Madigan v New South Wales Land and Housing Corporation - [2014] NSWCATCD 197 - NSWCATCD 2014 case summary — Zoe

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Madigan v New South Wales Land and Housing Corporation

[2014] NSWCATCD 197

NCAT Consumer and Commercial|2014-08-14

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At a glance

Source facts

Court

NCAT Consumer and Commercial

Decision date

2014-08-14

Catchwords

BREACH OF RESIDENTIAL TENANCY AGREEMENT - interference with reasonable peace - failure to repair - security of premises

Source

Original judgment source is linked above.

Catchwords

BREACH OF RESIDENTIAL TENANCY AGREEMENT - interference with reasonable peace - failure to repair - security of premises

Judgment (16 paragraphs)

[1]

reasons for decision

The applicant leases premises in Millers Point from the respondent. She has occupied those premises since 12 April 2004. The property is a three bedroom dwelling. It is one of several houses in a row, each house having its own backyard with a rear gate. This opens onto a narrow passageway extending along the entire length of the row of these houses. Photographs tendered by the tenant show some of the houses in that row. These dwellings are of a vintage age, exhibiting the external adornments affixed to dwellings erected early last century.
The tenant commenced these proceedings on 7 November 2013.

[2]

Orders sought

At the hearing the applicant's solicitor informed the Tribunal that the applicant sought compensation for economic loss and non-economic loss due to three breaches of the Act by the landlord - 1. pursuant to section 50 of the Act - interference with the reasonable peace, comfort or privacy of the tenant using the premises, 2. pursuant to section 63 of the Act - the failure of the landlord to provide and maintain the premises in a reasonable state of repair having regard to the age of, the rent payable for and the prospective life of the premises, and 3. pursuant to section 70 of the Act - the failure of the landlord to provide and maintain locks or other security devices necessary to ensure that the premises are reasonably secure.

[5]

The break-in

While the tenant was temporarily housed in nearby accommodation, she visited her residence on or about 7 May. She found the security gate, barring access to the general public along the narrow passageway which extended along the rear of the row of houses, and the gate, giving access to her rear yard, were open. Several of her plants were missing, plant pots were smashed, and damage had been occasioned to some of the garden ornaments in her backyard.
The tenant reported this incident to the police. The police recorded this as event reference number E 50893070. Leading Senior Constable Adam Macarthur and Constable Georgina Taylor noted that they spoke to the tenant. She informed them she was not able to provide any details about the vandalism as she had not been living in the premises for the prior four weeks due to construction taking place in her residence. The police further recorded that the tenant suggested that the robbery and the damage to the garden ornaments had occurred on the previous Sunday. She speculated that it was the work of her neighbour, as the tenant and the neighbour had "an ongoing feud". The constables noted that this acrimonious relationship was "highly" known to the police.
The tenant claimed that there were paint tins and other painter's equipment in the laneway. The Tribunal was invited to come to the conclusion that the landlord's contractors had left open both the security gate giving access to the passageway and the tenant's rear garden gate, which can only be opened from inside her yard. The tenant argued this indicated there was a lack of security allowing an intruder to wreak havoc with the tenant's garden possessions.
The Tribunal cannot accept that assumption.
The key to the security gate giving access to the passageway is a common key given to all other occupants of the row of houses. There was no evidence to demonstrate that the paint tins were placed there by the landlord's contractors, nor that those painters left the security gate open. Connecting the landlord's painters with the harm caused in the tenant's yard requires an unsound inference to be made. There is an excessive gap in this sequence of events to overcome before agreeing with the tenant's supposition. There are too many broken links in this causal chain to come to the suggested conclusion.
The identity of the intruder remains a mystery. It can only be solved by further extensive investigation or a confession being made by the perpetrator. If the finger of suspicion is to be pointed anywhere, it would be in the direction of the neighbour, rather than the landlord's contractors, as the tenant informed the police at the time.

[7]

Was liability already admitted?

The proceedings were before Senior Member Rosser on 26 May 2014. The tenant tendered a transcript of that hearing. The attention of the Tribunal was drawn to an exchange which occurred between Senior Member Rosser and Jackie O'Brien, a housing officer who represented the respondent, on that day - "Member: All right. So you're disputing liability as well? O'Brien: Yes. Member: So you're saying there is no breach of the tenancy agreement? O'Brien: No, we accept responsibility that there were some goods damaged. Member: Okay, no, I'm asking you whether you're disputing liability. O'Brien: I do dispute liability, sorry, yes. Member: So you're saying you're entitled to nothing because there is no breach of the tenancy agreement. Is that what the defence is going to be? O'Brien: Sorry, I'm saying there has been … Member: I know you understand that yes, you accept that there was damage. But whose fault do you say that was, yours, God's, nobody's? O'Brien: I'm saying there has been some damage - that some of the property was damaged due to our - - - Member: Negligence, whatever. O'Brien: Yes. Member: All right."
The tenant claimed that this exchange evidenced an admission on the landlord's part about liability. The Tribunal cannot come to that conclusion.
The written directions issued by the Senior Member included - ● granting leave to both parties to be legally represented, ● issuing directions about the exchange of evidence, ● nominating how that documentary evidence was to be compiled, and ● making ancillary directions about the conduct of the proceedings.
The tenant was directed to provide the landlord and the Tribunal with details of the claim including "submissions in relation to liability". The landlord was directed to provide documents including "witness statements and submissions in relation to liability".
Nowhere in that record of the directions made did the Senior Member note that liability had been conceded by the landlord. She did not record that the single question for resolution at the formal hearing would be merely the quantum of compensation to be awarded.
Therefore, the Tribunal is of the view that the issue of liability of the landlord remained to be determined.
The alleged failure about the security of the premises has been dealt with. That leaves the alleged breaches of either section 50 or 63 of the Act to deal with.

[8]

Was the tenant's quiet enjoyment interfered with?

Section 50 of the Act sets out that a tenant is entitled to the quiet enjoyment of the premises without interruption by the landlord, as well as prohibiting a landlord from interfering with, or causing or permitting any interference with, the reasonable peace, comfort and privacy of a tenant in using the residential premises.
The term "quiet enjoyment" does not mean quiet as in 'not noisy'. The term incorporates two concepts: that the landlord gives the tenant an exclusive and secure right to occupy the premises for the term of the tenancy agreement including the right to exclude others from the premises; and that the landlord guarantees that the tenant can enjoy all the uses of the premises that customarily go with a residential tenancy agreement.
It was common ground that the tenant has endured problems with several sewage overflows into her home. This was evidenced by photographs showing effluent flooding the property. The house was also invaded by smells and gurgling noises.
It was not in dispute that on all occasions, save for the tenth incident, the cause of the problem could not be rectified.
The tenant tendered copies of the respondent's electronically compiled file notes. These abound with phrases, replicated as originally printed - "Forensic cleaning required to successfully remove all traces of hazardous matter. Sewer overflow throughout dwelling. Extract water to Bed 1 & hall, clean out excessive sewer due to recurring choke. Replace boundry trap & sewer line to main in high street. Appox 10m of 150mm sewer line plus 150mm boundry trap. BATH/back bedroom - sewer choke - all drains are backing up. Bad sewerage stench. Sewerage has overflowed from ldy & bathroom floor drains again. /2 cancelled & upgraded to URG. Please camera sewer line down stream to see proof of line blockage and determine wether Housing or Sydney Water line is at fault. The blockage was on Sydney Water side. Break in line is well outside property boundary and also Sydney water issue., from syd water main stack line. Council permit - Sewer works. Traffic control for sewer dig up and replacement."

[9]

What caused the sewer system to back up?

Neither party addressed the crucial issue: What caused the sewer system to back up? There were no drainage plans tendered to the Tribunal to demonstrate where in the sewer system the blockage had occurred. There were no reports from any plumbers or contractors, or Sydney Water, about why the blockage occurred. From reading the excerpts above, it can be surmised that the fault may well have been in the Sydney Water sewer pipes under the street outside of the premises, not those beneath the landlord's property.
The Tribunal is of the view that the landlord has rapidly responded on all occasions to each catastrophe. The tenth incident was, apparently, the worst. The Tribunal cannot come to the conclusion that relocating the tenant to nearby premises while repairs, such as replacement of carpet, painting walls, and a forensic cleaning were carried out, resulted in any breach of the tenancy laws by the landlord. If anything, they demonstrate exactly what a prudent landlord should do to ameliorate the effects of the disaster by not continuing to expose the tenant to any health or safety risks.
The tenant signed a Declaration for Temporary Accommodation on 24 April 2013 stating - "… I give complete and unhindered access to my dwelling to Land and Housing Corporation and their contractors until the maintenance is completed. I acknowledge it is important to return to my dwelling, which now has an expected completion date of 3 May 2013. I will return to the above address on this date, or earlier if the maintenance work is completed"
By that declaration, the Tribunal is of the view that the tenant has waived any rights which she might have accrued under the Act or agreement by allowing the respondent unhindered access to interfere with her reasonable peace, comfort and privacy at her normal residence while work was being performed by the respondent.
The Tribunal is not convinced that there has been any failure on the part of the landlord to provide and maintain the premises in a reasonable state of repair. This is especially so having regard to the age of the house, being approximately 100 years old.

[10]

Are the proceedings estopped?

The landlord relies on a legal principle known as an Anshun estoppel. This prevents a party from bringing forward in a new claim a matter which was so relevant in a previous claim that it would be unreasonable not to have pursued it earlier.
This principle about the conduct of earlier litigation was formulated in Port of Melbourne Authority v Anshun Pty Ltd [1981] HCA 45, (1981) 147 CLR 589.
In Meriton Apartments Pty Limited v Industrial Court of New South Wales [2009] NSWCA 434, Acting Justice Handley succinctly expressed the Anshun principle as: "…there will be no estoppel unless it appears that the matter relied upon … in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely on it. Generally speaking it would be unreasonable not to plead a defence if … it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding."
An Anshun estoppel has limitations. In Champerslife Pty Ltd v Manojlovski & anor [2010] NSWCA 33, Acting Justice Handley explained there was an already established principle that proceedings for recovery of debt could be defended without affecting the defendant's right to bring proceedings later for breach of warranty. His Honour stated that where there are two separate and distinct causes of action, it is open to courts to allow the second proceedings. So, second proceedings are not always estopped as being unreasonable if there are two separate causes of action.
Examining the tenant's earlier claim in proceedings 13/34224 it is noted that the tenant's address was nominated as c/- Inner West Tenants Service. Attached to the application form was a letter of 25 June 2013 from Marrickville Legal Centre indicating that the orders requested of the Tribunal were for repairs to be carried out, a reduction in the rent due to withdrawal of services or facilities at the premises, and for the rent to abate due to the premises becoming unusable.
The letter from Marrickville Legal Centre indicated that the reason for the orders sought was because the "applicant had a sewerage overflow problem in her unit, which has now been repaired."
The application was lodged after the tenth incident occurred.
On 19 July 2013, the Tribunal ordered the rent be decreased, repairs to be carried out, and it was noted that the tenant agreed to withdraw the claim if the repairs were completed by 23 August 2013. Otherwise, the proceedings were adjourned.
On 6 September 2013, Marrickville Legal Centre withdrew the application as all repairs had been completed.

[13]

Does the Tribunal lack jurisdiction?

The application seeks orders to be made under section 187 of the Act. That section outlines the general powers of the Tribunal. It does not create a cause of action.
The tenant relies on three sections of the Act which cast an obligation on the landlord. These were listed in [3] above. If one of these is not complied with, a breach of the Act occurs. In that event, section 190 of the Act comes into play.
Section 190(1) of the Act allows a tenant to apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement. Sections 50, 63 and 70 of the Act all include the phrase, "This section is a term of every residential tenancy agreement."
Consequently, the residential tenancy agreement incorporates all three legislative obligations imposed on the landlord. Any breach of one of those sections is a breach of the residential tenancy agreement.
Section 190 of the Act has time limits. These are prescribed by Regulation 22(9) which reads - "For the purposes of section 190 (1) of the Act, the prescribed period for making an application for an order in relation to a breach of a residential tenancy agreement or proposed agreement is within 3 months after the applicant becomes aware of the breach."
The tenth incident of sewage overflow occurred during April 2013. The break-in occurred in May 2013. The premises were renovated after the tenth incident and repairs were performed with the consent of both parties. There has been no evidence of any failure by the landlord to keep the premises in a reasonable state of repair as required by section 63 of the Act. Rather, the reverse occurred.
The application was made on 7 November. It can only be based on a breach committed during the previous three months, that is, on or after 8 August. There is no evidence of any breach being committed during that three month period. The last breach alleged by the tenant to have been committed by the landlord would have occurred during May. The Tribunal concludes that it appears that the application has been filed out of time. If that conclusion is correct, the Tribunal lacks jurisdiction to entertain the claim.
This situation only became apparent to the Member after the lodgement of the applicant's estoppel submissions. It was not raised during the hearing. Neither party has been given an opportunity to comment about the time limitation. Doubtless, both parties would consider that a judicial ambush would occur if the proceedings were to be dismissed on this ground.
Therefore, the Tribunal is at pains to allay any concern that failure to lodge the claim within the required time limit has played a part in the determination of the litigation. It is only an observation.
Overall, the Tribunal concludes that the landlord has not breached any of the obligations cast on it by the Act or the residential tenancy agreement. Without any liability being demonstrated that the landlord should make good any loss by the tenant, the claim will be dismissed.
If the finding of the Tribunal on the question of liability is incorrect, the question of damages is now addressed.

[15]

The effect of the Civil Liability Act

In 2002, things changed. The New South Wales Parliament enacted the Civil Liability Act. Section 3 of that Act defined non-economic loss to mean, amongst other things, pain and suffering, and loss of amenities of life.
Section 28 of the CLA casts a wide net capturing any claim for damages for mental harm resulting from negligence, regardless of whether the claim is brought in tort, in contract, under statute or otherwise. Section 31 states that there is no liability to pay damages unless the harm consists of a recognized psychiatric illness.
The CLA also sets out that an injury includes impairment of a person's mental condition. It states that no damages can be awarded for non-economic loss unless the severity is at least 15% of a most extreme case. The maximum amount of damages in an extreme case has been $500,500.00 since 1 October 2010. If it can be proved that the severity of the injury is 15% of the most extreme case, the award of damages is 1% of $500,500.00, that is, $5,005.00. This concurs with the table in section 16 of the CLA.
A recent case in the New South Wales Supreme Court concerned an appeal from a local court Assessor. A husband and wife sued a travel company. They had relied on its advice about the best time to take a holiday in Tahiti. They stayed at the travel company's hotel at Bora Bora. On arrival, it was found that the accommodation was located in the middle of a construction site. One third of the beach was inaccessible due to the building works and equipment associated with the renovations. The Assessor awarded the consumers compensation for their inconvenience, distress and disappointment.
That litigation was Flight Centre Limited t/as Infinity Holidays v Janice Louw & anor. [2011] NSWSC 32. There, Acting Justice Barr reviewed several cases which had been determined by the Court of Appeal. He concluded that the tourists' hurt feelings were caught as "pain and suffering". This was an impairment of their mental condition and amounted to personal injury. Therefore, the severity of loss had to be at least 15% of a most extreme case. Since it was not, the judge set aside the Assessor's award of compensation.
In several cases heard by the New South Wales Court of Appeal, anxiety and distress have been included in the definition of the impairment of a person's mental condition. As well, the same court has held that grief; inconvenience, disappointment and injury to feelings are all elements of pain and suffering which fall within the definition of non-economic loss set out in the CLA.
In Insight Vacations Pty Ltd v Young [2010] NSWCA 137, 268 ALR 570, Chief Justice Spigelman stated, at [78], that he characterized grief, anxiety, distress and disappointment to be elements of pain and suffering, rather than being components of the "loss of amenities of life", within the definition of "non-economic loss" as it is defined in section 3 of the CLA.
In a detailed analysis of non-economic loss, Basten JA, with Spigelman CJ agreeing, found at [125] that - "Matters such as grief, anxiety, distress and disappointment … can be elements of pain and suffering. … Similarly … an award for "loss of amenities" ... resulting from 'the deprivation of the ability to participate in normal activities and thus to enjoy life to the full and to take full advantage of the opportunities that otherwise it might offer' ... are heads of damages which fall within the general law understanding of non-economic loss and the statutory definition of that term. Accordingly, they are subject to the constraints imposed by s 16."
Therefore, litigants in the Tribunal would have to demonstrate, presumably by way of medical or psychological report, that their pain and suffering was at least 15% of a most extreme case, before they can seek any compensation for pain and suffering or loss of amenities.
The tenant relied on a decision of Associate Justice Harrison in Fawzi El-Saiedy v NSW Land and Housing Corporation [2011] NSWSC 820 in which her Honour applied the principles of Baltic. She found that the tenant had suffered physical inconvenience and referred to the CLA. At [95] of her Honour's decision, she stated: "The plaintiff has not claimed damages for physical injury. He has claimed damages for discomfort and loss of enjoyment. It is my view that these types of damages do not fall within the definition of personal injury contained within the Civil Liability Act. Therefore [the] Act does not apply."
The headnote to that decision lists the cases cited. Neither Louw nor Insight Vacations was listed amongst the cases her Honour was taken to, or considered by her.
With all due respect to her Honour, the Tribunal considers itself bound by a Court of Appeal decision in preference to a decision by an Associate Justice. Therefore the tenant's claim for non-economic loss would fail due to the lack of medical evidence.

[16]

Quantifying the economic loss

As far as the economic loss claim is concerned, the tenant's advocate suggests that an appropriate award would include not only replacing items damaged and destroyed with comparable items, but replacing some made to specification. The tenant seeks an award of $11,752.50.
The measure of damages is the actual loss expressed as a monetary value. For example, a landlord may claim for the replacement of a damaged fixture or fitting to the premises. The Australian Tax Office has issued Tax Ruling TR 2013/4 which sets out the lifespan for various fixtures and fittings in leased premises. If the age of the damaged item has exceeded the depreciated lifetime, the item in question has no residual economic worth. So despite any additional damage, there is no loss to the owner, as it is not possible to damage an item that is considered to be of no value.
Similarly, a tenant or occupant cannot be recompensed "new for old". Personal possessions and furniture have an economic lifespan. The purchase price is usually when the value of the goods is at the highest as it includes the cost of goods, the retailer's overheads, as well as the mark-up to cover profits. After that, the value of the asset depreciates. Over time, that value would diminish to such an extent that the item would no longer have any value, other than sentimental. It could be that they could not be left as security with a pawnbroker, nor attract a price if offered for sale on eBay™. It could even be said that the chattels became so worthless, perhaps even useless, that a charity would decline to accept them as a donation.
The tenant's documents include a Table of Itemised Losses. These are grouped and the amounts claimed are - - items destroyed and disposed of, $592.00 - special order items destroyed and disposed of, $2,400.00 - items damaged, $4,675.00 - items damaged by removalists, $2,500.00 - items stolen from backyard, $1,456.51 - items damaged in the backyard, $128.99
The tenant faces evidentiary problems seeking this compensation. There was no evidence to demonstrate why the goods that were destroyed had to be destroyed, or whether the damage could have been rectified by repair or cleaning. A report by Wooden Comforts Pty Limited giving estimates of the cost of repairs was tendered. The author of the report did not view some of the items as these had been discarded by the tenant prior to the inspection. The other costs sought by the tenant are either her personal estimates or quotations for new items. The Tribunal was not informed whether the tenant had mitigated her loss by having a household insurance policy and making any claim on that insurance.
Therefore, even if the landlord was liable to compensate the tenant for some or all of the items claimed (and the Tribunal is not of that view), the amount of compensation which could be ordered to be paid cannot be calculated with any precision. B Howe General Member Civil and Administrative Tribunal of New South Wales 9 October 2014 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: 30 January 2015

Madigan v New South Wales Land and Housing Corporation

At a glance

Court

Decision date

Catchwords

Source

Catchwords

Judgment (16 paragraphs)

Parties

Cases Cited (9)