Makowska v St George Community Housing

Jurisdiction

1. The tenant signed a Residential Tenancy Agreement (RTA) with the New South Wales Land and Housing Corporation ('NSW Housing') which commenced on 26 June 1989.
2. On 1 April 2019 the respondent took over management of the tenancy. The tenant chose not to sign a new RTA.
3. The respondent gave the tenant a 'Confirmation of Transfer of Your Tenancy' dated 31 March 2019.
4. The respondent explained that it took over 'reactive and planned maintenance' of the premises on 1 July 2021.
5. Prior to that date, the respondent submits its role was limited to 'auditing' the repair and maintenance work which was managed by NSW Housing and its contractor, Broadspectrum. The respondent was 'limited in its commitment to time frames', including 'planned or project work' such as that requested by the tenant.
6. The respondent says it accepts that it is 'responsible to provide Tenancy and Property Management services for the building in which [the tenant] resides.'
7. The tenant is paying rent to the respondent.
8. The Tribunal is satisfied that the respondent is the landlord of the relevant premises, and that the Act applies.
9. The lawn forms part of the common area and forms part of the residential premises pursuant to Section 3 of the Act.
10. The Tribunal therefore has jurisdiction to deal with the subject matter of these proceedings and make orders under the provisions of the Act.

Extension of Time

1. The tenant stated that she was required to file her application by 30 June 2021 because a rent reduction pursuant to Tribunal orders in related matter SH 29/24933 expired on 31 March 2020.
2. However, the Tribunal notes that a tenant may, at any time before the end of a tenancy, make an application that the rent is excessive.
3. In relation to the other claim pursuant to 187(1)(b) which relates to the landlord's breach of section 63 of the Act, the prescribed period is within 3 months after the applicant becomes aware of the breach (r 39(9) Residential Tenancies Regulation 2019 (NSW).
4. Arguably this time has passed since the tenant submits the lawn has remained unrepaired since the time orders were made in related matter SH 29/24933 in February 2020.
5. That matter was the subject of continuing legal proceedings, culminating in an application for special leave to the High Court of Australia, filed on 11 November 2021.
6. The tenant submitted that she did not file her application in this matter until after the resolution of the related matter so as to avoid prejudicing the administration of justice.
7. The Tribunal has considered the guiding principles in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22.
8. Although there was a nearly 5 month delay in commencing these proceedings, the tenant has provided a reasonable explanation for the delay.
9. Based on the tenant's written submissions, I am satisfied she has a fairly arguable case.
10. The landlord did not complain of any prejudice due to the delay.
11. Therefore the Tribunal grants the tenant an extension of time to bring the claim under section 187(1)(b) of the Act.

Relevant Law

1. Section 44 of the Act provides: 44 Tenant's remedies for excessive rent (1) Excessive rent orders The Tribunal may, on the application of a tenant, make any of the following orders - (a) … (b) an order that rent payable under an existing or proposed residential tenancy agreement is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises and that, from a specified day, the rent for residential premises must not exceed a specified amount. (2) … (3 … (4) Determination of excessive rent … (5) The Tribunal may have regard to the following in determining whether a rent increase or rent is excessive - (a) the general market level of rents for comparable premises in the locality or a similar locality, (b) the landlord's outgoings under the residential tenancy agreement or proposed agreement, (c) any fittings, appliances or other goods, services or facilities provided with the residential premises, (d) the state of repair of the residential premises, (e) the accommodation and amenities provided in the residential premises, (f) any work done to the residential premises by or on behalf of the tenant, (g) when the last increase occurred, (h) any other matter it considers relevant (other than the income of the tenant or the tenant's ability to afford the rent increase or rent). (6) Effect of excessive rent order An order by the Tribunal specifying a maximum amount of rent - (a) has effect for the period (of not more than 12 months) specified by the Tribunal, and (b) binds only the landlord and tenant under the residential tenancy agreement or proposed residential tenancy agreement under which the rent is payable.

Order for Specific Performance

1. Although section 187 sets out the order-making powers of the Tribunal, those powers do not exist in abstract. They are only enlivened when a substantive provision of the Act is engaged, for example, a breach of the RTA or the Act, in this application, relevantly, section 63 of the Act.

Landlord's Obligation to Provide and Maintain the Residential Premises in a Reasonable State of Repair

1. Section 63 of the Act states: (1) A landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. (2) A landlord's obligation to provide and maintain the residential premises in a reasonable state of repair applies even though the tenant had notice of the state of disrepair before entering into occupation of the residential premises. (3) A landlord is not in breach of the obligation to provide and maintain the residential premises in a reasonable state of repair if the state of disrepair is caused by the tenant's breach of this Part. (4) This section is a term of every residential tenancy agreement.
2. The landlord's obligation to repair arises after the landlord has been put on notice of the need to repair. Once notice is received by the landlord, a breach of section 63 will only occur if the landlord fails to carry out any necessary repairs within a reasonable time: Northern Sandblasting Pty Ltd v Harris (1997) 146 ALJR 254.

Remedy

1. Should the Tribunal be satisfied that the landlord has breached section 63, and, finding in favour of the tenant, make an order that rent payable under an existing residential tenancy agreement is excessive, it is open to the Tribunal to both make an order for repair and award damages by way of a rent reduction (see Anforth et al, Residential Tenancies Law and Practice, 7th edition, 2017 citing the Tribunal decision of Potter v Wagstaff (1997)).
2. The use of the word 'may' in section 187 indicates that the Tribunal's powers under that section are discretionary. In Potter v Wagstaff the Tribunal stated that the 'repair should be ordered unless there are some sufficiently compelling discretionary factors …'

Issues

1. The issues for determination are therefore: 1. Has there been a reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises? 2. If the answer to (1) is affirmative, is the rent excessive? 3. Has the landlord breached its obligation under the Act to maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises? 4. If the answer to (3) is affirmative, should the Tribunal exercise its discretion to make an order for repair?

Has there been a reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises?

1. In 2019 the tenant brought a claim against the respondent for a withdrawal or reduction of facilities, being the common lawn area, in related matter SH 21/48098.
2. This is the same lawn which is the subject of the present application.
3. On 13 February 2020 in SH 21/48098 the Tribunal made the following finding: 'The flooding and overhanging of the trees have substantially interfered with the tenant in enjoying the lawn area. I am satisfied that from 15 March 2019, that there was a reduction of goods, services or facilities in the residential premises by the respondent.'
4. The present application is essentially that this reduction has continued.
5. The tenant refers to paragraph 36 of the Tribunal's decision in SH 21/48098: 'By the last hearing on 8 November 2019 the respondent had cleared the choke in the stormwater drain and was obtaining council approval to prune the trees and then re-landscape where the lawn that had deteriorated. In my view, the respondent was attending to those matters and no further order is required.'
6. In the present application, the landlord agreed that this anticipated work was not conducted: the trees have not been pruned and the lawn had not been re-landscaped or rehabilitated.
7. The tenant relied on a number of photographs of the lawn which show that the lawn is in poor condition, with large dirt areas and weeds.
8. The respondent's own photographs, taken more recently, also show some areas of bare dirt and weeds.
9. The respondent submitted: 1. It does mow the lawn and keep it clean and tidy; 2. 'many sections of the common area lawns and grounds [are] in very good, maintained condition'; 3. It has begun consultation with the other residents to determine what improvements are important to all the tenants 'to ensure our funds meet the needs of the community.'; 4. The deterioration of the lawn is at least in part due to weather events beyond the respondent's control, including drought and water restrictions from 10 December 2019 to 1 December 2020. 5. COVID 19 travel restrictions and lockdown have impacted service delivery. The respondent included a NSW government notice of stay-at-home orders commencing across greater Sydney from 26 June 2021.
10. I make the following findings: 1. From 15 March 2019, there has been a continuing reduction of goods, services or facilities in the residential premises, being the deterioration of some parts of the lawn in the common area. 2. Even accounting for water restrictions and COVID lockdown, by the landlord's own evidence, there have been opportunities to conduct the remediation, including between 1 December 2020 and 26 June 2021, and after COVID lockdown ceased towards the end of 2021. However, the landlord has not acted with reasonable diligence and has not attempted remediation. 3. Therefore the reduction was caused by the landlord and its failure to follow through with the anticipated work after November 2019 to prune overhanging trees and remediate the lawn.

Is the RentEexcessive?

1. Neither party provided evidence of the matters identified in section 44(5). In Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64, the High Court stated that a decision-maker must do the best that they can to assess the damage and loss suffered by the tenant on the evidence available.
2. A rent reduction is restricted to 12 months (section 44(6)).
3. I note that, when it assessed the same reduction of facilities in SH 21/48098, the Tribunal determined that the rent was excessive and that a 10% rent reduction for 12 months was fair.
4. I agree that, in all of the circumstances, the rent over the relevant period is excessive. The lawn is a feature of the property which is highly valued by the tenant who, as an artist, has a strong affinity for aesthetics.
5. I find that a rent reduction of 10% over the period is fair and reasonable. Therefore: 1. From 1 April 2020 to 3 January 2020 the rent of $176.94 is reduced and abated to $159.24; and 2. From 4 January 2021 to 31 March 2021 the rent of $335.02 is reduced and abated to $301.52.

Has the Landlord Breached Its Obligation Under the Act to Maintain the Residential Premises In a Reasonable State of Repair, Having Regard to the Age of, Rent Payable for and Prospective Life of the Premises?

1. Based on the same evidence outlined above, I make the following findings: 1. The landlord was put on notice of the need to remediate the lawn, at the time of the commencement of proceedings in SH 21/48098, if not earlier, and certainly by the time the Tribunal delivered its decision in that matter on 13 February 2020; 2. The landlord has not acted with reasonable diligence to remediate the lawn. 3. The landlord has breached its obligation under the Act to maintain the residential premises in a reasonable state of repair by failing to remediate the lawn, even accounting for the age of the premises and the relatively low rent paid for the premises.

Should the Tribunal exercise its discretion to make an order for repair?

1. For the following reasons the Tribunal finds that an order for repair to the lawn is appropriate: 1. The lawn is an important aesthetic feature of the property. 2. In February 2020, the landlord indicated to the Tribunal and to the tenant that its intention was to remediate the lawn, however, it has not done so. 3. The duty on the landlord is one of strict liability and therefore the limited budget of the landlord or other maintenance needs of the premises is no defence to a failure to carry out required repairs (see, for example, Capponi v Bridge Housing Limited [2021] NSWCATCD 1)

Orders

1. The Tribunal therefore makes the following orders: 1. The rent shall not exceed $159.24 from 1 April 2020 to 3 January 2021. 2. The rent shall not exceed $301.52 from 4 January 2021 to 31 March 2021. 3. Any overpaid rent is to be paid as a rent credit to the tenant's account. 4. On or before 3 June 2022 the landlord is to remediate the lawn in the common area of the premises in a proper and workmanlike manner.

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: 11 July 2022