Lam v Dirani

Background

1. The Landlord and Tenants entered into a residential tenancy agreement for premises at Beverly Hills, NSW. The term of the tenancy was 12 months. The Tenants vacated the premises at the end of the tenancy.
2. At the end of the tenancy disputes arose between the parties. The dispute with which this appeal is concerned is the Landlord's claim for repainting two bedrooms, the hallway, doors into the two bedrooms mentioned and various door trims (the "claimed items").
3. Proceedings were commenced in the Tribunal and a hearing held on 7 June 2019. At that hearing the Landlord was represented by a real estate agent.
4. At the hearing the Landlord's agent tendered ingoing and outgoing condition reports, photographs taken of various parts of the premises at the commencement and end of the tenancy, and an invoice for $1,100 incl GST for "Painting of two rooms, hall ways (sic), doors and door trims".
5. No written or oral evidence was given by the Landlord or any other person on behalf of the Landlord deposing to the state of the claimed items at the beginning or end of the tenancy.
6. The Landlord's agent, with commendable and proper frankness, informed the Tribunal that a number of the claimed items were, in fact, noted on the ingoing condition report (sound recording at 4:00), and in particular the skirting boards (where paint chips could be seen in the ingoing photos) and the walls of the two bedrooms (pre-existing marks on those walls were noted in the ingoing condition report, sound recording from 4:00 - 4:40). The agent suggested the premises were last painted about three of four years prior to the commencement of the tenancy. The agent agreed with the Tribunal that there would have been "substantial depreciation anyway" (meaning, in context, deterioration of the condition of that previous painting).
7. The agent told the Tribunal that he couldn't confirm the position with the door frames because in the photos "there was nothing specific".
8. As the sound recording demonstrates, the Tribunal examined the photographs tendered by the Landlord, and compared (where comparison was possible) the ingoing and outgoing photographs for each claimed item. The Tribunal Member said, during this inspection, that it was "very difficult to compare the ingoing and outgoing photographs" (sound recording at 9:39) because of their quality and the closeness of the camera to the various objects in some of the photographs. The ingoing and outgoing photographs were described by the Tribunal as "quite different" (sound recording at 9:41).
9. The Tribunal asked the Landlord's agent what the complaint in relation to the walls of the bedrooms was. The agent said it was "maybe scuff marks and such" (sound recording at 10:00). The Tribunal responded that there was already evidence of scuff marks on those walls at the commencement of the tenancy (from the ingoing condition report and some photographs). The Landlord's agent said that "maybe" the Landlord was referring to an agreement made between the Landlord and the Tenants for the Tenants to repaint the property (sound recording at 10:08).
10. No further evidence or submissions were advanced on behalf of the Landlord.
11. The Tenants confirmed, in their evidence, that there had been such an agreement. Mr Dirani gave evidence that the Tenants painted the whole of the premises except for the skirting boards and door frames, and said that that was possibly why the Landlord was putting her focus on those boards and frames (presumably because they now looked worse than originally because the walls nearby had been relatively recently painted).
12. Mr Dirani gave evidence to the effect that the marks and scratches about which complaint was made by the landlord were "there previously" (sound recording at 12:25 and 13:14).
13. After the Tenants had concluded their evidence (which included their submissions) the Tribunal proceeded to deliver oral reasons.
14. The Tribunal Member said that she had looked at the ingoing and outgoing condition reports, ingoing and outgoing photographs, had heard the evidence of the Landlord's agent and had heard the evidence of Mr Dirani.
15. The Tribunal Member then summarised Mr Dirani's evidence.
16. The Tribunal Member then said that she was persuaded, on the evidence given to the Tribunal, that the Landlord had failed to establish that the property painting was in a worse condition than it was at the commencement of the tenancy taking into account fair wear and tear.
17. The Tribunal then made the orders we have referred to at [1] above.

Extension of Time

1. The Tribunal's decision is dated 7 June 2019. Oral reasons were given by the Tribunal on that day when the Landlord's agent was present.
2. The Landlord says she did not receive the decision by email from the managing agent until 17 June 2019.
3. The Notice of Appeal was lodged on 24 June 2019, being seven days after the Landlord says she received the managing agent's email, and 17 days after the date of the Tribunal's decision.
4. The time in which an appeal is to be lodged in residential tenancy matters is within 14 days of the party being informed of the decision or the reasons for decision.
5. If the proper date to be considered is when the Landlord was personally informed of the decision, she is within time to appeal. If the proper time is the date her agent was informed of the decision, the Landlord is three days out of time.
6. There is no prejudice to the Tenants by extending time to appeal if the latter date is the correct date to consider. The Landlord is only out of time by three days if that is the proper date. Taking into account the matters referred to Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 in relation to extending time to appeal, we would extend time to appeal if that was necessary.
7. In those circumstances there is no utility in deciding whether the appropriate date to consider is the day the agent heard the decision or the date the agent told the landlord of the decision. Accordingly, we extend time to appeal to 24 June 2019.

Grounds of Appeal

1. The Landlord contended for six Grounds of Appeal, being: 1. the Tribunal failed to give proper reasons; 2. the Tribunal identified the wrong issue or asked the wrong question; 3. the Tribunal failed to take into account relevant (mandatory) considerations and failed to give adequate weight to a relevant matter; 4. the Tribunal took into account an irrelevant consideration; 5. the Tribunal's findings of fact were unsupported by evidence; and 6. the Tribunal was biased against the Landlord.

Ground 1 - Inadequate Reasons

1. The Landlord submitted that the Tribunal's reasons were inadequate because the Tribunal did not specifically refer to the evidence and material as to the state of the premises at the beginning and end of the tenancy and make findings of fact based upon that evidence. The Landlord submitted that the Tribunal failed to give any, or any adequate, explanation in its reasons for why it concluded that the photographs and the ingoing report were insufficient to establish that the tenant had damaged the premises as alleged.
2. The Tribunal's reasons were delivered orally. Accordingly, they were brief and more expansive reasons would have been given in writing had the Landlord sought written reasons pursuant to s 62 of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act"). It is therefore appropriate for us to consider all of the Tribunal's relevant observations made during the hearing (which would, in substance and in all probability, have found their way into more expansive written reasons had the Landlord requested them) rather than confine ourselves to that part of the sound recording which occurs after the Tribunal indicated that it would give its decision.
3. We have listened to the whole of the sound recording of the hearing below.
4. Contrary to the Landlord's submissions, the Tribunal expressly referred to having examined the evidence as to the state of the premises at the beginning and end of the premises.
5. The Tribunal noted that the ingoing condition report noted some marks on some of the claimed items, chips and marks were evident in some of the ingoing photographs and the Tribunal heard oral evidence from Mr Dirani to the effect that the damage the Landlord alleged had been caused by the Tenants had in fact been present at the commencement of the tenancy. Mr Dirani was not challenged on that evidence in cross-examination.
6. The Landlord's agent, and properly so, made a number of concessions about damage being present at the commencement of the tenancy. The Tribunal noted that it was very difficult to compare the ingoing and outgoing photographs.
7. The question of adequate reasons in the Tribunal was most recently addressed by the NSW Court of Appeal in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231.
8. Put shortly, the President and Ward JA expressed some doubt, although it was obiter, whether the Tribunal is duty bound to give any reasons unless a request for written reasons under s 62 is made.
9. We need not decide that point here because, assuming adequate reasons were required, in our opinion the Tribunal's reasons were adequate.
10. As Orr explains in relation to adequacy of reasons: 1. the appellate function does not consist of going through reasons with a fine-toothed comb and looking for any error, what is required is to consider whether the text of the reasons conveys what needs to be conveyed - see generally at [77], [88]-[93]; 2. reasons do not need to be formulaic in their format or expression, they must be considered holistically - see [77]; 3. it must be borne in mind that the standard of what are 'adequate' reasons is not perfection, the question is whether the minimum acceptable standard in the circumstances has been met - see [66] and [77]; 4. the quantity and quality of reasons required will depend on the circumstances such as the nature of the case and the nature of the power being exercised; and 5. in particular, the quantity of reasons required of Tribunal members must be considered in light of the substantial workload and time pressures of the Tribunal - see [68] and [70].
11. In our opinion, taking into account the substantial workload and time pressures of the Tribunal in group residential matters lists (in which these proceedings were heard), the nature of the case, the whole of the what was said by the Tribunal during the hearing, the evidence given and the lack of any testimonial evidence given on behalf of the Landlord, we are of the opinion that the reasons of the Tribunal met the minimum acceptable standard. Most fundamentally, the Tribunal's reasons adequately explain in a case of this nature why the evidence referred to in the Landlord's submissions was not accepted in the circumstances of the other evidence given and which was accepted by the Tribunal.

Ground 2 - the Tribunal identified the wrong issue or asked the wrong question

1. The Landlord submitted that the Tribunal "made its decision entirely based on the tenant's oral evidence". This submission is incorrect - see [9] - [20] above.
2. The Landlord submitted that there was no written consent for the Tenants to paint the premises. That may have been correct insofar as the writing part is concerned, but the Landlord's agent told the Tribunal that there had been an agreement to that effect. Whether that agreement was in writing or not is not to the point.
3. The Landlord submitted that she had personally inspected the premises after they were vacated, and she noted various things (useful to her case). However, that evidence was not given to the Tribunal below and is not admissible on this appeal, it not having been established that that evidence was not reasonably available to the Landlord at the time of the hearing below - see cl 12(1)(c) of Schedule 4 of the NCAT Act.
4. The Landlord submitted that the Tribunal should not have asked whether the whole premises were painted and whether the premises were worse off, but should have assessed the state of the premises at the end of the tenancy and determined whether the obligations under s 51(3)(b) and (c) of the Residential Tenancies Act 2010 (NSW) ('the RT Act') were breached.
5. Those sub-sections say: (3) On giving vacant possession of the residential premises, the tenant must do the following: (a) ... (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,
6. Section 51(3)(c) is irrelevant because it was not part of the Landlord's claim below. The claim below, as pressed at the hearing, was based solely upon s 51(3)(b).
7. It is clear from the sound recording, in our opinion, that the Tribunal did make its decision based on the test set out in s 51(3)(b) and not on another basis as submitted by the Landlord.
8. The Landlord submitted that a review of the photographic material demonstrated the error of the Tribunal's decision. This submission does not raise any question of law and no leave was sought to raise any other ground of appeal other than one raising a question of law. Alternatively, given the Tribunal's comments about the photographic evidence, and its flaws, the photographs do not demonstrate error. We reject this submission.

Ground 3 - the Tribunal failed to take into account relevant (mandatory) considerations and failed to give adequate weight to a relevant matter

1. The Landlord submitted that the Tribunal should have identified and evaluated all of the evidence that had some probative value and given reasons for accepting or rejecting it. This is a submission relevant to Ground 1, and not Ground 3, and we reject it for the reasons we have given in relation to Ground 1. In summary, having listed to the whole of the sound recording, in our opinion the Tribunal did evaluate all of the evidence which had probative value and did given adequate reasons.
2. The Landlord submitted that the Tribunal gave excessive weight to the evidence of the Tenants that they had painted the premises. We have listed to the sound recording and, in our opinion, that submission is not correct. There is nothing to indicate the Tribunal gave excessive weigh to that evidence.
3. The balance of the Landlord's submissions on this Ground were to the effect that the Tribunal preferred the Tenant's oral evidence to the Landlord's photographs and ingoing condition report.
4. Again, this submission does not raise a question of law. In any event, the Tribunal was entitled to prefer that oral evidence, particularly when it was not challenged in cross-examination. None of it conflicted with other incontrovertible evidence or was inherently implausible. As we have explained in relation to Ground 1, the Tribunal also took into account the concessions made by the Landlord's agent, the noting of damage in the ingoing report, the appearance of damage in some ingoing photographs and the difficulty in comparing the ingoing and outgoing photographs.
5. The Landlord submitted that the Tribunal failed to have regard to the invoice for painting the premises which was tendered as proof of the quantum of the claim. However, the invoice was not proof of damage, nor that the items painted had been damaged by the Tenants rather than having been present in the premises at the commencement of the tenancy. The invoice was nothing more than evidence of what it cost the Landlord to paint the premises and so was not probative of the liability part of the Landlord's case.

Ground 4 - the Tribunal took into account an irrelevant consideration

1. We doubt this Ground raises a question of law, but we reject it in any event.
2. The Landlord submitted that the Tribunal erred in taking into account the "substantial depreciation" since the premises were painted about three or four years prior to the commencement of the tenancy. The Landlord submitted that the Tribunal was referring to the Australian Taxation Office's depreciation schedule for fixtures and fittings in investment properties.
3. In the context in which it was said, we consider the Tribunal's reference to depreciation was a reference to the usual deterioration over time of building work such as painting and was not a reference to the Australian Taxation Office's depreciation schedule for fixtures and fittings. The deterioration of painting over time was one matter the Tribunal took into consideration in an endeavour to determine what was the state of the claimed items at the commencement of the tenancy. Accordingly, it was not an irrelevant consideration.

Ground 5 - the Tribunal's findings of fact were unsupported by evidence

1. The Landlord submitted that the Tenants did not adduce any documentary evidence about the painting of the property done by them, yet the Tribunal gave excessive weight to this fact and relied upon this fact for its decision.
2. The nub of the Landlord's submission is that there was no evidence the Tenants had painted the premises. This submission is incorrect. Evidence may be oral and may be documentary in nature, but oral evidence is still evidence. The oral evidence of Mr Dirani was evidence of the painting done by the Tenants. Documentary evidence was not required to prove this fact, particularly since Mr Dirani was not challenged on this evidence in cross-examination.
3. In any event, the relevance of that painting was simply to point out why the skirting boards and door frames may have led to the Landlord's greater focus on them (see [15] above) and was not significant to the decision of the ultimate issue of whether the Tenants had damaged the claimed items during their tenancy.
4. It was for the Landlord to establish a valid claim upon the bond (Pearson v Clark [2016] NSWCATAP 134 at [71]), which in the context of this dispute involved the Landlord proving on the balance of probabilities that the Tenants had breached their obligations regarding the condition of the property at the end of the tenancy in comparison to the commencement of the tenancy under s 51(3) (b) and (c) of the RT Act; and if so the loss that flowed from the breach. The task of the Tribunal was to assess the evidence and form its own view, including relevantly evidence regarding what was; and was not; fair wear and tear: Elhassan v Ayoub [2018] NSWCATAP 34 at [6] and [13].
5. We are not satisfied any error has been established in the manner in which the Tribunal considered the evidence; and the findings made by the Tribunal were reasonably available on the evidence adduced by both parties at the hearing.
6. We reject Ground 5.

Ground 6 - bias

1. The Landlord submitted that the Tribunal Member's conduct demonstrated a lack of impartiality and that the Tribunal Member had a predetermined position in favour of the Tenants. The Landlord submitted that the fact the Tribunal gave its decision immediately after the close of the evidence showed bias.
2. This Ground is devoid of substance.
3. We have listened to the whole of the sound recording of the hearing at first instance. That sound recording demonstrates that the Tribunal Member conducted herself as a model of fairness to both parties. To the extent the Member intervened from time to time, such interventions were made in order to direct the parties to the real issues in dispute, the evidence relevant to those issues and to seek some elaboration or explanation where the evidence was less than clear or less than clear to the Member.
4. The issues in this case, although important to all parties, were nevertheless limited, as was the evidence, and the disputes of fact were not complex or difficult. It is not surprising that the Tribunal Member was able to give her decision immediately after the close of the evidence. Such was proof of efficiency and expertise rather than bias.
5. We reject Ground 6.

Orders

1. We make the following orders: 1. Time to appeal is extended to 24 June 2019. 2. The appeal is 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: 02 October 2019