Jang v Vlotis

NCAT Consumer and Commercial|2021-06-21

Parties

The Applicant is the tenant of residential premises at XXX Regatta Road Canada Bay ("the rented premises"). For the sake of convenience the Applicant shall hereinafter be referred to as "the Tenant". The Tenant represented herself at the hearing with the assistance of a support person Zoe Paleologos.
The Respondents are the landlords of the rented premises. For the sake of convenience the Respondents shall hereinafter be referred to as "the Landlords". The Landlords were represented by their agent Denise Owen of Prestige Realty Group.

Application

In an application filed in the Tribunal on 8 March 2021 the Tenant requested orders for the Landlords to carry out repairs, compensation for breach of agreement and a rent reduction. Further the Tenant claimed that a notice of termination based on rent arrears issued during the moratorium period was retaliatory.
The Landlords' application for an order for termination and possession (File no RT21/18418) was dismissed. Accordingly the Tribunal is not required to determine if the Notice of Termination is retaliatory.
The Tenant's claim for repairs to the rented premises was resolved by mutual agreement. The Tribunal made orders by consent to give effect to that agreement.
The remaining issues concern the Tenant's claim for rent reduction and compensation. The Tribunal will turn to a consideration of those claims.

Background

The evidence establishes that Landlords and Tenant entered into a residential tenancy agreement in the usual form on 5 March 2018 ("the tenancy agreement"). The term of the agreement was for 52 weeks commencing on 5 March 2018 and ending on 4 March 2019. The weekly rent was $550.00. The premises consist of a house.
At the commencement of the tenancy, the agent and tenant conducted an ingoing inspection. An ingoing inspection report dated 2 March 2018 and photographs of the premises are in evidence. A copy of the ingoing inspection report was given to the tenant for comment. Both the Landlords' agent and the Tenant have signed the ingoing inspection report.
There is a dispute about when the Tenant returned the ingoing condition report. The copy of the report in the Landlords' bundle does not have any handwritten notations ("Landlords' Report"). The copy of the ingoing condition report tendered by the Tenant has numerous handwritten comments written in the space for "Tenant's Comments" (Tenant's Report").
There is a conflict between the parties about whether the Tenant returned the ingoing condition report with the handwritten comments to the Landlords' agent. Ms Owen denied ever receiving the Tenant's Report and submitted the document was only completed recently. She stated that a check of her records had failed to locate any copy of the Tenant's Report.
The Landlords rely on a statutory declaration from Rose Harb who was employed by the Landlords' agent as a property manager in or about March 2018. Ms Harb conducted the ingoing inspection and prepared the Landlords' Report on or about 2 March 2018. She provided a copy to the Tenant.
Ms Owen tendered a statutory declaration from Rose Harb dated 24 May 2021 in which she states: "I conducted the ingoing condition report on 02/03/2018 and Ms Eun Joo Ansia did not return the condition report with comments 7 days after moving in as advised to her when signing the lease and as per the tenancy act. The landlord and the tenant came to an agreement of giving the tenant three weeks free rent in return for painting the property. Afterwards we received photos from the tenant of the works completed. Ms Jang came into the office requesting more alterations and more free rent which the landlord approved for another three weeks free rent. All the comments that are written on the ingoing condition report given to you have been written recently and were not written when the tenant first moved into the property."
The rent ledger shows that on 5 March 2018 the Landlord gave the Tenant a rent free period of 3 weeks from 5 March 2018 to 26 March 2018.
On 6 April 2018 the Tenant received an additional 3 weeks free rent for painting for the period 27 March 2018 to16 April 2018.
There was a further adjustment to the ledger to take into account the 2 weeks rent paid by the Tenant at the commencement of the tenancy. In total the Tenant received 6 weeks rent free from the Landlord.
The Tenant gave sworn evidence regarding the ingoing inspection report. She stated that the handwritten comments on the Tenants' Report were made in March 2018. She referred to an email to the agent dated 26 April 2018 regarding the state of the rented premises. The Tenant requested more compensation from the Landlords for the work which she and her partner had done at the property.
In a statutory declaration made on 11 May 2021, the Tenant states at paragraph 4: I completed and returned the condition report and notified the landlord of numerous defects and repairs on 2 March 2018
The Tribunal has compared copies of the Landlords' Report and the Tenant's Report. There are obvious differences between the two documents.
For example a comparison of page 8 attached to the Landlord's Report and the Tenant's Report highlights the differences. The Landlord's Report notes that the "hot water tap is slightly leaking". The Tenant's Report has the word "downstairs" added at the end of the sentence.
The Landlord's Report only has the signature of Ms Jung. The Tenant's Report has the signature of both tenants.
The signature of the Landlord/Agent under the heading: "Signatures at the Start of the Tenancy" appears to be different on the Landlord's Report to that on the Tenant's Report.
The above comments are by way of observation only and for the purposes of determining the Tenant's claim for compensation it is unnecessary to make a finding as to which is the correct version of the ingoing inspection report. The Tribunal is not dealing in this case with a claim for compensation at the end of the tenancy where such a finding would be necessary to determine the claim.
The two reports assist in assessing the condition of the rented premises at the beginning of the tenancy. The Tenant asserts the Landlords were put on notice about the need to repair when she completed the Tenant's Report.
The Tenant seeks an order for compensation as a result of the Landlords' failure to repair the premises. In paragraph 2 of her submissions the Tenant lists the orders she requests from the Tribunal.
The Tenant seeks an order for repairs which has been dealt with by way of consent orders. The other orders sought are: 1. An order that the rent payable be paid to the Tribunal until the repair order is complied with (section 65(5) of the Residential Tenancies Act 2010 (NSW) ("the Act")); 2. An order as to the rent owed under the Agreement (section 188 (c) of the Act"); 3. An order that the rent payable is excessive (section 44(1)(a) of the Act); and 4. An order for compensation in the amount of $1,00.00 (section 187(1)(d) of the Act)

Legal Principles

The Act contains several provisions under which a tenant under a residential tenancy can make a claim against a landlord. The claim does not necessarily have to involve a breach of agreement and could be made on some other ground.
Section 44 of the Act provides: 44 TENANT'S REMEDIES FOR EXCESSIVE RENT (1) Excessive rent orders The Tribunal may, on the application of a tenant, make any of the following orders: (a) an order that a rent increase under an existing or proposed residential tenancy agreement is excessive and that, from a specified day, the rent for residential premises must not exceed a specified amount, (b) an order that rent payable under an existing or proposed residential tenancy agreement is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises and that, from a specified day, the rent for residential premises must not exceed a specified amount. (2) Time limit for excessive rent increase applications An application for an order that a rent increase is excessive must be made within the period prescribed by the regulations after notice of the increase is given. (3) Applications on withdrawal of goods or services A tenant may, before the end of a tenancy, make an application that the rent is excessive, having regard to the reduction or withdrawal of any goods, services or facilities provided with the residential premises, even if those goods, services or facilities were provided under a separate or a previous contract, agreement or arrangement. (4) Determination of excessive rent For the purposes of making an order under this section, the Tribunal may declare that amounts payable under a contract, agreement or arrangement under which goods, services or facilities are provided to the tenant are rent. (5) The Tribunal may have regard to the following in determining whether a rent increase or rent is excessive: (a) the general market level of rents for comparable premises in the locality or a similar locality, (b) the landlord's outgoings under the residential tenancy agreement or proposed agreement, (c) any fittings, appliances or other goods, services or facilities provided with the residential premises, (d) the state of repair of the residential premises, (e) the accommodation and amenities provided in the residential premises, (f) any work done to the residential premises by or on behalf of the tenant, (g) when the last increase occurred, (h) any other matter it considers relevant (other than the income of the tenant or the tenant's ability to afford the rent increase or rent). (6) Effect of excessive rent order An order by the Tribunal specifying a maximum amount of rent: (a) has effect for the period (of not more than 12 months) specified by the Tribunal, and (b) binds only the landlord and tenant under the residential tenancy agreement or proposed residential tenancy agreement under which the rent is payable. Note : A tenant under a social housing tenancy agreement may also apply for an order that rent is excessive if a rent rebate is cancelled (see section 141 (1)).
The landlord's general obligation to maintain the premises in a reasonable state of repair is set out in section 63 of the Act which provides: 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. (2) 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. (3) 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. (4) This section is a term of every residential tenancy agreement.
A breach of the obligation to provide and maintain the residential premises in a reasonable state of repair may constitute a breach of the residential tenancy agreement which would give rise to a claim for compensation.
The Tenant's claim must be considered by reference to both section 44 and 63 of the Act. There are different time limit considerations in bringing a claim under section 44 and section 63.
Section 190 (1) of the Act provides that any application to the Tribunal for a breach of a residential tenancy agreement must be made within the period prescribed by the regulations after the landlord or the tenant becomes aware of the breach.
Regulation 39 of the Residential Tenancies Regulations 2019 sets out the time limits for making applications to the Tribunal under the Act. Sub regulation 9 provides that for the purposes of section 190(1), the prescribed period is within 3 months after the applicant becomes aware of the breach.
In the case of section 44 of the Act, the tenant may before the end of the tenancy make an application that the rent is excessive having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises.
The types of orders which the Tribunal may make in dealing with applications under the Act are set out in section 187 of the Act.
In Annette Shailer v Camille Serisier [2016] NSWCATAP 131 the Appeal Panel considered whether the Tribunal could consider a claim under more than one provision of the Act where the legislation created an entitlement to bring a claim and the time limits which would apply. The Appeal Panel stated at [29] to [31]: 29 In circumstances where legislation creates an entitlement to bring an application before the Tribunal under more than one provision, it is sufficient for an applicant to establish an entitlement to relief under the terms of any one of those provisions, and for the Tribunal to grant such relief provided that such entitlement is established and is not otherwise unavailable by reason of any other provision of the legislation or for any other cause. Accordingly, it was appropriate for the Tribunal to consider this aspect of the claim under the provisions of section 44. 30 For the purpose of these proceedings, it is necessary to focus on the provisions of subsection (3). In general terms, it may be assumed that the factual circumstances as they pertain to these proceedings would constitute a reduction in the facilities provided within the residential premises, because of the inability to make full use of the bedroom area through the inconsiderable inconvenience caused by frequent leaking of rainwater, as described. Whilst the circumstances pertaining to a reduction in the facilities might also constitute a breach of the provisions of the lease, for reasons which we have given, it is not necessary to establish a breach when determining entitlement to bring a claim under section 44(3). In the circumstances, the time limit for making such a claim is that which is set out in the subsection itself, namely that the application to the Tribunal must be made before the end of the tenancy. 31 In circumstances where the claim was made by the appellant under section 44 of the Act, and was made within the time prescribed, it follows that the appellant is entitled to consideration of her claim by reference to the totality of the period during which there has been a reduction in the facilities provided, and that the Member was in error in determining otherwise.
The tenancy remains on foot. Accordingly it is the Tribunal's view that it is unnecessary to decide whether that part of the application seeking compensation for breach of agreement was made within the prescribed time as the application under section 44 is clearly within time.

Consideration of the Tenant's Claims for Rent Reduction and Compensation

In paragraphs 19 and 20 of her submissions the Tenant seeks a determination of the rent payable under the agreement. The Tribunal determined in proceedings RT21/18418 that the weekly rental was $385.00 from 30 April 2020 until 31 August 2020 and reverted to $550.00 after that date.
The rent reduced to $385 per week on 30 April 2020 by the Landlords due to the impact of COVID on the Tenant. In an email from the agent to the Tenant on 16 April 2020 the Landlords agreed to a rent reduction of 30% to 30 June 2020.
Subsequently the rent reduction was extended to the 31 August 2020. The Tribunal finds the weekly rent for the period from 30 April 2020 to 31 August 2020 was $385.00.
After 31 August 2020 the Tenant continued to pay rent at $385.00 and fell into arrears. The rent ledger shows that the Tenant continued to pay less than the full amount and the arrears accumulated at the rate of $165.00 per week.
The Tenant claims that the rent is excessive having regard to the reduction or withdrawal by the Landlords of goods services or facilities provided with the residential premises.
Any order specifying the maximum amount of rent is limited to a period of no more than 12 months (Section 44(6)(a) of the Act)
In determining whether rent is excessive the Tribunal has had regard to the matters listed in section 44(5) of the Act.

Porch Area

The Tenant seeks a rent reduction of $15 per week from 15 April 2020 to 15 April 2021. The Tenant says that she reported there was severe water damage to the front porch area and notified that Landlord's agent of the need for repairs on 15 April 2020, 8 July 2020 and 9 July 2020.
The Tenant says that the handyman attended the rented premises on numerous occasions to carry out repairs but they were not completed until April 2021.
The Tenant asserts that she entered and exited the property in the dark during the evening. She submits that she felt unsafe.
The Landlords have provided invoices for repairs to the rented premises. On 29 May 2020 Hurley & Hutchinson attended and carried out repairs to the lights and disconnected the front verandah lights. The tax invoice noted that the light was made safe.

Backstairs

The Tenant seeks a reduction of $25.00 per week for the period from 9 February 2020 to 26 October 2020. She alleges that the stairs were not structurally sound due to the presence of rotting wood.
The Tenant seeks a further rent reduction of $100.00 per week from 26 October 2020 to 9 February 2021 because of faulty front and back steps. The Tenant contends that she could not safely enter or exit her home because of the condition of the stairs.
The Tenant alleges she sustained injuries on 12 December 2020 and 4 January 2021 due to the state of the backstairs. She argues there was a failure by the Landlord to maintain the stairs in a proper state of repair.
The Tenant relies of emails sent to the Landlords' agent in June and July 2020, and January and February 2021 together with photos taken in March 2021.
The Landlord disputes the Tenant's claim. The Landlord has provided invoices from Mauro Farias dated 11 November 2020 ("the Farias invoice") for the repair of loose tiles on the stair access to the balcony and Capital Corp dated 16 March 2021 for the supply and construction of timber stairs and balustrade.

Bathroom Cabinet

The Tenant seeks a rent reduction of $10.00 per week from 26 October 2019 to 26 October 2020 for damage to the bathroom cabinet causing rot and mould.
The Farias invoice shows that the bathroom cabinet was replaced shortly after 16 July 2020.

Cracked Shower Screen and Faulty Shower Head

The Tenant seeks a rent reduction of $10.00 per week from 15 April 2020 to 15 April 2021 for the cracked shower screen and faulty shower head.
The evidence shows the cracked shower screen and faulty shower head have not been repaired or replaced.

Water Damage to Downstairs Room and Upstairs Bedrooms

The Tenant seeks a rent reduction of $40.00 per week from 15 April 2020 to 15 April 2021 for severe water damage to the downstairs room and the upstairs bedrooms.
The Tenant relies on emails to the agent sent in April and July 2020, and January 2021 in which she complained about the problems.
The Landlord has not submitted any evidence to confirm that this repair was completed. The Tenant's position is that this repair remains outstanding.

Gaps in Laundry Ceiling

The Tenant says that the Landlord has not adequately filled the gaps in the laundry ceiling which allows rats and birds to nest in the roof. The Tenant seeks a rent reduction of $20.00 per week from 8 July 2020 to 21 June 2021.
It isn't clear from the Farias invoice whether this work has been completed or remains outstanding. The Tenant says the repair remains unresolved.

Gap in Kitchen Pantry

The Tenant seeks a reduction of $10.00 per week from 8 July 2020 to 21 June 2021 for the gap in the kitchen pantry causing a cockroach infestation.
The Tenant claims the repair is outstanding.

Was the Rent Excessive?

Section 44(5) of the Act sets outs certain matters which the Tribunal may have regard to when determining whether the rent is excessive.
There is no evidence before the Tribunal from either party as to the general market level of rents of comparable premises in the locality or similar locality (section 44(5)(a)) or the landlord's outgoings under the residential tenancy agreement(section 44(5)(b)).
The Tribunal has noted the fittings, appliances and other goods and services provided with the premises from the ingoing inspection report. The rented premises had no appliances other than a stove.
The Tenant argues that the rent should be reduced because of the state of the rented premises. That argument is persuasive and compelling.
The Tribunal is satisfied that the Landlord failed to maintain and repair the rented premises in accordance with his obligations under the tenancy agreement which resulted in a reduction or withdrawal of goods services or facilities provided with the premises.
There is no doubt that at the commencement of the tenancy the rented premises required maintenance. The Landlords gave the Tenant a rent free period in exchange for her and her partner painting the rented premises and undertaking repairs.
During the course of the tenancy the condition of the rented premises deteriorated and the Tenant asked the Landlords to carry out repairs. The invoices show that the Landlords expended a considerable amount on repairs. However in my view the repairs were often delayed and not done within a reasonable time frame.
There has been no increase in the rent during the period of the tenancy. The rent for the residential premises was $550.00 at the beginning of the tenancy and has remained at that figure except for the reduction to $385.00 from 30 April 2020 to 31 August 2020. The current rent is $550.00 per week.
Section 44(5)(h) provides that the Tribunal may have regard to "any other matter it considers relevant…"
The Tribunal considers that any rent reductions given by the Landlords during the course of the tenancy to be a relevant consideration in determining whether the rent is excessive.
The Application to the Tribunal seeking orders for rent reduction was filed on 8 March 2021. The Tenant confirmed at the hearing on 30 March 2021 that she would be seeking a rent reduction under sections 44(1)(b) and 45 of the Act to $385.00 for a period of 12 months.
In assessing the Tenant's claim for rent reduction the Tribunal has considered each of the items and the amount of the rent reduction sought by the Tenant. Rather than give a specific rent reduction in isolation for each item, the Tribunal considers it appropriate in the circumstances of the case to adopt a global approach.
The Tribunal has looked at the totality of the claims and taken into account the considerations referred to in section 44(5) of the Act.
The Tenant's complaints relate to the state of the rented premises and the Landlords' alleged failure to maintain the premises.
In Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 the Appeal Panel stated at [123]-[124]: 123 In Eliezer v Residential Tribunal and Ors [2001] NSWSC 1092 McClellan J considered what constituted goods, services and facilities in respect of a similar provision in the Residential Tenancies Act, 1987. His Honour said at [37]: With respect to s 47, I agree with the construction of the Residential Tribunal of the words "goods, services or facilities provided". In my opinion, s 47(1) is confined to the physical and other facilities, goods or services, provided within, or as part of, the tenanted property, and only if the landlord reduces or withdraws those facilities does an obligation arise. In circumstances where there has been a reduction in the quality of the amenity to be enjoyed in the tenanted premises by the actions of a third party, a complete stranger to the tenanted property, no breach of s 47(1) can occur. 124 As to what constitutes a reduction, in our view this means the goods, services or facilities are of a qualitative or quantitative standard which is less than what a landlord is required to provide under a residential tenancy agreement. On the other hand, a withdrawal suggests there must be a removal or inability to use the particular goods, services or facilities. That is, the goods services or facilities or part of them are no longer available to a tenant.
When the various items complained about are viewed cumulatively, the Tribunal finds that there was a significant adverse impact on the Tenant's ordinary use and enjoyment of the rented premises. It does not matter that the Tenant did not vacate the property.
The Tenant outlined in her evidence the severe disruption to her use and enjoyment of the premises caused by the Landlords' failure to repair the defects. The fact that the Tenant continued to reside in the rented premises does not mean there has been no reduction in the rent.
What must be evaluated is if and when the defects were repaired, and what, if any, effect there has been on the ordinary use of the premises and whether by their conduct the Landlords has substantially interfered with the Tenant's quiet enjoyment.
The adverse impacts are obvious. The Tenant was denied the opportunity to fully realise the benefits of the rented premises. The Landlords were on notice about the need for repairs but in my opinion failed to act within a reasonable time to have them done once notified by the Tenant.
In Roberts the Appeal Panel recognised at [63] that where the landlord has notice or ought reasonably be aware of the need for repairs but fails to act with reasonable diligence to have the repair carried out, an act or omission by the landlord giving rise to the state of disrepair can amount to a reduction or withdrawal of goods, services or facilities.
The Tribunal has power to reduce the rent but as noted earlier such order is limited to a period of 12 months.
The Tribunal is satisfied there was a reduction of goods, services or facilities in the residential premises by the Landlords for at least the 12 months period prior to the filing of the application prior to the amendment of the application on 30 March 2021.
The evidence shows that in respect of some repairs the Tenant complained as far back as March 2018. However the majority of requests were made in the period from 15 April 2020 to 24 March 2021.
The Tribunal is satisfied that whilst the Landlords did some repairs within a reasonable time, there were others which were either partly completed or not done at all. At the date of the hearing there were repairs which were outstanding and were the subject of the work order which was made by consent previously in the proceedings.
The rent for the premises from 5 March 2018 to the present has remained at $550.00 per week except for the rent reduction to $385.00 per week from 30 April 2020 to 31 August 2020.
There was no submission that $550.00 per week was not the market rent for the premises. Neither party argued that the weekly rent did not reflect the market rent for the premises. In the absence of evidence to the contrary, the Tribunal finds the market rent was $550.00 per week.
The Tenant has sought specific amounts for each item that has not been repaired by the Landlords. The Tribunal has adopted an averaging approach in dealing with the claim given the number of items, the amount sought in respect of each item and period of the requested rent reduction. The Tribunal has considered the items cumulatively.
The Tenant has justified the amount sought by reference to the "Table of Comparative Verdicts" set out in Anforth & Ors Residential Tenancies, Law and Practice, NSW, 6th ed, The Federation Press, Sydney pages 375-397.
There is always a difficulty in estimating an appropriate amount of rent reduction. The Tribunal must do the best it can on the available evidence.
In my view the appropriate amount to allow for the rent reduction is $100.00 per week for a period of 12 months subject to a partial offset for the period from 30 April 2020 to 31 August 2020 when the Tenant was already receiving a rent reduction of $165.00 per week. The Tribunal orders that the rent shall not exceed the sum of $450.00 per week from 30 March 2020 to 29 March 2021.
The Tribunal calculates that from 30 April 2020 to 31 August 2020 is a period of 124 days. Excluding that period, the rent reduces to $450.00 per week from 30 March 2020 to 29 April 2020 and from 1 September 2020 to 29 March 2021. The rent for the period from 30 April 2020 to 31 August 2020 ("the exclusion period") was already below $450.00 per week.
The Tribunal calculates the total amount of rent reduction less the exclusion period to be $3,443.89 being 241 days x $14.29 per day. Such amount is to by way of a credit on the Tenant's rent ledger to offset arrears of rent (if any) the Tenant may owe the Landlords.
The Tribunal has taken into consideration the matters referred to section 44(5) and has regard to the following facts: 1. The rental for the rented premises was $550.00 per week; 2. The Landlords gave the Tenant a rent reduction of $165.00 per week which reduced the weekly rent to $385.00; 3. The rent has not increased for more than 3 years and has remained at no more than $550.00 since March 2018; 4. The Landlords have spent a considerable sum during the tenancy on repairs; 5. The condition of the premises at the commencement of the tenancy as noted in the ingoing inspection reports; 6. The Tenant has continued to reside in the premises despite their condition and the fixed term having ended.
The Tenant seeks an order for $1000.00 compensation pursuant to section 187(1)(d) of the Act on the basis that the Landlords have breached her right to quiet enjoyment.
The Tribunal has considered the Tenant's claim and is not satisfied on the evidence that the Tenant has proved her case on the balance of probabilities. The Tenant has received a substantial rent reduction which of itself is suitable compensation for the alleged breaches of the tenancy agreement. The Tribunal dismisses that claim.
The Tribunal declines to make an order or the rent to be paid into the Tribunal pursuant to section 65(1)(a) of the Act. The Tribunal is mindful of the hardship to the Landlords if such an order was made. Further the Landlords will require funds to carry out the repairs to the rented premises which were the subject of previous orders. In the circumstances it is not appropriate to make the order sought.

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: 27 September 2021

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Judgment (14 paragraphs)

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