Qin v Billings

Legislative scheme

1. The Boarding Houses Act regulates the delivery of services to residents of boarding houses. Section 3 sets out the object of the Act: The object of this Act is to establish an appropriate regulatory framework for the delivery of quality services to residents of registrable boarding houses, and for the promotion and protection of the wellbeing of such residents, by: (a) providing for a registration system for registrable boarding houses, and (b) providing for certain occupancy principles to be observed with respect to the provision of accommodation to residents of registrable boarding houses and for appropriate mechanisms for the enforcement of those principles, and (c) providing for the licensing and regulation of assisted boarding houses and their staff (including providing for service and accommodation standards at such boarding houses), and (d) promoting the sustainability of, and continuous improvements in, the provision of services at registrable boarding houses.
2. The legislative scheme is based on the "occupancy principles:" Boarding Houses Act, Sch 1. The principles relevant to these proceedings are principle 1 and principle 8: 1 State of premises A resident is entitled to live in premises that are: (a) reasonably clean, and (b) in a reasonable state of repair, and (c) reasonably secure. 8 Payment of security deposits (1) The proprietor may require and receive a security deposit from the resident or the resident's authorised representative only if: (a) the amount of the deposit does not exceed 2 weeks of occupancy fee under the occupancy agreement, and (b) the amount is payable on or after the day on which the resident (or the resident's authorised representative) enters the agreement. (2) Within 14 days after the end of the occupancy agreement, the proprietor must repay to the resident (or the resident's authorised representative) the amount of the security deposit less the amount necessary to cover the following: (a) the reasonable cost of repairs to, or the restoration of, the registrable boarding house or goods within the premises of the boarding house, as a result of damage (other than fair wear and tear) caused by the resident or an invitee of the resident, (b) any occupation fees or other charges owing and payable under the occupancy agreement or this Act, (c) the reasonable cost of cleaning any part of the premises occupied by the resident not left reasonably clean by the resident, having regard to the condition of that part of the premises at the commencement of the occupancy, (d) the reasonable cost of replacing locks or other security devices altered, removed or added by the resident without the consent of the proprietor, (e) any other amounts prescribed by the regulations. (3) The proprietor may retain the whole of the security deposit after the end of the occupancy agreement if the costs, fees or charges referred to in subclause (2) (a)-(e) are equal to, or exceed, the amount of the security deposit. (4) In this clause: "security deposit" means an amount of money (however described) paid or payable by the resident of a registrable boarding house or another person as security against: (a) any failure by the resident to comply with the terms of an occupancy agreement, or (b) any damage to the boarding house caused by the resident or an invitee of the resident, or (c) any other matter or thing prescribed by the regulations.
3. An "occupancy principles dispute" is a dispute between relevant parties about the application of the occupancy principles in relation to a resident or former resident of a registrable boarding house.
4. A resident or a proprietor may apply to the Tribunal for the resolution of an "occupancy principles dispute": s 32. A "relevant party" is defined in s 32(2): (2) A "relevant party" is: (a) a resident or former resident of a registrable boarding house (or an authorised representative of the resident or former resident), or (b) a proprietor or former proprietor of a registrable boarding house.
5. The Tribunal may make various orders in relation to occupancy principles disputes. Those relevant to these proceedings are set out in s 32(4): … (c) an order for the payment of an amount of money (including an order for the refund or repayment of some or all of an amount paid as an occupancy fee or security deposit), (d) an order as to compensation,

Tribunal's decision

1. In the reasons for decision, the Tribunal characterised the application as an application for orders pursuant to s 32 of the Boarding Houses Act for the refund of monies paid to a boarding house operator for a bond, rent, rebate of rent and other compensation.
2. The residents provided a report from a real estate agent stating, in part, that: "I inspected the above property today at Daniel's request. In my opinion the 2 bedrooms I inspected would not be of a suitable standard for renting in their present condition. The carpet in both are sub-standard but specially in the room nearer the kitchen presents a health risk and needs to be replaced. A strong damp smell is present in both bedrooms. While the common areas are in line with the style and age of home the bathroom does not offer adequate privacy. The bathroom door has a section missing and would not be in line with NSW rental conditions."
3. Photographs of the property and email correspondence between the parties were also in evidence. The proprietor provided evidence suggesting that the property was available to be rented to university students.
4. The Tribunal made the following finding in relation to the proprietor's evidence: "He provided documents that the premises were able to be utilised by university students, but no details of the process which enabled that. The documents provided by the Respondent showed he has little or no knowledge of the legislation he is operating under. He seemed to expect the NCAT to gather evidence on his behalf and contended on the basis of an alleged interview with the receptionist at the real estate agency of the agent who provided the report that either the agency did not know she was doing the report or that she was not qualified to do so."
5. In support of the observations about the proprietor's lack of knowledge of the legislation, the Tribunal found that the proprietor demanded four weeks occupancy fee as a security deposit, despite the fact that the statutory limit provided in Schedule 1, cl 8(a) is the equivalent of two weeks occupancy fee for a security deposit.
6. The Tribunal accepted the residents' evidence in relation to the condition of the premises and their attempts to remedy the situation.
7. The Tribunal joined the company to the proceedings because receipts for some of the monies paid were on the company's letterhead. The Tribunal ordered that Mr Qin and the company pay the residents a total of $8,900 made up of $4,800 being the refund of the security deposit, $3,600 refund of three weeks' occupancy fee for both residents and compensation of $500.
8. The Tribunal stated that it had queried the amount of the security deposit and that Mr Billings' evidence was that he and Mr Mendoza had paid $2,400 each.

Grounds of appeal on questions of law

1. Mr Qin may appeal as of right on any question of law: NCAT Act, s 80(2)(b). The two grounds of appeal on questions of law are that: 1. the Tribunal wrongly joined the company as a party to the proceedings and made orders against it when it had not been notified of the hearing; and 2. the Tribunal member was biased because he: 1. uncritically accepted the evidence of the residents including evidence about the amount that had been paid by way of security deposit, and placed little or no weight on the written evidence of Mr Qin; 2. characterised an email that Mr Qin had sent after the residents had moved out as a "death threat" and took that conduct into account in reaching his conclusion; and 3. refused Mr Qin's application for an adjournment.
2. At the hearing Mr Qin withdrew the ground of appeal relating to the refusal of an adjournment.

Joinder of company

1. The residents brought the proceedings against Mr Qin. The Tribunal joined the company because receipts for some of the money the residents had paid were on the company's letterhead.
2. Mr Qin has provided evidence to the Appeal Panel which confirms that he is, and was at the relevant time, the owner, and therefore the proprietor, of the boarding house. A "proprietor or former proprietor of a registrable boarding house" is one of the parties to an "occupancy principles dispute." A "proprietor" is defined in s 4 to mean: (a) in the case of premises that are leased-a tenant or sub-tenant who is entitled to immediate possession of the premises, or (b) in any other case-an owner of the premises.
3. Although one or more receipts were issued to the residents in the name of the company, the company is not the proprietor.
4. Section 44 of the NCAT Act gives the Tribunal power to join a person as a party to proceedings "if the Tribunal considers that the person should be joined as a party." While the discretion to join a person as a party is broad, it should not have been exercised in this case because the company has no potential liability in these proceedings. An "occupancy principles dispute" is a dispute between relevant parties about the application of the occupancy principles. The relevant parties are the proprietor of the boarding house and the residents. No-one else is liable in relation to an occupancy principles dispute. In these circumstances, the Appeal Panel finds that the Tribunal erred when it joined the company as a party to the proceedings and made an order for payment of money against it.

Principles

1. Bias may be actual or apprehended. In relation to actual bias, the Court of Appeal held in South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16, McColl JA (with whom Giles and Tobias JJA agreed) that: "A party asserting actual bias on the part of a decision maker carries a heavy onus. The allegation must be distinctly made and clearly proved. A finding of actual bias should not be made lightly."
2. The test for apprehended bias is whether a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial and unprejudiced mind to the resolution of the question the judge is required to decide : Ebner v Official Trustee in Bankruptcy [2000] HCA 63; (2000) 205 CLR 337 at [6]; Michael Wilson & Partners Limited v Nicholls [2011] HCA 48; (2011) 244 CLR 427 at [31].

Uncritical acceptance of residents' evidence

1. Mr Qin relied on transcript of the proceedings before the Tribunal in which the Member said: Member: Your total claim is … so it's the bond … the bond of $1,200. D Billings: $2,400 member: $2,400 for each person for bond D Billings: $1,200 for each person Member: for a bond. D Billings: Total of $2,400 Member: And the rent? D billings: Full refund of the rent $2,400 Member: yeah … ummm Member: did you pay 4 weeks in advance? … you did. D Billings: yes … Member; Now just to make sure we've got the right figures … so it's $2,400 twice. D Billings: For the bond $2,400 Member: 2 lots of rent at $1800 which is $3,600 D Billings: Correct. Member: I make that $8,9000, would you please check those figures, 48, 36 plus 5 hundred equals $8,900. D Billings: that sounds correct.
2. According to Mr Qin, Mr Billings did nothing to correct the Tribunal's mistaken understanding of the amounts that had been paid. Instead he waited six weeks and then enforced the decision.
3. Mr Billings told the Tribunal twice that the amount for the security deposit was $2,400. That was correct. Later, the Member said "… so it's $2,400 twice." Mr Billings again stated that it was $2,400. The only time Mr Billings agreed with an incorrect figure was when the Tribunal nominated the total as $8,900.
4. The issue is whether the Tribunal was biased, not whether Mr Billings misled the Tribunal. The fact that the Tribunal accepted Mr Billings' confirmation of the Tribunal's understanding of the total amount that had been paid does not amount to either actual or apprehended bias.

Characterisation of email as 'death threat'

1. Mr Qin wrote an email to Mr Billings on 17 September 2014 in which he said: "You broke our rules again. You agreed with our guideline but broke "5. Ask for permission before inviting anyone to the property." You also broke Australian laws. Please don't do it again, or you might be killed or caught by a policeman."
2. The Tribunal noted at [8] of the reasons for decision that: "The emails from the respondent included death threats (email 17 September 2014 - after the applicants had vacated the premises) and other material which did little to rebut any of the assertions of the applicants."
3. Mr Qin submitted that the Tribunal's characterisation of the email as a "death threat" meant the Tribunal was biased. The email is clearly a threat that Mr Billings "might be killed" if he breaks the rules again. The characterisation of that email as a death threat does not amount to actual or apprehended bias on the part of the Tribunal.

Other grounds of appeal

1. Mr Qin requires leave before he can appeal on any grounds other than a question of law.
2. In relation to appeals from the Consumer and Commercial Division, leave can only be granted in the limited circumstances set out in Schedule 4, cl 12: (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
3. The grounds of appeal on questions other than questions of law were that: 1. the Tribunal made an incorrect finding of fact that the residents had paid a total of $4,800 as a security deposit when in fact they had paid a total of $2,400; 2. the Tribunal's finding that a real estate agent expressed the opinion that the premises were substandard and uninhabitable was incorrect and against the weight of evidence; and 3. new evidence is now available that was not available at the time of the hearing, namely: 1. a statutory declaration from a previous resident concerning the condition of the premises; and 2. evidence that Mr Billings might not be a reliable witness based on the transcript.

Incorrect finding of fact

1. Both parties accept that the Tribunal made an incorrect finding of fact about the amounts that the residents had paid to the proprietor and consequently, about the amounts that the proprietor should have to re-pay. The occupancy fee was $300 a week for each resident. Each resident paid the equivalent of four weeks' occupancy fee as a security deposit. That is a total of $2,400, not $4,800. In addition, each resident paid four weeks occupancy fee in advance. That is a total of $2,400. The Tribunal decided that each resident should receive a full refund of the security deposit and a full refund of three weeks occupancy fee - $1800, not $3,600. The Tribunal also decided to give each tenant $250 as compensation for the week they lived on the premises. That is a total of $500. Consequently, instead of awarding $8,900, the Tribunal should have awarded a total of $4,700.
2. We give leave to appeal on the ground that the Tribunal made a significant error of fact in calculating the amount paid to Mr Qin by the residents and therefore in calculating the sum to be paid to them by Mr Qin. We find that, as a consequence, Mr Qin has suffered a substantial miscarriage of justice because the decision is not fair. We have therefore set aside the money order made by the Tribunal.

Finding of "uninhabitable"

1. The Tribunal said in the reasons that: "The applicants provided a report by a real estate agent who stated that the premises were substandard and uninhabitable, and confirmed the strong odour identified by the applicants."
2. The report in fact expressed the opinion that the two bedrooms "would not be of a suitable standard for renting in their present condition". The test to be applied under principle 1 of the occupancy principles is whether the premises are "reasonably clean" and "in a reasonable state of repair". Arguably, the Tribunal applied the wrong test by finding that the premises were "uninhabitable" but there is no miscarriage of justice because the evidence from the real estate agent supported a finding that the premises were not reasonably clean or in a reasonable state of repair. We refuse leave for Mr Qin to appeal on this ground.

New evidence

1. Mr Qin tendered a statutory declaration from a previous resident. We find that this is not significant new evidence which was not reasonably available at the time of the hearing before the Tribunal below: NCAT Act, Sch 4, cl 12(1)(c). For that reason leave to appeal on this ground is refused.
2. The other example of new evidence was said to be the transcript of the proceedings. According to Mr Qin the transcript suggests that Mr Billings might not be a reliable witness. We find that the transcript of the proceedings is not "significant new evidence which was not reasonably available at the time the hearing before the Tribunal below." For that reason leave to appeal on this ground is refused.

Conclusions on the grounds of appeal

1. We have found that the Tribunal wrongly joined the company as a respondent to the proceedings and made an error of fact in determining the amount paid by the residents to Mr Qin and therefore in determining the amount payable by Mr Qin to the residents. We have rejected Mr Qin's ground of appeal that the Tribunal was biased and that he may have suffered a substantial injustice because the Tribunal found that the premises were 'uninhabitable'. In addition, there is no significant new evidence that was not reasonably available at the time of the proceedings and which means that Mr Qin may have suffered a substantial miscarriage of justice.
2. In paragraph 37 above, we found that the amount of the money order should have been $4700.00. As Mr Qin is the proprietor, we order that he pay this sum to the residents within 21 days of the date of this decision.

Enforcement of the order against the company

1. The parties advised the Appeal Panel during the hearing that the residents had enforced the Tribunal's money order against the company on 26 December 2014 and that the company had paid $3,902.40 of the $8,900 to the residents.
2. While the company was made a party to the original proceedings before the Tribunal, it is not named as an appellant in the Notice of Appeal. However, Rule 29(b) of the Civil and Administrative Tribunal Rules 2014, provides that the parties to an internal appeal are "any person or body … who was a party to the proceedings before the Tribunal at first instance". As the company was joined as a party to the Tribunal proceedings, it is a party to the appeal.
3. We have found that the company should not have been joined as a respondent to the proceedings and should not have had a money order made against it. We therefore order the residents to refund the sum of $3,902.40 that has been recovered from the company within 14 days of the date of this decision.

Costs

1. Mr Qin applied for costs in the sum of $3,050.
2. Under s 60 of the Civil and Administrative Tribunal Act, the general rule is that parties pay their own costs. There must be "special circumstances" justifying an award of costs before the Appeal Panel will make a costs order. (1) Each party to proceedings in the Tribunal is to pay the party's own costs . (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs . (3) In determining whether there are special circumstances warranting an award of costs , the Tribunal may have regard to the following: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
3. The special circumstances are said to be that the Tribunal made an error when finding that the residents had paid a total of $4,800 as a security deposit when they had only paid a total of $2,400. It was submitted that that error was occasioned by Mr Billings agreeing to the incorrect amount in relation to the security deposit.
4. As the extract from the transcript reproduced above at [27] demonstrates, the error in relation to the amount of the security deposit was the Tribunal's error. Mr Billings repeatedly quoted the correct amount. By indicating that the total figure of $8,900 "sounds correct" he did not give the Tribunal false evidence or make any incorrect submissions to the Tribunal about the amount that he and the other resident had paid. There are no special circumstances warranting an award of costs against Mr Billings. The application for costs is therefore refused. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. 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: 04 June 2015