Makowska v St George Community Housing Ltd

NCAT Appeal Panel|2020-05-12

REASONS FOR DECISION

The appellant rents a unit in Wollstonecraft from the respondent, pursuant to a Residential Tenancy Agreement. The appellant originally rented the property from the New South Wales Land and Housing Corporation, but on 1 April 2019 the respondent took over management of the property.
The appellant's unit is one of a number of units in a multi-unit complex. The complex includes a parking area and adjacent lawn area.
The appellant appeals from a decision of the Consumer and Commercial division of the Tribunal dated 13 February 2020 by which the Tribunal made orders directing that the appellant's rent be reduced pursuant to s 44 of the Residential Tenancies Act 2010 (NSW) (RTA) by reason of a reduction in goods and services provided to the appellant, and dismissed a number of other claims made by the appellant.
The other claims, as set out in the application filed by the appellant, were as follows: Order/s Sought Section 187(1)(a) - An order that restrains any action in breach of a residential tenancy agreement Section 187(1)(b) - An order that requires an action in performance of a residential tenancy agreement Section 187 (1)(d) - An order as to compensation $4284.80 Section 187(1)(e) - An order that a party to a residential tenancy agreement perform such work or take such other steps as the order specifies to remedy a breach of the agreement Section 187(1)(f) - An order that requires payment of part or all of the rent payable under a residential tenancy agreement to the Tribunal until the whole or part of the agreement has been performed or any application for compensation has been determined. Reasons for the Orders The extensive deterioration to the lawns has prevented tenant access and enjoyment, and the stormwater pits at the lower end of the car park and on the south-west path flood during periods of heavy rainfall making access impossible. The landlord was put on notice about these problems by the tenant's letter dated 13/10/2015, and by its letter dated 24/05/2016 the landlord had acknowledged that the problems existed. The landlord has not provided a remedy to date.

The Scope and Nature of Internal Appeals

By virtue of s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), internal appeals from decisions of the Tribunal may be made as of right on a question of law, and otherwise with leave of the Appeal Panel.
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 because: 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).
In Collins v Urban [2014] NSWCATAP 17, 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.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
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: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; or 3. 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; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. 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.

Grounds of Appeal

The appellant's Notice of Appeal set out her grounds of appeal as follows: 1. The Tribunal erred in law in respect of applying section 3 of the Civil Liability Act 2002 as a bar to the awarding of compensation for non-economic losses in circumstances where the appellant's alleged non-economic losses were not sought for personal injury in relation to the landlord's withdrawal of access to the lawns. 2. The Tribunal erred in law by reaching a mistaken conclusion in circumstances where the Tribunal disentitled itself from making a rent reduction order on the basis that the withdrawal of the south-west path did not amount, in the determination of the Tribunal, to a breach of quiet enjoyment. 3. The Tribunal erred in law by asking itself the wrong question in circumstances where the Tribunal asked itself whether by taking an alternative route to avoid the flooding of the south-west path amounted to substantial interference, instead of asking itself whether the appellant showed that the landlord made the south-west unusable by removing a service that had previously been there and that was relied upon by the tenant, as to whether it will amount to a breach of the covenant of quiet enjoyment. 4. The Tribunal erred in law where it made orders which are inutile. 5. The Tribunal erred in law by identifying a wrong issue in respect of the implication of the reasonable steps the landlord had taken and was taking to remedy the flooding of the south-west path and the deterioration of the lawns. 6. The Tribunal erred in law by ignoring relevant material where "there was a reduction of goods, services or facilities in the residential premises by the respondent" prior to 15 March 2019. 7. The Tribunal made material errors of fact in respect of the cause of the deterioration to the lawns, the extent of the deterioration of the lawns, the adequacy of the work on the stormwater lines to prevent flooding, and the date when the landlord was taken to have had received notice of the appellant's complaint about the deterioration of the lawns and flooding of the south-west path. 8. The decision was not fair and equitable. 9. The appellant has suffered a substantial miscarriage of justice.
We note that a number of these grounds do not raise any question of law and the appellant would need leave to rely upon them.
The appellant sought leave to appeal on each of the grounds set out in Clause 12 of Schedule 4 of the NCAT Act. The appellant did not in her Notice of Appeal expand upon the assertion that the decision was not fair and equitable. However in written submissions filed in support of her appeal, the appellant submitted that the Tribunal had shown prejudice against the appellant by allowing the respondent to rely upon documents produced on the second day of the hearing ("the 8 November documents"), being a tax invoice dated 21 October 2019 from Assett Group Services Pty Ltd which disclosed that "the stormwater line had been cleared out, cleared choke and cleaned stormwater drain and pit", that the Tribunal had been confused, and that the decision not to require the respondent to "return the lawns and stormwater lines to the state they were in at the point of entry into the contract" was "so unreasonable that no reasonable decision-maker would consider it fair and equitable".
In respect of her application for leave on the ground that the decision was against the weight of evidence, the appellant stated: The appellant provided a two-page document entitled "Evidence the applicant intends to rely on", which listed twenty-three (23) numbered items of documentary, photographic, and video evidence, which was provided as a reference to the appellant's paginated evidence bundle of that actual evidence as described. The Tribunal thus was given a snapshot of the appellant's case summary, the form the contract took between the parties, a spacial view of the complex, the correspondence showing the date of the original complaint, the admissions the landlord made in relation to the deteriorated lawns arising from the complaint, eyewitness substantiation of the ongoing nature of the flooding, documents showing the amount the plaintiff was paying in rent, five (5) forensic "before" and "after" photographs showing the deterioration of the lawns in neutral conditions, photographs of erosion from the loss of lawn, videos of the alleged cause of the lawn deterioration, and multiple videos of a flooding event. The Tribunal placed weight on an updated letter from Southern Star Landscapes referring to trees in only one location of the lawn area as being the cause of the deterioration of the lawns. Conversely, the five (5) forensic "before" and "after" photographs showing the expansive deterioration of the lawns in neutral conditions. The Tribunal also placed substantial weight on the "Tax Invoice of Asset Group Services dated 21 October 2019" which was never provided to the Appellant, and which was irrelevant material to both the temporal basis of the appellant's complaint and the contractual relationship between the parties. Conversely, the Tribunal ought to have given more weight to the appellant's evidence as follows: the appellant's letter of 13 October 2015 addressed to the Team Leader [4] and the "petition sheet containing 21 undersigned tenants" [4a], letter from Mr Hugill of 24 May 2016 [6], appellant's letter of 8 June 2016 [6a].
In respect of the assertion that there was significant new evidence available that was not reasonably available at the time of the hearing, the appellant identified the new evidence as follows: Document from the delegate of the NSW Land and Housing Corporation (NSWLHC) Mr A Newland, stating that the previous landlord (NSWLHC) had assigned on 1 April 2019 its entire right title and interest to the residential premises at 2 Milner Crescent, Wollstonecraft or had done so in any proceedings which amended the name of the respondent from NSWLHC to St George Community Housing. Photographs of the extensive disrepair of the lawns in another part of the complex and showing areas receiving full sun exposure. Video footage of continuing flooding of the lower end of the car park, the south-west path, continuing erosion and additional video footage of the cause of the flooding and erosion.
The appellant's explanation why the evidence was not available at the time of the hearing was: The respondent landlord put into question objective facts which were accepted between the parties as to the state of the disrepair of the lawns, the cause of the disrepair to the lawns and the work required to bring the lawns back into reasonable repair. The respondent landlord obfuscated the extent of (i) the true state of the lawns, (ii) the cause of the disrepair to the lawns, (iii) when it came aware of the disrepair to the lawns, (iv) the cause of the disrepair to the stormwater lines causing flooding to the south-west path, and (v) when it became aware of the disrepair to the stormwater lines causing flooding of the south-west path.
The Notice of Appeal set out the orders the appellant asserted the Appeal Panel should make as follows: 1. The appellant seeks an interlocutory order for a single-expert report addressing the state of the lawns throughout the complex and the stormwater lines, to be provided to the Appeal Panel by the respondent prior to the hearing. 2. The appellant seeks an order under section 187(1)(d) for compensation in relation to a breach of the covenant of quiet enjoyment of the landlord's withdrawal of access to the lawns in the amount of $3,997.56. 3. The appellant seeks an order under section 187(1)(d) for compensation in relation to a breach of the covenant of quiet enjoyment for the landlord's withdrawal of access to the south-west path during periods of heavy rainfall in the amount of $2,598.38. 4. The appellant seeks an order under section 44 for a twelve (12) month rent reduction at 6.5% of the fortnightly rental amount for the landlord's withdrawal of the use of the south-west path during periods of heavy rain, being in the amount of $593.19. 5. The appellant seeks an amendment of orders 1 and 2 that a refund for the equivalent amount of $912.60 is provided by the landlord as a credit to the rental account of the residential premises or a cash payment. 6. The appellant seeks an order under 187(1)(a) that the landlord stop damaging the asset of the people of NSW. 7. The appellant seeks an order under 187(1)(b) that the landlord repair the south-west path and the lawns throughout the complex. 8. The appellant seeks an order under 187(1)(e) that the landlord rebuild the areas of eroded earth and lay fresh lawns throughout the complex. 9. The appellant seeks an order under 187(1)(f) that the whole of the payment of the tenant's rent is made payable into the Tribunal until the whole of the orders are completed.
The appellant provided written submissions in support of her appeal and addressed the Appeal Panel at the hearing, which took place by telephone.
By its reply to the appeal the respondent supported the decision of the Tribunal, submitting that the decision did not disclose any error of law and that the orders made by the Tribunal were fair and equitable. The respondent maintained that: "The lawns and paths within the unit block are accessible. Works have been completed and are continuing to be completed as maintenance issues are reported."

Consideration

As we understand the appellant's grounds of appeal, and submissions, her challenges to the decision may be re-stated under five headings: 1. That the Tribunal failed to find a breach of the covenant of quiet enjoyment and failed to award compensation for such breach (this encompasses Grounds 2 and 3 in the Notice of Appeal). 2. That the Tribunal applied the incorrect test in considering whether to award compensation for non-economic loss (Ground 1 in the Notice of Appeal). 3. That the Tribunal had awarded a rent reduction rather than compensation for the withdrawal of facilities (Ground 4 in the Notice of Appeal). 4. That the Tribunal had only awarded a rent reduction for a period of 12 months and not awarded a greater rent reduction by reference to the state of the lawn and the stormwater drain (Grounds 6 and 7 in the Notice of Appeal). 5. That the Tribunal had relied on documents from Southern Star Landscapes which suggested that trees at the rear of the property be pruned or removed before any new turf is laid and that the Tribunal had relied upon the Assett Services Group tax invoice as evidence that the blockage of the stormwater drain had been rectified. (Ground 5 and also Ground 7 in the Notice of Appeal)
It is convenient to address the appeal by reference to the above five headings. In the course of doing so we consider whether each issue raises a question of law and if not whether leave should be granted to raise the issue.

Quiet enjoyment
In our view the Tribunal clearly applied the correct test for determining whether the respondent had breached its obligation to provide the appellant with quiet enjoyment. That test, as set out in the Judgment of Austin J in Advance Fitness v Bondi Diggers, is whether there had been substantial interference with the enjoyment of the premises through an act or omission that was either deliberate or negligent in the sense that the consequences were reasonably foreseeable.
The Tribunal's finding, that, in circumstances where there was an alternative path to access the appellant's unit, the occasional flooding of the appellant's preferred pathway was not a substantial interference in her enjoyment of her unit, was a finding of fact.
We do not consider that the Tribunal made an error of law. Nor do we consider that the Tribunal's finding of fact was against the weight of evidence or not fair and equitable.

Compensation for non-economic loss
We accept that the Tribunal made an error of law to the extent that it applied s 16(1) of the Civil Liability Act to the appellant's claim for compensation for loss of enjoyment of her property and inconvenience. That s 16(1) is not applicable to such claims is made clear by the decision of the High Court in Moore v Scenic Tours Pty Ltd [2020] HCA 17; 77 ALR 209.
However, that error had no impact upon the Tribunal's ultimate decision. The Tribunal having determined that the respondent was not in breach of its obligation to give quiet enjoyment, there was no basis for the Tribunal to award compensation in respect of the appellant's loss of enjoyment and inconvenience.

Failure to award compensation for the reduction in facilities
Section 44 of the RTA provides that the Tribunal may make an order "that rent payable under a…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".
Although it does not appear that the appellant's initial application included a claim for relief pursuant to s 44 of the RTA, the Tribunal granted such relief. Section 44 does not, in terms, authorise an order for the repayment of excessive rent. Nevertheless the respondent produced documents which showed that the appellant had been credited with the rent reduction ordered by the Tribunal. It cannot be said the Tribunal's order was "inutile", as it has had the effect that the appellant has received the benefit of the rent reduction ordered.
We do not consider that there was any error of law in the Tribunal ordering a rent reduction rather than the payment of compensation. Nor do we consider that that decision was against the weight of evidence or not fair and equitable.

Awarding a reduction in rent for only 12 months and only to the extent of 10% of the rent
As noted above, s 44(6) of the RTA limits the period for which the Tribunal may order a rent reduction to 12 months. There was no error in the Tribunal making an order for rent reduction for a period of only 12 months. The Tribunal had no jurisdiction or power to make an order for a rent reduction covering a longer period.
The Tribunal assessed the appropriate reduction of rent by reason of the matters complained of by the appellant, noting that there was no evidence provided by the appellant of "comparable losses". We understand the Tribunal's reference to "comparable losses" to mean the factor mentioned in s 44(5)(a) that is: "the general market level of rents for comparable premises in the locality or a similar locality".
The Tribunal referred to Commonwealth v Amman Aviation Pty Ltd (1991) 174 CLR 64 and "doing the best [it] can" assessed the appropriate reduction as 10%.
We find no error in the Tribunal's approach to the assessment of the appropriate reduction or in the quantification of the reduction. Nor do we consider the Tribunal's assessment to be against the weight of evidence or not fair and equitable.

Reliance upon the Southern Star Landscaping and Assett Group Services documents
In challenging the Tribunal's reliance upon the Southern Star document and the Assett Group Services tax invoice, the appellant sought to rely upon the new evidence identified in her Notice of Appeal. That material and the Southern Star and Asset Group Services documents could only have been relevant to the question whether the Tribunal should make orders for the rectification of the stormwater drainage and the lawn.
The Tribunal accepted that these issues had been rectified or would be rectified once the issue of overhanging trees had been resolved, and therefore considered it was not necessary to make orders.
The appellant's complaint about the Tribunal's reliance upon the Southern Star and Assett Group Services documents is that she was caught by surprise by the respondent's reliance upon these documents.
The appellant disputed that she had received these documents in advance of the respective hearings in which they had been tendered. Had that been shown to be the case, a question might have arisen whether the appellant had been denied procedural fairness.
However, there was no evidence before the Appeal Panel to support the appellant's allegation that she had been caught by surprise. Nor did the appellant provide a transcript of the hearing or any parts of the hearing.
By orders made on 12 March 2020 the parties were directed to file in advance of the appeal hearing a recording of the hearing and a typed copy of any relevant parts if they relied upon what happened at the hearing.
The appellant did not provide a recording or any transcript of relevant parts.
In those circumstances we do not find that the appellant was denied procedural fairness by the Tribunal's reliance upon the Southern Star and Assett Group Services documents. The Tribunal was entitled to accept those documents in evidence and rely upon their contents. Nor do we find that the Tribunal's reception of the documents disclosed prejudice against the appellant.
We are also not persuaded that any of the new evidence upon which the appellant seeks to rely was not reasonably available at the time of the hearing.
Accordingly our orders 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: 29 July 2020

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