Moroko v Cojay Holdings Pty Ltd

NCAT Consumer and Commercial|2022-03-04

Introduction

This is an application by tenants for an order pursuant to s 44(1)(b) of the Residential Tenancies Act 2010 (RT Act) that would declare that the rent payable for the premises was excessive by 50% of the rent payable (which was $1,100.00 per week) in respect of the period 6 April 2021 up to 1 March 2022 due to the reduction or withdrawal, by the landlord, of goods, services and facilities provided with the residential premises. The tenants had originally also sought other orders for repairs and declaring a termination notice retaliatory, but by the time of the hearing they had returned possession, which resulted in these claims falling away. This application was made to the Tribunal on 30 December 2021 (the application).
For the reasons set out following, the Tribunal is satisfied that the landlord withdrew from the tenant's use a large roof deck provided with the residential premises during the whole period of the tenancy, and an additional cabana/pergola area from approximately June 2021. It is also satisfied that the tenants' use of the premises was reduced by the landlord in other respects to a level far below the standard required to be provided by a landlord under a residential tenancy agreement. The landlord has already compensated the tenant for the loss of the roof deck in respect of a one-month period by providing two weeks rent free from 4 April 2021. The Tribunal has therefore made an excessive rent order reducing rent payable for the premises from 4 May 2021 up to the end of the tenancy. Having regard to the impact on the tenant of the reduced or withdrawn facilities and the totality of goods, services and facilities provided with the residential premises rent has been reduced by 30% or $330.00 (from $1,100.00) during this period. As the tenants have paid all rent owed up to the end of the tenancy, this excessive rent order is liquidated to a money order in the tenants' favour in the amount of $14,143.00.

Procedural history

The application was first listed before the Tribunal, differently constituted, for Conciliation and Hearing in a Group List in a VMR on 27 January 2022 along with a related application made by the landlord. Mr Moroko appeared at that listing of the application on behalf of the tenants. Mr Jonathon Carr, the landlord's Managing Agent, appeared on behalf of the landlord. In accordance with the Tribunal's usual practice where both parties are present at the first listing of an application, the Tribunal, differently constituted, attempted to assist the parties to resolve the dispute co-operatively by conciliation. Those efforts were not successful. As a consequence, the Tribunal adjourned both applications for a Special Fixture Hearing and issued directions to the parties for the filing and exchange of the documentary evidence that they intended to rely upon at the final hearing.

Evidence and hearing

Both parties complied with the Tribunal's directions for the filing and exchange of their documentary evidence. The tenant filed two bundles on 13 January 2022 and 9 February 2022, which were marked Exhibits A1 and A2 respectively. The landlord filed three bundles of documents on 10 February 2022, 24 February 2022 and 3 March 2022. These bundles were marked Exhibits R1 to R3 respectively. They included Statements of Peter Wensemius, Project Manager, dated 4 and 24 February 2022, Statements of Sidney Adams, Director of the Landlord, dated 9 and 24 February 2022 (2), Statements of Jonathon Carr, Head of Property Management, dated 7 and 24 February 2022, and a Statement of Erica Elzein, Property Manager, dated 22 February 2022.
The Special Fixture Hearing was conducted by telephone in accordance with NCAT's COVID-19 Revised Hearing Procedure. Mr Moroko attended the hearing on behalf of the tenants and gave oral evidence under a solemn promise to tell the truth. Mr Jonathon Carr, Property Manager, attended the hearing on behalf of the landlord and gave oral evidence under a solemn promise to tell the truth. Mr Sidney Adams, Director of the landlord, also gave evidence under a solemn promise to tell the truth. The parties had the opportunity to present their respective cases, to ask each other questions, and to make final submissions to the Tribunal.
At the end of the hearing I raised with the parties the potential implications of ss 15(4), 19(2)(c), 21 and 219 of the RT Act for the force and effect of the Deed of Variation to the residential tenancy agreement (as to which see following), providing them with a two week period to make any submissions on this point. The tenants responded to this direction. The landlord did not. The parties were asked to indicate in their submissions if the Tribunal could dispense with any further hearing on this point and deal with the issue on the basis of the submissions of the parties. The tenants consented to this course. The landlord may be taken not to have objected to it. On 21 March 2022 I therefore made an order dispensing with any further hearing of the application.

Material facts

The dispute arises from a residential tenancy agreement that was made between the parties on 4 April 2021 in respect of premises in Bondi. It was originally a fixed term agreement of 43 weeks and 3 days duration in respect of the period 4 April 2021 to 1 February 2022. The agreement is in standard form. However, it does include as a Special Condition the following term: Deck The deck will not be accessible during the construction period and should not be used during this time.
On 23 June 2021 the parties entered into a variation to the residential tenancy agreement (defined as the "second lease"). The variation extended the period of the agreement to 12 May 2022 and, relevantly to this dispute, included the following terms: RECITALS … D. The parties agreed to extend the term to 12 May 2022, by entering into a new lease ("the Second Lease"), upon the terms and conditions hereafter. AGREEMENT … 1.4 "First lease" means the residential tenancy agreement for the Property on 4 April 2021 between the Lessor and Lessee. 1.5 "Second lease" means the residential tenancy agreement for the Property commencing on 2 February 2022 and ending on 12 May 2022. 1.6 "Works" means any building works on the Property and Building. … 2 OBLIGATIONS AND ACKNOWLEDGEMENT OF THE PARTIES 2.1 Upon the execution of this Deed, the Lessees: (a) promise to provide unrestricted access to the builders as and when required, in relation to the Works being undertaken by the builders as provided for under the First Lease and as agreed between the parties today; (b) Acknowledge that the Lessor does not know when the works on the Property and the Building will complete, and that the Lessor has provided all information in relation to the works being undertaken on the Property and Building; (c) Acknowledge that the works on the Property and the Building could go continue (sic) to or even past 1 February 2022 and that no further extension in relation to the leasing of the Property (beyond 12 May 2022) will be provided; (d) Promise to release the Lessor from any action in relation to the entering into or arising from the First Lease in relation to the Works. (e) Promise that the Lessee will not request any further compensation or rental relief in relation to the First Lease or the Second Lease. …
The rent payable under the residential tenancy agreement at all material times for this dispute was $4,779.76 per calendar month (the equivalent of $1,100.00 per week). It appears that the premises was originally offered for lease at the equivalent of $1,200.00 per week, however, the landlord accepted the tenant's offer to pay $1,100.00. It was not contended that this was other than a market rent, being the rent the landlord was able to achieve as a rental return in the rental market as it prevailed at that time.
It is not in issue that the landlord provided the tenants with a 2 week rent free period at the start of the tenancy in respect of their inability to use the roof deck. There is a dispute as to the period for which this compensated the tenants, as to which see following. The landlord also contends that it reduced the rent payable for the premises for a month at some other time before 17 June 2021 (see Statement of Sidney Adams dated 24 February 2022 par 17). However, the rent ledger that is in evidence starts on 8 July 2021 and therefore does not reflect any such reduction. The tenants deny any rent reduction was given other than the 2 week rent free period.
The residential premises is a two bedroom, one bathroom apartment with a lock up garage and other car space. It is situated on the top level of an 8 storey apartment building and strata plan in Bondi known as 'Bluewaters'. It has a large outdoor balcony which is also referred to as a 'roof deck' area which has wide panoramic regional views, including over Bondi Beach, an additional 'cabana' alternatively called a 'pergola' and 'conservatory' with an alfresco lounge area immediately outside the second bedroom below the roof deck, and another front balcony that opens off the dining area, also referred to as the 'northern balcony'. The balcony/deck had outdoor furniture, BBQ and sound system which were incorporated into the residential premises. At page 21 of Exhibit A2 there is a scale plan of the residential premises which depicts the roof deck, cabana and other balcony, as well as the interior space. The roof deck and cabana are larger than the whole of the interior of the premises and other balcony combined.
At the material time for this dispute significant works were being undertaken to the common property of the strata scheme by the Owners Corporation. A builder t/a National Building Maintenance was engaged to carry out this work. This included concrete repairs, the replacement of balcony windows and glass panel replacement on every floor and the waterproofing throughout the building. It is not controversial that the scope of works was extensive, and escalated during the course of the work because the damage to the concrete was more severe than was first envisaged.
The tenants have submitted into evidence an extract of a plan of works which they found appended to the noticeboard of the Strata Plan after they had moved into the property. It relevantly states with respect to Lot 30 (the residential premises): [work] Start date Completion date Rooftop waterproofing membrane and guttering/downpipes 28 June 2021 24 January 2022 Additional balustrading and re-decking to apartment 30 28 June 2021 24 January 2022 Works associated with water leakage via unit 30 balcony 28 June 2021 24 January 2022

The tenants contend that a primary attraction to the property was the balcony/roof deck. They contend that at the time they negotiated the lease with the landlord's agent they were told that there would be repairs to the balcony area which would mean that it would be unavailable to them for 'about a month at some stage'.
That is denied by the landlord. The evidence of its Director, Mr Adams, is that it was always the case that the tenants would not have access to the balcony/deck during the period of the tenancy, and that they entered into the residential tenancy agreement on that understanding.
I do not accept this evidence. In the pre-agreement period Mr Moroko was in direct communication with Mr Adams negotiating the terms of the residential tenancy agreement. On or about 1 April 2022 Mr Adams sent Mr Moroko the following text message which is in evidence: Hi Daniel I will agree to option 2. However, please note that there will be no access to the rear deck for approximately a month at some stage, when the works are undertaking (sic) - I was not aware of this until 2 days ago when a meeting approved full works which include work underneath the conservatory. It may be less than a month. The builder has only just told me that it will be one month without the conservatory. Normally, I would have insisted that you pay rent from today, however, I am giving you 14 days upon the basis of the loss of use of the area under the conservatory for approximately a month. Please note that you will have full access to the other balcony throughout this time. Please confirm and I will authorise the agent to go ahead with option 2: $1,100 a week from 1 April 2021, however the first 14 days are rent free. Lease expiration is 1 February 2022. Please confirm
The tenant replied to this text: "yes confirmed".
On or about 9 April 2022 there was another text message exchange between Mr Adams and Mr Moroko, in which Mr Adams states as follows: The deck works were originally meant to be 1 month but it looks like it'll be closer to 4 months which is extremely disappointing.
I am satisfied on the basis of this evidence that the tenants relied upon Mr Adam's representation to them in the pre-agreement period that the balcony/ roof deck would be inaccessible to them for up to about 1 month only, and by implication, that it would be available to them for the remaining period of the lease.
That is also a direct implication of the rent free period. If the balcony deck was excluded from the residential premises entirely the rent would have been set on that basis - there would be no loss of consideration of possession to be compensated by a rent reduction. I am also satisfied on the basis of this evidence that the "construction period" referred to in the Special Condition in the first residential tenancy agreement is to be understood as an envisaged approximate one-month period. For completeness I also note that it is a necessary implication of the Special Condition concerning the construction period that the balcony/roof deck was incorporated into the residential premises by the residential tenancy agreement. If that were not the case, there would have been no need for the Special Condition.
I am also satisfied on the basis of the extract of the plan of works the tenants have submitted that Mr Adams knew, or ought to have known, at the time he represented to the tenants that the balcony works would only be of approximately one-month's duration that these works were in fact not projected for completion until 24 January 2022. I reach that conclusion because the landlord is a member of the Owners Corporation and in that capacity may be taken to have been fully informed of the scope of remedial work being undertaken by the Owners Corporation and its duration. The tenants also submit, and Mr Adams did not deny, that he is a member of the Executive Committee of the Owners Corporation. I am satisfied that in this capacity he would have been fully appraised of the scope of work and its duration. In other words, it is clear to me that when he represented to the tenants in the pre-agreement period that the balcony works would be of approximately one-month's duration he knew, or ought to have known that this representation was false.
The tenants contend that the remedial work on the balcony/deck commenced on or about the day they moved in (being 4 April 2022) and that they had no access to the balcony/deck after that date up to the end of the tenancy. That included no access to the outdoor furniture, BBQ and sound system on the balcony/deck that was incorporated into the residential premises. The tenants contend that the works involved frequent jackhammering of the surface of the balcony 7:30am to 5:00pm weekdays and 7:30am to 12noon on Saturdays. They contend that they suffered significant noise and dust nuisance as well as a loss of privacy because of the presence of tradespersons on site throughout the period of the works. In this respect (and again referring to the plan on page 21 of Exhibit A1), it was not just the case that tradespersons worked about the exterior of the premises. They had to gain access to the balcony/roof deck via the entrance hall way in the interior of the premises. I do not understand any of these matters to be in contest.
On or about 15 April 2021 there were communications between Mr Moroko and Mr Adams about the works in which Mr Moroko complained that the works were likely to extend beyond the one-month period he had been told. He raised the possibility of terminating the residential tenancy agreement on this basis. In a text message response Mr Adams states: Hi Daniel as discussed please let me know that you propose: I would prefer you to stay - the apartment is excellent and there is still use of the area in the conservatory (subject to when and if the works are undertaken). And the northern balcony is still available at all times Please let me know.
However, shortly after that date and certainly before mid-June (the precise date not being in evidence) remedial works commenced in the area of the cabana which resulted in that areas not being available for the tenants' use up to the end of the tenancy (see the Statement of Peter Wensemius dated 24 February 2022 par 4(b)).
The tenants also complain about the withdrawal, by the landlord, of the lock-up garage from their use for a period up to approximately 30 April 2021 because the landlord had building elements and other items stored in it. They complain that a dishwasher provided with the residential premises was malfunctioning or in operative from the start of the tenancy up until its end, and that there was a large hole cut into the ceiling of the interior which was not repaired despite an undertaking by the landlord and the landlord's agent to do so, and that there were additional water leaks through the ceiling of the lounge area that were notified to the landlord's agent on or about 3 September 2021, but which were never rectified. There is some lack of precision related to these complaints concerning the periods these facilities were affected as contended for by the tenants. But having considered the evidence of both parties I am satisfied that there is some substance to each of these claims.

Contentions of the parties

The tenants contend that the balcony/roof deck and cabana area of the premises was withdrawn from their use from the start of the tenancy and from approximately mid-April 2021 respectively, up to the end of the tenancy. They contend that the lock up garage and dishwasher were also withdrawn from their use during particular periods of the tenancy. Additionally, they contend that the noise, dust, and presence of tradespersons in and about the premises resulted in a significant qualitative reduction in their use of the interior of the premises, as did the hole in the ceiling and ceiling water leaks. In their final submissions, the tenants contend, in effect, that the Tribunal should declare that the variation to the residential tenancy agreement they signed on 23 June 2021 should be declared void to the extent that it purports to prevent them from bringing this action.
There was some contest by the landlord as to the facts asserted by the tenants. However, the landlord's primary contention is that the terms of the variation of the residential tenancy agreement dated 23 June 2021 are such that the tenants agreed to occupy the premises despite the construction work, and are prevented from making any claim against the landlord in relation to those works.

Jurisdiction

There is no issue that the Tribunal has jurisdiction to deal with this application in accordance with the provisions of the RT Act. In this respect the tenants' application has been made to the Tribunal before the end of the residential tenancy agreement as required by s 44(3) of the RT Act.

Applicable law

The Tribunal's power to order that the rent payable for the premises is excessive having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises is found in s 44(1)(b) of the RT Act. That section empowers the Tribunal to order that from a specified day the rent for the residential premises must not exceed a specified amount. Such an order can have effect for a period of up to 12 months: s 44(6)(a).
Section 44(5) provides that the Tribunal, may, relevantly, to the circumstances of this case, have regard to the following factors in determining whether the rent is excessive without limiting the factors that may be considered: the general market level of rents for comparable premises in the locality or similar locality, the landlord's outgoings under the residential tenancy agreement, any fittings, appliances or other goods provided with the residential premises, and, the state of repair of the premises.
In Roberts v Aboriginal Housing Office [2017] NSWCATAP 9 at [123] an Appeal Panel cited with approval a decision of McClellan J in Eliezer v Residential Tribunal and Ors [2001] NSWSC 1092 in which his honour held at [37] with respect to an antecedent provision to s 44(1)(b) of the current RT Act that the words "goods, services and facilities provided" are confined to the physical and other facilities, goods or services, provided within, or as part of, the premises and that the section is only engaged if it is the landlord (as opposed to a third party) who reduces or withdraws those facilities. As to the distinction between the terms 'reduction' and 'withdrawal' the Appeal Panel held at [124]: As to what constitutes a reduction, in our view this means the goods, services or facilities are of a qualitative or quantitative standard which is less than what a landlord is required to provide under a residential tenancy agreement. On the other hand, a withdrawal suggests there must be a removal or inability to use the particular goods, services or facilities. That is, the goods services or facilities or part of them are no longer available to a tenant.
Section 15 of the RT Act provides for the prescription of standard form residential tenancy agreements by regulation: ss 15(1) and (2). The prescribed standard form is found in Schedule 1 of the Residential Tenancies Regulation 2019 (RT Regulation). The terms of a standard form residential tenancy agreement must be consistent with the RT Act and RT Regulation: s 15(3). A residential tenancy agreement for which a standard form is prescribed may include additional terms, but only if (a) the terms do not contravene this Act or the regulations or any other Act, and (b) the terms are not inconsistent with the terms set out in the standard form: s 15(4). A residential tenancy agreement of a kind for which a standard form is prescribed is taken to include the terms of the standard form: s 15(5).
Section 19 of the RT Act prohibits certain terms from being included in a residential tenancy agreement: s 19(1). Relevantly, this includes terms that have the effect of exempting the landlord from liability for any act or omission by the landlord or any person acting on behalf of the landlord or landlord agent: s 19(2)(c).
Section 21 of the RT Act provides that terms that are inconsistent with the standard form residential tenancy agreement, or which are prohibited, are void: s 21(1). The Tribunal may, on the application, relevantly, of a tenant, make an order that a term of a residential tenancy agreement is void or partly void if satisfied that the term is inconsistent with any term included in the agreement by the RT Act or the regulations or is prohibited by the RT Act or the regulations: s 21(2).
Section 219 of the RT Act prohibits parties to residential tenancy agreements from contracting out of the Act and regulations. A term of any residential tenancy agreement is void to the extent that it purports to exclude, limit or modify the operation of the RT Act or the regulations or has the effect of excluding, limiting or modifying the operation of the Act or regulation: s 219(1). A person must not enter into any contract or other agreement, with the intention, either directly or indirectly, of defeating, evading or preventing the operation of the RT Act or regulations: s 219(2). A landlord's agent must not enter into any contract or other agreement with intention, either directly or indirectly, of obtaining exclusion from or indemnity for personal liability for any act on behalf of the landlord that renders the landlord's agent liable for an offence under the Act: s 219(3).

Consideration

In order to determine the outcome of this application the Tribunal must pose and answer the following questions: 1. Was the tenants' use of any good, service or facility provided with the residential premises reduced or withdrawn in the course of the tenancy? 2. Was any such reduction or withdrawal the result of conduct by the landlord? 3. What was the impact of any reduction or withdrawal of such goods, services and facilities on the tenants? 4. Was the rent payable for the premises excessive having regard to any such impact? 5. Do the terms of the variation of the residential tenancy agreement (or second lease) signed by the parties on 23 June 2021 prevent the tenants from pursuing this application? 6. What orders should be made in disposition of the application?
I am satisfied for the reasons set out above that the balcony/roof deck and its outdoor furniture, BBQ and sound system were incorporated into the residential premises by both the first and second lease agreements. I am also satisfied that the pergola was incorporated into the residential premises by both those agreements. These areas are not excluded from the residential premises by either agreement and it is a necessary implication of both the Special Condition of the first lease and clause 2.1 of the second lease that these areas were part of the premises demised to the tenants under those agreements, subject to a restriction on their use. As I have also observed above, that is also a necessary implication of the landlord providing the tenants with a 2 week rent free period at the start of the agreement in respect of their inability to use the balcony/roof deck for an approximate 1 month period. If there is any doubt about that with respect to the second agreement I note that the rent payable under that agreement was not varied from the first agreement. I am satisfied that this indicates that there was no reduction in the demised area of the residential premises. It is not controversial that the lock-up garage, dishwasher and interior ceilings were incorporated into the residential premises.
I am satisfied that the balcony/roof deck was withdrawn from the tenants' use from the start of the residential tenancy agreement on 4 April 2021 to 1 March 2022 due to the extensive construction works being carried out in this area on behalf of the Owners Corporation. This is not in issue. I am also satisfied that the cabana area was withdrawn from the tenants use by these construction works from at least mid-June 2021 and possibly as early as mid-April 2021 up to the end of the tenancy. This is also not in issue. I accept on the tenants' evidence that the lock up garage was withdrawn from their use from the start of the tenancy up to about 30 April 2021. I also accept that their evidence that the dishwasher was withdrawn from their use by it being in a state of disrepair for a substantial period, if not the whole period of the tenancy (I acknowledge there is some lack of clarity about this).
I am also satisfied that the tenants use of the whole of the interior of the residential premises was substantially reduced below the standard required to be provided by a landlord to a tenant under a residential tenancy agreement. The ceilings of the interior had a substantial hole for all or most of the tenancy (there is some lack of clarity about this), and there were water leaks from the lounge ceiling during rain from September 2021 up to the end of the tenancy. A landlord has an obligation to provide and maintain residential premises in a reasonable state of repair. The condition of the ceilings fell well below that standard.
Similarly, a landlord must not interfere with, or cause or permit an interference with, a tenant's reasonable peace, comfort and privacy of the residential premises (quiet enjoyment). In this case, I am satisfied that the construction works generated substantial noise over long periods most week days and on Saturdays which interfered with the tenants' peace and comfort. The works also generated substantial dust and dirt requiring the tenants' furniture and possessions to be covered in plastic during particular periods. This also seriously interfered with their peace and comfort. Tradespersons were on site on the outdoor areas of the premises for the duration of the works and entered the interior of the premises to gain access to these exterior areas. I am satisfied that this resulted in a serious interference with the tenant's privacy. In each of these respects the tenants' ability to use the interior of the residential premises fell far below the standard required of a landlord under a residential tenancy agreement.
I am satisfied that the reduction and withdrawal of these facilities was the result of conduct by the landlord. It entered into the residential tenancy agreement with the tenants in respect of the demised residential premises, which incorporated each of these facilities. For the reasons I have set out above, I am satisfied that the landlord knew or ought to have known of the scope and duration of the works when the residential tenancy agreement was made. Despite that actual or constructive knowledge, in the pre-agreement period the landlord's director, Mr Adams, made false representations to the tenants about the duration and impact of the works, apparently in an attempt to induce them into contract. It was this false representation about the duration and impact of the works that resulted in the facilities being reduced or withdrawn after the approximate one-month period of work represented was exceeded. Additionally, although the works were being carried out by the Owners Corporation, the landlord is a Member of the Owners Corporation (or at least its Director Mr Adams is (this is not clear on the evidence)). The works were being undertaken on the landlord's behalf and that of other Lot Owners. The conduct of the Owners Corporation in carrying out the works is therefore assimilated to the landlord as between the landlord and tenants.
For the same reason the failure of the Owners Corporation to repair the ceilings of the interior of the residential premises, including to prevent water ingress, is assimilated to the landlord as between the landlord and tenants. The landlord has rights and remedies against the Owners Corporation in respect of this failure to maintain common property, which the tenants do not. The failure of the landlord to exercise those rights and obtain those remedies is the conduct that resulted in the reduction in the tenants' use of these facilities.
There can be no issue that the garage and dishwasher were withdrawn from the tenant's use by the landlord. The landlord had an obligation to provide the tenants with vacant possession of the whole of the demised premises at the start of the agreement. He failed to provide vacant possession of the garage because he still had goods stored there. The dishwasher was withdrawn from the tenants' use by its state of disrepair.
I am satisfied that the impact of the reduction and withdrawal of these facilities on the tenants was very substantial. They lost the use of more than half the area of the demised premises. They were required to subsist in a noisy, dirty, construction zone with frequent interruptions of their privacy. The condition of the ceilings was unsightly and the water ingress presented a risk of damage to their possessions. They were seriously inconvenienced by being unable to use the garage and dishwasher.
As I have set out above I am satisfied that the rent payable for the premises at all material times for this dispute was a market rent. It was less than the advertised rate but it was arrived at via a negotiation process between Mr Moroko and Mr Adams. It may reasonably be inferred from this that this was the best rental return for the premises the landlord was able to achieve in the rental market at that time.
I am not satisfied that the rent payable for the premises already took into account the impact of the construction work. That is plain from the fact that the landlord provided the tenants with a two-week rent free period in relation to construction work at the start of the tenancy. If the rent rate already reflected the planned construction works it would have been unnecessary for the landlord to provide this rent free period. It is thus clear that the rent rate was set on the basis that the tenants would have the use of the whole of the demised premises with the exception of the balcony/roof deck during the "construction period", of 'approximately one-month' for which they were provided a two-week rent waiver in compensation.
For these reasons I am satisfied that the loss of consideration of possession of the premises the tenants' suffered due to the reduction and withdrawal of the facilities set out above was a factor of the rent that they paid, rather than of any under market value rent that they already had the benefit of.
Having regard to the very significant impact of the reduction and withdrawal of these facilities on the tenants' use of the premises I have determined that rent was excessive by 30% from 4 May 2021 up to the end of the tenancy on 1 March 2021. The tenants have already been compensated by the landlord for their inability to use the balcony/deck area for an approximate one-month period. The excessive rent order should therefore not take effect until that period is exceeded.
The tenants' contend that rent should be found to have been excessive by 50% of the rent payable. However, I must balance the tenants' loss of use of the premises with the use that they continued to have of it. In this respect, there is no issue that the tenants continued to occupy the premises at all material times for this dispute. They continued to have the use of two bedrooms, the kitchen, a bathroom, and the northern balcony. Although the impact of the construction works was substantial it was not equally severe over the whole course of the day or week. The noise and loss of privacy was limited to the period tradespersons were working on site. A 30% reduction in rent is significant. I am satisfied that it is proportionate to the loss of use of the premises the tenants' suffered.
There is some differential to the periods in which the facilities the subject of the claim were reduced or withdrawn from the tenants' use. They are appear to have been given vacant possession of the lock up garage on or about 30 April 2021, and the lounge ceiling water leaks do not appear to have commenced until September 2021. However, it would be excessively complicated to make multiple excessive rent orders calibrated to specific periods when the use of a particular facility became available or was reduced or withdrawn. The excessive rent order I have made involves some smoothing over the whole period of the tenancy.
It remains to be considered if clauses 2.1(d) and (e) of the variation to the residential tenancy agreement signed by the parties on 23 June 2021 prevents the tenants from bringing this action, or the Tribunal from making an excessive rent order in their favour.
Those clauses purport to limit the operation of provisions of the RT Act so as to negative the remedies available to a tenant as against the landlord, including under s 44(1)(b). It is thus an attempt by the landlord to contract out of the obligations imposed upon it by that Act. These clauses are therefore void by operation of s 219(1) and (2) of the RT Act. These clauses also purport to exempt the landlord from liability to the tenants for any act or omission by the landlord. Such terms are prohibited from being included in a residential tenancy agreement by operation of s 19(1)(c) of the RT Act. Because these additional terms constitute a contravention of the Act they also cannot be included in the residential tenancy agreement by operation of s 15(4)(a) of the RT Act. The tenants are therefore entitled to an order pursuant to s 21(2) of the RT Act that declares these clauses void and of no effect.
By operation of s 15 of the RT Act the terms of the prescribed standard form residential tenancy agreement, which incorporates the landlord obligations and tenant remedies available under the RT Act, therefore apply in the determination of this application. These obligations and remedies are not affected in any way by clauses 2.1(d) and (e). The tenants are therefore not prevented from pursuing this application, and the Tribunal is not prevented from making an excessive rent order, by those clauses.

Orders

For the foregoing reasons I make the following orders: 1. Clauses 2.1(d) and (e) of the variation to the residential tenancy agreement dated 23 June 2021 are void and of no effect. 2. The rent payable for the premises was excessive for the period 6 April 2021 to 1 March 2022 and must not exceed $770.00 during this period. 3. Cojay Holdings Pty Ltd must pay Daniel Moroko and Joseph Pamment $14,143.00 immediately.

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 2022

At a glance

Court

Decision date

Source

Judgment (11 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (2)

Cited By (1)