] NSWCATAP 17 at [65] to [79].
The material in the notice of appeal which was said to support leave to appeal on the basis that the decision was not fair and equitable was, in large measure, a repetition of the material already given in relation to the grounds of appeal, which has been quoted above. In relation to whether the decision was against the weight of the evidence, the Hernadys set out the evidentiary material upon which they relied in that regard. Finally, the "significant new evidence that was now available but was not reasonably available at the time of the hearing" was identified as an insurance report, a home assessor's report and a hygienist report.

Ms Raccani's Reply to Appeal

In her reply to appeal, filed on 23 November 2015, Ms Raccani supported the orders originally made. In particular, it was submitted in effect that on the evidence before the Tribunal at first instance it was established that all issues with the property were dealt with in a timely manner and a total of $2,319.50 had been spent on reports, cleaning, trade repairs and similar matters in the relevant period from May 2015. The reply also noted that the $486 ordered to be paid by the Tribunal had been paid by cheque dated 23 October 2015. Ms Raccani indicated that she accepted that the appeal had been lodged within time but opposed leave to appeal being granted.

The Substance of the Grounds of Appeal

The issues raised in the grounds of appeal can be seen as interrelated and overlapping.
The first ground of appeal identified the error made by the Tribunal below as a failure to make findings of material fact and to consider the evidence in respect of the following claims as described in the notice of appeal (where these could be identified as claims made in the document "Amended NCAT Orders - File No: RT15/47006" (the Amended Claims) this has been noted): 1. the claim for a reduction in rent of $215 per week from 1 May 2015 until the mould problem was rectified - par 9 in the Amended Claims (the Rent Reduction Claim); 2. the claims for compensation for a specific losses and expenses suffered by the Hernadys namely: 1. Storage due to mould in the property - $130 per month (par 8 of the Amended Claims is the only claim relating to storage and was only sought if an order was made to relocate the tenants while the water leakage repairs were carried out); 2. Cleaning because of the mould - $308 - par 15 in the Amended Claims; 3. Possessions affected by the mould - $411.12 - par 16 in the Amended Claims; 4. Increased heating costs because the air conditioning could not be used for heating because of mould - $358.02 and $332.05 (no such order is claimed in the Amended Claims); 5. Health issues and inconvenience because of the mould - $430 per week from 1 May 2015 - par 12 in the Amended Claims; (the Compensation Claims); 1. the claim for rectification of the mould problem in accordance with order 2 made on 18 August 2015 -pars 6, 10, 11 and 17 in the Amended Claims may relate to these matters but at least some of the works sought had already been carried out by the time of the hearing on 12 October 2015 (the Rectification Claim); and 2. the claim for properly cleaning the mould in accordance with order 2 made on 18 August 2015 - par 3 in the Amended Claims (the Cleaning Claim).
The second ground of appeal involved the contention that the Tribunal erred by failing to give adequate reasons in relation to the Rent Reduction Claim, the Compensation Claims, the Rectification Claim and the Cleaning Claim.
The third ground of appeal was that there was a denial of procedural fairness because the Tribunal below failed properly to consider the evidence in relation to the Compensation Claims, the Rectification Claim and the Cleaning Claim.
From this summary of the grounds of appeal it can be seen that ground 3 may be viewed as a subset of ground 1. Both grounds involved in substance the contention that the Tribunal below did not consider, properly or at all, the evidence, and make the necessary findings in relation to, the Compensation Claims, the Rectification Claim and the Cleaning Claim. In addition, ground 1 raised the error that the Tribunal did not consider the evidence and make findings in relation to all aspects of the Hernadys' Rent Reduction Claim. Failure to consider the evidence and then determine claims legitimately made in proceedings amounts to a failure to exercise the jurisdiction of the Tribunal once that jurisdiction had been properly invoked.
Ground 2 focused upon the failure to give adequate reasons in relation to all the claims referred to in ground 1. It can be seen that the failure to give any or adequate reasons in relation to the claims provided the foundation for the contention that the evidence in relation to those claims was not considered and that material findings were not made.
A failure to make material findings required in order to determine a claim and a failure to give adequate reasons should, nonetheless, be seen as distinct. Basten JA held in Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [42]: A ground of failing to give "any or any proper reasons" is frequently used without sufficient attention to the precise nature of the complaint. As has been noted on numerous occasions, it is important to distinguish between the situation where a judge has made and recorded a finding, without explaining the basis for the finding, and one in which the true complaint is that no finding has been made: see Waterways Authority v Fitzgibbon [2005] HCA 57; 79 ALJR 1816 at [129]-[130] (Hayne J). If a particular finding is a necessary step in support of the court's orders, the failure to make the finding may constitute an actual failure to exercise the jurisdiction conferred on the court, despite the appearance of exercise. However, the complaint is then not properly one of a failure to give reasons, but of a failure to address and determine a necessary issue.
Having regard to these matters, the Appeal Panel believes that the substance of the grounds of appeal can appropriately be considered by determining: 1. whether the Tribunal below failed to give adequate reasons in relation to the Rent Reduction Claim, since that claim was identified and considered by the Tribunal and some findings in respect of it were made; and 2. whether the Tribunal below failed to exercise the jurisdiction of the Tribunal properly invoked by the Hernadys in respect of the Compensation Claims, the Rectification Claim and the Cleaning Claim.
It can be noted that a failure to give adequate reasons and a failure to exercise jurisdiction are both errors of law: Khan v Kang [2014] NSWCATAP 48 at [28]. Consequently, the Hernadys do not require leave to appeal in respect of the grounds of appeal upon which they rely.

Did the Tribunal fail to give adequate reasons in relation to the Rent Reduction Claim?

Parties' Submissions

In their submissions the Hernadys drew attention to the fact that they claimed a reduction in the rent of $215 per week for the period from 1 May 2015 until the mould problem was rectified. The Tribunal, however, only allowed a reduction for the six week period from 1 July 2015 to 14 August 2015 of $50 per week. There were no reasons given why that six week period was chosen. The reasons why the reduction was found to be $50 rather than the $215 per week claimed were short and non-specific. In these circumstances, it was submitted that the reasons for the decision on the Rent Reduction Claim were inadequate.
Ms Raccani's submissions focused upon the evidence that was before the Tribunal below. It was submitted on her behalf that the evidence showed that the landlady and her agent had responded in a timely manner to the complaints made by the Hernadys and that all of the issues had been properly addressed by the time of the hearing in the Tribunal below.

Consideration

The Tribunal below did make findings in respect of the claim for a rent reduction of $215 per week and these were as follows: 1. "[i]n about May [2015], [the Hernadys] complained to the landlord's agent about mould and its effect"; 2. "by the time the matter came on for hearing [on 12 October 2015] the landlord had addressed all of the original concerns of the tenants"; 3. "[a]s at the hearing date work had been done on the guttering, the shower leak had been fixed and a cleaner had attended to clean up the mould although it must be said that this was not to the complete satisfaction of Mrs Hearnady [sic]"; 4. "I think it is likely that wet weather together with a shower leak and damaged guttering at least contributed to the mould problem within the house"; 5. the "landlord should compensate the tenant for loss of amenity over a 6 week period from June 2015 [1 July 2015 to 14 August 2015]"; 6. the rent reduction should be $50 per week "as the tenants were able to use almost all of the rooms and facilities of the premises".
From order 1 made on 12 October 2015, which referred to the rent being "excessive in accordance with the Residential Tenancies Act, 2010", it appears that the Tribunal was exercising its power to order the payment of reduced rent under s 44(1)(b) of the RT Act. This was also the section of the RT Act expressly relied upon by the Hernadys in par 9 of the Amended Claims. No issue was raised on the appeal as to whether this was the appropriate section under which to proceed and the Appeal Panel was prepared to assume, for the purposes of this appeal and without deciding that issue, that the orders made on 12 October 2015 could have been made under that section.
In addition to the duty to give reasons for decision upon request by a party under s 62(2) of the Act, the Tribunal sitting in the Consumer and Commercial Division has a duty under the common law to give reasons for its decisions, as explained in Collins v Urban [2014] NSWCATAP 17 at [48] to [57]. Nonetheless, even if an obligation to give reasons for a decision exists, its discharge 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 (1987) 10 NSWLR 247 at 280.
The Appeal Panel is of the view that the Tribunal below did not in its reasons or in the decision set out the basis for concluding that the reduction in rent should be for the six week period from 1 July 2015 to 14 August 2015. The claim made by the Hernadys was for a reduction of rent for the period from 1 May 2015 until the mould problem had been addressed. The Tribunal below found that in about May the Hernadys had complained to the landlady's agent about the mould and that by the hearing on 12 October 2015 all of the original concerns of the tenants had been addressed. There was, however, no finding or reasoning which explained or justified why the period of 1 July 2015 to 14 August 2015 was the appropriate period during which the rent should be reduced. There was no articulation of the grounds upon which this aspect of the decision rested.
To this extent, the Appeal Panel would uphold the appeal against orders 1 and 2 made on 12 October 2015.
The other aspect of the Hernadys' appeal concerning the Rent Reduction Claim related to the allowance of a rent reduction of $50 rather than the $215 claimed. The Tribunal's findings in this regard included: "For me the chief issue was the extent to which the mould was a result of the state of the premises and failure of the landlord to act. Mould is a frequent complaint in tenancy matters and the common finding is that it is a lifestyle issue resulting from the use of the premises by the tenant. In this case the tenants conceded that they had all doors and windows closed at night but were mindful of the need for ventilation during the day. Miss Pike for the landlord said that on periodic inspection she had noted that all doors and windows were closed. … I think it is likely that wet weather together with a shower leak and damaged guttering at least contributed to the mould problem within the house. As a result I find that he [sic] landlord should compensate the tenant for loss of amenity over a 6 week period from June 2015. The rent reduction should be $50 per week as the tenants were able to use almost all of the rooms and facilities of the premises. …"
From these findings it is can be seen that the Tribunal below, in reaching its decision as to the amount of any rent reduction, took into account and based its decision on the causes of the mould, the extent to which the landlady or the tenants were responsible for those causes and the extent of the loss of amenity of the premises resulting from the presence of the mould. Assessing the extent to which rent is excessive because the presence of mould has reduced the amenities provided in residential premises is not an exact science. It is a matter of evaluative judgment. In a case such as the present, which was not, for example, a situation of an identifiable area of the whole premises not being available for use, the determination of the appropriate rent reduction was not susceptible of detailed arithmetic justification.
The Appeal Panel is of the view that the reasoning of the Tribunal in this regard can be seen as articulating, albeit shortly, the essential grounds upon which this aspect of the decision rests.
In considering the adequacy of the Tribunal's reasoning in determining the amount of the rent reduction, it is also appropriate for us to take into account the requirement in s 36(4) of the Act that the practice and procedure of the Tribunal, which in our view includes the giving of reasons for decisions, is to be implemented in such a way that the cost to the Tribunal, among others, is proportionate to the importance and complexity of the subject-matter of the proceedings and the fact that the preparation of reasons does involve a cost to the Tribunal. In the present case, these considerations support the conclusion that the reasons required to be given should not be overly elaborate and should deal with the relevant issues as concisely as possible. We believe this was achieved by the Member in this case.
In addition, we bear in mind the principles expounded in the authorities concerning the extent of reasons required to be given including the following: 1. 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]; 2. 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]; 3. 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].
In the light of these considerations and the nature and extent of the subject matter of the claim, in our opinion, although the reasons in support of the conclusion that the rent reduction should be $50 per week were neither long nor detailed, those reasons were adequate in the circumstances to discharge the relevant duty of the Tribunal. Accordingly, there has not been a failure to give adequate reasons for this aspect of the matter. For essentially the same reasons, we also conclude that there was no failure to make material findings in relation to the amount of the rent reduction.
We note that the reasoning and conclusion of the Tribunal below concerning the amount of the rent reduction was not challenged on any basis other than adequacy of reasons or failure to make material findings in this appeal.
For these reasons we propose to dismiss the appeal in so far as it challenges the conclusion that the rent reduction should be $50 per week.

Did the Tribunal fail to exercise its jurisdiction in respect of the Compensation Claims, the Rectification Claim and the Cleaning Claim?

Parties' Submissions

In their submissions the Hernadys drew attention to the claims in their original application and in the Amended Claims and the fact that they had led considerable evidence in relation to those claims. Their complaint was that the Tribunal did not, however, expressly deal with some of those claims or consider the evidence led. For these reasons, it was submitted that this aspect of the decision should be set aside
Ms Raccani's submissions once again focused upon the evidence which showed that the complaints made by the Hernadys had been responded to in a timely manner and that all of the issues had been properly addressed by the time of the hearing in the Tribunal below.

Consideration

A review of the orders made on 12 October 2015 and the reasons for decision given on 14 October 2015 indicates that the Compensation Claims, the Rectification Claim and the Cleaning Claim were not specifically referred to at all by the Tribunal below.
The reasons for decision refer to "an application by a tenant for various orders relating to the presence of mould" and to the fact that the Hernadys "sought a work order for various appliances and works suggested by the Dr Damp report". It was also noted in the reasons that "[a]t the hearing the parties were not able to reach agreement on the quantum of compensation". There were, however, no other references to the Compensation Claims, the Rectification Claim and the Cleaning Claim.
The Appeal Panel considers that a Member called upon to determine claims such as the Compensation Claims, the Rectification Claim and the Cleaning Claim would generally be required to do the following in order to exercise the jurisdiction of the Tribunal, assuming that it has been properly invoked: 1. Identify each relevant claim for relief and the statutory provision or common law principle supporting the claim; 2. Identify each of the relevant elements of the causes of action which must be satisfied in order to justify granting the relief sought; 3. Make material findings of fact and law in respect of each of those elements; 4. Explain what relief, if any, should be granted and why.
It may be the case that the fact that these steps have been taken can be seen to be implicit in the reasons and orders made and this will be sufficient. The reasons for decision and orders of the Tribunal below concerning the amount of the reduction in rent in respect of the Rent Reduction Claim in the present case are an example of where the findings, reasoning and wording of the orders, reflecting the wording of s 44 of the RT Act, are sufficient to establish that the jurisdiction of the Tribunal has been exercised in that regard.
It is always preferable, however, unless circumstances do not permit, for the steps outlined above to be explicitly addressed in the reasons for decision or the orders made. As we have made clear above, in doing so the reasons do not always have to be lengthy or detailed, especially if that would be neither necessary nor proportionate. Nonetheless, the orders and reasons must make it clear that the jurisdiction of the Tribunal, where it has been properly invoked, has been exercised.
In the present case, the Compensation Claims, the Rectification Claim and the Cleaning Claim were not identified by the Tribunal as claims for relief in the proceedings, the statutory bases for the claims were not referred to even though they had been explicitly identified in the Hernadys' Amended Claims, no findings of fact or law were made in respect of the claims and no orders, whether upholding or dismissing the claims, were made.
In these circumstances, the Appeal Panel can only conclude that the Tribunal below failed to address and determine the issues necessary to deal with each of the Compensation Claims, the Rectification Claim and the Cleaning Claim, to the extent that each of those claims was properly before the Tribunal at first instance. To this extent, the Tribunal failed to exercise the jurisdiction of the Tribunal under the RT Act which had been properly invoked by the Hernadys.
For this reason, the appeal relating to the Compensation Claims, the Rectification Claim and the Cleaning Claim should be upheld.

Other Grounds of Appeal

Since we have decided to allow the appeal in relation to the period of time during which the rent should be reduced and in relation to the Compensation Claims, the Rectification Claim and the Cleaning Claim, we do not need to consider any other grounds of appeal in relation to those claims.

Claims Not the Subject of this Appeal, Claims No Longer Relevant and Other Matters

As has been noted above, we did not understand the Hernadys to be challenging that aspect of the orders of 12 October 2015 which required Ms Raccani to pay $186.00 for the servicing of the air conditioner. We note that it was accepted that Ms Raccani had already paid that amount together with the $300 in respect of the reduced rent by the time of the hearing of this appeal.
As set out above, the Hernadys made claims for 20 different orders in the "Amended NCAT Orders - File No: RT15/47006". Not all of these claims were the subject of this appeal. The only claims identified in the grounds of appeal as being affected by the errors relied by the Hernadys were the Rent Reduction Claim, the Compensation Claims, the Rectification Claim and the Cleaning Claim and in relation even to some of those claims it does not appear to us that they were included in the Amended Claims.
In any event, as the Appeal Panel understands it, the Hernadys were no longer pressing a number of the claims made in the Amended Claims and this is probably explicable on the basis that they have been overtaken by events. Those claims no longer pressed appear to us to be the claims in pars 1, 2, 4, 5, 7, 13, 14, 18, 19 and 20 of the Amended Claims.
In addition, it also appears to the Appeal Panel that the Rectification Claim and the Cleaning Claim are no longer relevant as the Hernadys have vacated the property some time ago and their residential tenancy agreement with Ms Raccani has come to an end. These were the subject of pars 3, 6, 10, 11 and 17 in the Amended Claims, as the Appeal Panel understands it.
The Appeal Panel's conclusions on the appeal mean that it will be appropriate to remit part of the proceedings to the Consumer and Commercial Division. In doing so, however, we propose only to remit those claims which were the subject of the appeal and which remain relevant in the circumstances, namely: 1. the Rent Reduction Claim limited to the question of the period during which the rent should be reduced; 2. the Compensation Claims.
In case we have misunderstood the position concerning the continued relevance of the Rectification Claim and the Cleaning Claim we shall grant leave to the Hernadys, if they wish, to apply in the Consumer and Commercial Division for permission to raise those claims in the remitted proceedings and a Member of that Division can determine whether or not those claims should be permitted to be raised.
The Appeal Panel also notes that, in so far as the Hernadys are pressing claims under s 190(1) of the RT Act or certain other sections, cl 22 of the Residential Tenancies Regulation 2010 establishes certain time limits for making such claims. This decision of the Appeal Panel should not be taken as indicating that any of the Hernadys' claims were or were not made within the relevant period prescribed by cl 22. These are also issues that would have to be decided in the remitted proceedings.
Finally, we note that the Hernadys asserted that there was additional evidence, namely an insurance report, a home assessor's report and a hygienist's report, that was not before the Tribunal below and that was significant new evidence that was not reasonably available at the time of the hearing in the Tribunal below, for the purposes of cl 12(1)(c) of Sch 4 to the Act. It does not appear to the Appeal Panel that this type of material could properly be characterised as "not reasonably available" at the time of the original hearing. There was no explanation given as to why such reports could not have been obtained by the Hernadys simply by asking for them to be prepared prior to the hearing on 12 October 2015.

Conclusion

In summary, we have decided that: 1. The appeal so far as it related to the period during which the rent should be reduced is to be upheld. 2. The appeal so far as it related to the amount of the rent reduction, being $50 per week, is to be dismissed. 3. The appeal so far as it related to the Compensation Claims, the Rectification Claim and the Cleaning Claim is to be upheld, to the extent that those claims were properly before the Tribunal below.
Consequently, the orders disposing of this appeal should include an order that the orders made on 12 October 2015 should be set aside and orders to the following effect substituted: 1. That, having regard to the reduction or withdrawal of facilities provided with the residential premises the subject of these proceedings on account of dampness and mould, the rent payable under the residential tenancy agreement in respect of those premises was excessive and, from the date and for the period determined by the Consumer and Commercial Division on remittal of these proceedings, the rent for the premises must not exceed $380 (that is $50 less than the current rent payable under the residential tenancy agreement). 2. The proceedings are remitted to the Consumer and Commercial Division to determine: 1. in respect of the claim for a reduction of rent, the date from which and the period during which the rent should be reduced in accordance with the preceding order; 2. the Compensation Claims; 3. the Hernadys have leave, if they contend that the claims the subject of pars 3, 6, 10, 11 and 17 in the Amended Claims are still relevant, to apply in the Consumer and Commercial Division for permission to raise those claims in the remitted proceedings.
Having regard to the extensive evidence that was already before the Tribunal at first instance in this matter, the limited nature of the claims remitted for determination and the requirement in s 36(4) of the Act that the Tribunal implement its practice and procedure so as to facilitate the resolution of the issues between the parties 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, the Appeal Panel directs, as permitted by s 81(1)(e) of the Act, that the claims remitted to the Consumer and Commercial Division be reconsidered or determined without further evidence.

Orders

Consequently, the orders of the Appeal Panel are: 1. The appeal: 1. so far as it related to the period during which the rent should be reduced is upheld; 2. so far as it related to the amount of the rent reduction, being $50 per week, is dismissed; 3. so far as it related to the claims the subject of pars 6, 8, 10, 11, 12, 15, 16, 17 and 18 in the document headed "Amended NCAT Orders - File No: RT15/47006" filed in proceedings RT15/47006, is upheld. 1. The orders made on 12 October 2015 in proceedings RT15/47006 are set aside. 2. In place of the orders referred to in the preceding order 2, orders that: 1. having regard to the reduction or withdrawal of facilities provided with the residential premises the subject of proceedings RT15/47006 on account of dampness and mould, the rent payable under the residential tenancy agreement in respect of those premises was excessive and, from the date and for the period determined by the Consumer and Commercial Division on remittal of these proceedings, the rent for the premises must not exceed $380; 2. the amount (less $300) of any overpayment of rent paid by the appellants to the respondent because of the operation of preceding order 3(a) is to be paid by the respondent to the appellants within such time as the Tribunal hearing these proceedings on remitter determines; 3. the respondent is to pay to the appellants $186 in respect of servicing of the air conditioner. 1. Proceedings RT15/47006 are remitted in part to the Consumer and Commercial Division for the redetermination of: 1. the claim the subject of par 9 in the document headed "Amended NCAT Orders - File No: RT15/47006" filed in proceedings RT15/47006 for reduction of rent, but limited to the questions of the date from which and the period during which the rent should be reduced to $380 per week; 2. the claims the subject of pars 8, 12, 15, 16 and 18 in the document headed "Amended NCAT Orders - File No: RT15/47006"; 3. the claim for increased heating costs because the air conditioning could not be used for heating because of mould in the sum of $358.02 for the May quarter of 2015 and $332.05 for the August quarter of 2015, if the claim is found by the Consumer and Commercial Division to have been properly before the Tribunal at the hearing on 12 October 2015. 1. The appellants have leave, if they contend that the claims the subject of pars 3, 6, 10, 11 and 17 in the document headed "Amended NCAT Orders - File No: RT15/47006" are still relevant, to apply in the Consumer and Commercial Division for permission to pursue those claims in the remitted proceedings. 2. The claims remitted by these orders to the Consumer and Commercial Division are to be redetermined without further evidence, unless the Tribunal otherwise orders.
The Appeal Panel notes that the sum of $300 referred to in order 3(b) and the sum of $186 referred to in order 3(c) have already been paid by the respondent to the appellant and those sums are not required to be repaid by the appellants or paid again by the respondent.

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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 March 2016

Residential Tenancies Regulation 2010(NSW)

At a glance

Court

Decision date

Before

Source

Judgment (19 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (6)

Cited By (14)