Quader v Nguyen

Background

1. The first instance proceedings and this appeal relate to a house in Bankstown that was the subject of a residential tenancy agreement commencing on 10 December 2020 with a weekly rent of $800, the appellants being the tenants and the respondent the landlord.

Tribunal proceedings and decision

1. The appellants' application, which lodged on 6 October 2021, sought: 1. compensation of $171 per month for the additional internet charge due to the lack of NBN at the premises, relying on s 187(1)(d) of the Residential Tenancies Act 2010 (NSW) (RTA); 2. an order that the rent payable was excessive due to a reduction or withdrawal of services, relying on s 44(1)(b) of the RTA; 3. an order for the repayment of rent paid above the amount specified by the Tribunal, relying on s 46 of the RTA; 4. an order that the landlord carry out repairs, relying on s 65 of the RTA; 5. an order requiring a copy of a key or other opening device be provided to the tenant, relying on s 73(c) of the RTA.
2. The hearing was conducted on 21 December 2021. The Tribunal's reasons for decision were delivered orally at the conclusion of the hearing and, in response to a request from the appellants, were subsequently published in writing on 25 January 2022. The Tribunal determined that the appellants were: 1. entitled to a rent reduction of $50 per month for 12 months (ie $600) for there being no NBN or broadband service; 2. entitled to a rent reduction of $20 per month for 12 months (Ie $240) for there being no telephone or television antenna; 3. entitled to compensation of $50 for the back patio fan not working during their tenancy; and 4. not entitled to any rent reduction in respect of a claim that the driveway was unusable.
3. A work order was also made for the respondent to replace that back patio fan, but that order was not challenged in this appeal.

Scope and nature of internal appeals

1. Internal appeals may be made as of right on a question of law, and otherwise with leave, that is, with the permission of the Appeal Panel: s 80(2)(b) of the NCAT Act.
2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. whether there has been a failure to provide proper reasons; 2. whether the Tribunal identified the wrong issue or asked the wrong question; 3. whether a wrong principle of law had been applied; 4. whether there was a failure to afford procedural fairness; 5. whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. whether the Tribunal took into account an irrelevant consideration; 7. whether there was no evidence to support a finding of fact; and 8. whether the decision is so unreasonable that no reasonable decision-maker would make it.
3. An error of law will also occur where there is a material failure by the Tribunal to respond to a "substantial, clearly articulated argument relying upon established facts" may be characterised either as a failure to afford natural justice or as a constructive failure to exercise jurisdiction: Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 at [24]- [25] (Gummow and Callinan JJ; Hayne J agreeing at [95]); DVE18 v Minister for Home Affairs (2020) 276 FCR 401; [2020] FCAFC 83 at [34]; followed by the Appeal Panel in Goncalves v Bora Developments Pty Ltd [2021] NSWCATAP 231 at [9(2)].
4. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Sch 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: (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).
5. In Collins v Urban [2014] NSWCATAP 17 (Collins), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 may have been suffered where: "… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance."
6. In Collins, the Appeal Panel at [77], without seeking to be exhaustive in any way, stated the authorities establish that: 1. if there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" within cl 12(1)(a) of Sch 4 of the NCAT Act; 2. the decision under appeal can be said to be "against the weight of evidence" within cl 12(1)(b) of Sch 4 of the NCAT Act where the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach.
7. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act.
8. In Collins, the Appeal Panel stated at [84(2)] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: "(a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed."

Submissions and evidence

1. In deciding the appeal, we have had regard to the Notice of Appeal lodged on 8 February 2022 and the appellants' submissions filed on 6 April 2022. The respondent has not filed either a reply to the appeal or written submissions.

Notice of Appeal

1. The Notice of Appeal was lodged on 8 February 2022, which is within the 14-day period specified in r 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW) since the written reasons for the orders made on 21 December 2021 were not provided until 25 January 2022.

Grounds of Appeal

1. The grounds of appeal specified in the Notice of Appeal were expressed as follows and it is convenient to subsequently refers to those matters as grounds 1 to 5: "- The Tribunal Member failed to consider the overwhelming evidence provided by the appellant, including but not limited to, the severe undue financial hardship placed upon the appellant, the fabrications and mistruths provided by the respondent, and comparative rental prices. - The Member's written reasons for the decisions made are not consistent with the evidence provided on multiple grounds. One such example is her statement that the appellant "did not do anything to mitigate their loss" which is untrue. The evidence showed that the appellant exhausted all options available to minimize losses. - The Member should have excused the respondent's representative, as they failed to provide a Tenancy Management Agreement. This document was specifically requested by the previous Tribunal Member to ensure the representative was legally entitled to attend the hearings and provide oral evidence. The respondent also failed to submit any evidence to the Tribunal which the member ignored, even though the appellant made every effort to ensure their evidence reached the Tribunal on time. - The Member did not consider that the respondents current representatives were not involved in any way with the original tenancy and the issues, therefore they have no first hand knowledge of any dealings. - The Member failed to consider the far ranging financial and mental impacts of the issues presented as the rent reduction she ordered amount to just $17.5 per week."
2. The order which the appellants sought in the Notice of Appeal was that the rent reduction be assessed at $200 per week, that the respondent be ordered to pay them $12,000, and that a rent reduction of $200 per week apply until either the services are provided or they vacate the subject property.
3. The appellants also sought leave to appeal on the basis that the decision was not fair and equitable, and that the decision was against the weight of the evidence.

Relevant law

1. Section 44 of the RTA relevantly provides: 44 Tenant's remedies for excessive rent (1) Excessive rent orders The Tribunal may, on the application of a tenant, make any of the following orders - … (b) an order that rent payable under an existing or proposed residential tenancy agreement is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises and that, from a specified day, the rent for residential premises must not exceed a specified amount. … (3) Applications on withdrawal of goods or services A tenant may, before the end of a tenancy, make an application that the rent is excessive, having regard to the reduction or withdrawal of any goods, services or facilities provided with the residential premises, even if those goods, services or facilities were provided under a separate or a previous contract, agreement or arrangement. … (5) The Tribunal may have regard to the following in determining whether a rent increase or rent is excessive - (a) the general market level of rents for comparable premises in the locality or a similar locality, (b) the landlord's outgoings under the residential tenancy agreement or proposed agreement, (c) any fittings, appliances or other goods, services or facilities provided with the residential premises, (d) the state of repair of the residential premises, (e) the accommodation and amenities provided in the residential premises, (f) any work done to the residential premises by or on behalf of the tenant, (g) when the last increase occurred, (h) any other matter it considers relevant (other than the income of the tenant or the tenant's ability to afford the rent increase or rent). (6) Effect of excessive rent order An order by the Tribunal specifying a maximum amount of rent - (a) has effect for the period (of not more than 12 months) specified by the Tribunal, and (b) binds only the landlord and tenant under the residential tenancy agreement or proposed residential tenancy agreement under which the rent is payable. …
2. The appellants' application also relied on s 187(1)(d) of the RTA which grants the Tribunal the power to award compensation.

Appellants' submissions

1. Mr Quader began by observing that the amount awarded was equivalent to about $17 per week or about one week's rent and that the total rent paid had been in the vicinity of $50,000. He then referred to aspects of the transcript from the hearing and the reasons subsequently delivered in support of his contention that the amount awarded should have been higher, the amount for which he contended, both at first instance and in this appeal, being $200 for each week of the tenancy.
2. In addition to the absence of any NBN connection and the consequences of that, submissions were made in relation to the suggestion there had been a failure to mitigate loss. The decision in relation to the driveway was also challenged and it was contended that the amount of $20 per month for the lack of phone line and television was too low.
3. There was also a submission that the Tribunal had erred in only ordering the fan to be fixed and not the other matters, such as the lack of NBN connection.
4. Mr Quader agreed that the appellants' case could be summarised as (1) the claim for compensation for the additional internet cost was not dealt with, and (2) the amount awarded for rent reduction was too low.

Respondent's submissions

1. Ms Nguyen submitted that the appellants could have used another service provider and that they could have terminated the lease. She noted that the lack of a telephone connection and television antenna had been included in the amount determined at first instance. In relation to the driveway, she suggested a comparison between the subject driveway and the next door driveway and submitted that the driveway had been approved by the local council. She conceded that the claim for compensation had not been considered but suggested that the orders made by the Tribunal were fair.

Submissions in reply

1. Mr Quader said there was no evidence that another service provider could be used for the NBN connection, that evidence had been provided that a 5G connection was not possible, and that there was no evidence in relation to the matters raised by Ms Nguyen in relation to the driveway. He also referred to matters relating to compliance with the orders made by the Tribunal on 21 December 2021.

Consideration

1. The appellants lodged additional documents by email at 6.53pm on the evening before the hearing of the appeal. There are three reasons why we have excluded those documents from consideration. First, since it would be procedurally unfair to allow the appellants to rely on documents which have not been provided to the respondent. Secondly, since they were filed well after the time set by the Appeal Panel at a directions hearing on 25 February 2022 for the lodgement of the documents upon which the appellants wished to rely, namely 1 April 2022. Thirdly, since they did not go to the issues in the appeal other than providing a copy of the reasons for the first instance decision which had already been provided.
2. The respondent lodged documents by express post, said to have been received at the Tribunal's post office box on the last working day prior to the hearing. While those documents may have been lodged on 15 April 2022, which was the last day for compliance that was set, those documents were not received by us prior to the hearing. Further, the documents had not been before the Tribunal at first instance.
3. Since an appeal is not a re-hearing of the application, even if those documents were available to us, they could not be considered. The first two pages of those documents were said to be the Reply to Appeal but, as an opportunity was provided for the respondent to make oral submissions during the hearing of the appeal, there is no detriment arising from the absence of the Reply to Appeal as it was open to Ms Nguyen to make the same submissions orally.
4. It is convenient to consider the subject matter of this appeal topic by topic.

Absence of NBN connection

1. In the application, the first order sought was for compensation and the first paragraph under the heading "Reasons for the Order/s" set out the basis of that claim was being the additional internet cost of $171 per month. It is clear that claim for compensation was not considered and that there was supporting evidence for that amount to which there does not appear to have been any challenge. The failure to consider that claim amounts to an error law.
2. When determining a claim for compensation, such as a claim for compensation under a residential tenancy agreement, the assessment of the amount payable must be determined by reference to the fundamental principle that the party affected by the breach should be put in the same position as if the breach had not occurred. That was made clear by the High Court in Haines v Bendall (1991) 172 CLR 60 at 63; [1991] HCA 15 (Haines) where it was said: "The settled principle governing the assessment of compensatory damages … is that the injured party should receive compensation in a sum which, so far as money can do, will put that party in the same position as he or she would have been in if the contract had been performed …"
3. As the tenancy commenced on 10 December 2020, when that claim was considered at the hearing on 21 December 2021 a period of 12 months and 11 days had elapsed. Using the rate of $171 per month, an amount of $2,112.68 should have been determined. That is an amount assessed for the direct loss resulting from the absence of any NBN connection and it is noted that is equivalent to about $40 per week.
4. However, the appellants' claim for compensation, both at the 21 December 2021 hearing and in the appeal, went beyond that cost to include a claim for loss of income. That is not a claim for direct loss: it is a claim for consequential loss.
5. The principles relating to when a consequential loss can be recovered are well-established, by the rule in Hadley v Baxendale (1854) 9 Ex 341, which set out two tests, either of which needed to be satisfied for there to be an entitlement to recover. The first test is whether the damages claimed may fairly and reasonably be considered as arising naturally, in the usual course of things, from the breach. The second test is satisfied when the subject damage "may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it."
6. As to the first test, we are not satisfied that loss of income can reasonably be considered to arise naturally, in the usual course of things, from the lack of an NBN connection, especially when there are alternative means of obtaining internet access. As to the second test, there was no evidence that Mr Quader's income or dependency upon an NBN internet connection was either disclosed or discussed at the time when the tenancy agreement was made and there is no basis for a finding that it can reasonably be supposed to have been in the contemplation of both parties at that time.
7. Accordingly, we do not consider Mr Quader's loss of income was recoverable as compensation with the result that its non-inclusion at first instance did not involve any error.
8. We are of the view that, in relation to the claim based on the lack of an NBN connection, an amount of $2,112.68 should have been allowed as compensation. First, that amount represents the application of the basic principle set out in Haines. Secondly, that is the primary basis on which the appellants made that claim. Thirdly, that amount can be objectively determined and does not require any subjective assessment, such as by reference to comparative rentals which may differ in amount for a variety of reasons. It is thus not necessary to consider a rent reduction (under s 44(1)(b) of the RTA) for the lack of an NBN connection as any such claim would overlap the claim for compensation (under s 187(1)(d) of the RTA) and to do so would be to order the respondent to pay the appellants twice for the same loss.

Driveway

1. Having reviewed the evidence and submissions in relation to the claim that the driveway was so steep that the appellants were unable to use it, including the two statutory declarations upon which the appellants relied, we do not see any error of law has been established, bearing in mind that an appeal is not an occasion for a rehearing of the application but requires an identification of either an error of law or a matter which warrants leave to appeal being granted. That being the case, it remains to consider the amount allowed by way of rent reduction.

Lack of telephone connection and television antenna

1. In an age when the use of mobile phones is widespread, the lack of a telephone connection is of less significance. It is clear that these claims were considered and assessed at first instance. They are claims of a kind that would lead different people to assess different amounts. It is not a matter for us to substitute an amount we consider appropriate as to do that would be to conduct a rehearing. The question is whether there was an error of law in what was done at first instance and we are unable to see any such error. Accordingly, the amount of $240 that was awarded in relation to these claims is confirmed.

Back patio fan not working

1. Again, we have been unable to find any error of law or other reason why the amount awarded for this item should be varied. Hence, the amount of $50 that was awarded at first instance is confirmed.

The repair order

1. During the appeal, a submission was made that the repair order only covered the back patio fan and not any other matter, such as the NBN connection, the telephone connection and the television antenna. There are two reasons why we consider those matters were correctly not included. First, the application only sought an order under s 65 of the RTA in relation to the back patio fan. Secondly, s 65 only deals with repairs and thus only relates to the rectification of what is present: not to the addition of what is absent. In other words, s 65 provides a power to make an order for an amendment or alteration and not an addition.

Ground 1

1. The first of the five grounds of appeal raised the appellants' evidence of financial hardship, the conduct of the respondent, and comparative rental prices. If the reference to financial hardship is to the loss of income of Mr Quader, we have already explained why that is not recoverable. As to the conduct of the respondent, it is that conduct which provides the basis for compensation. While s 44(5) of the RTA renders comparative rental prices a relevant consideration when determining any rent reduction, for the reasons indicted above, the Tribunal considers the absence of an NBN connection should be considered as a claim for compensation under s 187 of the RTA.

Ground 2

1. This ground complained that the decision at first instance suggested the appellants failed to mitigate their loss. The Tribunal accepts that the appellants took action to mitigate their loss by incurring additional internet charges which have been considered when assessing the compensation to which we consider the appellants are entitled.

Ground 3

1. The third ground was a complaint that the respondent failed to provide to provide the Tribunal with a copy of a Tenancy Management Agreement. It appears a copy of that document was provided to the appellants and to the Tribunal but did not reach the member prior to the hearing. This ground also complains that the respondent failed to submit any evidence but there is no obligation on a party to do so. This ground does not reveal any error of law.

Ground 4

1. This ground only refers to the respondent's representative and does not reveal any error of law.

Ground 5

1. The final ground was that there was a failure to consider the financial and mental impacts of the issues raised. As to the financial impacts, we have already indicated the reasons why any loss of income cannot be recovered. As to the mental impacts, we accept that the Tribunal has jurisdiction to award damages for mental distress: Torpey v Stewart [2021] NSWCATAP 248. However, having examined the statutory declaration and oral evidence of Mr Quader before the Tribunal, we do not consider that any claim was made for mental distress. Accordingly, we do not consider that the Tribunal made any error of law in failing to consider this issue.

Leave to appeal

1. It is also necessary to consider whether the appellant may have suffered a substantial miscarriage of justice because: first, the decision challenged in this appeal was not just and equitable; secondly, that decision was against the weight of the evidence. If either of those issues are resolved in favour of the appellant there is a third question of whether the discretion should be exercised to grant leave to appeal.
2. The matters raised in the Notice of Appeal in support of the contention that the decision was not just and equitable have been considered. We are not satisfied that the absence of an NBN connection warrants a rent reduction as high as $200 per week, being 25% of the rent payable and the amount that will be substituted for the $600 allowed at first instance, namely $2,112.68, is considered to be reasonable compensation.
3. Having considered the topic of the driveway, we have borne in mind the two statutory declarations provided by the appellants and, while we do not consider an expert report would be needed to establish this claim, we do not consider the rejection of this claim to have been either unfair or inequitable.
4. The evidence which it was suggested should have been given more weight was (1) the statutory declarations, (2) evidence of loss of income, (3) evidence of comparative rents, and (4) documents relating to the driveway.
5. Evidence of loss of income is not relevant since that claim cannot be maintained. The evidence of comparative rents in relation to the absence of an NBN connection would be relevant to a claim for rent reduction under s 44 of the RTA. However, that claim cannot be maintained as we have assessed compensation under s 187(1)(d) of the RTA for that claim.
6. Having considered the statutory declarations and the documents relating to the driveway, we are not satisfied that, weighing up the available evidence on this topic, that the outcome on this issue can be said to have been against the weight of the evidence.
7. Even if the appellant may have suffered a substantial miscarriage of justice because the decision could be said to have not been fair and equitable or if it could be said that the decision was against the weight of the evidence, we do not consider the discretion should be exercised to grant of leave to appeal. By reference to the categories suggested in Collins at [84(2)] quoted above, we are not persuaded that leave to appeal should be granted.

Conclusion

1. It is convenient to here to refer to two matters which we do not consider relevant to a determination of this appeal. First, to the extent that the respondent's submissions went to liability, they are not relevant in this appeal because the respondent has not lodged any appeal and the appellants have only raised the question of what amount should be awarded. Secondly, to the extent that the appellants made submissions in relation to compliance, such as late compliance, our concern in this appeal is whether the orders made should be confirmed, amended or set aside.
2. Taking the amount of $890 awarded at first instance, it is necessary to remove the amount of $600 that was awarded in relation to the lack of an NBN connection, giving the $290 that was awarded in respect of the other claims, and then add the compensation of $2,112.68 which we consider should have been allowed for the lack of an NBN connection. That gives a total amount of $2,402.68.

Orders

1. For the reasons indicated above, we make the following orders: 1. the appeal in relation to the award of $890.00 to the appellants is upheld; 2. order 1 made by the Tribunal on 21 December 2021 is varied by substituting the sum of $2,402.68 for the sum of $890.00 referred to in that order; 3. leave to appeal is refused.

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: 02 May 2022