Jordan v Tsang

NCAT Appeal Panel|2018-10-24

REASONS FOR DECISION

The appellants appeal a decision of the Tribunal, in the Consumer and Commercial Division, relating to an application about a residential tenancy agreement. The appellants were the tenants under that agreement and the respondent was the landlord. The tenancy agreement between the parties was for a term of three years.
On 4 April 2018, the landlord made an application to the Tribunal, pursuant to the Residential Tenancies Act 2010 (NSW) (the RTA), seeking payment of the bond and amounts for compensation for damage left by the appellants after they had vacated the premises at the end of their lease, on 14 March 2018.
On 2 July 2018 the Tribunal made a money order in favour of the respondent landlord for a total of $6,017 for the following items: By consent rental arrears owing $90.00 •Building rectification works $4,108.60 •Electrical work - make safe $165.00 •Painting rectification works $968.00 •Replace cat door $29.90 •Replace 2 x curtain rods only $78.00 •Cleaning of the premises $577.50
The balance of the claim was dismissed and the bond was directed to be paid to the respondent and any amount received to be credited to the money order.
For the reasons set out below we have dismissed the appeal.
The appellants appealed the decision of the Tribunal on 16 July 2018. The appeal has been filed within the relevant time period in r 25 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules).
The Appeal Panel received the following submissions and documents relating to the appeal from the parties. 1. 'Notice of Appeal' received 16 July 2018; 2. Reply to Appeal together with submissions received 2 August 2018; 3. Submissions and documents received from the appellant on 31 August 2018; and 4. Submissions and documents received from the respondent on 26 September 2018.

Scope and nature of internal appeals

Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80 (2) Civil and Administrative Tribunal Act 2013 (NSW) ('the NCAT Act').
The appellants appeal on both a question of law and seek leave on the basis that decision was against the weight of evidence and not fair and equitable.
As this is an appeal from a decision of the Tribunal in the Consumer and Commercial Division, cl 12 of Sch 4 of the NCAT Act applies and the Appeal Panel may only grant leave to appeal where it 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).
We have dealt with this provision in more detail below.

Ground 1 - Procedural Fairness - Bias

The appellants allege that there was a lack of procedural fairness in that the Tribunal Member was biased. Where there is a failure to afford procedural fairness, it is an error of law that does not require leave of the Appeal Panel: Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [14]-[21].
The appellants assert that the Member interjected repeatedly when Ms Jordan was giving evidence and she was not able to finish her sentences. The appellants also allege that the Member's reference to them as "you people" was inappropriate and that the Member was intimidating and showed bias.
In her application to the Tribunal the respondent had claimed that the tenants had carried out unauthorised alterations and additions to the residential premises during the tenancy agreement. The respondent had also claimed general compensation for wear and tear beyond fair wear and tear due to the tenants' unauthorised use of the premises for hundreds of people through Airbnb.
The appellants allege that the Member was biased, as he believed their sole intention was to profit and seek a "financial gain" through leasing the premises as an Airbnb. They assert that the Members attitude about them leasing the premises to others through Airbnb impacted on his overall view of case. They submit that the Member's conduct demonstrated a lack of impartiality and that he had a predetermined position that they would need to do a lot of work to prove their case, making it hard for them to receive the benefit of the doubt. In particular the appellants refer to the following exchanges in the transcript: Tribunal "Ms Jordan, I would suggest that by letting some of the premises out for Airbnb, I don't think you would convince me that you were a good tenant." …. "So, in the inspection did you claim there was any damage? During the inspection, she did not claim to see any damage at all, in fact if you have a look at the emails she said she would like us to keep certain things there, but she was not prepared to pay for it." … Jordan, "We haven't been able to get approval for any tenancies anywhere, we've gone from all the way out west to all the way south, city everywhere, so we're staying with a friend now, we're living with a friend with two cats..." Tribunal: "While I understand that that may be your current circumstances. I'm not sure how it relates to today's claims?" ' Jordan "The way it relates to today's claims, and you really didn't interject her when she waffled on with all of the different scenarios and lies that she did come up with even under her so called oath. Please, please don't interrupt me, it would be really great."
The appellants state that the Tribunal's comments within the first three minutes of the transcript that "I don't think you would convince me that you were a good tenant," were not appropriate and demonstrated impartiality. They also highlight that the Tribunal repeated several times that their participation in Airbnb was a "serious breach" even though the tenancy was terminated at the end of the fixed term and not for any breach.
For the reasons set out below, we are not satisfied that there has been a breach of procedural fairness by the Member or that there has been actual or apprehended bias.

Actual Bias

The onus of demonstrating actual bias lies with the appellants.
In Minister for Immigration & Multicultural Affairs v Jia Legeng [2001] HCA 17 Hayne J wrote at [183]: "Bias" is used to indicate some preponderating disposition or tendency, a "propensity; predisposition towards; predilection; prejudice". It may be occasioned by interest in the outcome, by affection or enmity, or, as was said to be the case here, by prejudgment. Whatever its cause, the result that is asserted or feared is a deviation from the true course of decision-making, for bias is "anything which turns a man to a particular course, or gives the direction to his measures" [citations omitted].
In James Bromfield v New South Wales Gun Club [2019] NSWSC 430, citing the same case, Sakkar J wrote, It is uncontroversial that domestic tribunals are not held to the same stringent requirements as courts of law. Hayne J made this clear in Minister for Immigration and Multicultural Affairs v Jia (2001) 205 CLR 507, where His Honour notes that the particular features of a body will determine what is appropriate decision-making procedures (at [181]). In particular, His Honour noted that in many cases it will be important, and indeed necessary to the decision making process, that those doing the 'judging' have a particular expertise in a certain subject-matter. Relying on this specialised knowledge that exists beyond the particular factual confines of the case before them, will not, in and of itself, constitute bias (at [180]). His Honour went on to state (at [187]); It is critical, then, to understand that assessing how rules about bias, or apprehension of bias, are engaged depends upon identification of the task which is committed to the decision-maker. The application of the rules requires consideration of how the decision-maker may properly go about his or her task and what kind of degree of neutrality (if any) is to be expected of the decision-maker.
The party asserting bias has a heavy onus to discharge. In South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16, McColl JA (with whom Giles and Tobias JJA agreed) said; (citations omitted) A party asserting actual bias on the part of a decision maker carries a heavy onus. The allegation must be 'distinctly made and clearly proved. A finding of actual bias should not be made lightly; cogent evidence is needed; a finding of bias is a grave matter.
An inquiry about actual bias in the form of prejudgment as alleged by the appellants requires an assessment of the state of mind of the Tribunal Member based on what he said and did.
The respondent's application before the Tribunal was for the appellant's breach on vacating the premises. Section 51(3) of the RTA relevantly states: (3) On giving vacant possession of the residential premises, the tenant must do the following: (a) remove all the tenant's goods from the residential premises, (b) leave the residential premises as nearly as possible in the same condition, fair wear and tear excepted, and, if there is a condition report, as set out in the condition report applicable to the premises when the agreement was entered into, (c) leave the residential premises in a reasonable state of cleanliness, having regard to the condition of the premises at the commencement of the tenancy, (d) remove or arrange for the removal from the residential premises of all rubbish, having regard to the condition of the premises at the commencement of the tenancy, (e) return to the landlord all keys, and other opening devices or similar devices, provided by the landlord to the tenant.
To accommodate Airbnb guests, the appellants had undertaken some work to the premises, for which they did not seek approval from the respondent. This unauthorised work was relevant to the determination of the Tribunal, in particular whether the appellants had left the premises in nearly as possible in the same condition, fair wear and tear excepted, as when they commenced their tenancy: RTA, s 51(b). It was never in dispute that the appellants had carried out unauthorised works. At the commencement of the hearing, the Tribunal Member did seek to get the parties to resolve the matter without a hearing. He also stated that on the material before him, it appeared that the appellants had breached the tenancy by performing unauthorised building work. The Tribunal Member explained that if the matter could not be resolved by agreement he would hear from both parties and make a final determination based on the evidence and submissions. That was not inappropriate in the circumstances. Section 37 of the NCAT Act states that the Tribunal may, where it considers it appropriate, use resolution processes.
Putting to the parties the issues in the case that will need to be considered did not in this case amount to bias. It was not in dispute that the building works were not authorised by the landlord as is required by ss 67 and 69 of the RTA. In those circumstances, simply stating what was in issue does not amount to bias. Further, whether the premises had been used as Airbnb during the tenancy was also a matter relevant to the finding of whether the damage claimed by the respondent was beyond fair wear and tear. At para 27 of the reasons for decision the Tribunal ultimately found: 27 Finally, the landlord claimed compensation in the sum of $2,182.00 for wear and tear beyond fair wear and tear due to the hundreds of people via Airbnb who stayed in the property which has led to the property being in a very depleted state. This claim was based on the cost of repainting the whole premises inside before renting out the property again. The Tribunal considered that it was a claim based more on the landlord's assumptions rather than any hard evidence. As set out above, the landlord conceded that she has now undertaken more extensive renovation works to the premises beyond simply rectifying the issues caused by the tenants. The landlord simply had no evidence to establish whether or how the hundreds of people via Airbnb who stayed in the property caused there to be any more wear and tear beyond fair wear and tear. And the Tribunal considered that any claim based on Section 51(3)(b) is based simply on the tenants leaving the residential premises as nearly as possible in the same condition, fair wear and tear excepted as set out in the condition report applicable to the premises when the agreement was entered into. The test is applicable irrespective of the Airbnb issue and how many people stayed there. The landlord produced no evidence to establish that the tenants caused damage beyond fair wear and tear sufficient to require the repainting of the inside of the whole premises and the Tribunal was not persuaded that it should make such an order. The claim was dismissed.
Those findings demonstrate that in relation to some of the items claimed, the Member did not find that the leasing of the premises for Airbnb caused wear and tear beyond fair wear and tear. In those circumstances we are not satisfied that there was an actual bias on behalf of the Tribunal in relation to the use of the premises for Airbnb. Further, even though the Tribunal stated that the breaches of the tenancy may affect their credibility in the case, para 27 demonstrates that the findings were not made on any finding as to the credit of the appellants, but rather on whether the respondent had made out her case.
We do not find that actual bias by the Member has been established.

Apprehended Bias

The apprehension of bias principle and its application were discussed by the High Court in Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337, at [6] to [8], per Gleeson CJ, McHugh, Gummow and Hayne JJ, as follows: 6. Where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge (or other judicial officer or juror), as here, the governing principle is that, ..., a judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide [citations omitted]. That principle gives effect to the requirement that justice should both be done and be seen to be done [citations omitted], a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle. 7. The apprehension of bias principle may be thought to find its justification in the importance of the basic principle, that the tribunal be independent and impartial. So important is the principle that even the appearance of departure from it is prohibited lest the integrity of the judicial system be undermined. There are, however, some other aspects of the apprehension of bias principle which should be recognised. Deciding whether a judicial officer (or juror) might not bring an impartial mind to the resolution of a question that has not been determined requires no prediction about how the judge or juror will in fact approach the matter. The question is one of possibility (real and not remote), not probability. Similarly, if the matter has already been decided, the test is one which requires no conclusion about what factors actually influenced the outcome. No attempt need be made to inquire into the actual thought processes of the judge or juror. 8. The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an "interest" in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed.
When a party submits that there is or was a reasonable apprehension of bias, it requires an inquiry about whether a fair-minded lay observer might reasonably apprehend that the Member might not bring an impartial and unprejudiced mind to the resolution of the question the Member is required to decide.
The appellants assert that they were not allowed to present their case and they were repeatedly stopped by the Member. An overall consideration of the transcript and material before the Tribunal demonstrates that the Member did allow an opportunity for the appellants to present their evidence. At times the appellants were stopped in order to ensure the submissions and evidence were relevant to the issues being raised. Having considered the transcript we do not find that the Member's expressions amounted to intimidation or an apprehension of bias.
Section 38 of the NCAT Act relevantly provides that: 38 (4) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. (5) The Tribunal is to take such measures as are reasonably practicable: (a) to ensure that the parties to the proceedings before it understand the nature of the proceedings, and (b) if requested to do so--to explain to the parties any aspect of the procedure of the Tribunal, or any decision or ruling made by the Tribunal, that relates to the proceedings, and (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. (6) The Tribunal: (a) is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings, and (b) may require evidence or argument to be presented orally or in writing, and (c) in the case of a hearing--may require the presentation of the respective cases of the parties before it to be limited to the periods of time that it determines are reasonably necessary for the fair and adequate presentation of the cases.
It is apparent that where the Member did interject it was to keep the proceedings on point or to clarify issues with the parties.
In our view, when objectively assessed, the Member made his findings as to whether there had been a breach of the tenancy and specifically referred to the state of the tenancy at the beginning and at the end and made findings on the basis of the evidence before him.
In relation to the video evidence of the final inspection, during the hearing the respondent alleged that the appellants took an unauthorised video of recording of the final inspection without her knowledge or consent. The Member raised concerns about its admissibility with the appellants, however, the Member decided to admit the video into evidence. The Tribunal advised the respondent that if there was an issue with the legality of the recording, she could raise that issue with police but that those issues were not relevant to the hearing before him. In circumstances where ultimately the video evidence was allowed, it could not be said that there was an apprehended bias, rather the Tribunal was only dealing with an objection in relation to the admissibility of the evidence.
In all the circumstances we do not find that there has been either actual or apprehended bias by the Tribunal.

Ground 2 - Property depreciation and the condition of the property

The appellants allege that the Tribunal failed to take into account the property's condition, including that the gutters had decayed prior to them entering into the tenancy. The property is an 1800's Victorian terrace house which the respondent purchased in 2012. The appellants made submissions that the respondent had not undertaken works on the property and the Tribunal has not accounted for depreciation or for the state of the property. The Tribunal allowed $968 for painting work to one wall and the appellants submit that there was no evidence to support the damage to that wall except for three plaster marks and that in those circumstances the amount awarded was excessive.
It is clear from the Tribunal's reasons for decision that the issues now being raised by the appellants were raised and considered by the Tribunal. The reasons for decisions demonstrate that the Tribunal considered the photographic evidence presented by both parties, the video evidence provided by the appellants and the condition report in determining the state of the premises both at the outset of the tenancy and the end of the tenancy. At paragraph 18 of reasons for decision, the Tribunal stated: 18. The Tribunal was satisfied that the landlord's ingoing property condition report when compared to the detailed outgoing photographic evidence established the damage that the tenants had caused to the premises in both carrying out the unauthorised alterations and additions and then in attempting to remove most of them. The Tribunal did not accept the tenants' videos and photographs recorded with any close up detail all the areas that the landlord was claiming for. The Tribunal did not accept that the tenants' evidence was sufficient to displace the landlord's detailed recordings of all the damage and the unauthorised and unlicensed work carried out by the tenants that needed rectifying and/or repairing.
It was open to the Tribunal to prefer the evidence of the respondent over that of the appellants and the Tribunal explained why it did so. The award of $968 for painting was to remedy the damage done by the appellants because of the unauthorised building work they had undertaken. On an evaluation of the evidence, the Tribunal found that the works were necessary and reasonable. The respondent had provided a quotation from a tradesperson to patch and paint the damaged areas caused by the tenant and it was open to the Tribunal to accept that quote. The Tribunal found that the appellants' photos lacked detail and preferred the detail of the respondent's photographs (para 16).
We find no error of law by the Tribunal as is alleged by the appellants. The Tribunal has taken into consideration relevant considerations in determining the issues.

Ground 3 - Landlord's planned renovations.

The appellants submit that the Tribunal should have considered the renovation plans of the respondent in its assessment of the damages for which they were responsible. These issues were raised by the appellants at the Tribunal hearing and the Tribunal recounted the submissions in its reasons for decision as follows: 9. The tenants stated that the terrace house was very old and not in good condition and submitted that what the landlord was attempting to do in pursuing her claims was to obtain money from them in order to carry out a renovation of her property. The tenants submitted that they left the premises in a reasonable state and commensurate with the condition that the premises were in as set out in the condition report applicable to the premises when the agreement was entered into.
The reasoning that follows demonstrates that the Tribunal did not accept those submissions and instead found that the damage was caused by the tenants and was beyond reasonable fair wear and tear. This was a finding open to the Tribunal on the evidence before it.
In assessing damages for breach of an agreement, the guiding principal is that the non breaching party (in this case the landlord applicant below) should be put in the same position had the breach not occurred. In Hyder Consulting (Aust) Pty Ltd v Wlh Wilmemsen Agency Pty Ltd [2001] NSWCA 313 Sheller JA states at para 54 In my opinion, if a defendant negligently damages or destroys the plaintiff's property, and there is no evidence that the plaintiff had any reasonable choice other than to replace or repair what had been damaged or destroyed, the cost of replacement or repair, provided it is not extravagant, is recoverable. In each case it is a question of fact.
Giles JA states at [107] said: The reasons of Moffitt P make clear that each case depends upon its own facts. The general principle of restitution in integrum, so that a plaintiff should be compensated for its loss, but not overcompensated, is undoubted. Its application will vary according to the circumstances.
The fact that the respondent may have ultimately renovated the premises was not relevant to the assessment of damages. That the respondent may ultimately undertake additional building works that extend beyond simply rectifying the damage caused by the appellants does not mean the appellants are not liable for the damage they caused.
We find no error of law on the basis.

Finding of fact unsupported by evidence

The appellants challenge the award of the amount of $4,108.00 for rectification of the building works. They submit that there was no breakdown of precisely the damage they had done.
The Tribunal was satisfied that the rectification of the unauthorised works carried out by the appellants was unsatisfactory. The Tribunal considered a quote provided from Owen Gardner of Gardeners Constructions which identified the cost to rectify water damage caused by the defective building works. The Tribunal was satisfied that those defects were caused by the tenants. In particular at [19] to [21], the Tribunal relevantly found: 19. The Tribunal was satisfied that the works carried out by the tenants were works carried out by Mr Von Reiche who was/is unlicensed. There was no evidence to establish that what remains is of a satisfactory standard. The Tribunal was satisfied that especially unlicensed waterproofing, roofing & guttering and electrical works could have a real adverse effect and potentially dangerous effect on the landlord's property and thereby affect the landlord's ability to let the residential premises to other tenants. 20. The landlord had a quotation from a licensed builder to rectify the water damage caused by the tenants' defective building works at the premises in the sum of $4,108.60. There was a quotation from an electrician to make the electrical safe in the sum of $165.00. There was also a quotation from a tradesperson to patch and paint all the damaged areas caused by the tenants in the sum of $968.00. 21. There was nothing produced by the tenants to suggest that the works required and the amounts sought were not necessary and reasonable. The Tribunal found that the tenants had not submitted any evidence capable of disputing the landlord's compensation claim for repairing the damage and/or rectifying the unauthorised work carried out by the tenants at the residential premises. The Tribunal allowed the landlord's claims above as sought.
The tenants did not provide an alternative quotation or expert evidence. The only evidence as to the cost of the rectification of the defective works found by the Tribunal was from the respondent. In those circumstances, it is difficult to see how the appellants could contend that there was an error of law because the Tribunal's findings of fact were unsupported. It was open to the Tribunal to accept the quote and the other evidence of the respondent in determining the cause of the damage and the costs of rectifying the defective work undertaken by the appellants.

Ground 5 - Leave to Appeal

The appellant seeks leave on the basis that the decision was against the weight of evidence and was not fair and equitable. In particular they challenge the Tribunals finding in respect of the video evidence they presented and the finding that the damage was caused by them.
We do not find that the appellants have established that they have suffered a substantial miscarriage of justice within cl 12 of Sch 4 to the NCAT Act, which would warrant the granting of leave on the basis that the decision made was against the weight of evidence. If the Appeal Panel is satisfied that the appellant for leave to appeal may have suffered a substantial miscarriage of justice on one of the grounds identified in cl 12(1)(a), (b) or (c) then the Appeal Panel "may" grant leave under s 80(2)(b) of the NCAT Act.
That clause was the subject of consideration in the Appeal Panel decision in Collins v Urban [2014] NSWCATAP 17. The Appeal Panel determined in that case that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred: see at [71]. A decision under appeal can be said to be against the weight of evidence where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reason Tribunal Member could reach: see Collins v Urban, at [77(2)]. If the Tribunal is satisfied that the appellant may have been deprived of a significant possibility or a chance which was fairly open that a different and more favourable result would have been achieved, then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or the decision was against the weight of evidence: see Collins v Urban, at [78].
To be granted leave to appeal, the appellant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at, or that there was a bona fide challenge to an issue of fact. It is appropriate to grant leave to appeal in circumstances where an injustice is reasonably clear, there is a factual error that was unreasonably arrived at and clearly mistaken or the Tribunal has gone about the fact finding process in such an unorthodox matter or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed: see Collins v Urban, at [84].
For the reasons already outlined above, we are of the opinion that leave to appeal should not be granted. It was open to the Tribunal to prefer the evidence of the respondent and it has come to its findings based on the evidence before it. The appellants have not demonstrated that there is a significant possibility that they have been deprived of a chance that was fairly open to them at the hearing before the Tribunal so as to achieve a better outcome than what occurred. We are not satisfied that the appellants have suffered an injustice which is reasonably clear.

Orders

In conclusion, the Appeal Panel makes the following orders: 1. Leave to appeal refused 2. Appeal dismissed 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: 22 May 2019

Residential Tenancies Regulation 2010(NSW)

At a glance

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Decision date

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Judgment (10 paragraphs)

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Legislation Cited (4)

Cases Cited (9)