Moniaci v Erickson

Background to disputes and decision at first instance

1. As already noted, Ms Erickson commenced proceedings on 29 July 2015. Her application was said to be urgent because there were "excessive water leaks" from the ceiling and walls each time it rained. Ms Erickson also alleged that the moisture in the walls caused electrical power loss and a risk of electrocution. She stated that this had happened once and she was concerned about the risks in the future. Ms Erickson also alleged that the water caused damage to her personal belongings.
2. The proceedings were listed for directions before the Tribunal on 10 August 2015. The Tribunal directed Ms Erickson to provide the material on which she wished to rely by 17 August 2015. Mr Moniaci was ordered to provide all documents on which he intended to rely by 31 August 2015. The proceedings were listed for hearing on 8 September 2015 and the parties were sent a notice of the hearing date on or about 13 August 2015.
3. The originating application was lodged by Ms Erickson under the Residential Tenancies Act 2010 (NSW) (the RTA). The RTA sets out the obligations between a landlord and tenant in relation to residential tenancies and provides for statutory obligations which are incorporated into the residential tenancy agreement. The RTA also provides for remedies for breach of a residential tenancy agreement, including rectification orders and compensation. Rent may be abated where the premises are unusable as follows: 43 Rent reductions (1) Reduction in goods, services or facilities The tenant may make a written request to the landlord at any time for a reduction in rent if the landlord reduces or withdraws any goods, services or facilities provided with the residential premises, even if those goods, services or facilities are provided under a separate or a previous contract, agreement or arrangement. (2) Premises unusable The rent payable under a residential tenancy agreement abates if residential premises under a residential tenancy agreement are: (a) otherwise than as a result of a breach of an agreement, destroyed or become wholly or partly uninhabitable, or (b) cease to be lawfully usable as a residence, or (c) appropriated or acquired by any authority by compulsory process. … (5) This section is a term of every residential tenancy agreement. 45 Remedies for reduction of rent on frustration of residential tenancy agreement (1) The Tribunal may, on application by the landlord or tenant, make an order determining the amount of rent payable if the rent is abated under section 43 (2). (2) The Tribunal may order that: (a) from a specified day, the rent for the residential premises must not exceed a specified amount, and (b) the landlord must repay to the tenant any rent paid by the tenant since the specified day that is in excess of the specified amount.
4. Section 63 of the RTA sets out the landlord's general obligations under a residential tenancy agreement as follows: (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.
5. A tenant may apply under s 65 for orders that the landlord carry out specified repairs to the premises. The tenant may also apply for an order for the payment of money and an order for compensation under ss 187(1)(c) and (d) respectively. Section 190(1) provides, A landlord or a tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations.
6. Regulation 22(9) of the Residential Tenancies Regulation 2010 (NSW) prescribes a period of three months for the purposes of, amongst other sections, s 190(1) of the RTA.
7. Ms Erickson provided the evidence she wished to rely on but, according to the Reasons for Decision provided by the Tribunal at first instance, Mr Moniaci did not.
8. Mr Moniaci's managing agent requested an adjournment which was considered by the Tribunal on 1 September 2015. The Tribunal refused the request and provided the following reasons: 1. Matter has been set down for hearing since 13/08/15, the information of unavailable dates has been provided too late. 2. Insufficient reason to delay the applicant's claim, especially in circumstances where the landlord is already represented. The matter remains listed on the above date and your attendance at the hearing is required.
9. A further request was made, which was considered by the Tribunal on 3 September 2015. The request was also refused and the following reasons were provided: The respondent's agent has not advanced further reasons why the matter should be adjourned, having regards to what was put by Member De Jersey in her reasons for refusing the original request for an adjournment. There is no consent of the other party to the adjournment. The matter remains listed on the above date and your attendance at the hearing is required.
10. Mr Alex Da Silva, Mr Moniaci's managing agent, represented Mr Moniaci at the hearing and Ms Erickson represented herself. The Tribunal recorded as follows: The Tribunal has received a bundle of documents from the applicant. The bundle includes a copy of the lease, the rent ledger and photographs and email exchanges concerning the condition of the property. The respondent had twice sought an adjournment of the proceedings which applications were both refused. The agent appearing was concerned that his client landlord was not present. The agent however was prepared to concede that as the managing agent, since 2008 and before the events the subject of these proceedings arose, the managing agent had authority to deal with the tenant's claim and the agent was given leave to appear on that basis.
11. The Tribunal recorded that Ms Erickson and Mr Da Silva gave evidence and the facts were "largely uncontested". It was also noted that Ms Erickson's bundle of documents were admitted without objection. Ms Erickson provided the Appeal Panel with a copy of the documents tendered before the Tribunal at first instance.
12. There was no request for an adjournment made on the day of the hearing. Relevantly, the Reasons for Decision do not refer to such a request and Mr Moniaci does not contend a request was made.
13. The Tribunal made the following findings: 1. The roof of the granny flat needed to be repaired and Mr Moniaci knew this since by at least 2 February 2010 after a severe rain event. 2. Mr Moniaci attended the property on many occasions to fix the problem but the leaks had continued. Mr Moniaci and Ms Erickson dealt directly with each other on these issues but the problem did not abate and by May 2015, after a storm, the granny flat flooded. 3. Mr Moniaci consented to a work order to repair the roof and the scope of works were agreed between the parties. 4. Mr Moniaci knew that the premises were not in a "fully inhabitable condition" from at least May 2015 but failed to effect the necessary repairs to the roof. 5. Ms Erickson continued to reside in the granny flat even though the roof was leaking and the roof remained unrepaired. There was a breach of the lease for which she was entitled to be compensated. 6. Ms Erickson was limited to claim abatement compensation from May 2015, when the flooding event occurred, which is within the three-month period that the Tribunal considered Ms Erickson should have made any claim under s 190(1) of the RTA and reg 22(9) of the Residential Tenancies Regulation 2010. 7. Allowing Mr Moniaci three to four weeks to diagnose the problem and effect any repair, a period of 18 weeks would be an appropriate period on which to base a claim for rent abatement and compensation. 8. Once the flooding occurred, the granny flat was only 30% habitable. The flooding affected all the rooms and the electricity to the flat was also interrupted. 9. The weekly rental attributable to the granny flat would be $320. The Tribunal also accepted that Ms Erickson lost the use of the granny flat for the whole of the period, being 116 days (which we noted is 17 rather than 18 weeks). 10. The rent should abate by 70% of $320, making a total of $3,711.65 to be paid to Ms Erickson by Mr Moniaci. 11. Compensation for the loss of Ms Erickson's personal property should be $1,835, which was conceded by Mr Moniaci's agent. This figure was based on evidence provided by Ms Erickson that she had replaced a queen bed mattress, two lounge suites, a laptop and computer hard drive, a keyboard and floor mats and coverings. Ms Erickson provided evidence of this in her bundle of documents. The Tribunal noted that the evidence of the value of these items was not contested and, in the Tribunal's opinion, the amounts claimed were reasonable.
14. In its Reasons for Decision, the Tribunal recorded that the two issues in dispute were the value of the rent for the granny flat and the period that rent should be abated.
15. Ms Erickson contended $320 per week was the appropriate rental to be attributed to the granny flat. Mr Da Silva contended that the appropriate rate should be $280 per week. The Tribunal preferred the evidence of Ms Erickson, noting that the agent had originally stated the rent for the whole of the property was $830 and that market rental for the granny flat "might" be $350. The Tribunal observed that while neither party produced evidence of a comparable granny flat rental, Ms Erickson's estimate was accepted.
16. In respect of the second issue in dispute, the Tribunal stated it did not accept the agent's submission that the property would only be effected by the water leak for 30 days. It was noted that the uncontested evidence of Ms Erickson was that the roof had not been repaired, she could not occupy the whole of the granny flat and electrical supply was irregular. Based on these matters, the Tribunal stated that it preferred the evidence of Ms Erickson.

Grounds of appeal and reply to appeal

1. Mr Moniaci set out his grounds of appeal in his Notice of Appeal. He provided written submissions and documents in support on the appeal. Mr Moniaci also made oral submissions. In summary, Mr Moniaci contended as follows: 1. Leave to appeal should be given because there was significant new evidence now available that was not reasonably available at the time of the hearing. The evidence was not available because Mr Moniaci was not present at the hearing, notwithstanding requests for adjournments prior to the hearing. The new evidence comprised brochures of comparable rental properties for a three-bedroom house, photographs showing the outdoor living area Ms Erickson had created with electronic items stored in the outside area and an invoice for roof repair that was said to have been completed on 14 August 2015. 2. Mr Da Silva attempted to have the hearing adjourned prior to 8 September 2015 because Mr Moniaci was overseas. The Tribunal refused and the decision was therefore unfair. Mr Moniaci was unable to defend the case by providing further evidence. 3. Mr Moniaci should not be responsible for a storm that was out of his control which led to the flooding of the granny flat and Ms Erickson's personal items being damaged. He could not have foreseen the flooding and Ms Erickson should have had contents insurance to cover the damage to her personal item items. 4. Mr Moniaci disputes that the granny flat was "unliveable" for 116 days or that there was no power to 10 days. He also submits it was not until the 10th day that Ms Erickson advised that she was without power and once he was advised of this he immediately had the power restored. 5. He had caused repairs to be done to the roof on 14 August 2015 costing $682 (the invoice was attached to Mr Moniaci's appeal submissions). 6. Mr Moniaci disputes the amount on which the compensation was calculated. In his view, the value of the rent in the granny flat would have been in the vicinity of $100-$130 per week. Calculating compensation on the value of $320 per week to the granny flat and therefore the value of the front house at only $510 per week was inconsistent with the evidence of rental for comparable properties, which was provided by Mr Moniaci in support of his appeal. Mr Da Silva was asked to make a decision about how much he estimated the granny flat to be worth without sufficient time to consider the matter. In any event, Mr Da Silva's response related to a new granny flat not the granny flat which was the subject of the proceedings, which was old. 7. The Tribunal did not have the benefit of understanding the nature of the outdoor fibreglass and timber framework area adjacent to the granny flat. According to Mr Moniaci, Ms Erickson had affixed extra load on the framework causing the roof to sag, which added to the water leaking problems. She stored electronic items, such as TV screens and speakers, which should not have been stored under the fibreglass roof. He should not be responsible for any loss relating to these items. 8. Ms Erickson had been subleasing the premises without permission from the agent or Mr Moniaci.
2. In oral submissions, Mr Moniaci contended there was a denial of procedural fairness because he was in hospital when the hearing date was set and overseas until 13 September 2015. If he had been present at the hearing, he would have presented the new evidence referred to in para [23] above.
3. Ms Erickson opposed the appeal and, as already noted, provided a copy of the evidence she had relied on at the hearing at first instance.

Nature and scope of the appeal

1. The Civil and Administrative Tribunal Act 2013 (NSW) (the CAT Act) provides for internal appeals as of right on any question of law, and with leave of the Appeal Panel on any other ground: see s 80(2)(b) of the CAT Act.
2. At the appeal hearing, Mr Moniaci raised the question of whether he was denied procedural fairness because the Tribunal had refused the requests for an adjournment made by his managing agent prior to the hearing.
3. The issue of whether there has been a denial of procedural fairness is a question of law.
4. If Mr Moniaci is not able to establish this ground, he needs leave to appeal. The Appeal Panel could not otherwise discern any further questions of law from his grounds of appeal or written and oral submissions.
5. Clause 12 of sch 4 of the CAT Act provides that the Appeal Panel may grant leave only if it is satisfied that the appellant may have suffered a "substantial miscarriage of justice" because the decision was not fair and equitable, against the weight of evidence or because significant new evidence had arisen, which was not reasonably available at the hearing.
6. The issues for the Appeal Panel were therefore whether the Tribunal denied Mr Moniaci procedural fairness and, if not, whether the Appeal Panel should give leave to appeal on the merits.

Was there a denial of procedural fairness?

1. The Tribunal is bound by the rules of procedural fairness: s 38(2) of the Act. Relevantly, the Tribunal must "take such measures as are reasonably practicable to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings": s 38(5)(c) of the Act. The refusal of a reasonable request for an adjournment may amount to a denial of procedural fairness depending on the circumstances: Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 at 611 [40]; [2002] HCA 11; Minister for Immigration and Citizenship v Li (2013) 87 ALJR 618; 297 ALR 225.
2. The guiding principle of the Act and the procedural rules in their application to proceedings in the Tribunal is "to facilitate the just, quick and cheap resolution of the real issues in the proceedings": s 36 of Act. Section 36(4) provides that the practice and procedure of the Tribunal should be "implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings".
3. As noted in Raslan v Pan [2015] NSWCATAP 12 at [28] (citing Re Minister for Immigration and Multicultural Affairs: Ex parte Lam (2003) CLR 1 at [37]) the focus of an enquiry about procedural fairness is on avoiding "practical injustice". It is not "an abstract notion". It is therefore relevant to consider whether the alleged breach of procedural fairness would have made any difference to the outcome of the case: Stead v State Government Insurance Commission [1986] HCA 54; 161 CLR 141 at 145.
4. There is no dispute that Mr Moniaci was given notice of the hearing and was represented at the directions and final hearing by his managing agent. The Tribunal at first instance did not make any determination about an adjournment. No request was made, the issue having already been considered by the Tribunal on 1 and 3 September 2015.
5. A question arises as to whether this amounted to a denial of procedural fairness and whether the Tribunal should have adjourned the hearing, despite the previous rulings and the fact there was no request, on its own motion. Relevantly, there was no appeal against the interlocutory rulings made by the Tribunal on 1 and 3 September 2015, nor was there material provided by either party addressing this issue.
6. As already noted, the first application for an adjournment was refused on the basis that the managing agent represented Mr Moniaci, the matter had been listed for hearing since 13 August 2015 and the information about unavailable dates had been provided too late. In response to the second request, the Tribunal noted that no further information had been provided to advance the case for an adjournment and Ms Erickson did not consent to an adjournment.
7. Even if Mr Moniaci had made an application for leave to appeal these interlocutory decisions, based on the material provided, the Tribunal's reasons for refusal and Ms Erickson's request for an urgent hearing, we would have refused leave. In our view, the refusals to adjourn the proceedings prior to the hearing were reasonable in circumstances where Mr Da Silva appeared at the initial directions hearing and was authorised to represent Mr Moniaci, there was no suggestion he was unavailable, Ms Erickson had raised the need for urgency in listing the proceedings for hearing in her application (she alleged there was the potential for ongoing water leaking and the risk of dangerous electrical faults) and she did not consent to the applications for an adjournment.
8. It is not apparent from the reasons given by the Tribunal to refuse the adjournment requests that there was any complaint made to the effect Mr Da Silva was unable to represent Mr Moniaci at the final hearing. Mr Moniaci may have wished to be present but the issues that were in dispute, as disclosed in the Reasons for Decision and as outlined in Mr Moniaci's grounds of appeal, could have been argued by Mr Da Silva at the final hearing. For instance, there is no explanation as to why the material about the comparable market rentals could not have been provided at the hearing on 8 September 2015 given it was clear from Ms Erickson's application that she sought rent abatement. Nor was it explained why the issues now raised by Mr Moniaci, about why he should not be responsible for the storm damage either because he could not have foreseen the damage or Ms Erickson should have claimed on insurance, could not have been raised at the hearing by Mr Da Silva. Mr Moniaci raised issues about the compensation claimed by Ms Erickson but those issues could have been raised by Mr Da Silva as the basis of Ms Erickson's claim was provided by her well before the hearing.
9. Accordingly, the Tribunal at first instance cannot be criticised in proceeding with the hearing on 8 September 2015. First, there was no request for an adjournment. Secondly, there was nothing before the Tribunal that would have alerted it to the need to adjourn or, at least to offer Mr Da Silva the opportunity to make another application for an adjournment (see, for instance, CKG v Public Guardian [2014] NSWCATAP 32 at [29] to [31]).
10. We therefore reject this ground of appeal.
11. This issue, and the new evidence and submissions Mr Moniaci now wishes to rely on, may nonetheless be raised in the context of his application for leave to appeal.

Should Mr Moniaci be given leave to appeal?

1. The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel of the Tribunal conducted a review of the relevant cases at [65] - [79] and concluded at [84]: The general principles derived from these cases can be summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) 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; or (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.
2. Having considered the Reasons for Decision, the material that was before the Tribunal at first instance and the new material sought to be relied on by Mr Moniaci, we are not satisfied that Mr Moniaci has established any of these matters for the reasons that follow.
3. One of the issues raised by Mr Moniaci was that he should not be responsible for storm damage and flooding which was out of his control. This is not relevant to a rent abatement claim because the Tribunal may make an order that rent is to be abated for a specified period if it is satisfied the premises have become "wholly or partly uninhabitable" (see ss 43(2) and 45(2) of the RTA).
4. On the question of whether Mr Moniaci could be held responsible for the damage to Ms Erickson's personal items, the Tribunal found that Mr Moniaci was on notice of the repairs needed to the roof and, while the Tribunal did not make an explicit finding that Mr Moniaci would therefore have been on notice of the potential loss that may be incurred following a storm, this is implicit in the reasoning. There is nothing unorthodox or unjust about the reasoning adopted by the Tribunal in this regard.
5. In so far as Mr Moniaci contends Ms Erickson should have made a claim on her insurer for the loss of her personal belongings and it is therefore unfair he was ordered to pay compensation for these items, we reject this submission. It is not apparent from the Reasons for Decision whether this was raised at the hearing but in any event we are not persuaded that this discloses an injustice or unfairness that is reasonably clear. Whether Ms Erickson had insurance or whether she should have made a claim on her insurance is irrelevant to the issue of whether she was entitled to compensation for breach of the residential tenancy agreement. Ms Erickson was not obliged to make any claim on her insurance or indeed to have contents insurance to cover these losses. If the primary obligation is on the landlord to provide and maintain the premises in a reasonable state of repair (see s 63(1)), Ms Erickson should not be refused compensation because she has insurance. If Ms Erickson had claimed on her insurance, she no doubt would have had to pay an excess and her insurer may have first sought recovery from the party at fault. This issue could not have affected the outcome of the decision at first instance.
6. The Tribunal found, based on the evidence of Ms Erickson, that the granny flat was not fully habitable for 116 days. It relied on the "uncontested" evidence of Ms Erickson, the fact that the roof had not been repaired at the time of the hearing and the evidence of Ms Erickson that she did not have regular electricity supply. There was no evidence provided to the contrary during the hearing at first instance or in the documents provided by Mr Moniaci for the appeal as "new evidence". Mr Moniaci simply asserts that he cannot understand how the Tribunal made a finding that the premises were uninhabitable for 116 days. The Tribunal did not make a finding that the premises were wholly uninhabitable but that the premises were partly uninhabitable and rent should therefore be reduced by 70%. This finding was open to the Tribunal on the material before it and we are not satisfied that the fact finding process adopted by the Tribunal was unorthodox or mistaken or that there was an injustice that was reasonably clear.
7. In his grounds of appeal, Mr Moniaci contended that the value of the rent attributed to the granny flat would have been in the vicinity of $100 −$130 per week. He provided evidence, being brochures setting out the rent for three-bedroom houses of in the range of $695 to $780 per week. There was no evidence about whether these premises were in fact comparable, particularly having regard to the fact that in the residential premises the subject of the dispute there was a granny flat in close proximity to the house. This may have reduced the attractiveness, and therefore the market rental, for the front three-bedroom house. The rental for the whole of the premises was $830 per week. The Tribunal valued the granny flat at $320 per week, implicitly attributing the remaining rental of $510 per week, to the front house. Relevantly, the "new" evidence provided by Mr Moniaci was not tested, is not, on its face directly comparable, and there was no explanation provided as to how this new evidence had only just "arisen" and why the evidence was not reasonably available at the time of the hearing: cl 12(1)(c), sch 4.
8. As already noted, there was no evidence provided by either party about a directly comparable property at the hearing. The Tribunal made an estimate based on the best available evidence on the day. Mr Da Silva said the value of the granny flat would be $280 per week. The value determined by the Tribunal was not significantly more than this. There was nothing unorthodox or clearly mistaken in the Tribunal's fact finding process.
9. The further issue of contention raised by Mr Moniaci was about the value of the compensation ordered by the Tribunal. This finding was based on evidence provided by Ms Erickson at the hearing at first instance. It was not disputed by Mr Da Silva. Relevantly, the Tribunal, having considered the material, also formed the view that the amount claimed was reasonable. The Appeal Panel, having reviewed this material, is of the view that this finding was reasonably open to the Tribunal. Accordingly, there was nothing unjust in the Tribunal making such a finding.
10. Finally, Mr Moniaci seeks to argue that Ms Erickson exacerbated by weighing down the adjoining fibreglass roof with items, causing it to sag, and improperly storing items under this fibreglass roof. This is a new claim that could have been raised at the hearing at first instance. Ms Erickson did not have the opportunity to respond and should not be required to face such an assertion on an appeal. In any event, it is not apparent from a review of the documents provided by Ms Erickson in support of her compensation claim that she made a claim in respect of the items Mr Moniaci alleges were stored under the fibreglass covering.
11. In summary, this is a case where minds may differ as to the outcome about, for instance, the value of the granny flat and the extent of the rent abatement. However, the Appeal Panel is not satisfied that this is a case where the Tribunal at first instance has made findings that were "unreasonably arrived at" or "clearly mistaken" or that there was an injustice that was "reasonably clear".
12. Accordingly, leave to appeal is refused.

Conclusion

1. Having regard to the foregoing matters, the Appeal Panel determined to dismiss the appeal.

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: 09 February 2016