Johnson v Wilson

NCAT Appeal Panel|2018-01-23|Before: Dr J

Background

This is an appeal from a decision made in the Consumer and Commercial Division of the Tribunal published on 2 November 2017 (which we will refer to as the Decision). The Decision arose out of a dispute between the appellants and respondent concerning obligations under a residential tenancy agreement. The appellants were the tenants and the respondent was the landlord. We will refer to the appellants as the tenants and to the respondent as the landlord.
The Decision records an order that the tenants are to pay to the landlord an amount of compensation of $2,195.00.
The tenants filed a Notice of Appeal by which they dispute two aspects of the Decision resulting in the order which is the subject of this appeal. It is helpful to summarise the relevant aspects of the Decision, so as to understand this appeal. That summary is as follows: 1. The tenants occupied residential premises pursuant to a residential tenancy agreement entered into with the landlord, and they vacated the premises in May 2017. The landlord brought a claim for compensation for damages in the amount of $29,480.15 in respect of damage allegedly caused by the tenants during the term of the residential tenancy; 2. The landlord amended her claim for compensation to the sum of $15,000.00 made up of 11 separate claims; 3. The Decision dealt with each of the claims and recorded the evidence tendered by the parties and considered by the Tribunal. That evidence included an ingoing condition report (dated 14 May 2013) and photographs taken at the time of the commencement of the tenancy and an outgoing inspection report (dated 1 May 2017) and photographs, recording the condition of the premises at the end of the tenancy; 4. In respect of the landlord's claim for compensation totalling $2,090.00 for damage to kitchen cabinetry, the Tribunal recorded that the landlord's claim constituted one half of the quote to resurface the kitchen doors and drawers to repair damage allegedly caused by the tenants. The Tribunal found that the ingoing condition report did not record damage to the doors and drawers in the kitchen, but that the outgoing report recorded scratches to panels and nails into cabinetry; 5. The Tribunal found that the scratches and chips were greater than would be expected for fair wear and tear, and the Tribunal concluded that the only inference the Tribunal could make was that the extent of the damage has been caused by the tenants' use of the premises. The Tribunal went on to say that the amount claimed should be discounted by 50% to take into account that the renovation will give to the landlord an improvement in quality of the painted surfaces and extend the economic life of the cabinetry. The Tribunal allowed the sum of $1,045.00 as compensation to the landlord; 6. With respect to the landlord's claim for compensation for the cost of painting doorframes and damaged walls, the Tribunal noted that the amount claimed was $1,900.00 being one half of the cost of painting the doors and damaged walls; 7. The Tribunal recorded its satisfaction that the damage to the paintwork on the doorjambs was caused by the tenants' use of the property. The Tribunal recorded that it was not satisfied that the landlord had proven that the damage to the walls was greater than fair wear and tear. In the absence of any separation of the cost of painting the doorjambs, doors and walls, the Tribunal discounted the claim by 50% to take into account that the repainting of the premises will give to the landlord an improvement in quality of the painted services and extend the economic life of the paintwork; 8. Accordingly, the Tribunal decided that the tenants should pay compensation in the amount of $950.00 as the tenants' contribution to the cost of rectification of the paintwork; 9. Another claim resulted in the Tribunal awarding $200.00 compensation to the landlord. That award is not appealed; and 10. The Tribunal made the order for the tenants to pay to the landlord the sum of $2,195.00.

Notice of Appeal

The tenants filed a Notice of Appeal on 16 November 2017. The grounds of appeal may be summarised as follows: 1. In respect of the kitchen cabinetry claim, the quotation which the landlord relied upon claiming $4,180.00 (reduced to $2,090.00) refers to "white satin finish" which constitutes replacement with a surface which is more modern and of vastly improved quality and value; 2. The landlord provided no evidence to substantiate the claim of damage and its extent beyond fair wear and tear. The discount of 50% does not fully or completely take into account the above factors and a 50% contribution by the tenants is beyond what can be reasonably justified; 3. In respect of the claim concerning painting doorframes and jambs, the tenants say that the evidence relied upon by the landlord, namely an email from Mins Painting Service, is not a sufficiently valid written quotation or invoice for work performed; 4. The specific statement regarding costs makes reference only to "walls" and makes no reference to "doorjambs"; 5. The extent to which the tenants are proportionately responsible was not reliably established because the actual scope and extent of patching and painting was not substantiated or given in evidence; 6. The landlord failed to establish that the claim of damage to the walls was greater than fair wear and tear. This was confirmed by the Decision [see par 72]; 7. The email from Mins Painting Service makes no statement regarding the cost of painting doorjambs and therefore there was no amount for the Member to consider; and 8. The tenants contended that without any evidence to substantiate the tenants' proportional contribution to damage, and the improvement in quality and value of the kitchen services, the landlord's claim should be further discounted by 50%, amounting to a total discount of 75%. Accordingly, the claim should be $522.50.

Reply to Appeal

The landlord has filed a Reply to Appeal opposing the tenants' appeal and submitting that the amounts awarded were too low. The landlord has not filed a cross appeal.

Submissions

The Tribunal made directions for the parties to exchange submissions in support of and in opposition to the appeal. The paragraphs below summarise those submissions.

Appellants' Submissions

In respect of the kitchen cabinetry claim, the tenants submitted that the scope and extent of the claim of damage beyond wear and tear has not been substantiated by the landlord or by the Tribunal. The tenants submitted it has been presumed by inference that they caused damage to the entire surface and not part of it. They contend that their contribution to "surface replacement" as a result of damage caused by them has been determined at 100% and therefore they have suffered a substantial miscarriage of justice. Only a small proportion of the panels comprising the kitchen was damaged beyond wear and tear and therefore, the most they should pay is an amount proportionate to the small proportion of damaged panels. They estimated the proportion at 5.7% of the total number of panels.
In respect of the painting claim, the tenants submitted that the email from Mins Painting Services does not constitute a "substantial written quotation or invoice of work performed" and nor is there any itemisation of the work performed. In any event, the landlord had already intended to undertake painting.
The tenants further contend that the email from Mins Painting Services states that the walls were patched and repainted and that there was no reference to any work performed on the doorjambs. Furthermore, the Tribunal did not state that the damage to the paintwork on the doorjambs was beyond wear and tear.

Respondent's Submissions

In respect of the kitchen cabinetry claim, the landlord states that she has claimed the entire resurfacing costs of the kitchen cabinetry incurred as a result of the tenants' damage. The quotation for such work amounted to $4,1080.00 but that amount was "depreciated" by 50% to reflect the age of the cabinetry, resulting in a claim against the tenants totalling $2,090.00.
The landlord contends that the whole cabinetry needed to be resurfaced and could not be patched or repaired. There was no evidence that the white satin finish was more expensive and the landlord's submission is that it would have been more expensive to use a metallic finish (the previous finish).
In respect of the landlord's compensation for the cost of painting, the landlord acknowledges that she had an intention to paint the premises at the end of the tenancy but the nature and extent of that work had to be extended when the damage allegedly left by the tenants was noticed.
The landlord referred to the statement from the painter and to the fact that that statement refers specifically to doors and doorjambs.

Hearing of the Appeal

At the hearing of the appeal, the parties were encouraged to resolve their differences by negotiation but were unable to do so.
Mr Johnson spoke for himself and the other tenant in support of the appeal. His essential submission concerning the kitchen cabinetry claim was that the scratches were minimal and the evidence led by the landlord was not sufficient to justify a conclusion that the tenants were responsible for damage. The amount awarded was excessive.
In respect of the painting claim, Mr Johnson submitted that the damage to the doorjambs was pre-existing. He was not able to produce evidence to that effect and indeed it was not a point raised in the Notice of Appeal or written submissions.
Ms Swadling, a real estate agent, represented the landlord. She disputed that the damage to the kitchen cabinetry was minimal and said that the evidence disclosed that a large number of panels (she counted 18) were damaged out of a total number of panels of between 28 to 35.
In respect of the painting claim, Ms Swadling referred to the email where the painter makes specific reference to the doorjambs. She also referred to the ingoing condition report which was amongst the landlord's written submissions and submitted that that report did not disclose any pre-existing damage.

Decision

At the conclusion of the appeal hearing, we indicated to the parties that we intended to make an order dismissing the appeal and would formally reserve our decision. We indicated we would provide a written statement of reasons. What follows is our written statement of reasons and the order we foreshadowed dismissing the appeal.
Appeals from decisions made in the Consumer and Commercial Division of the Tribunal are regulated by s 80 of the Civil and Administrative Tribunal Act 2013 (NCAT Act) and by cl 12 of Sch 4 of the NCAT Act. Section 80 states that an appeal may be made in the case of a decision which is not an interlocutory decision, as of right on any question of law or with the leave of the Appeal Panel on any other ground. Clause 12 limits the other grounds by stating the following: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied 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). Note. Under section 80 of this Act, a party to proceedings in which a Division decision that is an internally appealable decision is made may appeal against the decision on a question of law as of right. The leave of the Appeal Panel is required for an internal appeal on any other grounds. (2) Despite section 80 (2) (b) of this Act, an internal appeal against a Division decision may only be made on a question of law (as of right) and not on any other grounds (even with leave) if: (a) the appellant is a corporation and the appeal relates to a dispute in respect of which the Tribunal at first instance had jurisdiction because of the operation of Schedule 3 to the Credit (Commonwealth Powers) Act 2010, or (b) the appeal is an appeal against an order of the Tribunal for the termination of a tenancy under the Residential Tenancies Act 2010 and a warrant of possession has been executed in relation to that order.
In our opinion, the relevant parts of the Decision under appeal do not contain any question of law, or demonstrate that a substantial miscarriage of justice has occurred in the sense envisaged by cl 12 of the NCAT Act, subject to the qualification which we express later in these reasons. In our view, the tenants have not established that the Decision was not fair and equitable nor that the Decision was against the weight of evidence.
In respect of the kitchen cabinetry claim, the Tribunal found that the scratches and chips were greater than would be expected for fair wear and tear. The Tribunal found that the only inference that the Tribunal could make was that the extent of the damage was caused by the tenants' use of the premises. The tenants were not able to identify any question of law arising out of this process of reasoning and nor were they able to demonstrate that the Decision in this respect gave rise to a substantial miscarriage of justice. The point made by the tenants was that the evidence disclosed that the number of damaged panels was very small compared to the total area. However, the tenants did not adequately address the proposition that damage (even if over only a very small area) could not be remedied by patching, and that the only effective remedy was to repair all panels. The Tribunal discounted the landlord's claim by 50% in acknowledgment that the landlord was undertaking work which would improve the quality of the painted services and extend the economic life of the cabinetry.
In respect of the painting claim, the Tribunal found that the damage to the paintwork on the doorjambs was caused by the tenants' use of the property. In respect of the walls, the Tribunal was not so satisfied. The Tribunal then acknowledged that there was no separation of the cost of painting the doorjambs, doors and walls and therefore, a discount was required. That discount was also said to be in acknowledgment that the repainting would give to the landlord an improvement of the quality of the painted services and extend the economic life of the paintwork.
The landlord's representative referred us to an email from Mins, the painter dated 11 December 2017. That email postdates the hearing. In the absence of any explanation from the landlord as to why that evidence was not submitted to the Tribunal when the proceedings were heard in November, we think it would be unfair to the tenants to allow this fresh evidence to be considered. Notwithstanding our rejection of that email, we are of the view that there was evidence (referred to in par 70 of the Decision) which was sufficient to ground the finding that the damage to the paint work on the door jambs was "on the balance of probabilities caused by the tenants' use of the property" (par 72). The report the Tribunal appears to have relied upon refers to paint scratched off all the metal door frames, which we take to refer to the doorjambs. That email is from the painter and is dated 25 May 2017. The tenants submitted it should not be persuasive because it is not a quotation or invoice. In our view, the Tribunal was entitled to consider the email in support of the landlord's claim because it was a statement from the tradesman who performed the painting work for the landlord.
The guiding principle for assessing damages is that the award should put the party suffering loss in the same position that the party would have been in had the breach (here, the breach by the tenants) not occurred: see Yang v NSW Land and Housing Corporation [2016] NSWCATCD 37 as an example where this principle has been applied in the Tribunal. This involves making an award of damages which does not put the party in a better position. The relevant considerations were discussed in Tzaneros Investments Pty Limited v Walker Group Constructions Pty Limited [2016] NSWSC 50. This case, and many others, confirmed that the court or tribunal should discount the award of damages in appropriate cases. This is what the Tribunal has done in this case.
The tenants have not demonstrated that the Decision involves any error of law adverse to their position. Nor have the tenants demonstrated that they have suffered a substantial miscarriage of justice. In our view, the Tribunal had evidence sufficient to lead to the finding that the kitchen cabinetry needed replacement by reason of damage for which the tenants were responsible. There was no evidence that patching would have been appropriate. In respect of the painting claim, the Tribunal had evidence sufficient to find the presence of damage to the doorjambs for which the tenants have responsibility. The Tribunal was entitled on the evidence to discount the amount claimed to allow for both the absence of separation of the costs of painting the door jambs and the costs of the walls and also to make a discount in recognition of the landlord being in an improved or better position following the painting.
The tenants submitted that the level of the discount is not sufficient. In assessing damages, the courts have recognised that on some occasions precise evidence is not available but where it is not, the court must do the best it can (see JLW (Vic) Pty Ltd v Tsiloglou [1994] I VR 327). Here the Tribunal was satisfied that the landlord had suffered an actual loss. Although there may have been difficulties in establishing the actual loss in money, the law does not permit difficulties to estimating the loss in money to defeat the court or tribunal in providing the only remedy for breach of contract, an award of damages (see Fink v Fink [1946] HCA 54; (1946) 47 CLR 127 at 143). In our view, the Decision demonstrates that the Senior Member found that the landlord suffered actual loss and that the award was reflective of the principle that the amount awarded should provide as reasonably as the evidence permits compensation to the landlord for the loss suffered. Accordingly, we are of the view that the submissions of the tenants should be rejected.
In an earlier paragraph, we indicated that we had one qualification. That qualification is this: 1. The Decision discounts the landlord's claims by 50% in recognition that the landlord should not be compensated for an expense which will result in an improvement in the quality of the relevant surfaces and extend the economic life of those surfaces. However, the landlord's claim was already discounted by 50% of the amount actually incurred. In effect, the Tribunal has made a further discount on a discounted claim; 2. It is not clear whether the Tribunal's decision was based on the view that a 50% discount on a claim already discounted by 50% was appropriate or whether the Tribunal overlooked the fact that the landlord only sought 50% of the amount incurred; and 3. The landlord has not elected to appeal and their representative indicated during the appeal that they would be content for the orders currently made to remain in place.
In the above circumstances, where we have found that the tenants have not established that their appeal should succeed, the appropriate order to be made is one dismissing the appeal.
No other orders were sought.

Orders

The Appeal Panel makes the following order: 1. Appeal dismissed.

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 07 February 2018

At a glance

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Judgment (10 paragraphs)

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Cases Cited (4)