Lirantzis v Germond Pty Ltd

Background

1. The following facts are uncontroversial. In or about May 2013 the parties entered into a managing agency agreement for management of residential premises at Sandringham, New South Wales. The respondent selected tenants and recommended two tenants to the appellant in or about October 2013. In late January 2014 the appellant terminated the managing agency agreement and commenced managing the property herself.
2. On or about 3 August 2022 the tenants vacated the premises and the appellant became aware of issues which she generally characterises as "neglect and damage". On 6 December 2022 the appellant commenced proceedings against the respondent. In the application form, the appellant alleges that as her managing agent the respondent owed her a duty of care which required the respondent to screen the former tenants properly, that the respondent failed in that duty and that as a consequence the appellant suffered financial loss and emotional distress.
3. The appellant claimed damages in the sum of $101,579.
4. At the hearing, the appellant raised the following: 1. The appellant submits that the respondent failed to adequately screen the tenants with the result that those tenants have caused damage to the property (the screening allegation); and 2. The appellant submits that the respondent stole from the appellant. The respondent sent two different versions of the lease agreement to show that the respondent received $100 more per week in rent then was set out in the copy of the lease agreement which was provided to her (the pricing allegation).
5. For convenience we have summarised the relevant findings of the Tribunal from [21] as follows: 1. The Tribunal does not have jurisdiction to hear and determine the application as it relates to the pricing and the screening allegation because both are out of time. 2. The appellant's claims are consumer claims under s 79 E of the FTA and the Tribunal's jurisdiction is limited by section 79 L of the FTA which states that the Tribunal does not have jurisdiction to hear and determine a consumer claim if any of the following apply: 1. the cause of action giving rise to the claim first accrued more than three years before the date on which the claim is lodged and, 2. the goods and services to which the claim relates were supplied or if made in instalments were last supplied to the claimant more than 10 years before the date on which the claim is lodged. 1. In respect of the pricing allegation, the Tribunal found that the appellant was aware of the potential issues with the rent since at least March 2014 and the application needed to be lodged by March 2017 and is therefore out of time. 2. In respect of the screening allegation, the Tribunal found that the appellant became aware of the information contained in the rental application documents in March 2014, that any cause of action accrued at that time, that the claim should therefore have been brought by March 2017 and is therefore out of time. 3. There is nothing in the application material which suggests that the tenants were of bad character or otherwise unsuitable for the tenancy. 4. The tenants were approved by the appellant and the appellant's own evidence suggests that the tenants were good tenants for around eight years. 5. The Tribunal ordered the application be dismissed and granted leave to the respondent to apply for an order for costs. Reserved the question of costs.

Scope and nature of internal appeals

1. Internal appeals may be made as of right on a question of law, and otherwise with permission (that is, with the "leave") of the Appeal Panel: s 80(2) of the NCAT Act.
2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
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 Schedule 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. In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.

Submissions and evidence

1. In deciding the appeal, we have had regard to the following:

• The Notice of Appeal lodged on 26 April 2023 with attachment A, the appellant's material filed on 30 May 2023 consisting of 159 pages, the original hearing material (39 pages), and appeal submissions (28 pages).
• The Reply to Appeal lodged 8 May 2023 with attachments and the bundle of documents the respondent filed on 14 June 2023 (45 pages).

Grounds of Appeal

1. The appellant set out five grounds of appeal in written material filed on 16 May 2023. We have summarised the grounds as follows: 1. The appellant claims that the cause of action arose in August 2022 upon discovery of damage to the property when the tenants vacated and the tenancy ended. The appellant claims that the application was brought within three years of August 2022. 2. The Tribunal erred in allowing the respondent leave to apply for costs. 3. The Tribunal failed to consider an extension of time application under section 41 of the NCAT Act extending time to commence proceedings under section 79 L of the FTA. 4. The appellant seeks leave to appeal because the orders made by the Tribunal were not fair and equitable. The appellant claims she has suffered a substantial miscarriage of justice because the Tribunal ignored the pricing allegation. 5. The Tribunal erred in not finding that "another real estate agent would have put down the Defence Housing Department as tenant on the lease and we would not be here today as DHA would have attended to the [tenants'] damages." The appellant claimed that the Tribunal should have found that the respondent's failure to name DHA as the tenant amounted to a breach of guarantees in Australian Consumer Law (ACL).

Reply to Appeal

1. In the Reply to Appeal the respondent submits that the decision was fair and equitable and made in accordance with the evidence. There are no errors of law and the appellant has not provided or referred to any new evidence that was not available in the first instance and no factual errors or conclusions were unreasonably arrived.
2. The respondent concedes the appeal was filed in time.

Ground 1

1. We refer to the appellant's appeal submissions on page 23 of her appeal bundle "These are the issues and errors in order": "The landlord became aware of certain issues which she generally characterises as neglect." The appellant claims she became aware of her loss and damage in respect of the residential premises in 2022 when the tenants vacated the premises.
2. This ground raises a question of law, namely whether the Tribunal erred in identifying and applying the test as to when the appellant's cause(s) of action first accrued. Accordingly, the appellant has a right of appeal on this ground and leave to appeal is not required: s 80(2)(b) NCAT Act.

The applicable time limit - when does a cause of action accrue

1. Section 79L(1)(a) of the FTA provides that the Tribunal does not have jurisdiction to hear and determine a consumer claim if, relevantly, the cause of action giving rise to the claim first accrued more than 3 years before the date on which the claim is lodged. This period may be different to the general limitation period applicable to the cause of action if pursued in proceedings in a court: see eg s 236(2) of the ACL.
2. The terms "cause of action" and "accrues" are not defined in the FT Act. However, the meaning is the same as applicable to proceedings in court. In Sacks v Hammoud [2016] NSWCATAP 225 (Sacks) at [32] to [73], when considering the construction to be given to an equivalent provision to s 79L contained in s 7 of the then Consumer Claims Act 1998 (NSW) (repealed), the Tribunal said that the term "cause of action" refers to the elements necessary to give rise to the right of action (at [32]). It cited the comments of Wilson J in Do Carmo v Ford Excavations Pty Ltd (1984) 154 CLR 234 at [245]: "[T]he concept of a 'cause of action' is seen to be clear. It is simply the fact or combination of facts that give rise to a right to sue. In an action for negligence it consists of the wrongful act or omission and the consequent damage … Knowledge of the legal implications of the known facts is not an additional fact which forms part of the cause of action."
3. When a cause of action arises requires relevant findings of fact.
4. It is incumbent upon the Tribunal to identify the cause of action and the Tribunal did so in paragraph 4. The appellant alleges that the respondent has breached s 60 of the ACL and that the breach of the consumer guarantees is said to have arisen as a result of the "failure by the respondent to adequately screen the tenants, with the result that the tenants caused damage to the property".
5. The cause of action is therefore clearly set out by the appellant and clearly identified by the Tribunal: the failure by the respondent to carry out their duties, namely the vetting process, with due care and skill causing the appellant's loss and damage.
6. The appellant submitted that the economic loss which she suffered was consequent upon the emergence of the fact of the damage to the premises in 2022 and that is what brought the appellant's causes of action into existence.
7. There are three possible causes of action that the appellant could raise in the context of these facts:

Accrual of a cause of action under s 60 of the ACL

1. The appellant claims that the cause of action under s 60 of the ACL arose because the respondent did not vet the tenants with due care and skill in about October 2013. However, the appellant submits that that cause of action did not accrue until the tenants vacated the premises in 2022, because she was not aware of the damage the tenants had caused until then.
2. We do not accept this submission. In our view, the Tribunal correctly found that a cause of action for breach of consumer guarantees arose at the time the appellant could have become aware of the alleged breach by the agent, which was when the appellant took over the management of the residential premises in 2014 and not in 2022 when the tenants allegedly left the premises in a state of disrepair.
3. We note that in addition to dismissing the application because it was out of time, the Tribunal found there was no substance in the allegation that the Tribunal had not vetted the tenant correctly. In our view, this finding was open to the Tribunal. This is because the appellant did not establish that the vetting of the tenants in 2013 was causally connected to the claim which gives rise to loss and damage in 2022.
4. In relation to this, it is clear from the evidence provided by the appellant that her claim for damages arises from the alleged failure by the tenants "to not leave 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" (see s 51 of the RT Act) . A breach of s 51 gives rise to a claim for damages under section 190 of the RT Act. A dispute about an alleged breach of s 51 cannot arise until after the end of the tenancy agreement. There is nothing in the material provided to suggest that there is any link between the vetting process undertaken by the respondent in 2013 and the condition of the premises in 2022, in circumstances where the appellant had managed the tenancy agreement since 2014.
5. There is no error on a question of law established and no error for which the leave of the appeal panel is required. This ground of appeal is dismissed.

Accrual of a cause of action - in negligence

1. The appellant claims that the respondent breached a duty of care owed to her. In order to establish an action in the tort of negligence the appellant must prove on the balance of probabilities that the respondent owed her a duty of care, the respondent breached that duty and the appellant suffered loss as a result of that breach and that loss was not too remote.
2. We are not satisfied that the appellant established a claim in negligence.
3. First, even accepting that the respondent owed the appellant a duty of care, there is no evidence to suggest that the tenants were not properly vetted or that the failure to vet is causally connected to any damage or loss claimed by the appellant. As was stated by the Tribunal at [37] of the written reasons, the standard of care expected of a managing agent must be objectively determined and this is most readily done with reference to how the respondent's performance of the services differed or fell short from the manner in which a reasonably competent professional would have performed the same services.
4. There was no evidence before the Tribunal, nor has any evidence been tendered on appeal, to suggest that the respondent breached its duty of care or performed below a reasonably expected standard. Simply to state that the "respondent did not provide due care and skill in assessing the tenants as suitable tenants for the property" does not give rise to an error on a question of law.
5. The Tribunal, correctly, in our view found that the cause of action in negligence accrued at the time the tenants were vetted in 2014, and not as is submitted by the appellant, when she discovered the residential premises were damaged. A submission that there be a general qualification that time does not commence to run until the damage is discovered by the plaintiff or could on reasonable inquiry have been discovered in claims in negligence for economic loss was rejected by a majority of the High Court in Hawkins v Clayton (1988) 164 CLR 537: see, as per Deane J in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514 at page 540.3. The appellant could on reasonable enquiry have discovered that the tenants,' whom she approved in 2014, were not suitable, at the latest when she assumed the day to day management of the premises. Upon terminating the managing agency agreement the appellant had every opportunity to make reasonable enquiries as to the ongoing suitability of the tenants. Even in the event of a breach of duty of care, any negligent conduct was reasonably discoverable in 2014 at the latest and the Tribunal was correct to dismiss the appellant's claim.
6. There is no error on a question of law established and no error for which the leave of the appeal panel is required. This ground of appeal is dismissed.

Accrual of cause of action - breach of contract

1. The causes of action in contract was dealt with by the Tribunal at [27] and following. A cause of action for breach in contract accrues at the date of the breach: Woolcock Street Investments Pty Ltd v CDG Pty Ltd and Another (2004) 216 CLR 515 at [103]; Allianz Australia Insurance Ltd v Haddad [2015] NSWCA 186 at [21]. In this case, the date of the alleged breach was March 2013 when the tenants were selected by the respondent.
2. Applying s 79L of the FTA, it is clear, that the Tribunal had no jurisdiction to determine the appellant's claim based on these causes of action because they accrued more than three years before she commenced proceedings in the Tribunal. In any event, even if the appellant had commenced proceedings within three years of the accrual of the relevant cause of action, the evidence provided did not establish that any breach by the respondent in vetting the tenants in 2013 was causative of loss suffered in 2022.
3. There is no error on a question of law established and no error for which the leave of the appeal panel is required. This ground of appeal is dismissed.

Ground 2

1. The appellant claims that the Tribunal erred in granting leave to the respondent to apply for costs. The Reply to Appeal confirms that the respondent has not applied for costs and has no intention to apply for costs in relation to the first instance proceedings. As there is no application for costs and no order for costs has been made, this ground of appeal is moot and insofar as is necessary, we dismiss it.

Ground 3

1. The appellant submits the tenants' delinquency did not become manifest until "the tenants trashed my property" and that time should have been extended under s 41 of the NCAT Act.
2. We disagree.
3. Section 41(1) of the NCAT Act states that the Tribunal may "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". (Emphasis added).
4. Section 79L of the FT Act states that the time limitation period in s 79L of the FT Act is a jurisdictional time limit, equivalent to the time limits to take proceedings in the Tribunal for breach of statutory warranties under 48K of the Home Building Act 1989 (NSW). For the same reasons as were expressed in S & G Homes Pty Ltd t/as Pavilion Homes v Owen [2015] NSWCATAP 190 at [50]-[53], the Tribunal cannot invoke s 41 of the NCAT Act to extend time under s79L of the FT Act, as it is not a limitation defence but rather a jurisdictional fact that confers jurisdiction on the Tribunal or does not: Boutenko v The Owners-Strata Plan No 77480 [2022] NSWCATCD.
5. Section 79L(1) clearly states that the Tribunal does not have jurisdiction to hear and determine a consumer claim if the cause of action giving rise to the claim first accrued more than three years before the date on which the claim is lodged. The words "does not have jurisdiction" unequivocally limit the power of the Tribunal to hear and determine cases that fall outside the three year accrual period and the Tribunal cannot extend time in these circumstances: Hua Nan Trading Pty Ltd v The Owners - Strata Plan No 32396 [2023] NSWCATAP 66.
6. In any event, we note that the appellant did not seek an extension of time at the hearing below. The appellant should not be permitted to run a case that that was not an issue that it raised before the Tribunal. We refer to Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645 - 646. To similar effect is Mamo v Surace (2014) 86 NSWLR 275 at 289 where McColl JA, with whom Ward JA and Tobias AJA agreed, held: '[75] A party is bound by the conduct of his or her case. It has long been the law that, except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him or her, to raise on appeal (even one by way of rehearing) a new argument which, whether deliberately or by inadvertence, he or she failed to put during the hearing when there was an opportunity to do so: Coulton v Holcombe (1986) 162 CLR 1 at 7-8 per Gibbs CJ, Wilson, Brennan and Dawson JJ; approving University of Wollongong v Metwally (No 2)(1985) 59 ALJR 481 at 483; Whisprun Pty Ltd v Dixon [2003] HCA 48; (2003) 77 ALJR 1598.'
7. This principle has been consistently applied in the Tribunal. Refer, Oppidan Homes Pty Ltd v Baldwin and Granofsky [2016] NSWCATAP 109, Scarano v Palm Pools and Spas Pty Ltd [2019] NSWCATAP 79 and in Gan v Shop 3, 228-230 Hanvaylee Parade Kensington Pty Ltd [2016] NSWCATAP 210 at [55].
8. This ground of appeal is dismissed.

Ground 4

1. The appellant submits that the Tribunal erred in dismissing the "rental difference" claim. The appellant alleges fraud and that the overpayment by the tenants gave rise to the respondent's obtaining a financial benefit by deception. The submissions are contained in the notice of appeal. It is stated that the "real estate agent was stealing from me $100 a fortnight". The issues in dispute were said to have arisen in 2014 and caused the appellant to terminate her managing agency agreement. The respondent denies the claims and the Tribunal found that the claim was not made out on the available evidence.
2. The appellant states variously "I cannot believe the Tribunal member turned a blind eye to this" and "the orders made by [the Tribunal] is ignoring the facts and not applying the law correctly" and the appellant "has suffered a substantial miscarriage of justice."
3. We consider that this is not a valid ground of appeal. Consistently with the approach to appeals brought by self-represented appellants identified in Cominos v Di Rico [2016] NSWCATAP 5 at [12] - [13], we consider that this ground of appeal does not raise an error on a question of law or a question for which the leave of the Appeal Panel is required. Simply stating that a decision is unreasonable or unjust does not identify an error in the Tribunal's reasons for decision. The appellant submits in her written submissions she ought to be granted leave to appeal because the decision is not fair and equitable within the meaning of cl 12(1) of Schedule 4 of the CAT Act. However, there are no submissions provided why the decision was against was against the weight of evidence or that the decision was unreasonable and unjust. In any event, even if the appellant had established the facts complained of, the application to the Tribunal was out of time.
4. This ground of appeal is not established.

Ground 5

1. The appellant claims that that the respondent was negligent in not entering into residential tenancy agreement with the Defence Housing Australia (DHA) as one of the tenants was employed by the Australian Defence Force. It is submitted by the appellant that 'we would not be here today as DHA would have attended to the [tenants'] damages."
2. The Tribunal found that there is no evidence that DHA would have agreed to enter into a residential tenancy agreement with the appellant, or that it was DHA practice to a "attend to damages" in the event of a breach. The appellant submits that the findings are against the weight of evidence and the orders were not fair and equitable.
3. We consider that the Tribunal's findings in relation to this issue were open to it. Simply stating that a decision is unreasonable or unjust does not identify an error in the Tribunal's reasons for decision. The appellant submits that she ought to be granted leave to appeal because the decision is not fair and equitable within the meaning of cl 12(1) of Schedule 4 of the CAT Act. However, there are no submissions provided why the findings are against the weight of evidence or that the decision was unreasonable and unjust. This ground of appeal is not established. This ground of appeal does not raise an error on a question of law or a question for which the leave of the Appeal Panel is required.
4. In any event the cause of action for breach of consumer guarantees under s 60 of the ALC accrued in 2014 at the time of the alleged breach for the reasons set out above.

Orders

1. The orders of the Appeal Panel are: 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: 15 September 2023