Johnston v NSW Land and Housing Corporation

The Tribunal's reasons

1. The Tribunal Member identified that in her application Ms Johnston sought: 1. an order under s 65(1) of the RTA that the landlord carry out repairs; 2. an order under s 44(1)(b) of the RTA for a rent reduction of 30% from 4 June 2023 to 3 June 2024; and 3. compensation in the amount of $3,000 under s 187(1) of the RTA.
2. Consent orders were made in relation to repairs and the Member was therefore not required to deal further with that issue. The Member noted that the other issues related to: 1. Ms Johnston's claim that the orders made by the Tribunal in November 2022 with respect to the courtyard had not been carried out satisfactorily as sand, which had been used to fill gaps in the pavers instead of cement, had washed away leading again to an uneven surface; and 2. a leaking roof leading to water ingress in the laundry.
3. In respect of the courtyard the Member accepted that the issue of uneven pavers returned at some point following the initial repairs. She referred to an email sent on 27 July 2023 by a tenant advocate on behalf of Ms Johnston to a client services officer notifying that the issue with the pavers had returned. She also referred to a follow up email sent to the officer by the advocate on 16 August 2023. The Member then stated at [9]: The tenant advocate and the tenant, would presumably be aware that this is not the correct procedure to request repairs and/or maintenance be undertaken by the landlord, being NSW Land and Housing.
4. At [21] the Member stated she was not satisfied that the landlord was properly made aware that the paver issue had returned prior to being served with Ms Johnston's application to the Tribunal. The Member did not consider the tenant advocate emailing the client services officer's direct email sufficient in the circumstances, "especially when a clear process of requesting repairs and maintenance is prescribed by the respondent, who undoubtedly deals with thousands of such requests". The Member found that Ms Johnston's application to the Tribunal was received by the landlord on 15 December 2023 and as a result there could only be a possible breach of the landlord's obligation in s 63 of the RTA with respect to repairs from that date. As the landlord contacted Ms Johnston on 19 December 2024 and began to make arrangements to inspect the paving, she found there was no breach by the landlord and compensation was therefore not payable.
5. The Member also found that a rent reduction (which does not require a breach be found) could not be awarded under s 44 of the RTA in respect of the pavers prior to 15 December 2024 as a tenant is required to properly notify the landlord of the issue in an attempt to mitigate the tenant's loss.
6. In relation to water ingress to the laundry, the Member found that the landlord's action in carrying out repairs when the issue first occurred at the end of November 2023 was reasonable and thus there was no breach by the landlord of its obligations under the RTA. In relation to the second occurrence on 24 December 2023 when water began leaking through the light fitting in the laundry, the Member found that the issue was not resolved until 20 February 2024. The Member found that the delay was unreasonable and constituted a breach of both s 63(1) and s 52 of the RTA from 13 January 2024 onwards, which date she considered was a reasonable timeframe for the repairs to have been carried out.
7. The Tribunal Member awarded a rent reduction of 10% for the periods 29 November 2023 to 20 December 2023 and 24 December 2023 to 20 February 2023 in respect of the laundry as Ms Johnston had limited use of the laundry. She also awarded Ms Johnston a rent reduction of 20% in relation to the courtyard from 15 December 2023 until works which had been ordered on 5 February 2024 at an earlier hearing were completed or 28 November 2024, whichever occurred first.
8. Ms Johnston's claim for compensation was only considered in relation to the landlord's failure to repair and maintain the property following the second water ingress occurrence when water came through the light fitting in the laundry as the Member had found no breach by the landlord in relation to the pavers or the first water ingress. The Member noted that Ms Johnston had claimed compensation for "stress, anxiety, disappointment and inconvenience". The Member ordered Ms Johnston be paid $500 compensation for non-economic loss for the inconvenience and disappointment of the landlord failing to attend to the laundry repairs in a reasonable time. She excluded "personal injury" components, being stress and anxiety.

The appeal

1. Section 80(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) provides that an internal appeal from a decision of the kind in this appeal can be made as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds.
2. In Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 at [24]-[40], the Appeal Panel set out the principles concerning questions of law within s 80 of the NCAT Act. An appellant is required to identify a pure question of law which then becomes the subject matter of the appeal: Wilson v Chan & Naylor Parramatta Pty Ltd atf Chan 7 Naylor Paramatta Trust [2020] NSWCA 62 at [4] and [11]; Orr v Hunter Quarries Pty Ltd [2022] NSWCCA 39 at [12] and [14] summarising Orr v Cobar Management Pty Ltd [2020] NSWCCA 220. The question of law should be articulated with precision: Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378 at [22], Kudrynski v Orange City Council [2024] NSWCA 33 at [48], Wollondilly Shire Council v Styles [2024] NSWCATAP 104 at [28].
3. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
4. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel set out the principles applicable when considering whether leave should be granted.
5. Ms Johnston identifies the following as her grounds of appeal: 1. The Tribunal erred in law when it limited the compensation awarded to the appellant to exclude feelings of stress and anxiety as they were forms of personal injury falling for assessment under the Civil Liability Act 2002. 2. The Tribunal erred when it held that the respondent could only be put on notice of a need for repairs to the premises by following the procedures specified by the respondent for that purpose. It further erred in law by finding the respondent could only be in breach of its repair obligations under the RTA from 15 December 2023 onwards.
6. The first ground as pleaded alleges that the Tribunal either misunderstood its jurisdiction or did not apply the relevant law. We are satisfied that this ground raises an error on a question of law, such that leave to appeal is not required. The second ground also appears to also raise a question as to whether the Tribunal applied the relevant law. As argued, it also raises a question as to whether there was no evidence to support the Tribunal's finding that notice was required to be given in a particular way. This would also raise a question of law. In relation to this ground of appeal, in addition to alleging error on a question of law, Ms Johnston argues that the decision was against the weight of the evidence.
7. Ms Johnston also seeks leave to appeal on the basis that the decision was not fair and equitable, although the submissions suggest that this ground relates to ground 1 above.

Consideration

1. We will deal with Ms Johnston's grounds of appeal in order as submitted.

Ground 1 - compensation

1. The first issue to be determined is whether the Tribunal erred in excluding any consideration of "stress and anxiety" when determining whether compensation was payable to Ms Johnston. We note that compensation was only considered in relation to the second water ingress occurrence as the Tribunal had found no breach by the landlord of its obligations in relation to the courtyard pavers and the first water ingress occurrence.
2. The Tribunal found that in relation to the second water ingress occurrence that the landlord was in breach of its obligations in s 63(1) and 52 of the RTA. Section 63(1) provides 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. Section 52 refers to the general obligations of a landlord to provide the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant. Having then determined that the rent should be reduced for a certain period arising out of the breach by the landlord of its obligations, the Tribunal went on to determine whether compensation was payable to the tenant in accordance with the Tribunal's powers in s 187(1)(d) of the RTA.
3. Section 50 of the RTA provides for a tenant's entitlement to quiet enjoyment of the premises. In her submissions to the Tribunal Ms Johnston submitted that the landlord had breached her right to quiet enjoyment of the residential premises, causing her "distress, disappointment, anxiety and embarrassment" for which she ought to be adequately compensated. Elsewhere in the bundle of documents provided for the hearing Ms Johnston stated she was seeking compensation for "stress, anxiety, disappointment and inconvenience". Ms Johnston's submissions to the Tribunal referred to the Civil Liability Act 2001 which would preclude an award under the RTA for non-economic loss for personal injury unless a certain threshold was met. The submissions also referred to Baltic Shipping Co v Dillon (1993) 176 CLR 344 and Moore v Scenic Tours Pty Ltd [2020] HCA 17; 268 CLR 326. In this appeal Ms Johnston submits that the Tribunal in not having regard to these cases misdirected itself as to the applicable law as feelings of stress and anxiety arising from a breach of quiet enjoyment are not forms of personal injury falling for assessment under the Civil Liability Act. As noted above, the Tribunal excluded any consideration of stress and anxiety on the basis that these were "personal injury components" of the claim.
4. The landlord argues on appeal that the damages claimed by Ms Johnston for stress and anxiety flow from a psychiatric injury, being a physical or mental condition, which falls within the definition of personal injury within the Civil Liability Act and not from any breach of contract. It is further submitted that no evidence has been provided to support the contention that Ms Johnston's feelings of stress and anxiety flowed directly from the breach.
5. In Baltic Shipping the High Court held that disappointment and distress caused by a breach of a contract for pleasure or relaxation is a compensable head of loss which is separate to any damages for personal injury. In Moore v Scenic Tours the High Court referred to Baltic Shipping and to Spigelman CJ in New South Wales v Ibbett (2005) 65 NSWLR 168 at 172 where he stated: The concept of 'personal injury' ... has rarely, if ever, been used to refer to harm to reputation, deprivation of liberty, or to injured feelings such as outrage, humiliation, indignity and insult or to mental suffering, such as grief, anxiety and distress, not involving a recognised psychological condition. (See, for example, Baltic Shipping Co v Dillon [1993] HCA 4; (1993) 176 CLR 344 at 359-363.)
6. In Makowska v St George Community Housing Ltd [2021] NSWSC 287 at [26] the Supreme Court held that the Appeal Panel, with reference to Moore v Scenic Tours, was correct in accepting that a claim under the RTA for compensation for loss of quiet enjoyment of the premises, and for inconvenience, did not constitute a claim for personal injury damages and did not fall within the definition of non-economic loss in the Civil Liability Act.
7. In this matter Ms Johnston made no claim that she had suffered a physical or recognised psychological illness by reason of the landlord's breach. We accept that the Tribunal made an error on a question of law to the extent that it applied s 16(1) of the Civil Liability Act to Ms Johnston's claim for compensation for loss of enjoyment of her property.

Ground 2 - date of breach

1. This ground alleges that the Tribunal made an error in determining that the landlord could only be in breach of its obligations under the RTA from 15 December 2015, the date it was served with Ms Johnston's application to the Tribunal. It is submitted that the error arose out of the Tribunal's finding that an email to a client service officer was not sufficient notice in circumstances where the landlord had prescribed a particular process for requesting repairs and maintenance.
2. At the Tribunal hearing Ms Johnston's representative drew the Member's attention to the emails of 27 July 2023 and 16 August 2023 about the requested repairs to the pavers in the courtyard. The first email was sent to the Senior Client Service Officer who had been dealing with Ms Johnston. The second was sent to the Senior Client Service Officer and to the relevant team email address. The emails were included in Ms Johnston's materials filed with the Tribunal and provided to the landlord. The email of 27 July 2023 made clear that further issues have arisen with the pavers in the courtyard. From a copy of the transcript of the hearing provided by the landlord, the only other mention of when the landlord was notified of the need for repairs to the courtyard is a statement by the landlord's representative when presenting the landlord's case: When questions are sent via email to Housing in relation to maintenance, they're often referred back onto maintenance, and we wait for a response from them before we can respond to questions being asked. But that's no excuse to not responding to emails, apart from when a person is on leave, but then you would think that somebody else would respond, I acknowledge that.
3. There was no further discussion at the hearing of when the landlord was notified of the need for repairs or whether any particular method of notifying repairs was required to be followed by a tenant.
4. It is clear from the Tribunal's reasons for the decision that it considered that the email of 27 July 2023 and the follow up email of 16 August 2023 did not constitute notice of the need for repairs. The Tribunal's finding in this regard was made because of its erroneous view that notice in a particular form was required. In the landlord's submissions in the appeal, the landlord accepts that there is no need for the landlord to be notified of repairs in a particular way. It is clear that there is nothing in the RTA or the tenancy agreement which would prescribe any particular method for the notification of the need for repairs. We are of the view that the Tribunal misapplied the relevant law.
5. We also are of the view that there was no evidence before the Tribunal upon which it could base its decision that notice was not provided until 15 December 2023. We base this conclusion on the fact that there was no evidence before the Tribunal in these proceedings of any particular procedures in place within NSW Land and Housing Corporation for notifying of a need for repairs, neither party was given an opportunity to address the Tribunal on how the need for repairs is notified and no inquiry was made of the landlord about when it was notified of the need for further repairs to the courtyard.
6. The appeal must be allowed. The most appropriate course is for the matter to be remitted to the Tribunal for reconsideration of those aspects of the case affected by the appeal. We note that there has been no challenge to the Tribunal's decision with respect to a rent reduction relating to the water ingress incidents affecting the laundry. In relation to the courtyard and the compensation claim, while additional amounts are sought there is no interference with the amounts awarded in the decision. We therefore make no change to the Tribunal's orders of 3 June 2024. Any further amounts, if awarded on remittal, can be so ordered.

Orders 1. Appeal allowed. 2. The proceedings are remitted to the Tribunal for reconsideration by a differently constituted Tribunal in accordance with the following directions: 1. any assessment of whether there has been a breach of the landlord's obligations and whether a rent reduction should be awarded in relation to the courtyard is to be made on the basis that the landlord was notified of the need for repairs to the courtyard on 27 July 2023; 2. any award of compensation is to be redetermined in accordance with these reasons. 1. The Tribunal in the remitted proceedings may allow the parties to rely on such further evidence as the Tribunal considers appropriate

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: 13 November 2024