Hunter v Compass Housing Services Co Limited

the law

Section 187(1)(d) of the RT Act says that the Tribunal may make an order for compensation. However, in order to do so, in the circumstances of this case, the tenant must establish on the balance of probabilities and with evidence, that the landlord breached a term of the RTA causing her damage and loss for which she is entitled to be compensated. That is, the tenant must first establish a breach of an obligation by the landlord, and once that is proved, to then prove the damage and loss that is a consequence of the breach.
Section 190 of the RT Act gives the Tribunal jurisdiction to determine disputes involving an alleged breach of a RTA by a tenant or landlord. Such claims may be made to the Tribunal during or after the end of an RTA and whether or not a termination notice has been given or a termination order made. However, such a claim must be made within the required time period, which is 3 months from the date the party asserting the breach becomes aware of it (unless time is extended pursuant to section 41 of the NCAT Act) (Regulation 22(9) of the Residential Tenancies Regulation 2010), and the claim is limited by the prescribed amount of the Tribunal's monetary jurisdiction.
In the present matter it does not appear that there is any issue in relation to the limitation period because the breach alleged appears to be an ongoing breach by the landlord.
Further or in the alternative, to the extent that any extension of time is required the Tribunal would be minded to grant an extension of time for the filing of this application under s 41 of the NCAT Act upon application of the principles in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22.
In order for the Tribunal to award compensation for damage and loss based on breach of a contract, such as an RTA, the applicant must prove that the loss claimed results from the usual course of events, or arises naturally from, such a breach, or that it was in the reasonable contemplation of the parties at the time the contract was made that such a loss would be incurred if the contract was breached in the manner alleged (in other words, the loss must have been foreseeable) see: Hadley v Baxendale [1854] Eng R 296; (1854) 9 Ex ch 341.
In this matter the tenant must prove that the landlord breached section 63 and or s 62 of the RT Act.
Section 63 of the RT Act sets out the general obligations of landlords in relation to residential premises. Section 63 is also a term of every RTA by virtue of section 63(3) of the RT Act. It relevantly states: 63 Landlord's general obligation (1) A landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. …
Section 62 of the RT Act defines urgent repairs. It says relevantly: urgent repairs means any work needed to repair any one or more of the following - ……………………… (d) a serious roof leak, ……………………… (h) serious storm or fire damage, (i) a failure or breakdown of the gas, electricity or water supply to the residential premises, ………………………… (k) any fault or damage that causes the residential premises to be unsafe or insecure, (l) any other damage prescribed by the regulations, but does not include work needed to repair premises that are owned by a person other than the landlord or a person having superior title (such as a head landlord) to the landlord.
Section 63 of the RT Act is relevant in this case because the landlords contend that they did not breach the RTA; that they acted appropriately to fulfil their obligations to maintain the premises in a reasonable state of repair upon being notified of the water ingress and mould growth. Further, that it was a builder's warranty matter and that therefore they were unable to do any works until the builder returned to rectify the works under warranty. If there was no breach of the RTA, any claim for compensation based upon such an alleged breach must fail. This will require the Tribunal to consider the interaction and distinctions to be drawn between sections 63 and 62 of the RT Act.

consideration

The tenant claims to have suffered loss as a result of the landlord's failure to keep the premises in a reasonable state of repair due to the water ingress and mould issue. In this regard in the present matter the tenant is claiming compensation being for loss of enjoyment in her use of the premises, inconvenience and disappointment. The tenant acknowledges that she has already been paid an amount of rent abatement for her loss of use of the premises. However, the tenant contends that this amount did not contemplate her damages for non-economic loss.
Section 63(1) of the RT Act says that a landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. This provision is an implied term of every tenancy agreement pursuant to s 63(4) of the RT Act.
The obligation of the landlord to repair arises after the landlord has been put on notice of the need to repair. Once notice is received by the landlord a breach of s 63 will only occur where the landlord fails to carry out any necessary repairs within a reasonable time.
Section 63 of the Residential Tenancies Act 2010, states: Landlord's general obligation i. A landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. ii. A landlord's obligation to provide and maintain the residential premises in a reasonable state of repair applies even though the tenant had notice of the state of disrepair before entering into occupation of the residential premises. iii. A landlord is not in breach of the obligation to provide and maintain the residential premises in a reasonable state of repair if the state of disrepair is caused by the tenant's breach of this Part. vi. This section is a term of every residential tenancy agreement.
As noted in Residential Tenancies Law and Practice New South Wales, 6th Edition by Allan Anforth, Peter Christenson and Sophie Bentwood ("Anforth") at [2.63.4] "The landlord has actual or imputed notice of all defects which exist at the commencement of the lease and are detectable by reasonable non-technical inspection".
Further "The landlord can acquire notice either through the tenant providing it or from any other means, including for example from the landlord's own periodic inspections. If the landlord acquires notice of the defects other than via the tenant, the duty of repair arises whether or not the tenant requests the repairs (Weeks v Bond [1997] QCA 349) and irrespective of whether the tenant is even aware of the defect".
Relevant principles have been discussed in many decisions of the Tribunal, including Bannister v Cheung [2014] NSWCATCD 105 and Fuller v NSW Land and Housing Corporation [2013] NSWCTTT 648.
It did not appear to be in dispute that there was water ingress mould in the premises. What appeared to be in dispute between the parties whether there had in fact been a failure by the landlord to attend to the water ingress and mould issue.
The landlord said that the premises was "brand new" when the tenant moved it. The landlord acknowledged the water ingress issues due to a building defect and said that they were unable to rectify this due to it being a builder's warranty issue. There were delays in getting the builder back to fix the issue under that warranty.
The situation appears similar to when issues arise with the failure of a strata corporation to conduct repairs. In that regard the law is well settled. For example, in Reiss v Helson [2001] NSWSC 486, Master Harrison upheld a decision of the Tribunal to the effect that inaction by an owners' corporation is no defence to a claim against a landlord for failure to repair. (See also Ellington v Evens (2009), and Reiss and Olsen v Massey (2010)).
Similarly, in the present matter the Tribunal considers that inaction by the builder is no defence to the claim against the landlord for a failure to repair the premises.
The facts of this matter clearly demonstrate a failure to repair by the landlord causing water ingress and mould. Further it appears that the required repairs appear to fit the definition of "urgent repairs" under s 62(d) being a "serious roof leak".
The Tribunal is satisfied therefore of a breach of s 63 by the landlord.
The Tribunal finds that, as a result of the landlords' breach of the residential tenancy agreement, namely, failing to keep the premises in reasonable repair, the tenant suffered loss and damage. Having found this breach the Tribunal then needs to determine what, if any compensation may be awarded.
Section 187 of the Act provides that the Tribunal may, on application by a landlord or a tenant, make an order for compensation to be paid for any breach of a residential tenancy agreement.
The Tribunal is satisfied that the tenant mitigated her losses. In that, she made constant attempts to contact the landlord, and followed up the status of repairs to the premises.
The application in this matter is in relation to compensation for loss of enjoyment, inconvenience and distress in the tenant's use of the premises. The tenant has already accepted an amount from the respondent by way of a rent reduction / abatement for her loss of use of the premises.
As noted in the matter of Hyndes v Maddak Pty Ltd [2021] NSWCATAP 302 at [45] to [47]: [45] The claim for reduction of rent is a different claim to a claim for breach of the covenant for quiet enjoyment, although they may overlap and although both claims may succeed. As Basten J said in Makowska at [43], the description "a reduction or withdrawal of a facility" used in s 44 is: "… language which does not necessarily involve loss of quiet enjoyment of the premises." [46] That the claims are not mutually exclusive was the holding in Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 at [86] in a passage cited with approval by Basten J in Makowska at [46]. [47] In Roberts at [86] the Appeal Panel said: "86. That is not to suggest that a claim for damages for loss of quiet enjoyment and an order for the reduction of rent are mutually exclusive forms of relief. Depending on the claims made, there may be facts common to both types of claim which would need to be taken into account in order to avoid double compensation. For example if the premises (or part thereof) cannot be used in the manner intended or its use is in some way impaired by reason of a landlord's breach, it may be inappropriate to both reduce the rent and make an award of damages for loss of use."
In the present matter the Tribunal considers that it is able to make an award of compensation for loss of enjoyment, disappointment and distress as this is a different claim to that of a rent reduction. In this regard the Tribunal is not being asked to make any order for a rent reduction or abatement as the parties had already been able to agree this issue between themselves.
The Tribunal considers that the tenant is entitled to an amount of compensation representing the loss of enjoyment of the premises and her distress caused by the water ingress and mould issues.
This loss is recoverable as the RTA is contract for enjoyment pleasure and relaxation and therefore falls under the exception to the general rule that damages for distress and disappointment are not recoverable see: Baltic Shipping Co v Dillon [1993] HCA 4.
The Tribunal also accepts that distress, disappointment, and anxiety do not constitute a personal injury for the purposes of the Civil Liability Act 2002 (NSW) (CLA) and s 16 of the CLA does not apply see: Moore v Scenic Tours Pty Ltd [2020] HCA 17.
In the matter of Hartland and Panuccio v Bergmark (2010) an amount of $1500 was awarded for non-economic loss for water leaks into the property causing mould to develop over a period of six months. In the matter of Cooley v Department of Housing (2003) an amount of $3000 was awarded for distress due to water penetrating the premises over a period of some 12 months.
In the matter of Fretin and Sun v Robinson (2005) the Tribunal awarded an amount of $2000 in non-economic loss for the inconvenience and stress to tenants caused by the unit flooding when a water heater fell from the wall.
Based on the above, in the present matter the Tribunal is satisfied that it should make an award of $2000 for the loss of enjoyment, distress, inconvenience and disappointment suffered by the applicant in her use of the premises as a result of the landlord's failure to repair.

At a glance

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Judgment (9 paragraphs)

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Legislation Cited (3)

Cases Cited (8)