The matter was listed for a special fixture hearing at the Tribunal in Sydney on 27 July 2016. The applicant ('the landlord') was represented by Ms Hook. The respondent ('the tenant') appeared and gave sworn evidence.
[2]
Background
The dispute involves metal coverings/ shutters (which are hereafter referred to as "shutters") made and installed by the respondent ('the tenant') on windows and doors at the residential premises in 2013. There is no dispute that there is a residential tenancy agreement between the parties. The residential property is a free standing brick house in Peakhurst, NSW. The applicant's late mother was originally the tenant, and the tenancy was transferred in 2012 after her death. There is a written residential tenancy agreement between the parties dated 13 February 2012. The tenant has lived in the property since 2005. The tenant currently resides in the property alone. In 2013, the tenant made shutters for doors and windows from strips of scrap metal that he has attached together to form a structure. The tenant installed the shutters, affixing them externally to window frames and some door frames of the premises. The shutters have small slots at the top, but otherwise cover the majority of the window space of the premises. The tenant asserts that he installed the shutters for "privacy".
The tenant has made clear at all times (including at the hearing of this matter) that he refuses to remove the shutters because he believes the landlord has no legal right to prevent him installing and retaining the shutters.
On 3 November 2015 the landlord issued a notice to terminate the tenancy on the grounds relevantly including that the tenant had breached s 87 of the Residential Tenancies Act 2010 ('the RT Act') by installing the shutters without written consent of the landlord, and that the property was not being kept in a reasonably clean condition. The tenant did not vacate the property and the landlord commenced proceedings in the Tribunal seeking a termination order. Those proceedings (Matter SH 15/66143) were set down for a special fixture hearing at the Tribunal in Kogarah on 24 February 2016. Both parties had filed and served documentary evidence in those proceedings. The landlord failed to appear at the hearing, and the proceedings were dismissed under Section 55(1)(c) of the Civil and Administrative Tribunal Act 2013 by reason of the landlord's non-appearance.
The landlord then applied for the proceedings to be re-instated under Section 55(2) of the Civil and Administrative Tribunal Act 2013. In Matter SH 16/10383 the Tribunal dismissed the application for re-instatement, on the ground that the landlord had not given a reasonable explanation for its non-attendance.
The landlord then issued a further termination notice under s 109 of the RT Act on 22 April 2016. The tenant failed to vacate the property, and the landlord commenced these proceedings. In these proceedings, the landlord seeks the following orders: (i) a termination of the tenancy on the basis the property has become wholly or partially uninhabitable under s 109 of the RT Act; or (ii) in the alternative, an order under s 187 of the RT Act that the tenant comply with the terms of the tenancy and the RT Act by removing the shutters.
Each party tendered documentary evidence. The documents of the landlord included the residential tenancy agreement; the notice to terminate; photographs of the premises (both outside and inside); a letter from Hurstville City Council (as it then was) to the landlord dated 15 April 2016 directing the landlord to remove the shutters within 7 days from the date of the letter authored by Mr Daniels, District Building Surveyor; a extract from the Building Code of Australia (the provisions of which are referred to in the letter dated 15 April 2016); a letter from Georges River Council dated 22 June 2016 authored by Mr Daniels, District Building Surveyor; and an email from Mr Daniels to the landlord referring to his qualifications. The landlord also relied upon emails between the landlord and the tenant in October 2015 that were filed and served in the earlier proceedings.
The tenant's documents included a series of written submissions and correspondence between himself and the landlord, both filed and served in these proceedings and filed and served in the earlier proceedings.
At the commencement of the hearing, the Tribunal pointed out an obvious inconsistency in the orders sought by the landlord. Section 109 of the RT Act only applies to residential premises becoming wholly or partially uninhabitable other than by reason of a breach by the tenant or the landlord of the residential tenancy agreement, or the RT Act. Leaving aside the issue as to whether the shutters make the premises wholly or partially uninhabitable, if the landlord's argument is accepted, any uninhabitability must be caused by the breach by the tenant of cl 25.1 of the residential tenancy agreement (installing any fixture or renovating or altering the premises without the prior written permission of the landlord) and s 66 of the RT Act.
The landlord cannot on the one hand argue that the premises are wholly or partially uninhabitable not by reasons of any breach by the tenant, and then on the other hand argue that the Tribunal should make an order that the tenant remove the shutters because the tenant has breached the residential tenancy agreement and s 66 of the RT Act.
It is surprising that this issue was not obvious to the landlord before the service of a termination notice under s 109 of the RT Act, particularly in circumstances where the landlord is a government entity who manages a large number of social housing properties; a regular party in Tribunal proceedings; and a model litigant. It is also surprising that the landlord filed proceedings in the Tribunal seeking to terminate the tenancy under s 109 of the RT Act in the circumstances of this matter. In any event, when this issue was raised with the representative of the landlord at the outset of the hearing, the application for a termination order was withdrawn.
As the application for termination was withdrawn under s 55(1)(a) of the Civil and Administrative Tribunal Act 2013, the only order sought in the proceedings was an order under Section 187 of the RT Act that the tenant remove the shutters.
[3]
Landlord's Evidence and Submissions
The landlord's evidence and submissions can be summarised as follows:
1. The tenant did not seek written consent before installing the shutters;
2. The landlord only became aware that the shutters had been installed in 2015;
3. When the landlord became aware the shutters had been installed, the landlord directed the tenant to remove the shutters;
4. The local Council had inspected the property. Mr Daniels is the relevant representative of the Council who conducted the inspection. The Council wrote to the landlord on 15 April 2016 directing that the shutters be removed;
5. The shutters are a health and safety risk to the tenant, by reason of not allowing sufficient light and ventilation; and impeding the tenant escaping the property and emergency services entering the property if there is a fire.
6. The landlord submitted that there was a clear breach by the tenant of cl 25.1 of the written residential tenancy agreement commencing on 3 February 2012 and s 66 of the RT Act, because the tenant did not obtain written consent of the landlord before altering the property. The landlord submitted that the breach was a "continuing breach" because the tenant had been instructed by the landlord to remove the shutters, and had not done so. The landlord submitted that the proceedings had been brought within the limitation period in reg 22 of the Residential Tenancies Regulation 2010 because the breach was the tenant's failure to remove the shutters, and this was an ongoing breach.
7. The landlord submitted in the alternative, that if the landlord was outside the limitation period under reg 22 of the Residential Tenancies Regulation 2010, the Tribunal should extend the limitation period pursuant to s 41 of the Civil and Administrative Tribunal Act 2013. The landlord submitted that it had written to the tenant asking the tenant to remove the shutters, and there had been no delay in taking proceedings in the Tribunal. Further, the landlord argued that there was no prejudice to the tenant, because the landlord was not seeking a termination order in these proceedings.
8. The landlord submitted that the dismissal of the previous proceedings did not make any findings on the merits of the dispute, and was a dismissal due to non-attendance at the hearing. The landlord argued it was not prevented by reason of that dismissal taking action to seek the tenant remove the shutters, as that was not an order sought in the earlier proceedings in any event (the only order being sought in those proceedings being a termination order for breach of s 87 of the RT Act). The landlord submitted it had not waived its right to take proceedings, nor was it estopped under the principle of Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589 from taking proceedings in the Tribunal seeking an order that the tenant remove the shutters.
[4]
Tenant's Evidence and Submissions
The tenant's evidence and submissions can be summarised as follows:
1. The tenant installed the shutters in 2013. The tenant accepted that he did not have the written consent of the landlord before installing the shutters;
2. The reason the tenant installed the shutters was due to "privacy". The tenant stated that, prior to the shutters being installed, there were curtains in the windows. The tenant stated that the curtains became "sun damaged" and he wanted shutters. Rather than replacing curtains, the tenant constructed his own shutters. The tenant made the shutters himself using strips of scrap metal and attached them to the premises;
3. According to the tenant, the shutters improved the ventilation and amenity of the house;
4. The tenant did not accept that the shutters increased any risk to him if there was an emergency, such as a fire. The tenant asserted that he could "easily" push out the bottom of the shutters, and emergency services could "easily" remove the shutters from the outside trying to get in;
5. The tenant disputed that Mr Daniels was an "expert";
6. The tenant stated that in August 2015 a technical officer from the landlord's Miranda office, Mr Alex Veldhoen, attended the property and inspected the shutters. According to the tenant, Mr Veldhoen had "no problem" with the shutters, and said that if anyone from the landlord raised the issue of the shutters "Get them to call me";
7. The tenant submitted that the landlord could not seek orders against him because the proceedings had been previously dismissed "twice before".
[5]
Documents of Each Party
The documents of the landlord include emails between the landlord and the tenant for the period between 15 October 2015 and 19 October 2015. On 15 October 2015 the landlord emailed the tenant directing that times be removed from the property including "metal sheets…from the windows" within 7 days or the landlord would issue a termination notice. An email on 16 October 2015 states that the tenant is in "serious breach" of the residential tenancy agreement by reason of the condition of the property, and the landlord will issue a notice to terminate if the property care issues are not addressed by 26 October 2016.
The landlord's documents also include an internal email from Ms Putra to Ms Walker and Ms Hile dated 19 October 2015. Relevantly, it refers to a telephone call from the tenant, who told the landlord to "reconsider" issuing a notice to terminate because he had "verbal approval" from Mr Veldhoen. The email of Ms Putra states: "Alex stated that he had never given approval for any unauthorised fixtures". On 19 October 2015 Ms Purta emailed the tenant relevantly stating "Mr Alex Veldhoen is our Technical Officer from Land and Housing Corporation told me that you have to remove all unauthorised fixtures (as per our previous letter/emails). He told me that he has never given you any approval form metal sheets, chicken coop etc. My senior officer will issue a Notice of Termination before the end of the month".
The letter from Mr Daniels of Hurstville City Council (as it then was) to the landlord dated 15 April 2016 states that there was an inspection carried out by Council officers of the property on 15 April 2015. The letter states: "The inspection revealed door and window openings to be covered in metal structures not allowing for the provision of light and ventilation in accordance with cll 3.84 and 3.85 of the Building Code of Australia. The current configuration of the building presents a health risk to its occupants. Council requires all metal structures covering windows and door openings to be removed within seven (7) days from the date of this letter. Failing which, Council will consider all legal avenues available so as to rectify the matter."
By way of letter dated 22 June 2016, Mr Daniels wrote to the landlord. Hurstville City Council is now Georges River Council. Mr Daniels remains a District Building Surveyor employed by the Council. Mr Daniels states that he attended the premises on 22 June 2016 and that "the metal structures covering the windows have yet to be removed". Mr Daniels again states the shutters "do not allow natural light and ventilation into the dwelling as such do not comply with Part 3.8.4.2 (Natural Light) and 3.8.5.2 (Ventilation Requirements) of the Building Code of Australia 2016 Volume 2".
The tenant's documents (filed in the earlier proceedings) included a letter from the tenant to the landlord dated 24 August 2015. That letter is a handwritten document. The letter seeks permission for the tenant to install a "small metal shed" next to the bedroom window to house a "wood fire oven" for "cooking" and to "keep warm" and another "small metal shed" to "keep a few birds". The letter makes no reference to the metal shutters he had installed at the property.
[6]
Relevant Legal Principles
Section 66 of the RT Act relevantly provides:
66 Tenant must not make alterations to premises without consent
(1) A tenant must not, without the landlord's written consent or unless the residential tenancy agreement otherwise permits, install or cause to be installed a fixture or make or cause to be made any renovation, alteration or addition to the residential premises.
(2) A landlord must not unreasonably withhold consent to a fixture, or to an alteration, addition or renovation that is of a minor nature.
(3) A landlord may withhold consent to any other action by the tenant that is permitted under this section, whether or not it is reasonable to do so.
(4) A fixture installed by, or on behalf of the tenant, or any renovation, alteration or addition to the residential premises by or on behalf of the tenant, is to be at the cost of the tenant, unless the landlord otherwise agrees.
(5) This section is a term of every residential tenancy agreement.
Clause 25 of the written residential tenancy agreement between the parties is relevantly in the same terms as s 66 of the RT Act.
Under s 187 of the RT Act, the Tribunal has the power to make orders "on application be a landlord or a tenant or other person under this Act" including "an order that requires an action in performance of a residential tenancy agreement (Section 187(1)(b) of the RT Act) and "an order that a party to a residential tenancy agreement perform such work or take such other steps as the order specifies to remedy a breach of the agreement" (Section 187(1)(e) of the RT Act). Under Section 190(1) of the RT Act, a landlord or tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement "within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations".
Regulation 22 of the Residential Tenancies Regulation 2010 sets out the relevant limitation periods in respect of the RT Act. Under reg 22(9) of the Residential Tenancies Regulation 2010, for the purpose of Section 190(1) of the RT Act, the "prescribed period for making an application for an order in relation to a breach of a residential tenancy agreement or proposed agreement is within 3 months after the applicant becomes aware of the breach".
Under Section 41 of the Civil and Administrative Tribunal Act 2013, the Tribunal has the power to extend limitation periods. The relevant principles for whether or not a limitation period should be extended are set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. The relevant criteria to be considered are:
1. The length of the delay;
2. The reasons for the delay;
3. Whether the party seeking the extension has a reasonably arguable case;
4. The extent of prejudice to the other party.
[7]
Jurisdiction
It is clear there is a residential tenancy agreement between the parties, and the Tribunal has jurisdiction in this matter, subject to the issues discussed below. There is also no dispute that the tenant did not have written consent of the landlord prior to installing the metal shutters. This clearly contravenes s 66 of the RT Act and cl 25.1 of the written residential tenancy agreement, which is in the same terms as s 66 of the RT Act.
[8]
Limitation Period
The original breach by the tenant is the installation of metal shutters. From the photographic evidence, the shutters are fixed to the window frames of the premises, and do not merely rest on their own weight. The Tribunal is satisfied on the evidence that they are "fixtures" (May v Ceedive Pty Ltd [2006] NSWCA 369 at [65]-[66]). Even if they are not fixtures, the shutters are clearly an "alteration" or "addition" to the premises, as they are physical items that alter the external appearance of the window and door frames, and affect the entry of light into the premises. The tenant required written consent before installing the shutters, in accordance with s 66 of the RT Act and cl 25.1 of the written residential tenancy agreement.
The original breach by the tenant of s 66 of the RT Act occurred when he installed the shutters without written consent of the landlord. The shutters were installed in 2013; the landlord became aware of the shutters in August 2013; and the landlord directed the tenant to remove the shutters in October 2013. However, it is not merely the tenant's installation of the shutters without written consent which is in breach of the residential tenancy agreement. It is also the tenant's failure to comply with the notice of the landlord to remove the shutters, so that the property is in the same condition that it was originally rented by the tenant. By continuing to fail to remove the shutters and restore the property to its original condition, the tenant's breach is ongoing. As the tenant's breach is ongoing, the Tribunal is satisfied the proceedings were commenced within the limitation period in reg 22(9) of the Residential Tenancies Regulation 2010.
If the above analysis of the limitation period is incorrect and the limitation period commenced to run in August 2015, the Tribunal is satisfied that the limitation period should be extended under s 41 of the Civil and Administrative Tribunal Act 2010 to 27 May 2016 in any event.
Proceedings in this matter were commenced on 27 May 2016, approximately 6 months after the landlord became aware the tenant had erected the shutters. However, the landlord had not delayed in taking proceedings against the tenant. The landlord had given the tenant written notice that the tenant must remove the shutters, or the landlord would seek termination of the tenancy. The landlord previously filed proceedings in the Tribunal seeking termination. Ultimately, those proceedings were dismissed by reason of the landlord failing to attend the hearing. The landlord sought to re-instate the termination proceedings.
Although the landlord was unsuccessful in having the termination proceedings re-instated, it is clear that the landlord was continuing to take action in the Tribunal regarding the issue of the shutters having been installed by the tenant without written consent. The current proceedings were filed approximately 9 weeks after the re-instatement application of the earlier proceedings failed.
In my view, the length of the delay in commencing these proceedings is not unreasonable. The reason for the delay is that the landlord had taken earlier termination proceedings. The landlord has continued to agitate the issue of the tenant having installed the shutters without written consent before the Tribunal, and it is not unreasonable that the landlord awaited the decision whether or not to re-instate the termination proceedings before filing this application in the Tribunal. There is no prejudice to the tenant by reason of the extension of the limitation period, in circumstances where the landlord has given written notice to the tenant to remove the shutters; the tenant continues to refuse to remove the shutters; and the landlord is not seeking a termination order in these proceedings.
[9]
Is the Landlord Prevented from Seeking a Rectification Order in These Proceedings?
The tenant argues that the Tribunal cannot make an order that he remove the shutters, because the proceedings had been dismissed "twice previously". In essence, the argument of the tenant is based on the principles of res judicata and issue estoppel enunciated by the High Court in Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589. Those principles have recently been considered by the Appeal Panel of the Tribunal in Pearson v Clark [2016] NSWCATAP 134.
The Tribunal is not satisfied the landlord is prevented from seeking an order under s 187 of the RT Act by reason of the dismissal of the earlier proceedings. Although the parties to the proceedings are the same, the landlord was raising a different cause of action in the earlier proceedings (seeking to terminate the tenancy under s 87 of the RT Act rather than an order that the property be restored to its condition prior to the shutters being installed by the tenant). The Tribunal made no findings on the facts or the merits in the earlier proceedings; they were dismissed solely on the basis of the landlord's non-appearance at the hearing. Any order that the Tribunal makes in these proceedings that the shutters be removed is not inconsistent with the previous orders that the application for termination be dismissed for non-appearance of the landlord, and the refusal to re-instate those proceedings.
[10]
Application of Law to Facts
The Tribunal is satisfied that the tenant has installed the shutters without written consent of the landlord, and has continued to refuse to remove the shutters. Such actions constitute a breach of s 66 of the RT Act, and the residential tenancy agreement.
The Tribunal is satisfied that the appropriate order under s 187 of the RT Act is to remove the shutters and put the property back in the condition it was when the tenancy commenced in February 2012.
The tenant asserts that Mr Veldhoen gave him "oral permission" to retain the shutters at an inspection in August 2015. However, the salient issue is not whether Mr Veldhoen gave oral permission to retain the shutters. The salient issue is that the tenant installed the shutters without obtaining prior written consent of the landlord. The contemporaneous emails of the landlord in October 2015 indicate that Mr Veldhoen did not give "oral permission". The actions of the landlord made clear from October 2015 onwards that it did not consent to the tenant having installed the shutters, and has unambiguously sought that the tenant remove the shutters.
The Tribunal is not satisfied that any Jones v Dunkel (1959) 101 CLR 298 inference should be drawn from the landlord's failure to call evidence from Mr Veldhoen. Under the principle of Jones v Dunkel, if a party fails to call evidence from a witness it would reasonably have been expected would have been called, an inference can be drawn that the evidence of that witness would not have assisted the party who did not call the witness. An inference under Jones v Dunkel does not extend to the drawing of an inference that the evidence of the witness would have been adverse to a party. According to Ms Hook, she was "unaware" Mr Veldhoen had inspected the property, and no statement had been obtained from him.
Rules of evidence do not apply in the Tribunal (Section 38(2) of the Civil and Administrative Tribunal Act 2013) but evidentiary principles are relevant to the conduct of hearings in the Tribunal. However, accepting the operation of the principle of Jones v Dunkel in the Tribunal, the Tribunal does not draw an inference that Mr Veldhoen's evidence would not have assisted the landlord because there was no reasonable expectation the landlord would call him to give evidence.
Even if Mr Veldhoen had orally approved the shutters after they have been installed (as the tenant asserts), the original breach by the tenant is that he installed the shutters without the written consent of the landlord. Section 66 of the RT Act refers to "written consent", not oral consent, and such written consent must be obtained before the fixture, alteration, or addition to the property is made. What Mr Veldhoen may, or may not, have orally said to the tenant is irrelevant to the fact that the tenant required written consent from the landlord prior to installing the shutters. The landlord has never given its written consent to the shutters being installed, and has given written notice to the tenant the shutters be removed.
The Tribunal is satisfied it is appropriate the Tribunal make an order under s 187 of the RT Act that the tenant remove the shutters. The correspondence from the Council makes clear that the shutters are a health and safety issue, and that the Council may take legal action against the landlord if the shutters are not removed. There is clear prejudice to the landlord if the shutters are not removed, because the landlord faces the potential that the Council will take legal action against it. In circumstances where the shutters were not in place at the commencement of the tenancy; the landlord has given written notice to the tenant to remove the shutters; and the landlord may face action from the local Council if the shutters are not removed, the appropriate order is that the tenant remove the shutters.
Further, the correspondence from the Council states that the shutters are a "health risk". The correspondence from Mr Daniels is that the shutters significantly reduce light and ventilation in the premises. The risk to the tenant's health by reason of the reduction of light and ventilation is a sufficient basis to direct the tenant to rectify his breach of the residential tenancy agreement and s 66 of the RT Act by removing the shutters.
Further, although no reference is made in the correspondence to the risk of fire or other emergency, the photographs of the shutters show locking devices (which appear to be bolt locks) on the upper sections of the shutters. The shutters may not only make it more difficult for the tenant to get out of the property if there is an emergency, it may make it more difficult for emergency services to locate him and to enter the property.
The tenant asserts that it would be "very easy" for him to get out of the property in an emergency, and for emergency services to get in. However, the shutters are self-designed by the tenant. There is no evidence they comply with Australian Standards, and no evidence from an expert engaged by the tenant that they do not affect the safety of the premises.
The tenant submits that Mr Daniels is "not an expert" and cites the provisions of the Uniform Civil Procedure Rules 2005 in respect of expert evidence. The Uniform Civil Procedure Rules 2005 do not apply in the Tribunal. The Tribunal is satisfied that Mr Daniels is a District Building Surveyor employed by the local Council, and has inspected the property on 2 occasions. The Tribunal is satisfied that it is the opinion of Mr Daniels that the shutters are a risk to health and safety, and that they do not comply with the Building Code of Australia. As a District Building Surveyor employed by the Council, the Tribunal is satisfied Mr Daniel's is appropriately qualified to express that view. The tenant has provided no evidence from an expert that the shutters comply with the Building Code of Australia, or are not a risk to health and safety. Further, the Tribunal is satisfied that the Council may take legal action against the landlord if the shutters are not removed.
[11]
The Doctrine of Waiver
The Tribunal is not satisfied that the landlord has waived its right to seek an order that the tenant remove the shutters. The doctrine of waiver arises in circumstances where a party acts deliberately in a manner that is inconsistent with its legal rights or expressly or impliedly leading the other party to reasonably believe the former's legal rights will not be enforced (Commonwealth v Verwayen (1990) 170 CLR 394). In this matter, the landlord has acted in a manner, since becoming aware of the shutters, in a manner consistent with the landlord insisting that the shutters be removed, not in a manner consistent with it allowing the tenant to keep the shutters (St George Community Housing v El-Nachar [2013] NSWCTTT 184). The Tribunal is not satisfied the landlord is prevented from bringing the proceedings by reason of the doctrine of waiver.
[12]
Conclusion
The Tribunal is satisfied that the tenant has breached cl 25.1 of the residential tenancy agreement and s 66 of the RT Act by installing the shutters without prior written consent of the landlord. The Tribunal is satisfied that the appropriate order to remedy the breach is that the tenant be directed to remove the shutters pursuant to s 187(1)(b) and (e) of the RT Act. A reasonable period for the tenant to remove the shutters is 14 days from the date of this decision.
G J Sarginson
General Member
Civil and Administrative Tribunal of New South Wales
10 August 2016
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 22 September 2016