Lewer v Smith

[2016] NSWCATAP 76

NCAT Appeal Panel|2016-01-18

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At a glance

Source facts

Court

NCAT Appeal Panel

Decision date

2016-01-18

Source

Original judgment source is linked above.

Judgment (12 paragraphs)

[1]

Introduction

A landlord, Mr Brewer, has appealed from a decision of the Consumer and Commercial Division of the Tribunal ordering that he pay his tenant, Ms Smith, $2,115.000 as compensation for breaching the agreement. The Tribunal found that the landlord had breached the agreement because his agent had induced the tenant to sign the agreement by a statement that she knew to be false, misleading or deceptive: Residential Tenancies Act 2010 (NSW), 26(1). That statement was that there had not been any illegal activities associated with the premises.
Section 26(1) of the Residential Tenancies Act, the provision in issue in this appeal, provides that: False representations A landlord or landlord's agent must not induce a tenant to enter into a residential tenancy agreement by any statement, representation or promise that the landlord or agent knows to be false, misleading or deceptive or by knowingly concealing a material fact of a kind prescribed by the regulations.
Prior to the hearing the parties terminated the agreement by consent from 27 May 2015. The only order, against which the landlord may appeal, is the order as to compensation.
The landlord submitted that he was not liable for any false statement made by the agent and even if he was, the Tribunal gave no reasons for preferring the tenant's evidence about the misrepresentation to that of the agent.
We have decided the landlord is liable for false statements inducing a tenant to sign an agreement but that the Tribunal has failed to make some material findings of fact and has given inadequate reasons for its decision. We have set aside the Tribunal's decision that the landlord is to pay the tenant the sum of $2,115.000 on or before 17 July 2015 and remitted the whole matter to the Consumer and Commercial Division for re-consideration in accordance with these reasons.

[2]

[4]

Tribunal's decision and reasons

At [6]-[9] the Tribunal outlined the evidence of each party in relation to the tenant's claim that the landlord had breached s 26(1) of the Residential Tenancies Act. In summary, the Tribunal recorded the tenant's version as being: 1. before signing the Residential Tenancy Agreement, the tenant disclosed to the agent that she worked in the criminal justice system and that she wanted to be assured that the property was safe and secure; 2. the questions she asked included whether the location was safe and whether there had been any illegal activities associated with the premises; 3. the agent replied that while the property was "not in the best area, it was far from the worst" and, critically, that there had not been any trouble previously with the premises which had been occupied by a single mother and her children; 4. upon becoming aware that a previous occupant had been arrested for breaking into surrounding houses and was incarcerated in the correctional centre where the applicant was employed, the tenant questioned the agent again; 5. the agent replied that she knew about those incidents but as the offender was an occupant, not a tenant, she did not consider it relevant to her inquiries.
On the night of 14 March 2015 there was an attempted break in of the premises while the tenant and her son were asleep. Two days later the tenant left the property because she was too frightened to stay. On 4 April 2015 the house was broken into again and some of the tenant's possessions stolen.
In summary, the Tribunal recorded the agent's version as being: 1. the tenant did not inform him of any matters that were a high priority for her safety and security; 2. the agent admitted that the tenant had asked whether there had been any previous break-ins and she replied, "that there had allegedly been a break in some time ago but our office now believed that it was a 'staged' break in that everyone else in town knew about"; 3. in answer to the tenant's questions after the attempted break-in, the agent told the tenant that the partner of a previous tenant had been living at the property, had been arrested there and was now in prison.
The Tribunal concluded at [13], that: The evidence of each party conflicted with the other in respect of the questions asked by the applicant and the responses given by the landlord's agent prior to and after entering into the agreement. The Tribunal considered on the balance of probabilities, that the evidence given by the applicant was the more likely account of the discussions between the applicant and the managing agent prior to and after the signing of the residential tenancy agreement. The Tribunal was further satisfied with the applicant's evidence of the events relating to the previous tenancy. Based on these findings the Tribunal was satisfied the applicant was induced by the managing agent's false or misleading responses to specific questions to enter into the residential tenancy agreement.

[7]

Findings on material questions of fact

When giving written reasons, the Tribunal must set out "the findings on material questions of fact, referring to the evidence or other material on which those findings were based": NCAT Act, s 62(3)( a). Those findings relate both to what happened and to the elements of the alleged statutory breach.
The factual matters which the Tribunal was required to address when determining whether the landlord had breached s 26(1) of the Residential Tenancies Act, were that: 1. the landlord or landlord's agent induced a tenant to enter into a residential tenancy agreement; (the first material question of fact) 2. the inducement was by way of a statement, representation or promise; (the second material question of fact) 3. the landlord or agent knew that statement, representation or promise to be false, misleading or deceptive (the third material question of fact).
The Tribunal expressly found at [13] that the tenant "was induced by the managing agent's false or misleading responses to specific questions to enter into the residential tenancy agreement".
The Tribunal made no express finding identifying the statement, representation or promise that the agent made. However, it is apparent from the evidence that the representation was that there had not been any illegal activities previously with the premises. While the Tribunal should have made that finding expressly, its failure to do so does not constitute an error of law because the finding is apparent when the reasons are read in their entirety.
The Tribunal made no express finding as to the third material question of fact, that is, whether the agent knew that the statement, representation or promise was false, misleading or deceptive. The Tribunal recorded that the agent had disclosed to the tenant after the attempted break-in on 14 March 2015 that she was aware that a man who resided with a former tenant had been arrested at the premises. However, that evidence is not a sufficient basis for us to be satisfied that the Tribunal made a finding that the agent knew that the statement or promise was false, misleading or deceptive. A finding of that seriousness and significance should be supported by reference to the evidence and made expressly.
This was not a ground of appeal raised by the landlord or the Appeal Panel and it would be procedurally unfair to set aside the decision on that basis. Nevertheless, we note it here so that it may be taken into account when the matter is re-heard.

[10]

Inadequate reasons for findings about level of compensation

The tenancy was terminated on 27 May 2015, the date that the tenant vacated the premises. The tenant claimed compensation for the rent paid from 4 April 2015 when she moved out, even though she had left some of her possessions at the property. The Tribunal noted that the rent for the period of 4 April 2015, when the tenant left the property, to 27 May 2015, when she gave vacant possession, was $2,115.00.
The Tribunal awarded compensation for the entire period on the basis that the tenant had asked the agent if she could terminate the tenancy and the agent had told her that she was not able to terminate the tenancy during the fixed period of 12 months. The Tribunal said at [15] that: While the tenancy was not terminated until 27 May 2015 the Tribunal was satisfied from the evidence of the applicant regarding her request to terminate the tenancy and her fear of living in the premises based on the false or misleading statements by the respondent's agent that the breach by the landlord entitled her to compensation for the rent paid during this period.
The standard form of Residential Tenancy Agreement set out in Schedule 1 of the Residential Tenancies Regulation 2010 states that parties to a residential tenancy agreement must comply with the Residential Tenancies Act and the Residential Tenancies Regulation. The Tribunal may therefore make an order for compensation where a party breaches the Residential Tenancies Act. In this case the Tribunal ordered that the tenant was entitled to compensation for the rent paid from 4 April 2015, when she first left the property. The basis for that decision was that the agent had induced her to enter into the Residential Tenancy Agreement by making a representation which he knew to be false. In addition he told her, wrongly, that she could not terminate the tenancy during the fixed period.
While the Tribunal gave reasons for finding that the tenant was entitled to compensation, no reasons were given for the amount of compensation ordered. In particular, the Tribunal gave no reasons for finding that the tenant had established a basis for compensation equalling 100% of the rent payable for the period from 4 April 2015 to 27 May 2015. We note that the tenant conceded during the appeal hearing that during this period she was storing some of her possessions on the premises. The Tribunal has erred in failing to provide adequate reasons for its decision in relation to this issue.

Lewer v Smith

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Judgment (12 paragraphs)

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