Macionis v Franklin

Decision of the Tribunal

1. The Tribunal's findings and reasons are summarised as follows:

Cleaning

1. The Tribunal accepted the tenant's evidence that the agent's inspection of the property (and photographic evidence) occurred while the tenant was still in the process of moving out of the property. The Tribunal accepted the tenant's evidence that the agent had attended the property to collect the keys on 14 January 2021 whilst the tenant was still in the process of vacating and having the property cleaned. The tenant paid $660 to a professional cleaner recommended by the landlord's agent, and the cleaner was still working until the early evening of 14 January 2021. The tenant also undertook cleaning herself.
2. The Tribunal was not satisfied the photographs taken at the outgoing inspection by the landlord's agent were taken before the tenant had fully vacated and finalised the cleaning of the residential premises. Accordingly, the Tribunal was not satisfied the photographic evidence of the condition of the premises accurately reflected the condition of the property at the end of tenancy.
3. The tax invoice for cleaning of $550 relied upon by the landlord only identified an "end of lease clean" and did not identify the areas cleaned or otherwise provide adequate detail of the cleaning performed.

Pool Glass Fence Repair

1. It was not in dispute that a glass panel of the pool fence had been damaged during the course of the tenancy when a family member of the tenant fell though it. The tenant asserted that she engaged a contractor to replace the panel, and cleaned glass from the pool. The landlord's oral evidence was that the replacement panel "did not comply with regulations" and needed to be replaced. The landlord also asserted that glass remnants were found in the pool.
2. The Tribunal accepted that there was contemporaneous evidence that the tenant had complained the glass panel was loose (an email to the landlord's agent dated 6 September 2020). The Tribunal did not accept that the landlord's evidence established that the tenant's repair was inadequate or why it was inadequate. The invoice relied upon by the landlord did not identify that the glass panel replaced was inadequate, defective, or non-compliant with any applicable regulations. The Tribunal was not satisfied the landlord had established a need to replace the panel caused by the tenant's original breach.

Electrical Repairs

1. The Tribunal noted that the landlord did not press a number of items set out in the invoice of $1,320. The two main items claimed were blown globes and one missing air-conditioning remote. The Tribunal found that there were some blown globes but noted the landlord's invoice did not itemise how many, and the Tribunal found the amount claimed by the landlord was excessive. The Tribunal awarded the landlord $100 as compensation for the cost of replacing globes.
2. In respect of the air-conditioning remote, the Tribunal accepted the tenant's evidence that at the commencement of the tenancy the landlord only supplied one air-conditioning remote control, which the tenant returned at the end of the tenancy.

Air Conditioning Unit

1. The landlord claimed $242 for the cost of repairing a conduit to the air-conditioning unit, asserting that the tenant's dog chewed it. The tenant disputed any damage and asserted the air-conditioning unit was working at the end of the tenancy. The Tribunal was not satisfied the landlord had proved that at the end of the tenancy the air-conditioning unit was not working, and that the landlord's evidence was deficient because the repair invoice did not state what was wrong with the air-conditioning unit.

General Repairs

1. The landlord relied on an invoice from a handyman dated 30 January 2021 for various repairs. At the hearing, the landlord only pressed 7 items. The tenant's evidence disputed that any of the items claimed were anything more than fair wear and tear, and that some of the items were damaged or missing at the commencement of the tenancy. The tenant had made comments on the ingoing inspection report about the condition of the property.
2. The Tribunal accepted that the comments of the tenant (in addition to her oral evidence) established "that there were a number of maintenance issues with the property, that it was not in newish condition". The Tribunal found the photographs of the landlord, in addition to the landlord's other evidence, did not establish any of the general maintenance repairs claimed by the landlord were types of damage beyond fair wear and tear.

Scope and Nature of Appeals

1. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) ("the NCAT Act").
2. Internal appeals involve consideration of whether there has been any error of law; or any error other than an error of law sufficient to grant leave to appeal under Sch. 4 Cl. 12 of the NCAT Act.
3. An appeal is not simply an opportunity for a dissatisfied or aggrieved party to re-argue the case they put at first instance: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10].
4. 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.
5. 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 Sch. 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).
6. 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.
7. Even if an appellant from a decision of the Consumer and Commercial Division requiring leave to appeal has satisfied the requirements of cl. 12(1) of Sch. 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act.
8. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner 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.
9. Even if the appellant establishes that it may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the NCAT Act. The appellant must demonstrate something more than the Tribunal was arguably wrong (Pholi v Wearne [2014] NSWCATAP 78 at [32]).

Grounds of Appeal

1. Unfortunately, neither the Notice of Appeal or the other submissions and materials relied upon by the landlord for the purpose of the appeal hearing clearly articulated any grounds of appeal.
2. Both the landlord and the tenant appeared to be under the erroneous assumption that the appeal was a re-hearing of the dispute before the Tribunal. Whilst we understand that the parties were not legally represented, the landlord was represented by a licensed real estate agent.
3. There are numerous decisions of the Appeal Panel that point out the importance of an appellant being able to clearly articulate its grounds of appeal (i.e. what are the errors of law in the decision appealed against; or what are the errors that are not errors of law but are errors of a type that leave to appeal should be granted under cl. 12 of Sch. 4 of the NCAT Act) and make submissions that engage with the grounds of appeal. It is insufficient for a party bringing an appeal to merely give a narrative as to why they are dissatisfied with the decision that is being appealed against.
4. The landlord's complaints about the decision are summarised as follows: 1. The Member "rushed" through the hearing; interrupted the landlord and the landlord's agent; and did not give the landlord a reasonable opportunity to be heard. 2. The Member erred in making a factual finding that the tenant had not fully vacated the premises and was still in the process of moving out and cleaning when the landlord's agent conducted the inspection on 14 January 2021. 3. The Member did not fully consider and give weight to the landlord's evidence.
5. Accordingly, we regard the grounds of appeal being raised as: 1. denial of procedural fairness (error of law). 2. making factual findings when there was no evidence to support the factual findings (error of law), and 3. the decision was against the weight of evidence (an error of a type that leave to appeal is required).
6. The landlord provided a written transcript of the parts of the hearing that it asserted were relevant to the appeal. Both parties provided copies of documents they relied upon at the hearing before the Tribunal on 16 August 2021. Both parties attempted to rely upon some fresh documentary evidence that was not before the Tribunal at the hearing on 16 August 2021, but we have not taken such documents into account as such evidence was reasonably available to the parties prior to 16 August 2021.

CONSIDERATION

1. Before dealing with the grounds of appeal, it is appropriate to briefly set out the relevant legal principles applicable to claims by landlords for payment of residential tenancy bonds due to repairs and/or cleaning of the premises at the end of the tenancy.
2. Section 51 of the RT Act relevantly states: 51 Use of premises by tenant … (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. …
3. Section 175 of the RT Act states: 175 Powers of Tribunal (1) The Tribunal may, on application by a landlord or tenant or any other person (including a former co-tenant) who has an interest in the payment of a rental bond, make an order as to the payment of the amount of the rental bond. (2) The Tribunal may make an order whether or not the amount of a rental bond has been paid by the Secretary. (3) An application for an order must be made within the period prescribed by the regulations.
4. If the amount claimed by the landlord for repairs and/or cleaning expenses exceeds the rental bond amount, the landlord can also claim under ss 187 and 190 of the RT Act (subject to the monetary jurisdiction of the Tribunal and limitation periods that are unnecessary to discuss for the purpose of this decision).
5. Applicable principles regarding breach are discussed by the Appeal Panel in Pancio v Crompton & Jennings [2015] NSWCATAP 110 at [18]-[24] and Vasales v Li [2021] NSWCATAP 295 at [29]-[31]. The landlord bears the onus of proving breach of s 51(3)(b) of the RT Act in the sense that there is damage to the property beyond fair wear and tear. Fair wear and tear means the reasonable use of the house by the tenant and the ordinary operation of natural forces. The issue is to be considered objectively. The requisite standard is that commonly prevailing among tenants of comparative premises, and the issue should not be approached from the subjective perspective of a fastidious and obsessive landlord. The Tribunal compares the condition of the property at the commencement of the tenancy and the condition of the property at the end of the tenancy. The absence of ingoing and outgoing inspection reports compliant with ss 29 and 30 of the RT Act is not fatal to the landlord's application, but is relevant to the weight given to the other evidence given as to the condition of the premises at those two points in time.
6. Further, the bond is a payment by the tenant held as security. The onus is upon the landlord to prove an entitlement to the bond or any part of it at the end of the tenancy by way of proving breach of a relevant provision of the RT Act or the residential tenancy agreement by the tenant, and that the breach causes loss to the landlord (Tang v Zhao [2020] NSWCATAP 243 at [22]-[23]).

Was the Landlord Denied Procedural Fairness?

1. Applicable principles were succinctly set out by the Appeal Panel in Kotsakis v Hidajat [2021] NSWCATAP 358 as follows at [53]-[56]: The Tribunal must observe the rules of natural justice: s 38(2) of the NCAT Act. That subsection expressly states that the Tribunal "is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice." The general law principles of procedural fairness which encompass the natural justice hearing rule are set out in s 38(5) of the NCAT Act, which relevantly provides: "The Tribunal is to take such measures as are reasonably practicable: … (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings." However, the hearing rule, as s 38(5) (c) indicates, is not absolute. The Tribunal is only required to take "reasonably practicable" measures to ensure that a party has a "reasonable opportunity" to be heard. As Gleeson CJ in Re Minister for Immigration and Multicultural Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 said at [37] in respect of procedural fairness: "...Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice." Accordingly, what constitutes a "reasonable opportunity" to be heard will depend on the circumstances of each case. Giles JA put it succinctly in Brennan v New South Wales Land and Housing Corporation [2011] NSWCA 298; (2011) 83 NSWLR 23 at [63]: "...in principle, the requirements of procedural fairness are identified as a matter of law depending upon the institutional setting in which decision-making is to operate, the relevant statutory scheme, the subject matter of the decision and, as part of that analysis, the seriousness of the potential consequences of an adverse decision."
2. Under s 38(4) of the NCAT Act, the Tribunal is to act with as little formality as the case permits and according to equity, good conscience, and the substantial merits of the case without regard to technicalities or legal forms.
3. Under s 38(6)(c) of the NCAT Act, the Tribunal may, at a hearing, require the presentation of the respective parties' cases before it be limited to the periods of time that it determines are reasonably necessary for the fair and adequate presentation of the cases.
4. Under s 36(3) of the NCAT, parties and their representatives have a duty to co-operate with the Tribunal to give effect to the "guiding principle" that the Tribunal is to facilitate the just, quick and cheap resolution of the real issues in the proceedings under s 36(1) of the NCAT Act.
5. The landlord submits that the presiding Member at the Tribunal hearing "rushed" the landlord's agent in presenting the landlord's evidence and submissions; and only focused upon some of the photographs taken at the outgoing inspection on 14 January 2021. The landlord further submits that the Member interrupted the landlord's agent and the landlord.
6. Both the transcript provided by the landlord; and the content of the reasons of the Tribunal dated 18 August 2021 do not support this contention. The hearing was not an opportunity for the landlord to make overly lengthy submissions about each item of damage and cleaning claimed by the landlord.
7. The task of the Member was to conduct the hearing in a fair and efficient way so that both parties had a reasonable opportunity to have their case considered and make submissions within the allocated hearing time. To properly administer a hearing, it is necessary for a Member from time to time to interrupt parties and representatives to keep them focused upon the real issues in dispute. It is not the role of the parties and representatives to dictate the procedural framework of the hearing to the presiding Member. There was nothing inappropriate or unfair in the Member requesting the landlord's agent to focus upon evidence and submissions about the photographs the landlord was relying upon at the outgoing inspection and whether such photographs demonstrated damage or unreasonable uncleanliness, as such evidence was important to the real issues in dispute that the Member was required to determine.
8. We are not satisfied that the conduct of the hearing by the Member failed to give the landlord a reasonable opportunity to be heard and present its case.
9. The landlord submits that Mr Macionis was "prevented" by the Tribunal from giving evidence at the hearing about events of 14 January 2021, when the keys to the property were returned to the landlord and the outgoing inspection occurred.
10. It is clear from the transcript and the reasons of the Tribunal that Mr Macionis did give oral evidence. Whether he gave any or any fulsome evidence about whether the tenant had completely vacated the premises prior to the keys being returned and outgoing inspection occurring is not the salient enquiry. The landlord clearly had the opportunity to give such evidence, as did the landlord's agent. The tenant had a different version of events. The Tribunal's acceptance of the tenant's oral evidence regarding the events of 14 January 2021 does not constitute a denial of procedural fairness to the landlord.
11. No denial of procedural fairness has been established. This ground of appeal is dismissed.

Did The Tribunal Make Factual Findings Without Evidence?

1. There was clearly evidence given at the hearing by the tenant to support the relevant factual findings made by the Tribunal. No error of law has been established. This ground of appeal is dismissed.

Was the Decision Against the Weight of Evidence?

1. The landlord submits that the decision was against the weight of evidence. In particular, the landlord submits that: 1. The keys had been returned and the tenancy ended before the outgoing inspection occurred. The tenant was not in the process of "moving out" or performing cleaning when the outgoing inspection occurred. 2. The panel of the pool fence had been damaged during the tenancy and the repairs conducted by the tenant were inadequate. In these circumstances, the landlord's replacement of the panel was caused by the tenant's breach. 3. The Tribunal should have accepted the landlord's evidence about the condition of the property and the commencement of the tenancy and its condition at the end of the tenancy over that of the tenant.
2. It is clear from the documents and submissions of the parties at the hearing on 16 August 2021 that the tenant had a different version of events.
3. A decision is "against the weight of evidence" when 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 reasonable Tribunal Member could reach (Collins v Urban at [77]).
4. We are not satisfied the landlord has established the decision was against the weight of evidence such that a substantial miscarriage of justice occurred. The Member's reasons clearly set out why the Member was not satisfied the landlord had proved any breach of s 51(3)(b) of the RT Act (other than in respect of the issue of the globes). The Member's reasons are logical and orthodox.
5. Further, the Member's finding that the landlord had not proved that the tenant had breached s 51(3)(b) of the RT Act was not based solely upon the finding that the photographs taken by the landlord's agent at the outgoing inspection were taken before the tenant had completely vacated the premises and was still in the process of cleaning the premises. The Tribunal was justifiably critical of the lack of adequate detail provided in the invoices provided by the landlord in respect of cleaning and repairs. The Tribunal was entitled to place significantly diminished weight upon such evidence.
6. We are not satisfied the decision was against the weight of evidence. We are also not satisfied the decision was not fair and equitable. No basis for leave to appeal under cl. 12 of Sch. 4 of the NCAT Act has been established by the landlord, and we do not grant leave to appeal in accordance with the principles set out in Collins v Urban.

ORDERS 1. Leave to appeal is refused. 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: 19 November 2021