Martin v McCarthy-Nielsen

Grounds of appeal

1. The substantive grounds of appeal were attached to the Notice of Appeal dated 18 September 2019. We have sought to distil the grounds of appeal in these reasons.
2. Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80(2), NCAT Act.
3. Without expressing exhaustively possible questions of law, they include (in no particular order): 1. Whether there has been a failure to provide adequate reasons on request by a party pursuant to s 62 of the NCAT Act, or a failure to provide written reasons in accordance with clause 11 of Schedule 6 to that Act; 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. See, for example, Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13].
4. 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 clause 12(1) of Schedule 4 to 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).

The decision of the Tribunal

1. The background to the matter and the decision of the Tribunal below may be summarised as follows.
2. The parties entered into a residential tenancy agreement in respect of premises at Katoomba. The written tenancy agreement was entered into on 30 January and the tenants sought $7530 as compensation for the landlord breaching the tenancy agreement. The claims were based on the tenants' right to quiet enjoyment and their right to receive proper notice if the landlord required access to the premises.
3. The tenants sought the compensation for the following heads of damage: 1. 50% of rent reduction for the period 15 April 2019 to 27 May 2019 in the sum of $1380; 2. packing costs in the sum of $2400; 3. removal costs of $1250; 4. non-economic loss for time, distress and breach for Patrick Martin in the sum of $1000; and 5. non-economic loss for time, distress and breach for Sally Butler McPhee $1000.
4. The dispute arose following the landlord's decision to list the property for sale. The tenants claimed that the landlord failed to give proper notice on separate occasions during the sale process. They claimed that various people attended the property without the required notice and this conduct also disturbed the tenants' right to quiet enjoyment.
5. The Tribunal (differently constituted) made orders pursuant to s 60 of the RT Act in related proceedings (RT 19/13866) which are not subject of this appeal. Relevantly the Tribunal made orders in those proceedings authorising the landlord or her agent to enter the residential premises for the purpose of preparing a floor plan of the premises. The Tribunal further authorised the landlord to enter the residential premises between 12 and 12:30 pm on each Saturday from 20 April 2019 and each Wednesday from 12 to 12:30 pm to allow open house inspections by prospective purchasers.
6. The Tribunal in this matter stated in its reasons that the tenants did not accept these orders and had lodged an appeal but the appeal was withdrawn because the property was sold. The orders remained in full force and effect and were not revoked. In those circumstances the Tribunal was not satisfied that the tenants had any basis for an application for compensation in respect of the landlord gaining access to the premises in accordance with previous orders made by the Tribunal. Based on these facts the Tribunal dismissed the tenants' claim for compensation in respect of the landlord entering the premises to prepare a floor plan and for the open house inspections.
7. The tenants referred to a number of other occasions when the landlord requested access to the premises. These were to put up a 'for sale' sign to allow a handyman to carry out maintenance and to have prospective purchasers of the property attend for a viewing. The tenants submitted they did not authorise a "for sale" sign to be displayed anywhere on the property, nor did they consent to having a handyman attend the premises unannounced. It was the landlord's position that the handyman and the tenants had worked out access consensually. The handyman tendered a statement to that effect but did not attend the hearing to give evidence.
8. Ultimately the Tribunal was satisfied that the landlord gave written notice in respect of the handyman's initial attendance at the premises but found there was no evidence to establish, on the balance of probabilities, that the landlord gave proper notice or that there was consent by the tenants in respect of subsequent attendances of the handyman or others over time. The Tribunal found that the evidence that the landlord produced was insufficient to displace the tenants' evidence given at the hearing. The Tribunal was satisfied that the onus was on the landlord to establish that proper notice was given on every occasion or that access was allowed by consent.
9. The Tribunal was therefore not satisfied that the landlord's evidence established that she had complied with the RT Act. The Tribunal found that the landlord had breached the tenancy agreement by failing to give proper notice and that this conduct disturbed the tenants' right to quiet enjoyment. The Tribunal accepted that the breach occurred on a number of occasions.
10. Although the tenants claimed $1380 for the period from 14 April to 27 May 2019, the Tribunal considered that it was more appropriate to deal with the matter as an overall lump-sum compensation payment rather than as a rent reduction because the times and dates of the breaches were not consistently on the same day each week or for the same amount of time on each occasion. The Tribunal found that the breach was ongoing and that the breach amounted to a loss of quiet enjoyment rather than to a reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises.
11. The Tribunal found that the tenants at no time denied access to the handyman or took any other action because proper notice that not been given. Overall the tenants stated that the situation was really invasive and it was a concerning time for them but the Tribunal found there was little evidence produced by the tenants to support those claims.
12. The Tribunal considered the lack of action by the tenants to raise the issue with the landlord's agent or to stop the ongoing unauthorised access to the property occurring did not support their submission of it being a breach at the high end of the scale.
13. The Tribunal determined that $300 was fair and reasonable compensation for the landlord's failing to give proper notice and thereby breaching the tenancy agreement and disturbing the tenants' right to quiet enjoyment.
14. The Tribunal dismissed the tenants' claim for compensation for packing costs and removal costs.
15. The tenant's claim for additional compensation for non-economic loss for time, distress and breach was dismissed also on the basis that the tenants had already been compensated for breach in the sum of $300. In respect of the claim for distress, the Tribunal was not satisfied that the tenants had established that they met the threshold test of the severity of the non-economic loss being at least 15% of the most extreme case. Any claim for compensation for distress was therefore dismissed. In dismissing this aspect of the tenants' claim, the Tribunal cited Flight Centre v Janice Louw [2011] NSWSC 132; (2011) 78 NSWLR 656 (Louw) to the effect that s 16 of the Civil Liability Act 2002 (NSW) (the CL Act) applied in the circumstances.
16. The Tribunal ordered the landlord to pay $300 to the tenants.

Notice of appeal

1. The tenants filed a Notice of Appeal dated 18 September 2019 seeking "Orders The NCAT Appeal Panel should make": 1. A rent reduction of 50% for the period 15 April 2019 to 27 May 2019 totalling $1380; 2. Non-economic loss of $1000 to Patrick Martin and $1500 to Sally Butler McPhee for repetitive breaches of the agreement by the landlord.
2. In their written submissions the tenants summarised their appeal grounds as follows: For the above reasons, when considering the claim for compensation, weight was only given to evidence in relation to breaches by the landlord for failing to give proper notice to enter the premises, and not that the entries were "unlawful".
3. The tenants submit that their award for compensation was inadequate and that the Tribunal erred because it failed to compensate the tenants for each individual breach in respect of: 1. the open house inspection; 2. installation of a "for sale" sign; 3. the entry to conduct a floor plan; and 4. entries by a handyman to improve the premises' presentation for prospective purchasers.
4. The appeal in respect of the dismissal of the claim for damages for removalists and packing costs was withdrawn.

The open house inspection

1. In respect of the appeal against the decision not to award damages for the open house inspections, we are of the view that the tenants have failed to establish an error of law or any other ground of appeal for which leave is required.
2. The tenants submitted that the RT Act does not permit periodic open house inspections and that the Tribunal erred when it failed to find a breach established and failed to award compensation. We disagree. Section 60 of the RT Act permits the Tribunal to make an order authorising the landlord or any other person to enter the residential premises for the purposes of showing the residential premises to prospective purchasers "on a periodic basis". In addition the residential tenancy agreement allows for inspections and specifically "the landlord may show the residential premises to potential purchasers not more than twice in any period of a week and must give the tenant at least 48 hours notice each time".
3. Further and in the alternative, we accept the landlord's submission that an order for access had already been granted in related proceedings RT 19/13866 on 11 April 2019. The order authorised the landlord or her agent to enter on each Saturday and Wednesday for open house inspections. The tenants appealed but before the appeal was determined the property sold and the appeal was withdrawn. In those circumstances the order for access for twice weekly open house inspections remained at all times in full force and effect.
4. We reject the grounds of appeal stating that the entries for open house inspections were "unlawful". We cannot find any error in the Tribunal's findings at [8] that the landlord had access to the premises pursuant to an order of the Tribunal, and accordingly the Tribunal did not err when it refused to award compensation for "unlawful" open house inspections for the purpose of allowing prospective purchasers to inspect the residential premises.

Installation of "for sale" sign and "unlawful" access

1. We are not of the view that the Notice of Appeal and or the submissions dated 29 August 2019 disclose any error in the Tribunal's reasons in relation to this ground of appeal. The landlord explained that the "for sale" sign was not erected on the premises but attached to the outside of the fence and that entry had not been required. This occurred because the tenants sent an email to the landlord dated 24 April 2019 stating that they would not give consent for such a sign to be installed on the premises. It is not clear from the Tribunal's reasons that it was aware that the sign had only been attached to the outside of the fence. The Tribunal addressed collectively the purported breaches for the installation of a "for sale" sign and the entries by a handyman at [9]: The tenants set out a history of a number of other occasions when the landlord requested access to the premises to put up a "for sale" sign, have the handyman carry out works and have people related to the purchase of the property attend. The orders made in RT 19/13866 did not cover these other situations. The landlord had properly requested access on some occasions but it was not clear, especially in respect of the number of times that the handyman attended the property, whether proper access was always followed. The tenants also did not want the for sale sign put up. The tenant stated that he had not been advised by the handyman in respect when and how often he was attending and the handyman turned up numerous times unannounced. The landlord's real estate agent submitted a statement by the handyman stating that he thought he had worked out his access requirements consensually with the tenants during conversations he had directly with them at the premises. The tenants denied this. The handyman did not attend the hearing. The handyman statement was reasonably brief. In those circumstances, the Tribunal considered that it could not place as much weight on the landlord's evidence because the handyman was not able to be cross-examined, tested, questions or expanded upon as opposed to the tenant who was at the hearing and available.
2. The Tribunal essentially agreed with the tenants' evidence and found a breach of the residential tenancy agreement was established. At [10] the Tribunal agreed that: The landlord gave written notice in respect of the handyman's initial attendance at the premises but there is no evidence to establish on the balance of probabilities that the landlord gave proper notice or there was consent by the tenants in respect of other numerous attendances of the handyman or others over time.
3. Having found a breach of the residential tenancy agreement established by failing to give the proper notice and also finding that the landlord's conduct had disturbed the tenants' right to quiet enjoyment, the Tribunal proceeded to determine, what, if any, damages may be awarded.
4. The Tribunal determined that $300 for non-economic loss, being mostly "a type of loss of amenity was fair and reasonable compensation in respect of the landlord's breaches".
5. We understand the tenants' grounds of appeal to include a complaint that the Tribunal's failure to address each alleged unauthorised entry by the handyman amounted to a failure to give reasons or to give adequate reasons for its decision. Whether written reasons are adequate was recently considered by the NSW Court of Appeal in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 (Orr) and in particular at [66]: In the context of appellate review of the adequacy of reasons, the function of an appellate court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [48] (Resource Pacific). The standard is not one of perfection: Bisley Investment Corporation v Australian Broadcasting Tribunal (1982) 40 ALR 233 at 255 (Bisley).
6. Having considered the reasons in their totality we have come to the view that the Tribunal conveyed the evidence it relied upon, identified the applicable sections in the relevant legislation and set out in some detail why, on balance, it awarded damages in the amount of $300. There was clear analysis of the facts. It was open to the Tribunal to conclude that it was more appropriate to deal with the matter as overall lump sum of compensation payment rather than a rent reduction because the time and dates of the landlord's breaches "were not consistently on the same day each week and for the same time amount of time on each occasion". This is a matter that could permissibly be taken into account and is consistent with the majority approach in Orr.
7. For these reasons we are of the view that this ground of appeal should also be dismissed.

Entry to prepare a floor plan

1. The tenants submit that the Tribunal erred in dismissing their claim for compensation for damages for "unlawful" entry to prepare a floor plan.
2. The tenants submit that the Tribunal erred when it refused to award compensation for this head of damage. We are not of the view that an error of law has been established. The tenants confirmed in writing to the landlord that access would be granted for the preparation of a floor plan, and this was confirmed by return email by the landlord on 15 April 2019: "Thank you for allowing access today for the purpose of a floor plan".
3. Section 56 of the RT Act permits the landlord or the landlord's agent to enter the residential premises at any time during the residential tenancy agreement with the consent of the tenant. We accept the tenants' submission that the RT Act does not permit entry for the specific purpose of preparation of a "floor plan". However, given that entry was granted by consent, nothing turns on whether the reason for access was specifically envisaged by the RT Act.
4. Accordingly, this ground of appeal must also fail.

Compensation for distress

1. The tenants submit the Tribunal erred when it denied the claim for compensation for distress. The tenants claim compensation for distress caused by unauthorised access by the landlord referring to the "late stage pregnancy and because [Ms Butler-McPhee] is the primary carer for our child". The Tribunal, already having awarded $300 for non-economic loss for breach dismissed the additional claim "for general loss of time, distress and breach for non-economic loss". The Tribunal concluded that the additional claim for distress is a claim for personal injury and attracts the provisions of s 16 of the CL Act. As no medical evidence was provided the Tribunal, rightly, could not be satisfied that the tenants had established that they met the threshold severity test of 15% "of a most extreme case" before damages may be awarded.
2. We are of the view that the Tribunal correctly distinguished between the tenants' claim for damages for non-economic loss for breach and their additional claim for "distress" which may be governed by the provisions of the CL Act. The Tribunal applied the decision of Barr AJ in Louw where His Honour concluded that a breach of contract claim for damages for inconvenience, distress and disappointment suffered in consequence of construction work being carried out next to holiday resort accommodation was a claim for non-economic loss within the meaning of the CL Act.
3. As was discussed by the Appeal Panel in Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9, there is no suggestion that a claim for damages for distress and anxiety and for the reduction of rent are mutually exclusive forms of relief. In the instant case the Tribunal took into account that there were facts common to both types of claim which were taken into account in order to avoid double compensation. The Tribunal, finding a breach established, awarded compensation for non-economic loss but refused to award what would effectively amount to double compensation for distress because there was "very little" evidence to support such a claim (see [16]), and because there was no compliance with the provisions of the CL Act.
4. We can find no error in the Tribunal's approach and accordingly dismiss this ground of appeal also.

Orders

1. The orders which we make are as follows: 1. Leave to appeal is refused and the appeal is otherwise 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: 11 November 2019