Kitchener v Clements

Facts

1. By Residential Tenancy Agreement made on 4 April 2020 made under the RTA the respondent leased residential premises at Byron Bay New South Wales to the appellants for a term of 12 months. A condition report filled out by the tenants, except for the landlord's signature, was completed and is dated 10 April 2020. The condition report referred to chips to woodwork, insect nest remains, dirty fly screen, dirty ceiling, cosmetic damage, and bedroom one is noted to have contained mould.
2. The tenancy ceased on 23 April 2021. Prior to the cessation of the tenancy, the appellants had made numerous complaints to the respondent concerning the state of the premises, especially relating to mould and dampness apparently caused by a defective gutter and drain. The respondent had attempted to repair the damaged guttering and instructed the appellants to clean the mould using sugar soap. A condition report was completed at the termination of the tenancy. A notation appears on the condition report apparently made by the landlord which states: "Property inspected 24/04/2021. All found to be in good condition."
3. Following cessation of the tenancy and the repayment of the bond of $2,000, the appellants made a claim for compensation in respect of alleged physical and psychological injury to the second appellant caused by the mould, a claim for a reduction in rent and a claim for damage to some of their belongings. The claim was not lodged with the Tribunal until 24 July 2021. The claim included claims for: 1. remediation removal and disposal of belongings ($1,465.03); 2. temporary accommodation on 15 April 2021 and 19 April 2021 ($1,858.10); 3. medical expenses ($4,696.79); 4. mould expert report ($3,012.94); 5. food delivery for the second appellant ($1,090); and 6. hiring a customer service assistant ($3,100.52) plus superannuation ($321.42).

Tribunal findings

1. The Tribunal considered each of the claims and made the following findings: 1. the claim for compensation for pain and suffering could not succeed because the statutory threshold of 15% of the most extreme case as provided by section 16 of the Civil Liability Act 2002 (NSW) had not been met; 2. as to the items listed in the "List of Damages", only one item was adequately supported by evidence: the other items were not expenditure or lost solely or directly as a result of a breach of the subject tenancy agreement. There was no evidence to establish a sufficient causal connection; 3. the evidence did not support the proposition that there was not effective use or enjoyment of at least a significant proportion of the subject residential premises in the period from 4 April 2020 to 23 April 2021; 4. there had been a failure on the part of the respondent to provide appropriate consideration for the payment of rent; the respondent was aware or should reasonably have been aware of the existence of defects in the building and the related risk of onset of mould; 5. the full and normal use of the premises was impaired to an extent by the onset of mould for a period from approximately 17 February 2021 until 23 April 2021, namely a period of nine weeks. The assessed weekly reduction in use and amenity of the premises over that period was to be assessed at $250 (per week) and the amount payable for loss of use and amenity was assessed at $2,250; 6. compensation for damaged items cannot be based upon the figures and limited evidence proposed by the applicants: $1,000 is considered to be a fair compensation for such items; 7. the expert mould report at a cost of $3,012.94 is a reasonable charge by the tenant against the landlord.

Grounds of appeal

1. The appellants claim that the condition report and accompanying photos from 4 April 2020 showed pre-existing mould; that a previous tenant had penetrated a stormwater pipe with a star picket causing it to block which led to blocked gutters and drainage pipes resulting in the residential premises not being structurally sound with dampness in the cavities, therefore being unfit for habitation since the beginning of the lease; and that a medical letter from Dr Lodge on 31 May 2021 confirmed that the second appellant, Ms Materna, was unable to work from September 2020 to April 2021 and the medical letter from Dr Owen on 29 July 2021 confirmed that Ms Materna "has a strong hypersensitivity to environmental mould which has caused a significant deterioration in health over the last 12 months".
2. The appellants have provided expanded grounds of appeal which raise three essential matters namely: that the Tribunal erred in finding that the statutory threshold of 15% of the most extreme case had not been met for the purpose of section 16 of the Civil Liability Act; that the Tribunal erred in law in that it failed to consider the injury to Ms Materna arising out of the unsound condition of the leased premises; and that the Tribunal erred in finding that the onset of mould entitled the appellants to a reduction of rent only from 17 February 2021.
3. The Appeal Panel notes that there is a threshold issue arising in this appeal, namely the fact that, although the appellants stated in their Application Form in RT 21/31889 that an extension of time was necessary in which to bring the proceedings, there are in fact two issues requiring extensions of time. The first issue relates to the fact that, as was recognised by the appellants, it was necessary to seek an extension of time because their application was made outside the time limits prescribed for the claim of compensation and the claim for a reduction in rent. Such applications were not considered by the Tribunal member.
4. The second issue relates to the fact that, on this appeal, the appeal was lodged more than 14 days after the date of notification of the reasons for the Tribunal decision. Accordingly an extension of time is required in which to bring the appeal.
5. For the reasons provided hereunder, the Appeal Panel finds that the failure to deal with the original time extension applications issue has the consequence that the application in RT 21/31889 was made without jurisdiction and the decision under review is accordingly invalid.
6. The Appeal Panel also observes that the notice of appeal, having been filed on 27 October 2021 in respect of a decision which was delivered on 29 September 2021, is beyond the 14 day period in which to appeal a decision brought in residential proceedings (as these proceedings were). Accordingly, an extension of time was required for the appeal to be determined.

Extension of Time

1. Rule 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW) requires that an internal appeal against the decision made in residential tenancy proceedings be made within 14 days from the date on which the appellant was notified of the decision or given reasons for the decision (whichever is later). The reasons were provided to the appellant on 29 September 2021 but the appeal was not made until 27 October 2021.
2. Section 41(1) of the Civil and Administrative Tribunal Act 2013 (NSW) ("the Act") provides: The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation.
3. Authorities have established the principles for the grant of an extension of time: see Habib v State of New South Wales (NSW Police Force) [2014] NSWCATAP 70 at [72] to [74]. Such paragraphs confirm the discretionary power of the Tribunal to grant an extension of time which is described as "unfettered but it must be exercised judicially" having regard to the objectives stated in section 36 of the Act namely "to facilitate the just, quick and cheap resolution of the real issue in the proceedings".
4. In Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22, the Tribunal at [22] stated that the relevant considerations were: the length of delay; the reason for the delay; the appellant's prospects of success, i.e. whether there is a fairly arguable case; and the extent of any prejudice suffered by the respondent to the appeal.
5. The appellants have stated that their sole income is derived from the business Rove Designs Pty Ltd. It is alleged that the illness of the second appellant allegedly caused by the respondent's breach of the terms of the lease resulted in the fact that she was unable to work in the business and suffered substantially. Due to ongoing psychological treatment of the second appellant "after the substantial pain and suffering experienced, she was unable to work and accordingly there was a greater workload on the remaining appellant". Accordingly, more time was required in which to prepare the appeal. The appellants also stated they were awaiting an expert report before commencing proceedings to claim compensation.
6. In our opinion an extension of time should be granted.

Absence of time extension

1. A question of law arises from these proceedings and can be stated simply as follows:

Claim for Compensation (Personal Injury and Damage to Goods) 1. The Residential Tenancy Agreement made between the appellants and the respondent expired on 3 April 2021. The appellants state that mould was present from the outset of the lease. In their Application to the Tribunal, they state: "The structural faults were all pre-existing damages before the start of the lease and the landlord is at fault, having failed his duty to maintain the premises in good repair… Given the lack of repair of the uninhabitable residential premises throughout and prior to the lease. The rent paid should be considered excessive, and the tenant supplied to the Tribunal to make an order… The tenant submitted the condition report at the beginning of the lease, stating mould issues and photos of visible mould, requesting action by the landlord via phone call. The landlord did not inspect the premises nor take any action but recommended superficially wiping the mould away with sugar site. Other initial request, like fixing a hole in the outdoor wall, were denied by the landlord with a comment that "yes it's an old building"." 1. The appellants have provided evidence that on 9 April 2021 an SMS from the landlord (the respondent) was received "confirming that a previous tenant had penetrated the stormwater pipe with a star picket causing it to block which led to the pre-existing issue of block roof gutters and drainage pipes, resulting in the residential premises not being structurally sound with dampness and the cavities, therefore being unfit for habitation since the beginning of the lease". 2. The appellants filed their application in proceedings RT 21/31889 on 24 July 2021. Orders were sought for compensation under section 187(1)(d) of the RTA claiming an amount of $47,063 for personal injury damages and damages to goods; and an order under section 44(1)(b) of the RTA that the rent payable "is excessive due to the reduction or withdrawal of any goods, services or facilities provided with the residential premises". 3. Section 187(1) of the RTA empowers the Tribunal to make an order for compensation in favour of a tenant or a landlord. However, by section 187(4)(a) of the RTA, the monetary limit which may be awarded is as prescribed by the Residential Tenancies Regulation 2019 (NSW) ("the Regulations"). Clause 40 of the Regulations fixes the maximum amount which may be awarded under section 187(4)(a) of the RTA in the amount of $30,000 in respect of a rental bond paid; and for any other issue, $15,000. 1. Section 190 of the RTA relates to applications for breaches of residential tenancy agreements. The section makes provision for a claim for compensation to be made by a landlord or tenant as follows: 190 Applications relating to breaches of residential tenancy agreements (1) A landlord or tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations. (2) An application may be made - (a) during or after the end of the residential tenancy agreement, and (b) whether or not a termination notice has been given or a termination order made. (3) [not relevant]. Accordingly, this section requires that any claim for compensation is to be made as prescribed by the Regulations. Significantly, clause 39(9) of the Regulations provides that any orders for compensation under section 190(1) of the RTA must be made within three months of the tenant or landlord becoming aware of the breach. 1. It is clear that the appellants were aware of the landlord's breach of the tenancy agreement at or soon after the commencement of the lease, albeit, they were not aware of the full extent of the breach and, as time progressed, the extent of the breach developed as the problems allegedly caused by the mould became more apparent. But there may be an explanation for the apparent delay in commencing proceedings resulting from the appellants' desire to obtain the mould expert's report before commencing proceedings to satisfy themselves that the presence of mould was confirmed and that they had a reasonable case for breach of the lease. Since the application was not filed until 24 July 2021, their claim was instituted more than three months after they apparently became aware of the apparent mould issue and breach of the lease. On this basis the claims for compensation were therefore brought out of time. However, the appellants stated that, until they received the expert's report, they were not in a position to confirm the presence of mould and accordingly they were not in a position to proceed with their application for compensation. This is a matter for determination at a rehearing. 2. It follows that, without the grant of an extension of time, the claim for compensation arising from the presence of mould was invalid. This fact appears to have been recognised by the appellants as they sought an order for extension of time. The Tribunal did not address this issue. Accordingly, the Tribunal had no power to make any award for compensation for these claims nor to consider the issue. 3. We further note that, although the Tribunal did not consider the second appellant's claims for non-economic loss reached the required threshold under section 16 of the Civil Liability Act, that fact did not prevent an award being made for economic loss nor for out-of-pocket expenses such as medical bills. Yet, the Tribunal's reasons are silent on those matters. Therefore, even within the ambits of the personal injury claim, the Tribunal erred in law in failing to consider the second appellant's claims for economic loss and out-of-pocket expenses. In such circumstances the whole of the Tribunal's decision regarding the personal injury claim should be set aside.

Claim for Excessive Rent 1. The appellants made a claim under section 44 of the RTA alleging that the rent was excessive. Section 44(1)(b) provides that an order may be made: … 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. Section 44(3) provides: A tenant may, before the end of the 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… (emphasis added) The effect of this provision is confirmed by subsequent subsections: with respect to the claim for rental reduction made under section 44(2), section 44(6) provides that an excessive rent order has effect for the period (of not more than 12 months) (see section 44(6)(a)) and only binds the landlord and tenant under the residential tenancy agreement or proposed tenancy agreement under which the rent is payable (see section 44(6)(b)). 1. Clearly, section 44 only has operation where there is in force a current lease, or a proposed lease. Since the claim that was made was brought after the lease had concluded, the Tribunal had no power to make an order for the reduction of rent in the absence of an extension of time and the Tribunal's allowance for a reduction in rent in favour of the appellants was mistaken and invalid.

1. It follows that the dismissal of the compensation claim, the making of the orders for a reduction in rent and the claim for damage to goods were made without power and the decision must be quashed.

Orders

1. The Appeal Panel orders that: 1. The decision under review be quashed pursuant to section 81(1)(c) of the Civil and Administrative Tribunal Act 2013 (NSW). 2. Proceedings RT 21/31889 be remitted to the Tribunal, differently constituted, for determination according to law. 3. The issue of whether an extension of time should be granted under section 41(1) of the Civil and Administrative Tribunal Act 2013 (NSW) in which to bring the appellants' claims is to be determined by the Tribunal. 4. The respondent is to be notified of these orders in accordance with the order made by the Tribunal on 3 December 2021, namely by sending correspondence and material to the respondent's email address referred to in the Tribunal's order.

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 January 2022