Murphy v Lewkovitz; Lewkovitz v Murphy - [2021] NSWDC 361 - NSWDC 2021 case summary — Zoe

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Murphy v Lewkovitz; Lewkovitz v Murphy

[2021] NSWDC 361

District Court of NSW|2021-02-11|Before: Hatzistergos AM

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At a glance

Source facts

Court

District Court of NSW

Decision date

2021-02-11

Before

Hatzistergos AM

Catchwords

(2011) 243 CLR 588 De Solei v Palmhide Pty Limited [2010] NSWCTTT 464 Dennis v Brownlee [1964] NSWR 544
(1963) 9 LGRA 415
[1963] SR (NSW) 719 Doe d Murray, Lord Bishop of Rochester v Bridges (1831) 1 B & Ad 847
(2000) 176 ALR 137

Source

Original judgment source is linked above.

Catchwords

(2011) 243 CLR 588 De Solei v Palmhide Pty Limited [2010] NSWCTTT 464 Dennis v Brownlee [1964] NSWR 544(1963) 9 LGRA 415[1963] SR (NSW) 719 Doe d Murray, Lord Bishop of Rochester v Bridges (1831) 1 B & Ad 847(2000) 176 ALR 137(2000) 75 ALJR Kuligowski v Metrobus (2004) 220 CLR 363(2004) 208 ALR 1(2004) 78 ALJR 1031[2007] NSWCA 69 Northern Sandblasting Pty Ltd v Harris [1997] HCA 39(1997) 188 CLR 313(1997) 146 ALR 572

Judgment (67 paragraphs)

[1]

& Sons Pty Ltd v McLeish (1970) 91 WN (NSW) 268 Goodhue v Volunteer Marine Rescue Association Incorporated [2015] QCA 234 Gray v Queensland Housing Commission [2004] QSC 276 Hampel v South Australian Housing Trust [2007] SADC 64 Hoblos v Alexakis [2021] NSWCA 126 Jones v Bartlett (2000) 205 CLR 166; (2000) 176 ALR 137; (2000) 75 ALJR Kuligowski v Metrobus (2004) 220 CLR 363; (2004) 208 ALR 1; (2004) 78 ALJR 1031; [2004] HCA 34 Lewin v Zhou [2018] NSWCATCD 54 Libra Collaroy Pty Ltd v Bhide [2017] NSWCA 196 Loose Fit Pty Ltd v Marshbaum [2011] NSWCA 372 Makita v Sprowles (2001) 52 NSWLR 705 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 Nelson-Hauer v Calman (1954) 73 WN (NSW) 449 New South Wales Department of Housing v Hume bhnf Donna Hume & Anor (2007) Australian Tort Reports 81-879; [2007] NSWCA 69 Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313; (1997) 146 ALR 572; (1997) 71 ALJR 1428 O'Brien v Roberts [2012] NSWCTTT 372 Proudfoot v Hart (1890) 25 QBD 42 Rendlesham Estates plc v Barr Ltd [2014] EWHC 3968 Rhesa Shipping CO SA v Edmunds [1985] 1 WLR 948 at 955; [1985] 2 All ER 712 Roberts v Bell [2001] NSWRT 6 Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 Sakoua & Anor v Williams (2005) 64 NSWLR 588; [2005] NSWCA 405 Summers v Salford Corporation [1943] AC 283 Summers v Salford Corporation [1943] AC 283 Tito v Wadell (No 2) [1977] CH 106 Varricchio v Wentzel (2016) 125 SASR 191 Texts Cited: Allan Anforth, Peter Christensen, Christopher Adkins, Residential Tenancies Law and Practice New South Wales (Federation Press, 7th ed, 2017) McGregor on Damages by James Edelman, revised by Simon Colton and Jason Varuhas (2021) 21st Edition Category: Principal judgment Parties: Christopher Murphy (Plaintiff/Cross Defendant) George Lewkovitz and Ilana Lewkovitz (Defendants/Cross Claimant's) Representation: Counsel: Mr D Hand (Plaintiff/Cross Defendant) Mr A Maroya (Defendant/ Cross Claimant)

[9]

Tenancy of Donald and Christina Graham

In about 2011, Donald and Christina Graham entered into a residential tenancy in relation to the property. Ms Graham gave evidence that at that point, the Defendants told them to "be aware that there would be mould and damp in the downstairs garage consistent with Sydney humidity." [18] Ms Graham said that both Defendants told them not to use the single garage because of the mould problem there but to use the double garage instead. [19] Ms Graham stated that the Defendants also told them they "had to" renovate the main bedroom and the attached bathroom but offered no explanation as to why. [20] I interpret "main bedroom" as a reference to the "master bedroom" which was adjacent to the southern wall marked on the aforesaid floor plan.
Email correspondence between Mrs Graham and the Defendants was tendered. [21] On 7 November 2012, Ms Graham emailed the First Defendant inter alia stating: As previously advised we have on-going humidity problems in our bedroom/walk in robe. This results in our de-humidifier taking out 20 litres of water every two days. Putting aside the additional electricity cost the inconvenience of having to do this is not acceptable. Please arrange for this problem to be fixed immediately. [22]
On or about 30 November 2012, Ms Graham stated that she had a conversation with the Second Defendant where she complained about what she perceived and observed as "constant damp and mould problem". She stated that the Second Defendant said words to the effect of: "I have lived here for 32 years without a damp problem in the bedroom. The soil underneath had no moisture and was sandy. My builder said there was no damp problem. It is the humidity in the air. Having to empty out damp absorption boxes once a month is hardly an onerous task". [23]
At one point, Ms Graham stated that the First Defendant acknowledged that there was a mould problem. She stated that he came over several times to the house. She showed him her bags that she had to throw out that had mould growth on them and her clothes that she had to take to the drycleaner because they had leather jackets that were full of mould. [24] She later added that "there was mould growing on everything that we owned." [25]
Ms Graham stated that on one occasion the First Defendant brought a builder and he stated "Look, I think there's evidence of rising damp." [26] In re-examination, Mrs Graham stated that after she showed the builder where the mould was and where they had to take water out the builder responded "no wonder you've got mould problems." [27] Although she omitted this in her affidavit evidence she stated that it was a matter of distinct re-collection as she discussed it with her family and "they have the same recollection." [28] She rejected the suggestion that her email indicated that the builder indicated the symptom but not the cause. [29] Ms Graham referred to the conversation with the builder as taking place during the second half of the 2 year tenancy. [30]
Thereafter, the First Defendant came over and Ms Graham described telling him "Look, I've spoken to the builder. The builder thinks its rising damp." The First Defendant is said to have replied "That's what we were told but I think it's just Sydney living but clearly you've got a mould issue so these rechargeable will help" [31] and "Look, this is what the builder told me - that you've got a rising damp problem." [32] Ms Graham stated that the First Defendant said that he would order rechargeable damp absorbers [33] and if this didn't work, he would have to look at other ways". [34] Ms Graham stated that these were never provided.
Ms Graham stated that at the time they began to "escalate this mould issue" she added that she also experienced respiratory symptoms which her doctor related to the mould and ceased after they had moved out. [35]
Ms Graham's email to the Defendants dated 30 November 2012, stated as follows: "Re the damp. We have lived in Sydney for over 20 years and have never had a damp problem like this. The de-humidifier we bought is taking out a significant amounts of water and the damp absorption boxes I bought to put in each of the wardrobes to absorb any residual damp are now full of water (after one month). I should also note that David noted evidence of rising damp outside the house and on the carpet in our wir [walk in robe] and bedroom so whilst he may not have been able to find the cause there is evidence of it. I note your comments regarding cost of his looking at this issue (for approximately less than one hour) and also note he is not a damp specialist". [36]
The Second Defendant responded to Ms Graham's email on 30 November 2012 as follows: "We cannot find a source of moisture other than airborne. To assist I have ordered 3 rechargeable dehumidifiers for the dressing room cupboards. You have never mentioned dampness in the bedroom area until recently. We have responded accordingly. As I recall the floor is polished floorboards and not carpeted. We are not ignoring the source of problem but thus far cannot find the cause other than the usual Sydney humidity. This is a common problem and having to empty out the damp absorption boxes once a month is hardly an onerous task. We have been renting out the house for the past eight years and none of the previous tenants have complained and they did not have the brand-new walk in wardrobes installed prior to your occupancy." [37]
The First Defendant could not recall the person referred to as "David" other than he recalled someone by that name who was an air conditioning consultant. He stated with reference to the email of 30 November 2012: Q. Do you have any recollection of back in November 2012 when Christina Graham raised with you an issue about rising damp A. No, look, I read that but quite frankly no one has ever proved rising damp. I've been under the house approximately once a year in 32 years for various reasons and one of the things I looked at the time - aside from dead possums, dead cats and other technical issues - was what's the evidence of rising damp or any other ventilation problems under the house, and haven't found any that are worth proceeding with. Q. In answer to the question, you addressed rising damp and ventilation. A. Yes. Q. Do you say that you yourself carried out inspections of the subfloor area as to whether or not it was properly ventilated? A. Yes. Q. You'd determined yourself, did you, that it was properly ventilated? A. No, because on some of the occasions I was down there with an appropriate professional and this is something that we happened to discuss over the time, and no specific issues came up that should be pursued. [38]
On 1 December 2012, Ms Graham emailed the Defendants in reply stating: "The bedroom and walk in robe is carpeted and your builder indicated he could see from the darkness vs lightness areas of the carpet that there may be rising damp i.e. he said while it could look like normal wear and tear he, as a builder, could see a pattern". [39]
Ms Graham conceded that she did not mention the word "mould" in her emails. In cross examination, it was put to Ms Graham that if she was extracting water of the magnitude she described she would have recorded mould as a consequence. Ms Graham responded that she thought it was sufficient to say to the landlord "Look, there is a mould issue". Nonetheless, Ms Graham accepted that those words were not in her email. She added that the mould was the underlying cause of her having to buy the dehumidifier and having to spend a lot of money on damp prevention. [40]
The Second Defendant could not recall as to whether any steps were taken to address the issue of the state of the carpet but insisted that "we did not ignore the tenant's complaint." She could not recall the precise action taken apart from calling the person "David." [41]
In cross examination, the Second Defendant accepted that Ms Graham raised the matter of dampness in the dressing room but stated there was no mention of mould. She later conceded that mould was part of Ms Graham's subsequent application to the then New South Wales Civil and Administrative Tribunal (NCAT). [42]
In his Affidavit evidence, the First Defendant stated: "At no stage did we deny the presence of mould. The dilemma was why was there so much. This was totally different to the occasional minor mould (particularly during the summer months) experienced by us in the past, despite rain almost every day for many weeks preceding. [43]
Also in cross examination, the First Defendant acknowledged that Ms Graham had referred to a mould problem. The transcript records: Q. She gave evidence that you acknowledged to her that there was a mould problem because you'd come over several times. She said, "I showed him my bags that I'd had to throw out and that had mould growth on them and my clothes that I had to take to the drycleaner because we had, like, leather jackets that were full of mould," and he said, "Look, I can see there's a mould problem. I'll order these electric rechargeable damp absorbers that will help with the mould problem." A. Yes. Q. You accept that her evidence is a correct statement of her dealings with you at that time? A. Sorry, I'd have to go through - that's a general statement. Was there a particular issue that you-- [44]
In about late 2012, Mr and Mrs Graham vacated the property after being given the notice of termination. [45] The property thereafter remained unoccupied until August 2013. [46]

[11]

Leather Jackets

The Plaintiff gave evidence that around the time of the 2015 lease renewal he and his partner (Ms Agnes Bruck) were standing in the walk in wardrobe area which had floor to ceiling robes with mirror sliding doors on three sides and where he kept his leather jackets in a partly concealed wardrobe. He stated that he then showed the First Defendant that he had just discovered mould on his leather coats. The First Defendant responded with words to the effect: "It is an air circulation issue. You should open the window at the end of the walk in wardrobe corridor. Keep the bathroom door shut. It is a 'ventilation problem'. It is your fault for not keeping the air circulating". [52]
He stated that the First Defendant did not suggest that there was any danger in mould. He accepted what the First Defendant said as he knew he was an Ear, Nose and Throat Specialist. During the inspection, when the Plaintiff showed the mouldy jackets, the Plaintiff stated that the Second Defendant said words to the effect "Sydney is a humid place. You should buy a packet of Damp Rid'. That is how I deal with the damp". [53] The Second Defendant denied saying these words adding that the only occasion on which she recalled discussing the topic of humidity was when she met the "Murphys" one summer at Westfield at Bondi Junction. [54]
The Plaintiff said that he took the leather jackets to the backyard and scrubbed them with vinegar and water to remove the mould and left them in the sun for a few days on the pool fence before putting them back in the hall cupboard. He stated that Ms Bruck bought a packet of Damp Rid and he left the windows open as the First Defendant had said. In addition, in the bathroom area, two windows were never closed again except when they were absent. The hall cupboard window was open during most days but closed it at night to avoid mosquitoes.
In cross examination, the Second Defendant said that she considered the leather jackets to be "prone to that [mould] if they weren't regularly ventilated". [55]
Whilst the Plaintiff was cross examined as to his own evidence, it was not put to him that the incident did not occur. Rather, it was suggested that after he had sought to treat the mould using amongst other things a hose, he couldn't exclude the possibility of residue moisture. The Plaintiff stated that he washed the jackets as best as he could scrubbing away, treating them with vinegar and expecting "these invisible and scentless spores would be dealt with." He said that he then hung them on the fence on wire coat hangers in the sunshine for probably ten days. [56] According to the Plaintiff, they were absolutely dry and that there was no suggestion of any water being carried. [57] Thereafter, he said that he was in and out of his cupboard getting other things but didn't see any mould on them again until 2017. [58]

[12]

Further Water Penetration

The Plaintiff gave evidence of other defects in the property.
On 3 August 2013, the Second Defendant sent an email to Ms Bruck stating that they would organise a plumber to repair the leak in the garage that was sighted the previous day. The Plaintiff stated that this was not attended to prior to his and his family's departure. [59] The First Defendant stated that this has been a long standing problem which defied several extensive attempts at rectification but despite the work the leakage continued sometime after each repair. [60]
The Plaintiff gave further evidence of a plumbing leak under the kitchen sink and a leaking tap. He stated that he asked the First Defendant to get a tradesman to repair it however he said he was busy and suggested that the Plaintiff tape it up. The Plaintiff stated that nothing was done and it stayed leaking until he ended up sliding on the floor sustaining injury on 30 November 2015. [61]
The First Defendant conceded that the issue of the leak had been reported on one occasion only and he thereafter sought to call the plumber on several occasions. He did not dispute that the repair had not been otherwise attended to. [62]
There was also a skylight in the kitchen which the Plaintiff asserted had water pouring in each time it rained, and had lifted and moved in the wind. The Plaintiff stated that he notified the First Defendant but nobody came to fix it. He stated that he climbed on the roof and used a bulldog clip and a child's screw toy to hold it down and they were still there when he vacated the property. [63]
The First Defendant responded that these issues were not identified or reported. He asserted that tile breakages were noted on roof inspection when the occupancy was released and that this would have caused moisture penetration of the kitchen in the meantime and damage to the parquetry floor. [64] Further, the First Defendant records that he was advised on one occasion only as to water dripping from the kitchen lights and not subsequently. He added that after the commencement of the proceedings the Defendants were advised that this had happened on more than one occasion. [65]
On 24 August 2016, the Second Defendant wrote to Ms Bruck via a David Stern confirming agreement to extend the lease by 12 months ending on 5 August 2017 on the monthly rental of $11,626.00 and that the rental conditions remained unchanged. [66] The Plaintiff agreed to take up the property for a further year. He did not recall signing a residential lease but did recall accepting the offer. [67]

[13]

Mould in March 2017

On 4 March 2017, the Plaintiff advised the Second Defendant: "There is a pool of water in the downstairs bedroom wardrobe. The damp destroyed my expensive leather jackets from Paris and New York. I accepted your husband's guess it might have been shower damp but in fact despite our moisture absorbers in this heavy rain it has come up through the floor". [68]
On 5 March 2017 at 6.34pm, the Plaintiff texted the Second Defendant photographs of the leather jacket with shoes and mould stating: "I treasured this jacket, also from New York. See the grey damp mould on it and the shoes. See the pic inside the robe with the wet piece of paper. See the 5 dehumidifier packets in the wardrobe situate under my clothes. See the two located where the water is now on the floor of the wardrobe at right angles to it where the track pants bottom is wet and the wet blue paper lies". [69]
The Plaintiff referred to track pants as starting to wick up moisture because the trouser legs of the pyjamas were in contact with the floor. He did not remove the clothing at that stage from the wardrobe. [70]
In any event, the Second Defendant responded on 5 March 2017 stating inter alia: "We will get an expert to look into it tomorrow and be in touch as it obviously needs to be investigated and repaired asap". [71]
The following morning at 11.50am, the Second Defendant contacted the Plaintiff by SMS stating: "Hi Agnes and Chris I have given Agnes's phone no to a company called AWS Sydney [redacted] who are rising damp specialists and will phone you to arrange access. I assume probably coming from under the house (?) but obviously need to find out and fix. I will contact others and give them Agnes's no. If that's ok with you. Regards Ilana". [72]
The Plaintiff responded: "A builder engineer said this in the kitchen is rising damp. BTW I don't speak much on the phone because each time someone calls I need to set up hearing aids and dongles. Would you please let me know how much is owing on the rent rise and how much it is per month. Best Agnes takes phone calls. I cannot hear a phone. CM". [73]
The Second Defendant responded: "Do you know any experts? We need to fix. I am just going off Google but have left a message for above company to contact you. We didn't know it was a problem. Llana". [74]
The Plaintiff responded: "I don't know this area at all. I did mention the damp and mould to your husband. I wanted to pass those jackets to my son. I hope they can be fixed. I threw one out handmade by a client after I won his case. I had two building guys one recently committed suicide and the other drank himself to death. Must be a depressing trade". [75]
The Second Defendant responded: "I have got a rising damp specialist to contact you and have left a message for a project manager we trust to call me. We'll get it fixed soon hopefully. There is definitely a large cavity under the house so show them the opening on side of front living room. So sorry about the jackets etc I wish you had told us earlier of how bad the problem and of course we would have attended to it. Illana". [76]
The Plaintiff thereafter responded: "I did mention it and assumed what your husband said was correct. On reflection I suppose I could have checked with an expert I assumed that you knew the house well. Anyway when the expert …". [77]
The Second Defendant was cross examined on what was described as her immediate assumption. The transcript records the following: Q. The issue of rising damp on the exterior walls and in the carpet in the bedroom had been raised with you in late 2012, and I suggest to you that is the basis upon which you made this assumption that it's probably coming from under the house. A. Well, it wasn't coming from above at that point, so. Q. How do you know it wasn't coming from above at that point? A. Well, no water was coming down or anything. Q. When you said, "I assume it's probably coming from under the house," what you meant was, "I think it's rising damp." That's correct, isn't it? A. The other thing I thought - sorry - there's a bathroom next door and I sent her another email saying, "Could you check the little toilet next door in case there's a leak there?" - and I have that email somewhere - when I thought it might have been the toilet next door or something that was leaking into the dressing room which is adjacent to it. Q. I suggest to you that the reason you went immediately to calling a rising damp specialist was because you were aware of the fact that the property had a rising damp problem. A. No, I obviously called the wrong specialist. Q. You accept, don't you, as you sit here before this Court today that at the time your suspicion was it was rising damp. A. It's just a term that one comes up with. I don't even know what rising damp - I'm not a builder. I'm - you know. I called in the experts. I wanted to establish what the problem was. I went to Google or the phone book and looked up people who were commenting on waterproofing. … Q. Immediately after my client raised with you his concerns about mould and damp in the walk-in robe on 5 March 2017, your mind turned straight away to rising damp. You accept that? A. No. There's a reply to him below that. "We will get an expert to look into it tomorrow and we'll be in touch as obviously it needs to be investigated and repaired ASAP." That's exactly my reply to him immediately below his email and which is - that's what I did. Q. I'm asking you, over on page 733, you've gone immediately to a rising damp specialist. Do you see that? A. 733. Sorry, which one do you want me to look at? Q. The one at the top right-hand side of the page. A. What, "Hi Agnes and Chris"? Q. Correct. A. "I've given Agnes' phone number to a company called AWS who are a rising damp" - well, I don't know that they - they just do waterproofing and whatever. I needed to know what was the problem. Q. Do you say to this Court that rising damp was not a-- A. I hadn't even seen the property. They emailed me and I looked up the phone book and I got people to come and look at it. I took them at their word 30 and that was that. Q. Do you say as at March 2017 and following you did not suspect it was rising damp? Is that what you say to the Court? A. I had no idea. I knew they were complaining about water, I have to find out what's causing the water or the mould or dampness, and it had been raining for a month nonstop. Q. Did the possibility of rising damp feature in your-- A. That's what I called the experts in to investigate. Q. Are you attempting to downplay-- A. Am I what, sorry? Q. Do you accept, before I move on from this topic, that at the time you formed the view that the dampness - when I say "at the time", I'm talking about at or about 4 March 2017 - you thought that the dampness was caused by rising damp? A. I am not qualified to say that. That's why I called in the experts. Q. You may not be qualified to say it, but I'm asking you did you at the time have the thought that the dampness was caused by rising damp? A. No idea. Q. No idea, do you say? A. I called in the experts. [78]
The Second Defendant was shown a statutory declaration she completed dated 8 June 2017 in which she stated with reference to her message referred to at [50]: "At the time, I thought that the dampness was caused by rising damp and I contacted two companies who I though specialised in rising damp to inspect the Premises." [79]
The Second Defendant would not concede that rising damp was on her mind at the time maintaining that was why she was calling in the experts. She rejected the suggestion that the reason she suspected rising damp in March 2017 was because she was well aware from late 2012 that the premises had a rising damp problem. [80]

[14]

Zenith

On 9 March 2017, a representative from Zenith attended the property being a Mr Marcus Pine. [81] The quotation dated 14 March 2017 was in the sum of $14,630 and advised that: Rising damp: 6 lineal metres of wall in the dining room Disconnect the air conditioner and remove it from the wall Remove the render from the wall up to the height of the window sill Install Techdry silicon Damp Proof Course (DPC) into the lowest mortar course to the floor Re-render the wall using a salt retarder in the render mix White set over the render to match existing Refit the Air conditioner Other recommendations: At the time of inspection there was a significant mould growth in the main bedroom and robe. This is extremely unhealthy and should be remediated for mould ASAP, the room and all of the contents need to be treated for mould. There may be a few sources for the dampness in the bedroom which is causing the mould The subfloor crawl space has no ventilation, this needs to be ventilated with mechanical ventilation (quote attached) The exhaust fan in the ensuite has an exhaust fan, however this fan is not ducted anywhere, therefore it is inadequate. I recommend that an exhaust fan be fitted into the ceiling and connected to ducting which ducts to atmosphere. This may be a large job as the ceiling may need to be removed in order to run the duct Ventilation of the actual room is also important. If natural ventilation can't occur, a dehumidifier and air purifier are recommended [82]
Zenith identified the sources of dampness that led to the mould as the inadequate subfloor ventilation and the inadequate exhaust system in the en-suite.
On 10 March 2017, the Plaintiff stated that he advised the Second Defendant that he closed the downstairs bedrooms wardrobe and bathroom until the problem was resolved and had moved to a spare room upstairs with his son sharing his mother's bed until things are remedied. He further requested that he be supplied with a copy of any mould reports so that he could work out what to dispose of and what had to be cleaned. He stated that the Second Defendant responded stating she would do this but had another company coming and would report once she had heard from them. [83] The First Defendant stated that at this point it was apparent that the Plaintiff was contemplating legal action. He stated this placed pressure on both the Second Defendant and himself to complete the repairs even before the cause of the water related-difficulties was yet to be reliably apparent. [84]
On 15 March 2017, AWS services emailed the Second Defendant at 4:32am recommending thermal imaging "to see the areas more appropriately." [85] That work was not carried out.
The First Defendant stated on 16 March 2017 a request was "repeatedly" made by the Second Defendant to Ms Bruck for a list of all the problems in the house she had previously alluded to and this was not supplied. [86]
Further, on 16 March 2017, the Plaintiff contacted the Second Defendant by email noting that it was almost two weeks since he was forced to vacate the downstairs bedroom, wardrobe areas and bathroom "due to rising damp but still no progress to resolution." [87] The Second Defendant responded: I have got a trusted builder 'Stuart' coming tomorrow he will contact Agnes for access as not happy with what AWS suggested so most likely will go with Zenith but wanted to confirm that it is definitely rising damp etc. Sorry but I am doing the best I can. I understand your frustration but there are four bedrooms upstairs. Stuart with be in touch. [88]
The Plaintiff responded pointing to the inconvenience of not having safe access to his things and how he needed a commitment to remedying the situation. [89] The Second Defendant responded stating: "Doing our best but as we don't live there we were not earlier informed of how bad the situation had become. February is always humid but no doubt something more contributing to the amount of ventilation in rooms. I am well aware of your frustration and on a more general note have been asking Agnes since well before Xmas to provide a list of issues (still waiting although I appreciate she had fracture) and this matter was not raised. It is not being neglected but want to make sure that with such huge expense it is the correct diagnosis and solution. I know you are paying a lot of rent but we are also the owners of a very valuable property which we want to maintain in good order and all houses have occasional problems. I appreciate your cooperation so bear with me". [90]
The Plaintiff responded stressing the urgency of a solution and how there are 5 full dehumidifiers on the floor and one hanging all to no avail. He added that "he would rather just fix things and telling him after two weeks of gross inconvenience someone called Stuart is going to ring is very disappointing." [91] The Plaintiff added that he doesn't want to wait weeks to be able to enjoy the safety of the house adding "Let's get it fixed pronto." The Second Defendant responded "Absolutely." [92]
On 20 March 2017, the Second Defendant forwarded an email to the Plaintiff and his partner stating inter alia: "I appreciate your concerns re possible mould downstairs and the inconvenience of temporarily sleeping upstairs and have therefore arranged for a specialist to inspect and report on the problem and arrange remediation asap. We have still not determined the cause of dampness other than unusually humid weather (always the case in Sydney) and poor ventilation but have decided in order not to inconvenience you longer to remediate first and once we know exactly what the underlying cause is to fix it and prevent recurrence. As I previously explained this is the wrong order but we need to do what we can in the meanwhile. I have therefore given Mr Greg Willis Agnes's phone number to arrange for access today and await his urgent report in order to remediate asap". [93]
On 21 March 2017, the Second Defendant wrote to the Plaintiff and his partner again stating: Thank you for allowing Greg Willis to inspect the property yesterday to report on the presence of mould and make recommendations re remediation. Following a conversation with him he says he did detect mould through the wardrobes and clothes within and the bedroom. This will obviously need to be cleaned up asap in order to enable you to return to sleep there and clean the contents therein. He commented on the possible presence of water penetration from the small guest bathroom which abuts one of the wardrobes and also the possibility of water coming from upstairs which may explain moisture in the ensuite ceiling. This is apart from possible rising damp yet to be determined. You will appreciate how complex this is and I will tomorrow contact a company called Megaseal who waterproofed the upstairs bathrooms sometime ago to ensure that is not another one of the causes. They will contact you re access and I once again apologise for these instructions but once we undertake the cleanup we obviously need to prevent recurrence by fixing the underlying causes. The mould has obviously been growing over a very long period and whilst George and I inspected the property a few months ago by arrangement, neither you nor Agnes was home and we of course did not check inside the cupboards as a matter of respect for your privacy. Had we been alerted to the longstanding severity of the problem at that time or earlier of course we would have so done and attended to repairs. The same goes for water damage in the kitchen. These things don't happen overnight and it is your responsibility to alert us to these problems. I have been asking Agnes for months to itemise problems. I thank you for your patience and cooperation in allowing tradesmen to inspect and assure you of our intention to minimise your inconvenience as best we can but this has become a complex problem with what appear to be multiple causes and will unfortunately involve further inconvenience ongoing. [94]
The First Defendant stated that he initially thought that the water coming into the downstairs en-suite bathroom ceiling was penetrating the tiles in the upstairs bathroom immediately above. He confirmed that the initial repairer Megaseal Pty Limited subsequently attended. [95]
On 22 March 2017, the Plaintiff was contacted again by the Second Defendant stating: "Good morning Chris and Agnes. This morning Penny Tralau Tel [redacted] from Mould Rescue Pty Ltd will contact you in order to assess what needs to be done and hopefully soon thereafter go about cleaning the downstairs area etc so you can move beck in asap. This is the wrong order to go about remediation and we hope then to fix the underlying cause so mould does not reoccur. I will also give your contact detail to some pool fencing contractors with a view to replacing the pool fence. We intend to do this asap given Agnes's recently telling me it is unsafe. They will need only go in though the side and eventually all the work of course will be out doors but a big job. …. Am doing my best" [96]
On 23 March 2017, the Plaintiff wrote to the Defendants asserting that they were in serious fundamental breach of the lease of the premises by the failure to provide a safe and healthy usage of the house. He pointed out that 4 mould experts had been sent including two from Prime and now they were proposing to send one more. He stated that they had failed to provide any feedback as to what they have said and why they have apparently been rejected. The Plaintiff pointed to inconvenience suffered by him and his family and how he was uncomfortably placed upstairs. He added "there are aspects of impact on my life and our health involved here and what we did to deal with the impact of the damp not realising the danger or effect of the problem." Further, he stated "I would rather things were resolved amicably but if you can't make full disclosure of the state of the property from your experts' consultations I will be forced to take legal action against you." [97]
At around 4.44pm on 23 March 2017, it appears that the Plaintiff sought and obtained advice regarding the matter from Mr George Thomas [98]
At 4.56pm, Ms Tatiana Stack (principal solicitor) from Shore Stack solicitors responded that with some advice about proceeding to NCAT to obtain rectification, rent abatement and compensation. The Plaintiff was also asked if he could obtain a report from a mould expert. [99]
What followed thereafter were a series of further emails between the Plaintiff and the Second Defendant much in a similar vein as the earlier ones. At 6.10pm the Second Defendant sent an email stating inter alia: … My replies are not self-serving but explaining what were are trying to do. If you read it you know that we will pay for professional mould removal and repairs to the house. I hope to hear from Penny [Tralau] tonight as I have left her a message to call me and I expect her company to proceed asap with the clean-up in order to get you back into the bedroom. Trying my hardest. We have been in touch with a handyman who will contact you soon but unlikely to be before about a week as very busy. We would appreciate it if when he comes you show him the listed items and any other necessary repairs. Right now priority one is the mould and to fix the water issues causing it. [100]
The Plaintiff responded at 6.35pm asking for the mould to be fixed and reiterating the need to see any reports from the mould experts that had been there. [101] At 7.07pm the Second Defendant wrote stating inter alia: Still waiting to hear from Penny and will be in touch when I do. Obviously were want you back in the downstairs area asap. [102]
At 7.14pm the Plaintiff emailed "Tatiana, George" under the heading of "Legal Professional Privilege. Solicitor Client Communication." The email inter-alia stated: I innocently wrote to her "I really need to see any reports you have from the mould experts who have been here. Have they sent reports or merely one line price quotes?" Ilana is going to get a rocket. She is getting a report from Penny after two hours of testing today. This expert Penny from will be telling her the house is not fit for habitation and she must spend $20000 immediately cleaning up the mould including tearing up the carpet etc. I'll keep you in the loop. She is blaming us for things that the experts have confided to me are not true eg damage in the kitchen wall onto the garden All the experts apart from Penny came her to examine and quote without fee. Everyone is well disposed toward me and have suffered being used and discarded without fees. [103]
At 9.05pm the Second Defendant wrote to the Plaintiff stating: I have had preliminary talks with Penny who with your permission would like to return on Monday to complete her inspection and then proceed to removal of all your mould contaminated belongings in order to clean and restore them. Whilst this is being done building works, drainage, plumbing, cabinet and necessary carpentry will be carried out where necessary. You will appreciate that all this will be disruptive and should you prefer to discontinue your tenancy we would understand. We are as concerned about these problems as yourselves but now have no choice but to proceed to rectification which will involve much disruption over the coming weeks. There is no choice. [104]
The Plaintiff appears to have received a response from Mr Thomas to his email of 7.14pm at 10.26pm on 23 March 2017. This email strongly encouraged litigation action. [105]
The following morning at 6.51am on 24 March 2017 the Plaintiff sent an email to the Second Defendant stating inter-alia: Ilana. ….. Please forward me any report or comments about the mould that you have from Penny so that I can assess the situation. Please forward any reports from the other mould experts you have sent. Please do not withhold any information that my concern my family' health and safety. Be assured that I will expect you to compensate me for any damage or loss and I want you to consider the rental position. It is easy to suggest 'discontinue your tenancy' but very difficult to do at short notice. You have spent weeks sending experts back and forth. We have a lease that expires in September. We cannot just walk out and find somewhere else as short notice. We hold you totally responsible for any loss or inconvenience and expect solatium to compensate this distress. I am happy to speak with you and see what can be arranged otherwise I will pass this on to my lawyers. I am conciliatory. I don't want a public court case that will no doubt focus on my children and attract media attention which endangers them. I have always tried to keep their live and my address private. We have paid you around $500,000 in rent, please stop being unpleasant and blaming and show me and my family respect. [106]
Yet further correspondence followed much in a similar vein. In short, the Plaintiff was reiterating holding the Defendants responsible expressing concerns as to the impact of the mould, renewing requests for the reports, threatening legal action and stating that he and his family had nowhere else to go. The Second Defendant reiterated that they were previously unaware of the extent of the problems, that work was being arranged but it would be disruptive so that a rent reduction could be negotiated, the Plaintiff's possessions would be demoulded at the owners' expense and a rent reduction offered. [107] Interspersed with those communications the Plaintiff sent further emails to "George and Tatiana" including one stating "and on it goes… I am interested in litigation." [108]

[15]

Mould Rescue

On 24 March 2017 at 2.30pm the Second Defendant emailed Penny Tralau of Mould Rescue Pty Ltd. That email stated: Hi Penny thank you for discussing the situation in a preliminary way last night. Having issues with an aggressive tenant but I have told him you will be returning Monday to complete your inspection and that we will professionally de-mould his possessions at our expense asap. and would negotiate a rent reduction for his inconvenience and unavoidable disruption. Alternatively he can move out permanently. There are no winners in this. George and I agree the in order to expedite building works and remediate damage it should be handled by one company rather than do various trades so Horizon if you have successfully worked with them in the past and they can do it all would be a good fit. [109]
Ms Tralau's report dated 24 March 2017 appears to have been forwarded to the Second Defendant on 29 March 2017.
That report identified significant mould contamination including from rising dampness in the ground floor bedroom. That mould was described as including condition 2 and 3 mould. Condition 3 moulds were described "as an indoor environment contaminated with the presence of actual mould growth, associated spores and fungal fragments." Condition 2 moulds were described as "an indoor environment that is primarily contaminated with settled spores or fungal fragments that were dispersed directly or indirectly from condition 3 areas, and which may have traces of actual growth." Ms Tralau recommended immediate action to determine the extent of cross contamination of the rest of the home and remediation of the ground floor areas and the dining room. [110]
The Plaintiff stated that Ms Tralau went over the house and started by placing the leather jackets in sealed bags stating "these are a health hazard" and she took them away. He stated that Ms Tralau warned that it was not safe to inhabit downstairs and said words to the effect "it is particularly dangerous in the front bedroom suite and the front lounge room on the eastern side as the mould is very severe." [111]
Recounting a conversation on or about 24 March 2017 the Plaintiff described Ms Tralau advising that she was told to do whatever to fix the problem.
The Plaintiff then gave evidence that Ms Tralau told him that the day after she forwarded her report, the Second Defendant advised her that: "It is too much money. We have to think about it. It's a lot of money to spend just because the tenant hasn't opened a window". [112]
Ms Tralau indicated to the Plaintiff that she thereafter stopped work at the owner's request. [113] The Plaintiff stated that he confined himself and his family to the upstairs area of the property using the kitchen briefly for meal preparation. [114]

[16]

MouldLab

On 27 March 2017, samples obtained by Ms Tralau were forwarded to MouldLab for laboratory analysis. [115] The MouldLab report stated that: The levels of airborne mould detected in the samples collected from within the premises ranged from "elevated" (in an upstairs bedroom) and "high" (in other upstairs bedrooms) and "very high" (in the downstairs area) being samples from the downstairs bedroom, walk-in robe, downstairs lounge, kitchen, downstairs art/lounge and laundry. [116]
The label "very high" was utilised where the airborne mould spore and hyphal concentration exceed 10,000 per cubic metre. It describes that all occupants should be excluded; however, if occupants have pre-exposing health conditions a lower exclusion limit should be considered. The results included a 161,440 per cubic metre in the main bedroom and 164,747 per cubic metre in the lounge, 110,667 per cubic metre in the kitchen, 193,120 per cubic metre in the downstairs art/lounge and 166,293 per cubic metre in the laundry. The MouldLab report stated at [4.7] and [4.9]: Based on the results of the samples submitted for analysis, the levels and genera of mould detected from samples taken from within the premises taken from … constitute a health hazard … Therefore continued use of the assessed premises must not be permitted until remediated. …… The premises and its contents require remediation by an accredited remediator, employing methods in accordance with Reference 2 or equivalent. [117]
The First Defendant conceded that the very considerable expenses outlined by Ms Tralau for cleaning plus the many additional building works, (kitchen and other cabinets, plus other trades fees) at a time when it was still not clear as to why the house was suffering from the extensive mould that was never previously experienced, was of much concern. [118]
The Second Defendant stated that the quote from Ms Tralau was approximately five times the amount quoted by Prime Restoration and the difficulty was that to clean the mould without addressing the underlying problem would only result in the return of the mould. [119]
The Second Defendant conceded that she read the summary of the MouldLab report after being provided with a copy by Ms Tralau. She added that Ms Tralau had already provided the information to the Plaintiff and that was why he moved upstairs. She stated that to remediate the problem it was necessary to first work out where all the moisture was coming from which occurred after the Plaintiff and his family moved out. [120]
The Plaintiff complained that the Defendants would not forward Ms Tralau's report to him despite repeated requests. [121] The Second Defendant stated that she wasn't going to hand over reports that she had paid for just because the Plaintiff was demanding them where she was the client not him. [122]

[17]

Prime Restorations

The report of Prime Restorations appears to be received by the Second Defendant on 28 March 2017 from Mr Greg Willis the project manager. [123] That report identified that high moisture content was emanating from the sub floor, lower section of the wall within the small toilet and cavity above the main bedroom toilet. The report identified that all items within the main bedroom, en-suite and bathroom would be subject to an inventory that would be identified as restorable and non-restorable. The items would be prepared and packaged, then housed and prepared for reinstatement. The restorable items would be decontaminated utilising a variety of methods including applying an anti-microbal and cleaning. The items would then be remediated utilising Ozone and air scrubber systems before being restored to the premises. Overall, the report indicated an estimated cost of $7,773 excluding GST. That did not include costs if found necessary of structural drying and dehumidification associated with building repairs. Nor did it include dry cleaning costs. [124]
The Plaintiff said that he was frustrated by the refusal of the Defendants to clean up the mould having initially offered to do so and that he was told by "Prime Mould's Greg and Omar" that they had been re-engaged to deal with the problem but the Second Defendant had tried to negotiate the work that they would do and the cost. [125] The Second Defendant denied the suggestion that she and the First Defendant did not want Prime Mould to carry out Mould Rescue's work but stated that it was first necessary to determine the cause of the mould. [126]
The Second Defendant accepted that having informed the Plaintiff that she was prepared to deal with the mould she did not proceed with the Prime Restorations quote. In cross examination, she stated her reasons as follows: "I would've, but by that stage Mr Murphy was becoming increasingly aggressive, demanding, he was sending me ten emails a day starting at 5am, practically. And I knew that we were heading towards litigation. Emails of the order of "don't you know I'm a lawyer" blah, blah, you know "don't you know who I am". [127]

[18]

Stuart Skeoch

The Second Defendant gave evidence that on 28 March 2017, she emailed Mr Stuart Skeoch of Expression Constructions Pty Ltd who she considered to be a good builder and whom she trusted. [128] The Second Defendant conceded that on instructing Mr Skeoch she had provided to him the quote from Prime Restorations and Ms Tralau. [129] The Second Defendant conceded that she had informed Mr Skeoch that she was likely to use Prime Restorations as she had a quote for virtually the same work for significantly less costs. [130] She stated that she was anxious at that point to find out the cause of the mould and it was for that reason that Mr Skeoch was engaged. Mr Skeoch provided a report on 30 March 2017 stating: Firstly, my opinion from my visit without influence from other inspections • Yes a higher level of moisture was present in the Walk in Robe and Bedroom • There was a strange centralised gathering of water within the centre of the Walk in Robe (attached photo 1), this also lined up with the dampness on the underside of the flooring (attached photo 2) • I did access the sub floor in these locations, in my opinion the moisture levels were not severe however apparent that a better system of ventilation is required. This would not necessarily mean a mechanical system, additional vents installed to the perimeter of the house would also assist greatly. In addition someone spending time cleaning out the existing vents would be a given. (attached photo 3) • I was told there was no bathrooms in the vicinity so I was not able to inspect the likelihood of these being an issue. • Regarding the dining room, I am not disagreeing that there is a combination of moisture entry and rising damp in this location and I do agree that remedial works would need to take place. However I would also be removing the overgrown vegetation and cleaning out the external drains (attached photos 4 & 5) as a first response. The report prepared by Mould Rescue is very thorough and also intense, although you have a duty of care I would be sharing this with the tenant. (but in your hands) The process and pricing they have given you is significant. I would avoid there proposal. Primes evaluation and pricing is considerably cheaper, although clearly not the same scope [131]
The Second Defendant was cross-examined in relation to Mr Skeoch's report maintaining that there was no rising damp. [132]
The Second Defendant nevertheless described acting on the advice of Mr Skeoch four months later when the Plaintiff and his family moved out. [133] The Second Defendant was questioned as to what that advice was and the transcript records: Q. Do you recall what his advice to you was? A. Sorry? Q. Do you recall what his--? A. Yeah, he said there was no rising damp and it was a horrible experience that morning for me anyway. I can tell you why. Q. I am asking you about what Stewart Skeoch advised you. A. That - I don't exactly remember but there was - and not just him - but no one definitively identified rising damp under the house in which we had lived for thirty something years and had tenants. This was a, a very new situation with moisture penetration. Q. I have asked you what advice did Stewart Skeoch give you. A. But there was no rising damp. Q. Go to page 466 of the bundle please. A. Okay, let's have a look. "Dear Ilana" -yes - "a high level of moisture was present." Q. This was the email that Stewart Skeoch sent to you in response on 30 March 2017. A. Right. He is saying he would avoid their - excuse his spelling - their proposal. Q. What he said to you was that he accessed the subfloor and "it was apparent" - he said - "that a better system of ventilation is required." Do you see that in the third dot point? A. Mm-hmm. Q. He also told you that additional vents installed to the perimeter of the house would greatly assist. Do you see that? A. Yeah. Q. Do you accept that advice from him? A. Yes, but later on we found out the water was coming from above not below, when we were able to totally inspect the premises. It was - the water was not coming from below. Q. And he said next, "That it would be necessary" - I'm summarising here - "to clean out the existing vents." Do you remember reading that advice from him? A. I just did now. I don't remember but I have just read it now. Q. Do you see in the fifth dot point he says, "Regarding the dining room, I'm not disagreeing that there is a combination of moisture entry and rising." Is it the case that the word "damp" also appeared in this email but it has been cut out of the email? A. Possibly, I don't know. It's not there is it. Q. The word "rising" is there, isn't it? A. Well, the word "rising" not ended, yeah. Q. I suggest to you that he was telling you that there was a combination of moisture entry and rising damp in the location of the dining room. Do you accept that? A. I can only say that we had lived there - we had owned the house for forty something years and we had not had a rising damp problem. [134]
In April 2017, the Plaintiff took a series of photographs of the property which was in evidence. [135] He described what was depicted in the photographs. [136]
On 2 April 2017 the Plaintiff issued a tweet which stated: Renting? Don't fall for that …landlord "blame the tenant" trick. #sue them. Sydney outbreak: dangerous mould. [137]
That tweet accompanied a Sydney Morning Herald article under the title "Sydney's Rain and Humidity triggers outbreak of dangerous mould". [138] The article described March 2017 as the "wettest March in 42 years" and one that "[had] created the 'perfect' conditions for mould, according to Ibrahim Ech, the principal work health safety consultant with Safety and Environmental Services."
In cross examination, the Plaintiff stated that it did not remind him of the conditions at the time but did serve to remind him of reading an article that said "A landlord may blame the tenant for failing to keep the property clean or to ventilate effectively." He maintained that that was written after a month of him dealing with the landlord. [139]

[19]

Tall Ideas Pty Ltd

On 24 April 2017, Tall Ideas Pty Ltd provided a report to the Plaintiff in respect of the subject premises. After making observations the Tall Ideas report stated: The house was originally built in 1930, with multiple additions to the base structure. In general the house is poorly designed with no consideration to site drainage and flashing. We believe the main source of the high moisture content in the house is from the stormwater runoff. Stormwater runoff would enter the subfloor zone through the Northern elevation behind the dining room wall due to the poor drainage, and along the Western elevation due the permeable side path and slope toward the house. There is also the risk that the swimming pool shell or plumping is leaking and contributing the problem. Once the water is in the subfloor zone area, there is now way for it to leave as there is no natural or mechanical sub floor ventilation. The lowest part of the house is where excessive moisture content would occur. The lowest area of the house are the front 2 rooms. Since there is no visible signs of a damp proof course or ventilation we would expect that the front two rooms would develop mould and mould spores growth, to extreme levels. In addition to the above, there are also additional elements that need to be addressed: • Roof flashing • Cracked roof tiles • Rotten window sills and flashing • Displaced gutters • Displaced downpipes • Perimeter stormwater collection points All the defects we have identified above are the direct result of incorrect construction, poor maintenance or building failure and all could of have been rectified at any time. The property has numerous inherent building defects and none of these defects have been caused by the occupation of the house. [140]
The First Defendant gave evidence that when he received Tall Ideas report he was furious with the Plaintiff as he and his wife had repeatedly asked if there was anything wrong and the report demonstrated problems which should have been referred to them at the earliest opportunity. He acknowledged that he had inspected the property previously in September 2016. In cross-examination, he stated that he was suggesting that the problems that emerged in the Tall Ideas report emerged between September 2016 and April 2017 because Sydney at that time had rained almost every day, there was warm weather and water penetrated the house. [141] He acknowledged that it was his responsibility to carry out inspections of the property to ensure that it was in a proper state of repairs. [142]
The First Defendant stated: When Ilana first heard about the mould and raised it with me, we both saw this within the context of our previous 34 years' experience living in the house: namely, that some manifestation of mould was an occasional issue in Sydney during the high humidity in the summer. However, it later became clear that something unusual was occurring and the more consultants that attended at the Property, the more complex became the need for more consultants that attended at the Property, the more complex became the need for investigations and subsequent repair works. This could not be done whilst tenants were still in the house as the kitchen, bathrooms and laundry need to be demolished. Earlier mould cleaning emerged as a need for major building works. [143]
The First Defendant also gave evidence that the drainage of the swimming pool had been completely excavated by Holford's Pool services at Bellevue Hill however they did not determine an obvious pipe leakage and that the dropping of the level was associated with evaporation. After the Plaintiff vacated, the First Defendant stated the investigation was repeated with a pool company with specialised detection devices for locating water leakage from the pipes and this work was satisfactorily carried out. [144]

[20]

NCAT Proceedings, Tenancy Termination, Property Renovation and Sale

On 13 April 2017, the Plaintiff lodged an application to NCAT for orders including compensation to his personal property ($15,000), an abatement or reduction of rent and for repairs. [145]
On 3 May 2017, the Defendants wrote to the Plaintiffs response to a letter sent by his solicitors accepting that the property was "wholly or partly uninhabitable" and enclosing a notice to terminate the tenancy. [146] A covering letter stated "we accept that the property is presently uninhabitable in whole or part otherwise than as a result of a breach of the RTA". [147]
On 18 May 2017, the Defendants lodged a claim in NCAT for compensation as follows: 1. A claim for $2,200 in respect of damage to the skylight and break of surrounding tiles said to have been occasioned when the Plaintiff sought to repair a leak in the skylight; 2. A claim for $14,860 in respect of a failure by the Plaintiff to keep the premises reasonably clean arising from the leakage of water through defective windows and from an upstairs bathroom, broken roof tiles and blockage of drains from leaves and debris; 3. A claim for rental arrears amounting to $21,030; 4. An order for the Plaintiff to remove the mould damage; 5. An order that termination notices issued on 6 April 2017 and 17 May 2017 were valid; a termination order and order for possession of the land and an order for an occupation fee. [148]
By consent on 7 July 2017 both NCAT proceedings were transferred to this Court by an Order made pursuant to clause 8 schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW). [149]
The Plaintiff gave evidence to the effect that he engaged five real estate agents "to find alternative accommodation seeking four bedroom house in the Eastern Suburbs to suit the children's schooling and friendships. We viewed several properties and settled on a house in Bondi Beach. We moved in or about July/August 2017." [150]
After the Plaintiff's family vacated the property, the First Defendant conceded that remediation work was carried out at a cost of more than $300,000 before the property came to be sold in April 2018. [151]
On 14 July 2017, the Defendants stated that they applied to New South Wales Fair Trading for payment of the rental bond of $9,900 which the Second Defendant acknowledged as having been paid to them. [152] In fact the bond amount was accepted by the Plaintiff as $9,600. [153] On 21 July 2017, the tenancy was terminated by agreement by the parties. [154]
There was no evidence that indicted that at the time of entering into the first tenancy agreement or at any point prior to extending the tenancy, either Defendant had informed the Plaintiff of the experience recounted by Ms Graham [155] with regards to the property in 2012 or that the Plaintiff was otherwise aware of those events.
The First Defendant gave evidence that after the vacation of the property by the Plaintiff, repairs to the house were commenced. He indicated that there was an overnight storm which dislodged a drain in the side of the house and it was particularly interesting because it identified some rotted timbers. He observed water was escaping from the drain causing some rotting in the area and there was also rotting in the area of the two windows which was quite prominent and didn't occur over night. He stated that this alerted to where the problem of water entry at the upper level was occurring which had not been seen by the consultants that had come to see the property nor the roofing company that patched up the mortar on the roof. The First Defendant suggested that this was a source of water entry. [156]
Tendered in the Plaintiff's case was a subpoena served on Aurick Pty Ltd. This was the builder engaged by the Defendants after termination of the Plaintiff's tenancy. [157] The subpoena sought production of all documents relating to any work including remedial work carried out by or at the request of Aurick Py Ltd [158] in respect of the property from 1 January to 14 May 2018. [159] No documents were produced in respect of that subpoena although no affidavit of service was produced. [160] Also tendered was a Notice to Produce served on the Defendants as to the remedial works carried out. [161] The only documents produced in Tabs 11-15 of Exhibit GL-1 to the Affidavit of the First Defendant sworn 17 September 2019. [162] An email of the scope of works for the subject property prepared by East and Co consulting in an email dated 27 July 2017 indicated a total estimate for works of $285,500. The covering email indicted that the proposed refurbishment was for a sale campaign. It was copied to "Stu" which I infer was Mr Skeoch. [163]
The property was ultimately sold in mid-2018 for $6.375 million dollars. [164]

[21]

Ray Fakhoury

On behalf of the Plaintiff on 27 June 2017, a site visit of the property was carried out by Mr Ray Fakhoury from DW Knox & Partners instructions from DJP Management Pty Ltd. [165] The report that followed was dated 20 October 2017. It indicated that the purpose of the visit was to inspect the condition of the house and to ascertain the likely cause of the alleged mould growth and prepare a litigation-compliant report with an expert opinion addressing matters raised by the landlords in their application made to NCAT dated 18 May 2017. Mr Fakhoury, a civil engineer indicated that he had worked for more than 30 years in the profession. His report stated that he was experienced in the assessment and restoration of private residences and designs stormwater on-site detention systems for Councils and greater Sydney.
Mr Fakoury described the property containing an original house constructed in 1930 with additions completed in about 1989 comprising extensions to the northern and western sides which incorporated a raft concrete slab being 110mm thick.
Mr Fakhoury made the following observations: Eastern building elevation 1. There were a small number of subfloor ventilation vents and that the vents appeared to be partially blocked by render. [166] 2. A strong musty smell typical of extensive subfloor dampness the occurrence of which was the result of water ingress in the underfloor area combined with inadequate subfloor ventilation. Western building elevation 1. There were only a small number of subfloor ventilation vents and that the vents appeared to be partially blocked by render: 2. The windows on the western wall at level 1 were affected extensively by rot. He described the level of rot observed as extensive and resulted in significant timber section loss. Based on observation and experience he stated that the majority of the observed rot would have been present when the tenant moved into the premises Northern building elevation 1. Mr Fakhoury observed that during his inspection of the northern perimeter wall the internal areas were "consistent with high moisture levels within the ground slab and walls." 2. He further noted that the parquetry flooring had cupped and detached from the concrete slab in places and he also observed bubbling and detachment of the paint and internal render typically. He noted that the cupping occurs when there is a higher moisture concentration at the underside of the floor boards then the top. He stated that this condition leads to curvatures in the floor boards as the underside of the floorboards expand relative to the top of the boards which are drier due to air. The occurrence of rising damp was seen as associated with an inadequate damp proof course (DPC) in the northern perimeter wall or the result of water coming into contact with the masonry above the DPC (assuming that a DPC had been provided) which is in turn associated with the rising damp observed in that area. [167] 3. Mr Fakhoury stated that the drain was not fit for purpose, and that the drainage detail along the outside of the northern perimeter wall was a poor design as it did not provide a "fail safe" mechanism to divert water in the event that the drain was "overloaded" with surface water runoff. [168] This led directly the rising of damp and mould related issues internally (including the detachment of the parquetry flooring) around this area. Ground Floor/southern Building Elevation 1. The high levels of mould growth in the ground floor area were ascribed as "predominantly due to the inadequate subfloor ventilation". [169] He stated: "Based on our observations made at the external wall elevations typically (and noting that there is minimal subfloor ventilation along the southern elevation of the house as the subfloor is largely concealed) we are of the view that the subfloor ventilation is inadequate and that cross floor ventilation is not sufficient enough to prevent mould growth." [170] Skylight 1. Mr Fakhoury further noted that the ceiling in the family room was affected by mould growth in the ceiling area around the skylight that would have been part of the extension completed in 1989. [171]
Mr Fakhoury concluded on the basis of observations made at the site visiting in June 2017 that: 1. The timber subfloor ventilation system is unsatisfactory and not in accordance with the BCA (Building Code of Australia) or accepted building practices. This has resulted in the mould growth and has created an environment that is not suitable for habitation. [172] 2. The construction of the rear concrete slab has compounded the issue of lack of subfloor cross ventilation. It is ideal in timber framed floor construction to have ventilation from all sides. If one side is blocked, then additional details are required to ensure that the sub floor space is ventilated so as to allow for drying out of the space. Mr Fakhoury opined that this has contributed to the mould growth with the bedroom at the ground floor south west corner of the dwelling. 3. The drain located outside the northern perimeter wall is unsuitable for the surface water runoff volumes experienced at the property; and this has led directly to the rising damp and mould related issues internally (including the detachment of the parquetry flooring) around this area. 4. The water ingress issues through the windows at level 1 (and the alleged mould growth around this area) is related to timber rot in the window framing that was present well before the tenant come to occupy the property. 5. The water leakage and mould growth on the ceiling around the north east corner of the skylight relate to a building defects that would not have been affected by any alleged rectification works completed by the tenant. 6. It is the writer's opinion that the above identified inherent building defects are as a result of original design and construction issues and not due to the tenant's occupancy. [173]

[23]

The Issue

Section 52(1) of the 2010 Act provides as follows: A landlord must provide the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant.
Section 52 of the 2010 Act was amended with retrospective effect in 2018 by the Residential Tenancies Amendment (Review) Act 2018 (NSW). [174] Relevantly, section 52 additionally provides: (1A) Without limiting the circumstances in which residential premises are not fit for habitation, residential premises are not fit for habitation unless the residential premises - (a) are structurally sound, and (b) have adequate natural light or artificial lighting in each room of the premises other than a room that is intended to be used only for the purposes of storage or a garage, and (c) have adequate ventilation, and (d) are supplied with electricity or gas and have an adequate number of electricity outlet sockets or gas outlet sockets for the supply of lighting and heating to, and use of appliances in, the premises, and (e) have adequate plumbing and drainage, and (f) are connected to a water supply service or infrastructure that supplies water (including, but not limited to, a water bore or water tank) that is able to supply to the premises hot and cold water for drinking and ablution and cleaning activities, and (g) contain bathroom facilities, including toilet and washing facilities, that allow privacy for the user. (1B) For the purposes of subsection (1A)(a), residential premises are structurally sound only if the floors, ceilings, walls, supporting structures (including foundations), doors, windows, roof, stairs, balconies, balustrades and railings - (a) are in a reasonable state of repair, and (b) with respect to the floors, ceilings, walls and supporting structures - are not subject to significant dampness, and (c) with respect to the roof, ceilings and windows - do not allow water penetration into the premises, and (d) are not liable to collapse because they are rotted or otherwise defective.
Section 52(4) of the 2010 Act provides that the section is a term of every residential tenancy agreement. Clause 18.1 of the residential tenancy agreement in any event provided that the landlord agrees to make sure that the residential premises are reasonably clean and fit to live in. [175]
The question of the Defendants' compliance with section 52 was raised in the Statement of Claim at [7] and [13] and identified in the Plaintiff's Schedule of Issues at [3]. In short, the Plaintiff's claim was that a breach of section 52 amounted to a breach of the terms each tenancy agreement. The Schedule of Issues identified it as being at the commencement of the tenancy. [176]
In so far as the nature of the breach was concerned the Statement of Claim relevantly pleaded: 11 At all material times, the Property was affected by water penetration, causing a damp environment that allowed mould to exist and proliferate in the Property. PARTICULARS (i) Insufficient and partially blocked sub-floor ventilation vents. (ii) The window framing was extensively affected by rot. (iii) There were high moisture levels within the ground slab and walls. (iv) There was inadequate damp-proof course within walls, and/or regular contact with water and masonry above the damp-proof course. (v) Water entry at skylight connections. (vi) Further particulars will be provided in the expert evidence to be relied upon by the plaintiff at hearing. 12 In early 2017, the Plaintiff became aware of the presence of mould in the property. 13 As a result of the water penetration and the associated dampness and mould, and in breach of the terms of the Tenancy Agreement referred to above, and each of them, the First and Second Defendants: (a) Did not provide the Property in a state that was fit for habitation by the Plaintiff; and/or (b) Did not maintain the Property in a reasonable state of repair.

[24]

Plaintiff's Submissions

The Plaintiff relied on the test endorsed in Gray v Queensland Housing Commission. [177] In that case, Chesterman J adopted the test in Summers v Salford Corporation [178] stating at [11]: The test approved by the House of Lords may be paraphrased: if the state of repair of a house is such that injury is to be expected, or will naturally occur, from the ordinary use of the premises they cannot be regarded as fit for human habitation.
The Plaintiff also relied on the decision of Millsteed J in Hampel v South Australian Housing Trust [179] where his Honour stated at [63]: Conclusion ….. In my opinion a house is unfit for human habitation if an occupier could be expected to suffer physical injury or injury to health from the ordinary use of the premises. It may be so unfit for any reason. The risk to health or safety may arise because the premises are in a state of disrepair or dilapidation or because of a lack of facilities such as the provision of adequate water, light, ventilation and so on.
Applying the tests stated in Gray and Hampel, the Plaintiff argued that the evidence would satisfy the Court that the property was in a state of repair such that, from the outset, injury was to be expected, or would naturally occur, from the ordinary use of the premises, such that the dwelling could not be regarded as fit for human habitation. The Plaintiff relied on the features identified by Mr Fakhoury and the opinions expressed by Mr Skeoch, the representatives from Zenith, and the engineer from Tall Ideas. The Plaintiff submitted: Here, the fact of the presence in the property of serious defects in the form of inadequate subfloor ventilation, drainage that was not fit for purpose, an inadequate damp proof course, the defective skylight connection and rotted windows - individually, and combined - rendered the property unfit for habitation, and in a state of repair that was not reasonable, at (and from) the commencement of the plaintiff's tenancies under the agreements entered in 2013 and 2015, and on each renewal of those agreements. The habitability of the premises sets a minimum level of disrepair below which a landlord is in breach of section 63 of the Act from the commencement of the tenancy. [180]
The Plaintiff noted that the Defendants did not produce any expert evidence in response to the Plaintiff's expert and after the Plaintiff vacated in July 2017, the Defendants undertook major building works by the extension renovations and repairs.
The Plaintiff submitted that the Court would be satisfied that the major building works addressed the concern raised by the specialist engaged by the Defendant in March and April 2017.
In reply, the Plaintiff submitted that the Court would accept the unchallenged opinion of Mr Fakhoury that the inadequacy of the subfloor ventilation was the predominant cause of the high levels of mould growth and the defects related to the original design and construction of the building such that this was present at the inception of the tenancy as demonstrated by Mrs Graham's unchallenged evidence that the dehumidifier in the downstairs bedroom and walk-in robe was taking out 20 litres of water every two days in late 2012. [181]
Whether the Plaintiff and his family resided at the premises without substantial complaint until March 2017 was said to have no bearing on the question of whether or not the property was fit for habitation for the purposes of section 52 of the 2010 Act. [182]
The Plaintiff further submitted that contrary to the Defendants submissions, there was evidence of the steps taken by the Plaintiff to find alternative accommodation suitable to the children's schooling and friendships.
The Plaintiff re-reiterated that the presence in the property of serious defects in the form of inadequate subfloor ventilation, drainage that was not fit for purpose, an inadequate damp proof course, the defective skylight connection and rotted windows - individually, and combined - rendered the property unfit for habitation. The habitability of the premises sets a minimum level of disrepair below which a landlord is in breach of section 52 of the 2010 Act from the commencement of each tenancy. This it was said were circumstances conducive to mould developing at the subject property.

[26]

Consideration

As the Plaintiff's loss is said to have arisen from March 2017 the question of breach of s52 of the 2010 Act falls to be considered at the point of the last tenancy agreement. Whether that was at 3 July 2015 when the lease was entered into or August 2016 when it was extended matters little.
Zenith identified the sources of dampness that led to the mould as the inadequate subfloor ventilation and the inadequate exhaust system in the en-suite. The Zenith quotation of 9 March 2017 indicated the need for mechanical ventilation in the main bedroom and robe area. It also recommended the installation of a damp proof course into the lowest mortar course to the floor of the wall in the dining room area. Mr Skeoch was specifically engaged by the Second Defendant to examine the cause of the mould. Mr Skeoch also noted that a better system of ventilation of the subfloor was required in the walk in robe and bedroom areas. He however recommended additional vents and cleaning of existing vents as opposed to mechanical ventilation. With respect to the dining room area he accepted that remedial works were necessary to address rising damp although suggested removing the overgrown vegetation and cleaning out the external drains as a first response. The Tall Ideas report identified the main source of the high moisture content in the house to be from the stormwater runoff which would enter the subfloor zone through the Northern elevation behind the dining room wall due to the poor drainage, and along the Western elevation due the permeable side path and slope toward the house. Once the water is in the subfloor zone area, the report stated that it would descend to the lowest part of the house where the front 2 rooms were and since there were no visible signs of a damp proof course or ventilation it would be expected that they would develop mould and mould spore growth to extreme levels. The report also identified that additional elements that needed to be addressed were the roof flashing, cracked roof tiles, rotten window sills and flashing, displaced gutters and downpipes and repairs to perimeter collection points.
Mr Fakhoury's report similarly identified inadequate subfloor ventilation and drainage, an inadequate damp proof course, the defective skylight connection and rotted windows all of which contributed to mould and preceded the Plaintiff's occupancy.
The expert evidence as to the presence of defects and the consequences that flowed from them was unchallenged.
The Defendants demonstrated a reticence to accept that the property was affected by rising damp from the subfloor. At one point the First Defendant attempted to assert the cause as coming from "above not below" based on a later inspection. This presumably was based on the observations made by the First Defendant when he described how a storm dislodged the drain pipe and revealed sources of water entry to the upper level. The Defendants ultimately advanced no submissions based on this evidence. Other explanations were also propounded including the need for window opening and Sydney humidity. Notwithstanding the advice received from experts including Mr Skeoch, the Second Defendant also would not entertain rising damp as an explanation.
The Defendants' opinions do not detract from the expert evidence particularly that of Mr Fakhoury which I accept as logical and plausible.
I am mindful of the summaries of the law in relation to the term "fit for habitation" in NSW to be found in cases such as Lewin v Zhou [186] and Roberts v NSW Aboriginal Housing Office [187] as well as those referred to in the Plaintiff's submissions. Both NSW cases acknowledged Summers v Salford Corporation. [188] In that case Lord Atkin stated: If the state of the repair of the house is such that by ordinary user damage may naturally be caused to the occupier either in respect of personal injury to life or limb or injury to health, then the house is not in all respect fit for habitation..... it is clear that premises may be unfit for human habitation even though it is physically possible for a tenant to reside in the premises." (emphasis added)
In FT Eastment & Sons Pty Ltd v McLeish [189] the Court in reliance upon Proudfoot v Hart [190] considered the words "fit for habitation" and "tenantable repair" and whether there was a difference. The Court stated: "must both import such a state as to repair that the premises might be used and dwelt in, not only for safety, but for reasonable comfort, by the class of persons by whom and for the sort of purpose for which, they were to be occupied.....The conclusion I draw... is that the landlord is obliged to hand the premise over to the tenant, at the commencement of the lease, in a reasonable state of repair having regard to its age, rent payable and the prospective life of the premises, and the state of the repair must at least meet the minimum standard inherent in the contemporary understanding of the term " fit for habitation". (emphasis added)
In Roberts v NSW Aboriginal Housing Office [191] the Appeal Panel of the NCAT after referring to the aforementioned cases stated: 118 In the case of mould, its continuing existence within the premises, particularly for an extended time, can result in the premises not being fit for habitation. In such circumstances there is a breach of the obligation to maintain and the fact that the mould is caused by a number of other defects does not relieve a landlord from liability arising from the mould. 119 That is not to suggest that the mere existence of the mould at any point in time gives rise to a liability in the landlord. Rather, it is the nature and extent of the defect that must be considered in evaluating whether or not the failure to maintain the premises in a reasonable state of repair has been breached because the premises are not fit for habitation. (emphasis added)
That approach is reinforced by the fact that section 52(1A) of the 2010 Act provides a check list that makes it clear that a property may not be fit for habitation where there are defects that may lead to prospective consequences through ordinary use. Clearly what is embraced by the term "not fit for habitation" includes defects of quality and it is wider than that of a house being in such a condition or otherwise as to be of imminent danger or not possible to reside in. This approach is consistent with that taken to the term in a somewhat analogous statutory context in Bole v Huntsbuild Ltd [192] and Rendlesham Estates plc v Barr Ltd. [193] In Jones v Bartlett [194] Gummow and Hayne JJ referred to dangerous defects in the following terms: 177 Some dangerous defects will exist at the time of entry into a tenancy agreement while others might develop during the course of the tenancy. It may be attractive to divide the class of "dangerous defects" between these two heads, but the evidence may sometimes be insufficient to determine which of these is the case in respect of any particular dangerous defect. Rather, a better approach is to look at the origin of the defect, particularly whether it arises from faulty design or workmanship, at whatever stage, or whether it arises from a lack of repair. …. 178 The thread running through these cases is that a dangerous defect will, or may, cause injury to persons using the premises in an ordinary way. They are defects in the sense that they are more than dangerous; they are dangerous in a way not expected by their normal use. Many domestic items might be said to be dangerous: gas ovens, caged fans, hard floors, electrical circuits and panes of glass may cause serious or even fatal injuries. However, they are ordinarily only dangerous if misused. They will only be defective if they are dangerous when being used in a regular fashion and ordinarily would not be dangerous when so used.
In this instance the structural defects arising from the lack of subfloor ventilation, the absence of a damp proof course, inadequate drainage and water penetration around the skylight and rotted windows are all factors referenced in s 52(1A) of the 2010 Act and were conducive to rising dampness and mould proliferation in the subject property such that injury or absence of reasonable comfort was to be expected, or would naturally occur, from the ordinary use of the premises.
The evidence establishes that extensive work was required to address the defects to the point where the Plaintiff was encouraged and ultimately forced to vacate. So much was conceded by the First Defendant who in his evidence described "major building works." The nature of the defects were such that they were clearly present at the commencement the Plaintiff's tenancy but specifically the last one and making the subject property not fit for habitation even though the Plaintiff and his family did and were able to reside there.
The fact that the premises were uninhabitable was conceded by the Defendants in their correspondence with the Plaintiff dated 3 May 2017 although not by reason of a breach of the residential tenancy agreement. To the extent that the later conclusion was arrived at on the basis of the defects not being present at the time of the last tenancy agreement, I do not accept this in light of the evidence (of Mr Fakhoury supported to some extent the Tall Ideas report) that the defects are as a result of the original design and construction issues of the subject premises and not due to the tenant's occupancy.
That conclusion is consistent with the experience of Ms Graham and the First Defendant's letter to Woollahra Council dated 6 April 1990 both of which are discussed below.
The obligation in section 52 of the 2010 Act is not subject to any qualification of reasonableness and is a contractual requirement. [195]
Accordingly, the property could not be regarded as fit for human habitation within the terms of section 52 of the 2010 Act as described above notwithstanding the Plaintiff and his family continuing to reside in it.

[29]

Plaintiff's submissions

The Plaintiff submitted that the habitability of the premises sets a minimum level of disrepair below which a landlord is in breach of section 63 of the 2010 Act from the commencement of the tenancy. The Plaintiff argued that no later than 2012 and probably earlier the Defendants were on notice that the property suffered from water penetration and mould proliferation and they took no action. [197] Notice was said to have arisen from the following: 1. From 1990 when the First Defendant wrote to Woollahra Council and certainly by no later than 2012 when the tenancy of Mr and Ms Graham was terminated when Ms Graham complained of removing 20 litres of water every two days from the main bedroom and which is something that she showed to First Defendant. 2. When the Defendants were informed of the mould growth on the Plaintiff's leather jackets in mid-2015 and from their inspections of the property it was submitted that they were aware of mould on the leather jackets at about the time of the parties' entry into the 2015 tenancy agreement. 3. From the fact that the Defendants were self-managers of the property and as such were regular visitors and had carried out inspections as a condition of the lease as recently as September 2016. 4. Between early March 2017 and late July 2017, the Defendants obtained various reports from mould professionals, builders and an engineer, all of which confirmed the existence of dampness and the dangerous levels of mould at the property, and that the primary cause was the structural defects in the property in the form of inadequate sub-floor ventilation. Despite obtaining advice the cause of the mould that had not been addressed by the time the Plaintiff vacated in July 2017.
Even if the Court were to find that the Defendants did not have actual notice of the water penetration, the Plaintiff contended that it would be satisfied that they had constructive notice of the defects, which is sufficient for the purposes of the section 63 of the 2010 Act. Reference was made in this respect to the decision of Doyle J in Varricchio v Wentzel. [198]

[30]

Defendant's Submissions

The Defendants submitted that they did not have either actual or constructive knowledge.
With respect to the letter to Woollahra Council dated 6 April 1990, the Defendants argued that the language used in that letter was indicative of a person who had problems drawn to his attention and the means for its solution. Reference was made to the First Defendant's letter of 6 April 1990 stating that they were intending to repaint the house and a decision was made to use a membrane style material called Emer-Clad which was described as outstanding which was reused 20 years later. [199] Evidence to a similar effect was given by the Second Defendant. [200]
The Defendants' contention was that rather than evidencing knowledge this was evidence of "a problem drawn to [the First Defendant's] attention, and the means for its solution." [201]
Secondly, in relation to the evidence of Ms Graham, the Defendants drew attention to the fact that Mr Graham did not give evidence in the proceedings despite evidence on the part of Mrs Graham as to his involvement in assisting her in drafting emails to the NCAT. [202] It was submitted that this leads to an inference that Mr Graham's evidence would not have assisted the Plaintiff. [203] Furthermore, attention was drawn Mrs Graham agreeing in cross examination that in her email correspondence with the Defendants there is no reference to the word "mould". [204] It was submitted that the Court was left with the impression that Mrs Graham made a complaint about damp but no contemporaneous written complaint about the mould. The Defendants drew attention to the Second Defendant's evidence where she denied that a complaint of mould figured in Ms Graham's complaints. [205] Further, the Second Defendant with respect to her correspondence to Mrs Graham denied any complaint of mould. [206]
Thirdly, the Defendants contended that the Plaintiff "informed the Defendants of the existence of mould on his leather jacket at about the time of entry into the 2015 tenancy agreement" which should not result in knowledge being imputed to the Defendants. The Defendants argued that this fact alone cannot constitute evidence of knowledge of a defect. It was contended that the Plaintiff's own submissions appear to accept (at [103]) that mould was a symptom not a cause. [207] In any event, the Plaintiff's pleaded case is that he first became aware of the presence of mould in early 2017. This was said to be confirmed in the Plaintiff's first affidavit at [18] where he stated that there had never been any complaint to the owner in relation to the state of the property until March 2017 and further paragraphs [19]-[24] of the Plaintiff's first affidavit did not disclose any basis for thinking that the mould was a cause for problem or concern between 2015 and early 2017.
Finally, the Defendants argued that the Plaintiff's closing contention was based on the Second Defendant's immediate diagnosis of rising damp as the cause of mould which was said to have "sprung from her knowledge, obtained prior to the plaintiff's entry into the tenancy agreement, of the fact of the existence of water penetration and mould proliferation problems at the property". [208] The Defendants submitted that in light of the correspondence between the Second Defendant, the Plaintiff and Ms Bruck, it was entirely reasonable for the Second Defendant to assume that moisture was a problem with moisture and damp being fairly closely synonymous. It was submitted that even if the Second Defendant believed that on 5 March 2017, the problem was attributable to rising damp the evidence does not afford a foundation for concluding that before 5 March 2017 the Second Defendant knew that the property was affected by rising damp (which was not otherwise established on the evidence, in any event). The Defendants contended that disbelief in the Second Defendant's evidence would not generate evidence that is contra-factual to the disbelief. [209] The Defendant argued that the response of the second Defendant included a statement "Do you know any experts? We need to fix. I am just going off Google but have left a message for above company to contact you. We didn't know it was a problem. Ilana". [210] This was said to be consistent with the tenor of the Second Defendant's oral evidence as she was not cross examined on her statement. [211]
Bearing in mind that on 5 March 2017, the Plaintiff sent the Second Defendant a photograph showing moisture on the floor of the wardrobe, which had wicked-up into his tracksuit pants, it was contended that it was entirely reasonable for the Second Defendant to assume that moisture was a problem and moisture and 'damp' are fairly closely synonymous. [212]
The Defendants argued that they acted reasonably in engaging Prime, Zenith, Ms Tralau and MouldLab. Their evidence was that their first concern was to establish the cause of the problem, and address that, before remediating the Plaintiff's chattels. It was also asserted that both Defendants asked the Plaintiff and his partner on repeated occasions to let them have a list of work that required to be done.
Attention was drawn to section 65(3) of the 2010 Act which stipulates that the NCAT must not find that a landlord has breached the obligation to maintain the premises in a reasonable state of repair unless it is satisfied that the landlord failed to act with reasonable diligence to have the repairs carried out. This was said to be a matter to be ascertained from circumstances of each case. It was submitted that a finding that both Defendants did not seek to apply reasonable diligence to have the repairs carried out given the nature of the work and the quotations that they had obtained was said to be not available. [213]

[31]

Consideration

Varricchio v Wentzel was based on section 68 of the Residential Tenancy Act 1995 (SA) which was differently worded. Nevertheless similarly to that section, section 63 of the 2010 Act does place a positive obligation on the landlord to satisfy himself as to the state of the premises.
In Northern Sandblasting Pty Ltd v Harris, Gummow J held:- In general, there is no breach on an express covenant by a landlord to keep the demised premises in repair unless two criteria have been met. First, the landlord must have information as to the existence of the defect such as would put a reasonable landlord on inquiry as to whether works of repair are needed and, secondly, thereafter the landlord must have failed to carry out the necessary works with reasonable expedition. But, as Cussen J pointed out, this is a rule of construction to be considered with the text of the particular lease, not a rule of law. [214]
Accordingly, the fact that the requirement is section 65(3) of the 2010 Act is specified as applying only to the Tribunal does not appear to be of any significance.
I do not accept the Second Defendant's account that in owning the house for forty years they had not had a rising damp problem. The First Defendant's evidence was that in the 34 years' experience of living in the house; some manifestation of mould was an occasional issue during the high humidity in the summer.
Whilst it may be accepted that the membrane described as Emer-Clad was used as described in the evidence of the Defendants, that evidence falls short of addressing the structural defects identified in the expert evidence relied upon by the Plaintiff. Moreover, it does not detract from the Plaintiff's claim that the Defendants were aware of the property being susceptible to water penetration in the form of rising damp and consequent mould proliferation from at least 2012 when the matter was raised by Ms Graham.
The First Defendant ultimately came to accept that the problem was complex and required major building works.
Mrs Graham's email dated 7 November 2012 brought to the First Defendant's attention that a dehumidifier had been purchased which was extracting 20 litres of water every two days. The Second Defendant expressed a view that the reference to 20 litres was a "typo" and if that were to be correct - "that's a major flood." She indicated that if it is not "a typo" she would have thought it was an exaggeration. [215] The First Defendant after attempting to explain his surprise indicated that he was not concerned about it being out of the ordinary. He stated that after reading reviews of such machines he viewed it as a normal performance characteristic as opposed to abnormal in the instance of excessive moisture. [216]
There was a reference in Ms Graham's email of 30 November 2012 to a person described as David being sent, however the Second Defendant (whilst accepting Ms Graham's complaint about the carpets) could not recall him and the First Defendant only recalled an air conditioning expert by that name.
Accepting Ms Graham's evidence as I do, I am satisfied on the balance of probabilities that there was evidence of rising damp and mould during the term of her tenancy. This is consistent with the earlier presence of rising damp referred to by the First Defendant in his letter to Woollahra Municipal Council on the 6th of April 1990 in the area of the southern wall of the property. The person known as "David" purportedly sent to examine the issue at the Defendants' request was not identified other than Ms Graham's reference to him as a "builder." Nevertheless, Ms Graham's references in her emails of 30 November and 1 December 2012 as to the observations made were consistent with rising damp. The observations as to the state of the carpet and the exterior evidence of rising damp were not challenged in cross examination. The evidence also indicated that moisture was being managed by dehumidifiers and damp absorption boxes.
Beyond this there is no evidence that the issues raised by Ms Graham were investigated or addressed between the termination of her tenancy and the commencement of the Plaintiff's tenancy. [217] The First Defendant added that he had been underneath the house once a year in 32 years including with an appropriate professional and no-one had ever proved rising damp and no specific issues came up that they needed to discuss. I give this evidence little weight in circumstances where the appropriate professional was not identified. The Second Defendant stated that she could not recall the precise action taken apart from calling a person named "David."
Contrary to the submission of the Defendants, the issue of mould advanced by Mrs Graham's evidence was supported by the First Defendant and the terms of Ms Graham's NCAT application that was acknowledged as having been made although soon thereafter withdrawn. Ms Graham's evidence as to her actual experience was unchallenged. [218] Ms Graham's complaint was also acknowledged by the First Defendant who at one point offered to purchase electric rechargeable damp absorbers.
The Defendants' submission that the failure to call Mr Graham should be viewed as not assisting the Plaintiff [219] overlooks s 164(1) of the Evidence Act 1995 (NSW). Moreover, in Goodhue v Volunteer Marine Rescue Association Incorporated, [220] Gotterson JA (with Margaret McMurdo P and Ann Lyons J agreeing) stated at [28]: "The rule in Jones v Dunkel is not one that requires a party to call other witnesses in order to corroborate evidence of a witness that has been called by the party. It concerns the drawing of inferences. It enables a tribunal of fact more confidently to draw an inference of fact in favour of a party from the opposing party's unexplained failure to call a witness whom that party would be expected to call in order to give evidence concerning the fact. However, as the New South Wales Court of Appeal in Morley v Australian Securities and Investments Commission recently reminded, if a party's case is otherwise proved, the inference that the absent witness would not assist the party's case does not detract from the proof (emphasis supplied)."
Whilst it is possible that the mould on the Plaintiff's jackets in 2015 also arose from rising dampness and a lack of sub-floor ventilation or any other circumstances involving the lack of repair of the property, it was a somewhat isolated observation unaccompanied by other observable signs.
The Plaintiff submitted that the Court would be satisfied that the Second Defendants immediate assumption expressed in the text message of 6 March 2017 at 11.50am of rising damp as the cause of the mould sprang from her knowledge, obtained prior to the Plaintiff's entry into the tenancy agreement, of the fact of the existence of water penetration and mould proliferation problems at the property. [221] I do not accept the Second Defendant's answers in cross examination in respect of her text message of 6 March 2017 at 11.50am. Those sought to resile from her expressed assumption of rising dampness as the cause of the mould complained of by the Plaintiff.
I acknowledge that in Kuligowski v Metrobus [222] the High Court stated at [60]: In general, disbelief in a witness's evidence does not establish the contrary. Similarly, disbelief in the case presented by the moving party does not necessarily permit the court to conclude that the positive case of the opposing party is correct. In particular cases it may not be possible to reach a conclusion either way: The judge is not bound always to make a finding one way or the other with regard to the facts averred by the parties. He has open to him the third alternative of saying that the party on home the burden of proof lies in relation to any averment made by him has failed to discharge that burden. [223] A failure to find a matter alleged does not establish the truth of the contrary of that which is alleged. There are many general statements about the operation of issue estoppel, approved in this court, which require more than non-satisfaction to establish an estoppel in later proceedings.
However, in Fazio v Fazio, [224] in the context of upholding the trial judge's rejection of witness evidence and subsequent drawing of an inference of the existence of a contrary state of affairs, Murphy JA stated:- [151] … The rejection of the evidence led by the appellant in relation to the '1982 agreement' did not, of course, mean that the judge should necessarily draw the inference that he did. A failure to find a matter does not establish the truth of the contrary of that which is alleged: Kuligowski v Metrobus [2004] HCA 34; (2004) 220 CLR 363 [60]. Nevertheless, in the evaluation of the evidence for the purposes of determining whether to draw inferences, the court may more readily draw an inference which is open according to 'experience and knowledge of human affairs', in the absence of any plausible competing hypotheses: Martin v Osborne (381).
I acknowledge the thrust of the Defendants' submission that disbelief in the Second Defendant's evidence does not establish the counterfactual. [225] However those denials do not stand alone. They were also inconsistent with the Second Defendant's communications with the Plaintiff and the statutory declaration she completed dated 8 June 2017. Moreover, bearing in mind the location of the moisture, and the evidence of rain around that time, I am satisfied that the basis of her assumption arose from her knowledge of the experience recounted by Ms Graham.
Beyond that from 2017 when the Plaintiff raised the matter the Defendants' efforts involved obtaining reports/quotations from a number of experts yet not acting with any immediacy despite acknowledging the adverse circumstances of the Plaintiff. Specifically, the Defendant did nothing to prevent the growth of mould to the Plaintiff's property despite having initially undertaken to do so. To the contrary, in May 2017 the Defendants initiated a claim before NCAT seeking amongst other things to hold the Plaintiff responsible for the mould that developed which was a claim it refrained from advancing in this Court. The Second Defendant's evidence that was being sought was to ascertain the cause of the problem before addressing it. This is inconsistent with her earlier communications. In any event, the delays led the Plaintiff to cease use of a significant part of the house.
In all of the circumstances, I am satisfied that the Defendants did have knowledge of the water penetration issues particularly in relation to the rising damp and mould at least from 2012 and failed to act with reasonable diligence to investigate and address the problem such that there was a breach of section 63 of the 2010 Act as described in Northern Sandblasting Pty Ltd v Harris by Gummow J. [226] Despite some evidence on the part of the Defendants seeking to ascribe responsibility on the Plaintiff, no defence or submission was advanced on the basis of s 63(3) of the 2010 Act.
Accordingly, the consequence is that the Defendants breached the contractual obligation embodied in section 63 of the 2010 Act.

[37]

Duty of Care

The Plaintiff's claim particularised the duty it asserted was owned to him in [9]-[10] of the Statement of Claim as follows: 9 At all material times the First and Second Defendants knew, or ought to have known, that the Plaintiff: a) relied on the First and Second Defendant to ensure that the property was fit for use as a dwelling: b) would likely suffer loss and damage of the kind and magnitude that the Plaintiff has suffered if the First and Second Defendants did not take reasonable steps to keep the property in a good state of repair, including by the rectification of defects and proper maintenance of the building; and c) accordingly, was vulnerable to the risk of suffering loss and damage of the kind and magnitude that he has in fact suffered. 10 By virtue of the matters pleaded in paragraph 9, the First and Second Defendants owed the Plaintiff a duty of care to avoid the risk of: a) economic loss; and /or b) loss and damage to the Plaintiff' property.
Breach was particularised in [15] of the Statement of Claim as follows: In breach of the duty of care referred to in paragraph 10 above, the First and Second Defendants failed to take reasonable steps to avoid a foreseeable risk of harm to the Plaintiff arising from the presence of the mould and dampness at the Property.
In Jones v Bartlett the High Court held that the landlord of residential premises owes a duty of care to his tenants and by application visitors. Each of the Justices however differed in their approach.
In Sakoua & Anor v Williams, [234] Mason P with whom Brownie AJA agreed stated as follows: 4 The Court discussed the content of the duty, with respect to the condition of the premises at the inception of the letting. Three justices in the majority favoured a duty expressed in terms of one to take reasonable care to avoid foreseeable risk of injury, leaving the practical content of the duty to be governed by the circumstances of the case (per Gleeson CJ at 184[56]-[58], per Gummow and Hayne JJ at 213[168]-[169]). 5 Two justices in the majority favoured slightly narrower formulations of the duty, referring to a duty to put and keep the premises in a state of safe repair (per Gaudron J at 192[88]-[93]), or to take reasonable care to avoid foreseeable risk of injury from defects of which the landlord was on notice or of which (by appropriate inspection) the landlord would reasonably become aware (per Kirby J at 240[252]). Callinan J expressed no opinion beyond the tentative statement that if any duty were owed, a matter of which he was far from convinced, he would define it as no more than a duty to provide, at the inception of the tenancy, habitable premises (at 252[289]). 6 McHugh J dissented, for reasons to which I refer below. 7 It can therefore be seen that, for Kirby and Gaudron JJ, the concept of a dangerous defect was central to the narrower duty of care that they favoured. For Gleeson CJ, Gummow and Hayne JJ the presence of such a defect at the inception of a tenancy was seen as highly relevant to a finding of breach of the more generally expressed duty of care that they favoured. 8 On my reading, none of the justices in the majority went so far as to take any duty to repair beyond requiring the lessor to address defects of which he or she was aware, or ought to be aware. And each of their Honours defined "defect" in this context to mean something more than a condition capable of causing injury (see Tina Cockburn, "Duty of Care of Landlords of Residential Premises" (2001) 20 U Tas LR 205 esp at 223-6; Sharon Erbacher, "Unsafe leased residential premises: A landlord's liability in negligence to injured occupants" (2002) 13 ILJ 134). [235]
Mason P also observed at [32]: The sharpening of building standards since the premises were built (both statutory and as reflected by general practice) did not in itself impose a duty to upgrade the premises before effecting the letting. Nor did such changes in standards establish in themselves that the steps were defective in the sense of putting the lessor in breach of the duty of care with the scope recognised in Jones
An analysis of the differences in Jones v Bartlett was also undertaken by McColl JA in New South Wales Department of Housing v Hume bhnf Donna Hume & Anor. [236]
Both parties drew attention the question of the content of the landlord's duties by reference to Ahluwalia & Ors v Robinson [237] where Hodgson JA held at [23]: In my opinion, Jones v. Bartlett makes it clear that, in the absence of a contract supportive of a higher duty, the duty of a landlord in relation to the safety of premises does not in general require a landlord to commission experts to inspect premises to look for latent defects, nor is it a duty to make premises as safe as reasonable care can make them. In general terms, the duty of the landlord is to be determined by reference to foreseeable risk of harm and what a reasonable person would do in response to that risk.
With reference to the question of what constitutes the taking of reasonable steps, the Defendants also drew attention to the comments of Gummow and Hayne JJ in Jones v Bartlett at [174] where their Honours stated: What constitutes the taking of reasonable steps will, as Dawson J noted in Northern Sandblasting, depend on all the circumstances of the case. What is reasonable for premises let for the purpose of residential housing may be less demanding than for premises let for such purposes as the running of a school, or the conduct of a hotel or club serving liquor. Moreover, the reasonableness of steps to be taken will be affected by the terms of the lease, including the level at which the rental is pitched, the obligations the parties allocated inter se and any specification of limited purposes to which the premises be put. It will also be affected by the terms of any applicable statutes, such as residential tenancy statutes. In some jurisdictions, there may be statutory requirements which supplant any common law duty or which impose a higher duty than the common law.
More recently in Aldred v Stelcad Pty Ltd, [238] Emmett AJA (with whom Macfarlan JA and JC Campbell AJA agreed) stated at [38]: The duty of care of a landlord is that which arises under the ordinary principles of the law of negligence. That is to say, the duty of a landlord is to take reasonable care to avoid foreseeable risk of injury to a person who enters onto the demised premises. The nature and extent of the duty and its practical content in a particular case is governed by the circumstances of the case. In the absence of a contract supporting a higher duty, the duty of a landlord in relation to the safety of premises does not in general require the landlord to commission experts to inspect premises to look for latent defects. Nor does a landlord have a duty to make premises as safe as reasonable care can make them. In general terms, the duty of a landlord is to be determined by reference to foreseeable risk of harm and what a reasonable person would do in response to that risk.

[38]

Breach of Duty

Accepting that the duty of care is as stated above, section 5B of the Civil Liability Act 2002 (NSW) (the 2002 Act) deal with breach and provides: (1) A person is not negligent in failing to take precautions against a risk of harm unless-- (a) the risk was foreseeable (that is, it is a risk of which the person knew or ought to have known), and (b) the risk was not insignificant, and (c) in the circumstances, a reasonable person in the person's position would have taken those precautions. (2) In determining whether a reasonable person would have taken precautions against a risk of harm, the court is to consider the following (amongst other relevant things)-- (a) the probability that the harm would occur if care were not taken, (b) the likely seriousness of the harm, (c) the burden of taking precautions to avoid the risk of harm, (d) the social utility of the activity that creates the risk of harm
Section 5C further provides: In proceedings relating to liability for negligence-- (a) the burden of taking precautions to avoid a risk of harm includes the burden of taking precautions to avoid similar risks of harm for which the person may be responsible, and (b) the fact that a risk of harm could have been avoided by doing something in a different way does not of itself give rise to or affect liability for the way in which the thing was done, and (c) the subsequent taking of action that would (had the action been taken earlier) have avoided a risk of harm does not of itself give rise to or affect liability in respect of the risk and does not of itself constitute an admission of liability in connection with the risk.
The Plaintiff submitted that the Defendants breached the duty of care by reason of the following: 1. The existence of dangerous and patent defects. [239] 2. The fact that the Defendants knew, or should have known, about the defects. [240] 3. The failure of the Defendants to take reasonable steps to repair the defects or otherwise to prevent the harm from occurring. [241] These matters are considered below.

[39]

The existence of dangerous and patent defects

The Plaintiff argued that the existence of dangerous and patent defects were related to defects in the property which created a risk of harm in the ordinary use of the premises as a dwelling. It relied on Mr Fakhoury's opinion that the water ingress and mould were caused by "inherent building defects … as a result of original design and construction issues." Reliance was also placed upon the Tall Ideas report which in its concluding paragraph stated: "All of the defects that we have identified above as a direct result of incorrect construction, poor maintenance or building folder and all could've been rectified at any time."
The Defendants contended that none of the expert reports adduced on the Plaintiff's part have conclusively opined that the cause of the mould problem that manifested itself on the Plaintiff's case in "early 2017" as stated in [12] of the Statement of Claim.
In this respect, the Defendant drew attention to a tweet issued by the Plaintiff on 2 April 2017. [242] Some emphasis was placed on that tweet and the accompanying article despite what it asserted was the Plaintiff's attempts to brush away its significance. The Defendant inferred that this gave another explanation for the mould that developed.
Firstly, the Defendants contended that Mr Fakhoury's report in particular his conclusions required comment. The Defendants drew attention to conclusions (i) and (vi) referred to at [122]. The Defendants argued that Mr Fakhoury did not elaborate, in accordance with accepted principles in Makita v Sprowles [243] and Dasreef Pty Ltd v Hawchar [244] how the subfloor timber ventilation system was in fact the cause of the mould growth.
Secondly, to the extent the alleged defects identified by Mr Fakhoury were attributable either to a non-compliance "with the BCA or accepted building practices" or "as a result of original design and construction issues and not due to the tenants occupancy." Mason P in Sakoua v Williams observed at [32] that "building standards since the premises were built did not in itself impose a duty to upgrade the premises before effecting the letting." Nor did such changes in standards establish in themselves that the steps were defective in the sense of putting the lessor in breach of the duty of care with the scope recognised in Jones [v Bartlett]."
Thirdly, the Defendants argued that whilst Mr Fakhoury opined that those "original design and construction issues" were "not due to the tenant's occupancy," he does not attribute them to a failure on the part of the Defendants either.
Fourthly, the Defendants disputed the Plaintiff's closing submissions that Mr Fakhoury's "opinions about the inadequacy of the subfloor ventilation gain support from the opinions expressed by (and the advice given to the Defendants by) Mr Skeoch, the representative from Zenith, and the engineer from Tall Ideas." The Defendant argued that when those opinions are examined there is little added to Mr Fakhoury's opinion.
In reply, the Plaintiff argued that the difficulty with the Defendant's submissions was that the defects in the property were not latent but rather patent particularly in light of Mrs Graham's unchallenged evidence which she complained to the Defendants about the 20 litres extracted every two days from the downstairs are of the house. Furthermore, contrary to the Defendant's Ms Graham gave evidence that she complained of mould to the Defendants [245] and that the First Defendant told her that he had ordered rechargeable absorbers "to address the mould and damp problems". [246] The Plaintiff further contended that it was not asserting that the landlords were required to upgrade the premises but rather they were obliged to rectify defects about which they had actual or constructive notice. To this end, there was no answer to assert as the Defendants do, that the property was built in another era. [247]
To the extent that the Defendants contended that none of the experts had conclusively opined what caused the mould problem was [248] it was submitted that the Court would reject this in light of the contents of Mr Fakhoury's report which in plain terms indicated the cause of the mould was an inadequate subfloor ventilation compounded by the construction of rear concrete slab and the rising damp in the property. On this basis, it was submitted that the Court would be satisfied that the expert evidence established that the Plaintiff discharged its onus of proving, on the balance of probabilities, that the cause of the mould growth at the property was the inadequate subfloor ventilation and the associated rising damp and that those "issues" were ones that caused the mould. [249]

[42]

Failure of the Defendants to take reasonable steps to repair the defects or otherwise to prevent the harm from occurring

The Plaintiff contended that the Defendants breached their duty of care by failing to take reasonable steps to avoid a foreseeable risk of harm. [251] This was subsequently particularised as requiring the Defendants to rectify known defects, maintain the property in a reasonable state of repairs and warn of the presence of water penetration and mould. [252]
The Plaintiff's written submissions elaborated: 1. That the Defendants were aware from no later than late 2012, that the property was susceptible to water penetration and mould proliferation, yet they did not take any steps to address the problem, and they did not warn the Plaintiff of the presence of water penetration and mould when Zenith, Mr Skeoch, the engineer from Tall Ideas and Mr Fakhoury attended the property and each immediately identified inadequate subfloor ventilation as a defect that required rectification. 2. The steps that the Defendants ought to have taken (but did not) included warning the Plaintiff of the presence of the dampness and mould at the property and ensuring that the source of the water ingress was identified and remedied. [253] The Plaintiff contended that evidence demonstrated that the Defendants did not issue any warning to the Plaintiff, and it was only some months after the Plaintiff and his family moved out that the Defendants undertook the remedial work that was recommended by Mr Skeoch in his email of 30 March 2017. [254] 3. The Defendants failed to disclose to the Plaintiff the existence of water penetration, the damp environment and mould, or the risk of the existence of mould, at the property at the time the Plaintiff agreed to lease the Property. [255] 4. The Defendants failed to take any proper or adequate steps to repair and/or remediate the Property to ensure it was in a habitable condition. In this respect the Plaintiff referred to its earlier submissions. 5. The Defendants failed to take proper or adequate steps to repair and/or remediate the Property to remove the existence of water penetration, the damp environment and mould, or the risk of mould, at the Property prior to the Plaintiff occupying the Property or during the period of the Plaintiff's occupation. 6. The Defendants failed to take proper or adequate steps to repair and/or remediate the Property during the period of occupation by the Plaintiff after receiving complaints by the Plaintiff of the existence of water penetration, the damp environment and mould at the Property.
The Defendants responded that their steps included the commissioning of Prime, Zenith, Ms Tralau and MouldLab and their first concern was to establish the cause of the problem and address that before remediating the Plaintiff's chattels. [256]
As to the matter in (i) above, the Defendants repeated that there was nothing that indicated that the Defendants knew or ought to have known of the alleged defects and there was nothing that indicted that they were on notice of matters that warranted rectification, or disclosure of, or warning about. [257]
As to the matter raised by (ii) above, the Defendants stated that this was of no moment as the steps taken were set out in their evidence The Defendants contended that the fact that it took them "some months" after the Plaintiff moved-out to undertake the building works (which were not solely 'remedial' in scope) is of no moment, either - as the property was untenanted, in any event. [258]
In respect of (iii) above, the Defendants contended that the Plaintiff did not establish on the facts and the applicable law that any such disclosure was warranted or justified.
In respect of (iv) above, the Defendants reiterated their earlier submissions adding that the question of non-habitability did not arise until March 2017and the Plaintiff continued to occupy the premises after March 2017 despite the Defendants having offered to terminate the tenancy with no adverse consequences.
As to (v) and (vi), the Defendants drew attention to the Defendants drew attention to its earlier submissions.
The Defendants argued that in all the circumstances there was no breach of duty on their part.
With regards to s 5B(1)(c) of the 2002 Act and for reasons earlier given, I am satisfied that from at least 2012 following Ms Graham's complaint a reasonable person in the Defendants' position would have embarked on inquiry as with a view to carrying out the necessary works with reasonable expedition. Whilst some investigations were taken subsequent to the Plaintiff's complaint in March 2017 the recommendations were not acted on with any expedition allowing the problem to escalate. Nor was the Plaintiff at any stage given any warning such as to allow him to protect his property either prior to his Plaintiff's occupation or after the matter was specifically drawn by him to the Defendants' attention.
The probability of harm arising if care was not taken was high with likely significant harm to property. Whilst the cost of the works undertaken following the Plaintiff's departure was described as being $300,000 it is not apparent how much of this related to remedying the subject defects. The extent of the work described in the Zenith report whilst not as comprehensive as that in the Tall Ideas and Mr Fakhoury's report was $14,630. That has to be viewed in light of all the circumstances including the significant rent paid by the Plaintiff and the likelihood that he would store items of high value. In my view, a reasonable person in the Defendants' position would have taken the precautions. No issue of social utility arises.

[47]

Causation

The Plaintiff has succeeded in his claim asserting breach of contract and breach of common law duty of care as indicated.
The question of causation at in respect of the breach of duty claim is governed by s 5D of the 2002 Act and in respect of the contractual breaches by the common law.
In Libra Collaroy Pty Ltd v Bhide [261] McColl JA stated: 220 Pursuant to s 5D(1)(a), the question whether their negligence was a necessary condition of the occurrence of harm is entirely factual, turning on proof by the plaintiff of relevant facts on the balance of probabilities in accordance with s 5E. The determination of factual causation in accordance with s 5D(1)(a) involves nothing more or less than the application of a "but for" test of causation 221 As Gleeson JA observed in Smith v South Western Sydney Local Health Network, factual causation as referred to in s 5D(1)(a) involves the application of common sense to the proved primary facts, it requires the consideration of the probable course of events had the omission (breach of duty) not occurred and, in a case of negligent omissions, requires the plaintiff to establish some underpinning factual circumstance that either of itself, or by inferential reasoning, enabled the Court to find that "but for" the negligent omission, the harm to the respondent would not have happened. (citations omitted)
Causation principles employed by the High Court in March v E & MH Stramare Pty Ltd [262] apply in breach of contract and the "but for test" is a common although not always sufficient test for causation. [263] It was not suggested that this would lead to any difference in outcome in the present case.
I will put to one side the Defendants' failure to warn the Plaintiff of the risk of water penetration and mould damage. It is unclear how it was being asserted the evidence supports that this failure caused the Plaintiff's loss. Leaving that aside, the Defendants did not contend that if a breach were otherwise established, causation would not be established. Plainly enough but for the Defendants' breaches and failure to take the other precautions referred to in a timely manner caused the Plaintiff's loss. Accordingly, the Defendants' failures were a necessary condition of the harm.

[50]

Sch Item # 1 at Court Slumber Time foam mattress electronic x2 - $1,626.27 Book page 179 Sch Item # 2 Casina Plush Queen mattress - $2,999.00 Sch Item # 6 Custom Moran lounge - $6,280.05 Sch Item # 8 Snooze double bed and base with mattress - $2,114.50 Sch Item # 10 2 Brown leather armchairs with brass stud detail - $2,612.50 Sch Item # 11 Winchester 3 seat lounge - $1,899.05 Sch Item # 14 Alpaca hand knitted rug from Paris - $133.33 Sch Item # 18 Pair racer motorbike gloves - $29.99 Sch Item # 19 Full Harley Davidson leather jacket - $256.33 Sch Item # 20 Leather motorcycle pants - $162.50 Sch Item # 21 Harley Davidson water proof pants - $59.50 Sch Item # 22 Mens leather shoes x 4 - $60.00 Sch Item # 23 DKNY rain jacket - $25.00 Sch Item # 24 Hugo Boss navy overcoat - $199.75 Sch Item # 25 Giorgio Armani wool scarf - $15.45 Sch Item # 26 American Stone vintage Roughneck jacket - $187.50 Sch Item # 27 BMW bomber jacket NY - $261.91 Sch Item # 28 Book shelves - $1,527.45 Sch Item # 29 Book shelves - $1,527.45 Sch Item # 30 Chest of drawers - $425.00 Sch Item # 34 Red Velvet upholstered custom 4-seater lounge - $2,100.00 Sch Item # 36 Fujitsu plasma TV and speaker - $1,200.00 Sch Item # 38 Slumber time single mattress - $639.20 Sch Item # 43 Bedding - wool underlay - $70.00 Sch Item # 44 Tempur pillows x 2 - $163.43 Sch Item # 45 Pillows x 2 - $57.14 Sch item # 46 Double mattress (no brand) - $350.00 Sch Item # 47 2 x Queen mattresses - $420.00 Sch Item # 60 10 pillows - $320.00 Sch Item # 61 5 Doonas - $400.00 Sch Item # 61 Large throw - $120.00 Sch Item # 61 6 x throw cushions - $120.00 Sch Item # 61 2 x lamp shades - $64.00 Claim for Depreciated market value of destroyed property $28,426.30

[52]

Defendants' Submissions

The Defendants argued that Mr Chan's report did not appear to be prepared in accordance with ordinary methodologies of loss adjustment nor the law of expert evidence. Specific criticism was advanced as follows: 1. The expert failed to view, inspect or examine each item of allegedly damaged property, and has expressed his opinions solely on the basis of the Schedule of Loss provided to him, which is identical with that used by Ms Tralau in her report. Proper, date-stamped photographs of each of the subject items were not made available to Mr Chan. 2. The report is expressed to have been based on "various discussions with Agnes Bruck" when she was not a witness to the proceedings and any instructions could not be tested. Further the nature and substance of those discussions are not set out or particularised, in the fashion required by Makita v Sprowles, [270] as follows: "…and, so far as the opinion is based on 'assumed' or 'accepted' facts, they must be identified and proved in some other way". That has not been done. 3. The Plaintiff's Closing Submissions appear to recognise some of those difficulties, and the "evidence in support of" the quantum advanced in the Schedule of Damages as set out in Annexure A to the submissions, does not include every item originally set out in the Schedule of Loss in Annexure B to Mr Chan's report. [271]
The Defendants argued that the whole report suffers from the manner of its presentation, and the statement of answers as conclusions, or in a rolled-up manner which fail to state, according to the criteria in Makita v Sprowles, the process of reasoning which has led to those particular answers and/or conclusions.
The Defendants made specific reference to the following items: 1. Item 6 (Custom Moran lounge): no evidence of the original acquisition cost is given, nor of the basis for the market value assigned by Mr Chan. 2. Item 10 (2 brown leather armchairs with brass stud detail): these armchairs appear to have been purchased as second-hand goods from Lawson's auction house. No evidence is given of their age (but it would be safe to assume that they are more than a year old), and it appears prima facie inappropriate to depreciate their value by 5% only (representing 1 year of life). 3. Item 14 (correctly numbered 16 on Schedule of Loss; Alpaca hand-knitted rug from Paris): no evidence of the original acquisition cost is given, nor of the basis for the market value assigned by Mr Chan. 4. Item 34 (red velvet upholstered lounge): no evidence of the original acquisition cost is given, nor of the basis for the market value assigned by Mr Chan.
The Defendants submitted that the Schedule of Loss (Annexure B) appended to Mr Chan's report was wholly inadequate as a factual or assumptive basis for the loss adjustment, such that the Court cannot be satisfied that the adjustment exercise has a proper basis in fact.

[57]

The Defendants submitted that the two sums of rent claimed by the Plaintiff have not been the subject of proper evidence substantiating the same.
The Plaintiff submitted that in respect of the amounts claimed for loss of rent the Plaintiff's gave evidence of the same, in the schedule to his Affidavit of 12 July 2019.
Firstly, there is a claim for a loss of rental income from storing all affected items in a studio owned by him in Chippendale from 17 July 2017 to March 2018, which was otherwise leased at $315.38 a week. Mr Chan is said to have valued that loss at $8,609 [274] - that is, the amount of $11,039 less a discounted amount ("salvage value") of $2,430. The Plaintiff's schedule MFI 4(2) claims an amount of $8,609.
In respect of this claim the Plaintiff's affidavit (schedule A) asserted that this related to the move from "Bellevue Hill" of mould affected goods to Chippendale and then to Glebe. In evidence, however, the Plaintiff said that the goods were removed from a garage at Randwick to a building at Chippendale. Mr Chan's report whilst listing a salvage value suggested an alternative more economical cost associated with the loss of rent as a more appropriate loss and stated that where there are alternative costs only one should be used.
Secondly, loss of rental income from the garage at the University House in Glebe, where the Plaintiff has stored the damaged goods since they were moved out of the Chippendale property in March 2018. Mr Murphy's evidence was that the rent payable on that garage was $100 a week. [275] Calculated to the date of the filing of the Plaintiff's Schedule of Damages (MFI 4(2)) on 9 February 2021, less the discount ("salvage value") of $4,050 applied by Mr Chan, the rental amount claimed is $5,476. The alternative costs appear to be referenced to commercial self-storage costs.
A further claim is also made for monthly rent and loss of rental income. According to the Plaintiff's schedule $4000 monthly was paid for rent for storage at Dover Heights. [276]
The evidence does not explain the circumstances of the various storage sites being used. Clearly part of the reason for the cost being incurred has been the Plaintiff's failure to effect repairs during the period thus far. Doing the best I would allow $4000 for storage in lieu of the rental costs claimed as reasonable and necessary.
As the Plaintiff is being compensated for the replacement cost of the various items of bedding, mattresses and lounges, I do not consider it reasonable and necessary to allow for the temporary purchases made from Ikea ($562.50 and $3511.17). The cost of International Conservation Service for a site visit ($283) and the costs of DW Knox and partners for an engineering report ($4,446) are more properly legal expenses and not part of the Plaintiff's entitlement to damages.
Overall, this makes a total claim for other expenses of $17,281.05 excluding the claim for the bond which is considered in the context of the Cross Claim.

[58]

Items for Mould Remediation

The Plaintiff's schedule included the sum of $53,229.00 for mould remediation based on the report of Penny Tralau from Mould Rescue Pty Ltd.
As noted earlier, Ms Tralau first inspected the tenanted property on 23 March 2017 at the request of the Defendants. In a report dated 24 March 2017, Ms Tralau commented on the furnishings in the ground floor bedroom stating: Both beds, the carpet, furniture, artwork and general contents have condition 2 moulds. All the leather items, like jackets and shoes have condition 3 moulds. [277]
Ms Tralau further commented on the ground floor bedroom stating: The entire contents of this room needs to be packed out and transported offsite for remediation and storage whilst the remediation is in progress. ….. During the pack-out process a picture inventory of all items will be done and provided to all materially interested parties. There will a number of items that will be identified as non-restorable, this will be set aside for discussion. In this room there are several pieces of artwork that have been affected by mould and will be taken to a specialised Art Restoration Company called David Stein & Co conservation located in Darlinghurst, they will provide for restoration which will be passed on to you for restoration. [278]
Ms Tralau's first quotation was for $40,535. although it appears to include remediation of the property.
Ms Tralau was asked to inspect mould on items on 20 June 2019. [279] Ms Tralau's report of 12 July 2019 describes her as a having the highest designations as a certified restorer, mould professional and contents loss specialist with the Restoration Industry Association. It describes Mould Rescue as providing assessments for indoor air quality, mould, damp and water damage on residential and commercial properties and conducting mould remediation and structural drying remediation.
Ms Tralau documents that she attended a garage in Glebe supervised by Ms Bruck where the various items were kept. She was also provided with a copy of a schedule of loss dated 24 June 2019 prepared by Ms Bruck which was annexed. Ms Tralau states that the scope of remediation is to the items that were stored in the garage since 21 July 2017.
Ms Tralau emphasised that she did not mean to restore items to the original condition such as to fix legs or re-attach a finial. She stated she would test using the ATP method during the remediation until she achieved a result of zero and at the end and before delivery she would take a surface sample from each piece of furniture which is then sent to a lab from processing. She stated that the restorability of mould contaminated contents within a water damage house depended upon porosity, level of contamination vs risk factor and economic value vs intrinsic value.
To demonstrate this she described: To demonstrate this: a piece of Ikea furniture that has condition 3 mould I could restore but wouldn't bother because of its low value. Antique timber furniture that has potential actual value as well as intrinsic value is complex to restore and takes time but is restorable and worth it. Items like lounges and mattresses I would not restore because of their complexity and risk factor. I can only remediate the outside, not the inside, for example I could only remediate the leather or fabric but could not open up the cushion to remediation the foam on the insides. Mattresses have a complex structure of layers of foam and coils m similarly, couches often have a wooden or metal frame along with cushion padding. [280]
Ultimately, Ms Tralau listed the various items with her conclusions with estimates (including GST) comprising:

Transport to and from $ 5,500
Storage of contents during remediation process (2 months) - $ 1,815
Administration and co-ordination - $ 5005
Consumables -$ 1,100
Labour for remediation of books -$ 6,006
Labour for remediation of furniture -$18,018
Testing (both ATP (adenosine triphosphate) and lab) -$11,550

Ms Tralau assessed the costs at $48,994 (inclusive of GST) but this did not include the art work and the failure to release the bond of the rental income of the garage in Glebe. These estimates were revised on 5 February 2021 in the amount of $53,229.00 inclusive of GST based on storage cost of $2750, ATP testing and for laboratory testing of $14,850. [281]

[59]

Consideration

The Defendant drew attention to the fact that Ms Tralau proceeded on the basis of the Schedule of Loss compiled by Ms Bruck in circumstances where she did not give evidence. I have earlier commented on that submission. There was no challenge to the Plaintiff's ownership of the items
Ms Tralau did not report findings in respect of the various items of property that she examined. Nor did she explain what specific items in the schedule she proposed to work on and which items she proposed to discard. One can infer from the schedule that the items Ms Tralau proposed to work on were those that were not discarded or the subject of Mr Volante's report. The schedule provides some statements as to advice given by Mould Rescue relating to items but were not the subject of cross examination or restriction under s 136 of the Evidence Act 1995 (NSW).
The books referred to in the Plaintiff's schedule as item 15 appear to be incorrectly cross referenced to a Mould Rescue quote in item 32. It describes them as having been sealed in plastic containers and a small portion were cleaned but kept away from the family residence. This is presumably a reference in item 33 to "Part Mould remediation fee and Chis Laycock books furniture removal at a total of $1,800."
Item 18 in the schedule is a quote which was given for restoration of art work by the International Conservation Art Service as a cost of $13,596 but it stated that a deduction should be made for 4 art works cleaned by Ms Tralau. That appears to be a reference to item 42 which described the costs of restoration of 2 Persian rugs and 4 art works by Ms Tralau by Mould Rescue at a cost of $1199 being a sum earlier referred to.
Item 34 in the schedule described as a Mould Rescue quote for remediation dated 26 May 2017 totalling $111,474. The significance of this in the context of the Plaintiff's claim was not explained.
The Defendant did not ultimately object to the tender of Ms Tralau's reports. [282] No issue was taken as to the Plaintiff's ownership of the items proposed to be remediated or the damage asserted as having been sustained. The fact that the relevant remedial action has not yet been undertaken is not a factor precluding recovery. In McGregor on Damages the learned authors state: In the case of goods other than ships the cost of repair has now become established as, prima facie, the correct measure of the claimant's loss. Accepted some time ago in a number of first instance cases, this was confirmed by the Court of Appeal in Darbishire v Warran where it was said by Harman LJ that "it has come to be settled that in general the measure of damage is the cost of repairing the damaged article". Moreover if, despite the repairs, the market value of the goods is less than before, the claimant should be entitled to such diminution in value in addition to the cost of repair. Thus in Payton v Brooks, Roskill LJ said: "There are many cases … where the cost of repairs is a prima facie method of ascertaining the diminution in value. It is not, however, the only method of ascertaining the loss. In a case where the evidence justifies a finding that there has been, on top of the cost of repairs, some diminution in market value … I can see no reason why the plaintiff should be deprived of recovery under that head of damages also." Thus in The Georgiana v The Anglican, the claimant was held entitled to recover, in addition to the cost of partial repairs to a yacht which did not make her as strong and seaworthy as formerly, the amount by which the value of the partially repaired yacht was less than before the damage occurred.(omitting citations) [283]
Generally damages are assessed as at the time of the relevant breach. [284] That is not absolute and a departure from the general rule arises where the damages reflect a cost or repairs which is heavy in relation to the Plaintiff's financial position. That may arise where liability is denied and in consequence the Plaintiff postpones the carrying out of repairs until judgment. [285]
In this instance the Plaintiff's evidence as referred to by the Defendants leaves uncertainty as to when and if repairs will be carried out. I have earlier allowed a partial claim for storage sufficient to facilitate repair. As to the loss incurred I would allow reasonable repair costs as at the time of breach. The Plaintiff did not advance a case otherwise.
Ms Tralau's report describes an overall cost but does not indicate the application of the methodology described. Beyond that it is a particularly high cost relative to the quotation of $7,773 plus GST prepared by Prime Restoration. Mr Skeotch noted that the process and pricing of Ms Tralau was significant and the proposal to be avoided. Although the Prime quote was not same scope Mr Skeotch noted that it was considerably cheaper.
Overall, despite the difficulties involved in assessment the Plaintiff has clearly sustained loss and however difficult the task is the Court is required to quantify the damage. [286] The Plaintiff did not seek to explain the high cost of Ms Tralau's treatment relative to the quotation of Prime. Overall, doing the best I can I would allow the sum of $20,000 being an amount calculated on a basis proximate to when the damage occurred.

[62]

Defendant's Submissions

The Defendant's argued that the salient features of Mr Volonté's reports are as follows: 1. Mr Volonté's report was first prepared at Ms Bruck's request. As earlier noted, Ms Bruck has not given evidence in the proceedings. Mr Volonté's further report dated 12 July 2019 was also addressed to Ms Bruck; 2. A further difficulty is that the Plaintiff has not put into evidence an inventory of each of the 40 allegedly mould-affected artworks. Nor is there a photograph of each of the allegedly affected artworks; 3. There is no evidence in the proceedings of the ownership of the 40 artworks; 4. Nor is there any evidence of the market value of the artworks. That makes, applying Ms Tralau's methodology of "restorability", referred to above, the Court's task of assessing damages impossible, because the Court has no evidence as to whether the costs remediation of the artworks is justified; 5. A further difficulty in the assessment if damages lies in the very loose estimate given by Mr Volonté' for the cost of undertaking Stage Two cleaning. [288] Including GST, the very broad range of $30,827.50 -$63,211.50. It is not appropriate for the highest total estimated figure of $63,211.50 to have been stated in the Plaintiff's schedule of damages. [289]
The Defendants contented that that none of the works have to date been carried out and that in order to recover damages of the sort that the Plaintiff seek in the present case he must either point to the fact that the work has been done to a sufficient fixity of intention in his resolve to carry out the remedial work it. It was submitted that there was no evidence before the Court that the Plaintiff ever intends to carry that work and there is no evidence capable of proving that the Plaintiff ever intends to carry out that work and there was no evidence in his affidavits of a fixity of intention to carry out the works. To the contrary, the Defendants assert that the Plaintiff in cross examination attempted to evade the issue such that he cannot establish that he has in fact suffered damage in the amount claimed. [290] The Defendants relied on Tito v Wadell (No 2). [291]

[63]

Consideration

The Plaintiff's evidence made reference to paintings as "my paintings" and given to me by my partner. [292] Photographs of some paintings were also tendered in evidence. [293] The question of ownership was not specified in the Defendants' Statement of Issues and the matter appears raised first in submissions.
Mr Volonté's reports did not acknowledge that the author had read the Code of Conduct pursuant to schedule 7 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) in accordance with UCPR 31.23. Nor did the report comply with UCPR 31.27. Notwithstanding this no objection was advanced as to admissibility.
I accept the Plaintiff's argument that if the Defendants wished to argue that the cost of repairs exceeded the value in the market of the damaged article then it was obliged to plead this as a matter of mitigation and seek to establish this. Although the Defendants at one point foreshadowed such an argument being advanced and seeking an amendment to do this was ultimately not advanced.
I have addressed the Defendants' submissions as to the failure to effect repairs at [299]-[300]. In my view, the Plaintiff has clearly suffered loss and the question is one of assessing the compensatory damages payable. Whether or not the Plaintiff actions the repairs matters not, as the value of the repairs is to compensate for the diminution in value.
The context in which Tito v Wadell (No 2) cited the need to demonstrate a fixity of intention involved a contractual obligation to do certain work. [294] Needless to say the facts of Tito are distinguishable from those in the instant proceeding which involved damage to chattels.
In assessing the loss sustained by the Plaintiff I bear in mind the value of the repairs at the time as indicated in the first report. I acknowledge that the Stage 2 costs were not particularised until the second and third reports and even then within a range. The reports do not identify the basis of the estimates bearing in mind Mr Volonté's acknowledgement that this can only be ascertained after the completion of Stage 1 work. Bearing in mind the uncertainty of Stage 2 and doing the best I can I would allow transport costs, Stage 1 work costs as well as a modest allowance to account for the possibility of Stage 2
Accepting that the question of the need and extent for stage 2 repairs is uncertain, I would overall allow $22,000 ($20,000 plus GST).
Overall the Plaintiff's damages allowed are: 1. Replacement of destroyed items based on Ms Chan's report - $28, 426.30 2. Other expenses as claimed - $17,881.05 3. Remediation of items described in Ms Tralau's report - $20,000 4. Paintings described in Mr Volonté's report - $22,000
This makes a total of $88,307.35

[64]

CROSS CLAIM

The Defendants/Cross Claimants by their Cross Claim asserted that on or about 24 August 2016 the term of the residential tenancy agreement dated 26 July 2013 was extended for twelve months ending on 5 August 2017 and the rent payable would be increased to $11,626 per month. The Defendants/Cross Claimants claimed that in breach of their agreement the Plaintiff/Cross Defendant failed to pay any rent for the period 5 April 2017 to 21 July 2017 being an amount of $41,393.61. [295] That amount was admitted by the Plaintiff/Cross Defendant. [296]
By their Defence to the Cross Claim the Plaintiff/Cross Defendant admits that he did not pay the rent for the period alleged but asserts that he was not required to pay rent in circumstance of the Defendant/Cross Claimants' failure to provide the property in a state that was fit for habitation or to maintain it in a reasonable state of repair such that the property was at all times vulnerable to water perpetration and in fact suffered from such water penetrations such that mould existed and proliferated with the property to the extent that it was not fit for habitation by the Plaintiff/Cross Defendant. Alternatively it was asserted that it is entitled to set off any amount that the Court finds the Defendants/Cross Claimants are liable to pay him against any unpaid rent that the Court finds he is liable to pay the Cross Claimants.
The Plaintiff/Cross Claimant submitted that the Cross Claim for unpaid rent did not account for the bond monies that were wrongly claimed by the Defendants in their reckoning of outstanding rent. Moreover in circumstances where the property was uninhabitable because of the extent of the dangerous mould contamination, the Defendant/Cross Claimants are not entitled to demand or to receive payment of any amount of the monthly rent as they provided no consideration under the lease during the period when the Plaintiff/Cross Defendant and his family were unable to use the property for its intended purpose as a dwelling that was fit for habitation.
Although the Plaintiff/Cross Defendant in submissions foreshadowed addressing the matter further in response to the Defendant/Cross Claimant's submissions the latter did not do so except to concede their recovery of the bond monies. The Plaintiff/Cross Defendant in reply reiterated his earlier submissions contending that in the event the Court were to dismiss his claims for the Defendant's breaches that the rent would be abated pursuant to section 43 of the 2010 Act.
In circumstances where I have found a breach of the terms of the agreement between the parties section 43(2) of the 2010 Act can have no application. The Plaintiff/Cross Defendant's obligation to pay rent remains notwithstanding that his ability to use the premise is affected as the obligation of the Plaintiff to pay rent is independent of the landlord's covenants. I do not accept in circumstances where the Plaintiff continued to reside in the premises there was a total failure of consideration. The statutory remedies available to the Plaintiff are to seek a reduction in rent under s44 of the 2010 Act or to seek termination. Alternatively the Plaintiff could seek compensation in NCAT pursuant to section 187(1)(b) of the 2010 Act. In this respect the authors of Residential Tenancies Law and Practice New South Wales (7th edition) state: Often the awards of compensation for various breaches are assessed by reference to the rent payable-for example the compensation for the loss of the facility is compensated by the amount of one weeks rent. There is nothing intrinsically wrong in such an approach as long as the quantum is truly proportional. Part of the logic is that the tenant should not normally be compensated for inconvenience in living in premises to a greater extent than the rent payable. This method of making a global assessment was recommended by the English Court of Appeal in Wallace v Manchester (1998) 30 HLR 1111 and also English Churches Housing Group v Shine [2004] EWCA 434. [297]
The Plaintiff/Cross Defendant in this Court did not advance any case for either statutory set off pursuant to s 21 of the Civil Procedure Act 2005 or equitable setoff. [298]
In the circumstances the Cross Claimant/Defendants are entitled to the balance of rental owing after deduction of the bond monies of $9,600 which have been received. This leads to an amount of $31,793.61

[66]

Endnotes

Statement of Claim at [16].
First Cross Claim filed 6 June 2018.
Defence to Cross claim at [5(c)] and [8(b)].
Defence to Cross Claim at [5(d)].
Statement of Claim at [7] and [13]
Statement of Claim at [25].
Statement of Claim at [9]-[11] and [15]-[16].
As adopted by the Fair Trading Act 1987 (NSW). See Statement of Claim at [17]-[23].
T 13.5-.7 and Plaintiff's Outline of Opening Submissions MFI 5.
T 32.11-.18 (Ms Graham), T 78.37-.46 (Plaintiff), First Defendant T 171.1-.20.
T 7.15-.33.
T 107.24-.35.
T 268.10-.38.
T 250.15.
Exhibit A, tab 21 at p 437.
Exhibit A, tab 25 at p 617.
T 239.4-24.
Exhibit A, tab 15 - Affidavit of Christina Graham dated 31 August 2018 at [5].
T 27.1-8.
Exhibit A, tab 15 - Affidavit of Christina Graham dated 31 August 2018 at [5]. The Second Defendant also gave evidence of brand new cupboards being installed T 168.26-.28.
Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p220-227.
Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p 227.
Exhibit A, tab 15 - Affidavit of Christina Graham dated 31 August 2018 at [12].
T 26.35-.40.
T 27.2-.3.
T 26.42-.45
T 36.41-.45.
T 37.20-.24.
T 37.48- 38.2.
T 27.30-.39.
T 26.45-.48.
T 27.18-.25.
T 26.33-.48.
T 27.23-.25.
T 27.47-.28.3.
Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p 226.
Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p 222.
T 252.1-.20.
Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p 224.
T 30.5-.41.
T 177.15- 178.17.
T162.9-164.8.
Exhibit 3 - Affidavit of George Lewkovitz dated 17 September 2019 at [73].
T 259.11-.24.
Exhibit A, tab 15 - Affidavit of Christina Graham dated 31 August 2018 at [15].
T 266.29-.38.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [4].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [5]. See lease at Exhibit A, tab 25, Exhibit GL-1 at p 688.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [7].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [8]-[9].
Exhibit A, Exhibit GL-1 at pp 711-724.
Exhibit A, tab 16 Affidavit of Christopher Murphy dated 27 March 2019 at [19]-[20].
Exhibit A, tab 16 Affidavit of Christopher Murphy dated 27 March 2019 at [21]-[22].
Exhibit 3, Affidavit of Ilana Lewkowitz 17 September 2019 at [8].
T 258.5-8.
T 77.38-47.
T 77.49-78.8.
T 78.19-.25.
Exhibit A, tab 16- Affidavit of Christopher Murphy dated 27 March 2019 at [6].
Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [33]-[34].
Exhibit A, tab 16- Affidavit of Christopher Murphy dated 27 March 2019 at [16].
Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [51].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [16]-[17].
Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [52].
Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [58]-[59].
Exhibit A, tab 25 at p 725.
Exhibit A, tab 16 Affidavit of Christopher Murphy dated 27 March 2019 at [10].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [29].
Exhibit A, tab 25 at p 732.
T 79.41-81.7.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [29] and also Exhibit A, tab 25 at p 732.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [30] and Exhibit A, tab 25 at p 733.
Exhibit A, tab 25 at p 733.
Exhibit A, tab 25 at p 733.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [30] and Exhibit A, tab 25 at p 733.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [30] and Exhibit A, tab 25 at p 733.Exhibit A, tab 25 at p 733.
Exhibit A, tab 25 at p 733.
T181.11-38; T182.7 - 183.5.
Exhibit D at [4].
T 183.13-184.16.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [32].
Exhibit A, tab 21 p441-2.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [34].
Exhibit 3- Affidavit of George Lewkovitz dated 17 September 2019 at [63].
Exhibit A, tab 25 p770.
Exhibit 3 Affidavit of George Lewkowitz dated 17 September 2019 at [63]-[64].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [36].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [37].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [37].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [37].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [37].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [37].
Exhibit A, tab 25 p737.
Exhibit A, tab 25 p737-738.
Exhibit 3- Affidavit of George Lewkowitz 17 September 2017 at [66]-[67].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [44].
Exhibit A, tab 16 at [45] and Exhibit A tab 25, p763-4.
Exhibit A, tab 22 at p549.
Exhibit A, tab 22 at p549-50.
Exhibit A, tab 22 at p550.
Exhibit A, tab 22 at p550-1.
Exhibit A, tab 22 at p553.
Exhibit A. tab 22, p551-2.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [50].
Exhibit A tab 22, p552-3.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [51] and Tab 22 at p554.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [52]-58].
Exhibit A, tab 22, p562.
Exhibit A, tab 22 p451.
Exhibit A, tab 22 p452.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [70].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [71].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [71]
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [72].
Exhibit A, tab 25 p784 and Exhibit A, tab 9.
Exhibit A, tab 9 p126-127.
Exhibit A, tab 9 p126-127.
Exhibit 3 Affidavit of George Lewkovitz dated 17 September 2019 at [74].
Exhibit 3 Affidavit of Ilana Lewkovitz dated 17 September 2019 at [12].
T 209.29-210.5.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [77].
T 199.5-.26.
Exhibit A, tab 21 p462.
Exhibit A, tab 21 p462-4.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [78].
Exhibit 3 Affidavit of Ilana Lewkowitz dated 17 September 2019 at [13].
T 198.46-.50.
T 216.45-218.5.
Exhibit A, tab 21 p461-462.
T 217.45-.50.
Exhibit A, tab 21 p466.
T 218.14-.19.
T 218.11-.12.
T 218.14-219.20
Exhibit A, tab 24 p608-616.
T 69.37-71.31.
Exhibit 1.
Exhibit 2.
T 84-.5-85.45.
Exhibit A, tab 23 p576.
T 265.43-.48.
T 265.50-266.2.
Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [85]-[86].
Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [90]-[91].
Exhibit A, tab25 p838.
Exhibit A, tab 25 p618-620.
Exhibit A, tab 25 p618.
Exhibit A, tab 25 p840.
Exhibit A, tab25 p 869 at [1].
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at [126(h)].
Exhibit F.
T 232.32-.41.
Exhibit A, tab 16 - Affidavit of Christopher Murphy dated 27 March 2019 at p297. Also see Plaintiff's Schedule of Damages MFI 4(2) p4.
Statement of Claim at [8] and Defence at [1].
T 171.30-.37.
T 244.40-.50.
T 226.42-.227.33.
Exhibit B.
T 150.5-.28.
See T 150.28-.50.
Exhibit C.
Exhibit E and T 227.35-230.12.
Exhibit A tab 21 at pp519-524.
T 231.15-.22 and Exhibit F.
Exhibit A, tab 13 p191.
Reference was made to photo 35 in the Tal Ideas report at Exhibit A tab 23, p595.
Exhibit A, tab 13 p193, at '(b) Northern perimeter wall'.
Exhibit A, tab 13, p194 at (b).
Exhibit A, tab 13 p193.
Exhibit A, tab 13 p192-193.
Exhibit A, tab 13 p192.
Exhibit A page tab 13, p197, at (i).
Exhibit A page tab 13, p197 at [7].
See clauses 3 and 25 of the savings, transitional and other provisions in Schedule 2 of the Residential Tenancies Act 2010 (NSW).
Exhibit A, tab 16 at p286 and Exhibit 3 (Exhibit GH1) at p714 .
MFI 1 at [3].
[2004] QSC 276.
[1943] AC 283.
[2007] SADC 64.
Plaintiff's written submissions at [107].
Plaintiff's written submissions in reply at [8].
Plaintiff's written submissions in reply at [9].
Defendant's written submissions at [80]-[81].
[2014] NSWCATCD 105 (Bannister v Cheung at [20] adopted a statement made by in De Solei v Palmhide Pty Limited [2010] NSWCTTT 464).
Defendant's written submissions at [82].
[2018] NSWCATCD 54at [25]-[28].
[2017] NSWCATAP 9 at [116]-[117].
[1943] AC 283.
(1970) 91 WN (NSW) 268.
(1890) 25 QBD 42.
[2017] NSWCATAP 9.
[2010] All ER (D) 84 and [2009] EWCA Civ 1146.
[2014] EWHC 3968. See also Gummow J in Northern sand Blasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313 at pp373-4; (1997) 146 ALR 572; (1997) 71 ALJR 1428
(2000) 205 CLR 166; (2000) 176 ALR 137; (2000) 75 ALJR.
McHugh J noted in Jones v Bartlett at [103] that reasonable care following a new letting may require inspection by a person with building qualifications who has the capacity to assess the safety of the premises.
Exhibit A tab 16 at p286.
Plaintiff's written submissions at [15]-[16].
(2016) 125 SASR 191.
T 329.26-36.
T 161.15-.26.
Defendant's written submissions at [40].
T 37.16-.31.
Defendants' written submissions at [44].
T 29.27-30.12.
T 162.9-.27.
T 162.9-.27.
Defendants' written submissions at [45].
Plaintiff's written submissions at [29] and Defendants written submissions at [46].
Defendants written submissions at [67].
Exhibit A, p733.
Defendants written submissions at [68].
Defendants' written submissions at [51].
Defendants' written submissions at [89]-[91].
(1997) 188 CLR 313; (1997) 146 ALR 572 at 612.
T 169.3-175.40.
T 252.22-.32 and T 253.31-.32.
T 170.46-.171.21.
See also T 34.5-.26.
Defendants' submissions at [44].
[2015] QCA 234. See also Ermel v DuluxGroup (Aust) Pty Ltd (No 2) [2015] FCA 17 at [99]-[100].
Plaintiff's written submissions at [29].
(2004) 220 CLR 363; (2004) 208 ALR 1; (2004) 78 ALJR 1031; [2004] HCA 34.
Quoting Rhesa Shipping CO SA v Edmunds [1985] 1 WLR 948 at 955; [1985] 2 All ER 712 at 718 (Lord Brandon of Oakbrook).
[2012] WASCA 72 (Newnes and Pullin JJA concurring).
Defendant's written submissions at [67].
(1997) 188 CLR 313 at 612.
Statement of Claim at [17], [23]-[24].
T 171.25-.172.14.
[2012] NSWCTTT 372 at [24(b)].
T 247.44-248.2.
See Statement of Claim at [24] and Plaintiff's Schedule of Issues at [11].
Lord Tenterden CJ in Doe d Murray, Lord Bishop of Rochester v Bridges (1831) 1 B & Ad 847; (1831)109 ER 1001 at 859 (B & Ad).
Dennis v Brownlee [1964] NSWR 544; (1963) 9 LGRA 415; [1963] SR (NSW) 719.
(2005) 64 NSWLR 588; [2005] NSWCA 405.
This summary was also applied to Loose Fit Pty Ltd v Marshbaum [2011] NSWCA 372 at [86].
(2007) Australian Tort Reports 81-879; [2007] NSWCA 69 at [56]-[65].
[2003] NSWCA 175 (cited in Sakoua & Anor v Williams (2005) 64 NSWLR 588; [2005] NSWCA 405 at [9]).
[2015] NSWCA 201 at [38].
Plaintiff's written submissions at [131(a)].
Plaintiff's written submissions at [131(b)].
Plaintiff's written submissions at [131(c)].
Exhibit 1.
(2001) 52 NSWLR 705.
[2011] HCA 21; (2011) 243 CLR 588.
Affidavit of Mrs Graham, Exhibit A tab 15 p218 at [15].
Affidavit of Mrs Graham, Exhibit A tab 15 p218 at [10].
Plaintiff's submissions in reply at [14(b)].
Defendants written submissions at [24].
Plaintiff's written submissions in reply at [16].
Plaintiff's written submissions at [131(b)].
Statement of Claim at [15].
Exhibit A, p424.
Exhibit A, p431.
Exhibit A, p466.
Exhibit A, p435.
Defendants written submissions at [69].
Defendant's written submissions at [71].
Defendants written submissions at [72].
Plaintiff's written submissions at [141]-[142].
Nelson-Hauer v Calman (1954) 73 WN (NSW) 449.
[2017] NSWCA 196 (Meagher and Ward JJA agreeing).
(1991) 171 CLR 506.
Commonwealth v Amann Aviation Pty Ltd 1991) 174 CLR 64 at 174-175; (1991) 104 ALR 1; (1999) ALJR 123; [1991] HCA 54.
T 131.11.
T 7.6-.12.
T 120.26-.41.
Exhibit A, tab 19 Affidavit of Christopher Murphy dated 12 July 2019 (3) Annexure A Item at [4] and Annexure A - p409-420. Receipts tendered were at Exhibit A p183 A to 183Z.
T 109.
Exhibit A, tab 12 p159.
(2001) 52 NSWLR 705 at [85]. See also Dasreef Pty Ltd Hawchar [2011] HCA 21; (2011) 243 CLR 588 at [66] per Heydon J.
Exhibit A tab 15, p166-178.
Plaintiff's written submissions in reply at [24(c)].
Plaintiff's written submission in reply at [25].
Exhibit A, tab 19 to Affidavit of Christopher Murphy 12 July 2019 (3) - Annexure A Item 38 p418.
Exhibit A, tab 19 to Affidavit of Christopher Murphy 12 July 2019 (3) - Annexure A Item 39 p419.
Exhibit A, tab 19 to Affidavit of Christopher Murphy 12 July 2019 (3) - Annexure A Item 25 p415.
Exhibit A, tab 5 p58.
Exhibit A, tab 5 p59.
Exhibit A, tab 7 p85.
Exhibit A, tab 7 p87.
Exhibit A, tab 8 p109.
Matika (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 at [59].
See McGregor on Damages by James Edelman, revised by Simon Colton and Jason Varuhas (2021) 21st Edition at [37003].
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR at p161-2.
Alcoa Minerals of Jamaica Inc v Broderick [2002] 1 AC 371 at p378
Hoblos v Alexakis [2021] NSWCA 126 per White JA at [20] McCallum JA at [64]-[65].
Exhibit A, tab 11 p157.
See Exhibit A p 157.
Defendant's Written submissions at [108].
T 92.42-93.15.
[1977] CH 106.
T 70.1 and 71.20.
Exhibit A, tab 17 - Affidavit of Christopher Murphy at 12 July 2019 at CM6 from pp 364 and Exhibit A, tab 24.
Tito v Wadell (No 2) [1977] CH 106 at p 333.
First Cross Claim at [4]-[5] and Defendant/Cross Claimants' Schedule of Damages MFI E
Defence to First Cross Claim at [5(a)]
Allan Anforth, Peter Christensen, Christopher Adkins, Residential Tenancies Law and Practice New South Wales (Federation Press, 7th ed 2017) at p375.
D'Ambrosio v Tyler [2009] ACAT33 at [25]--[42] which doubted that equitable setoff would be available.

Murphy v Lewkovitz; Lewkovitz v Murphy

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (67 paragraphs)

Legislation Cited (10)

Cases Cited (36)

Cited By (4)