Raissis v Anaz

NCAT Appeal Panel|2018-11-06

REASONS FOR DECISION

In March 2017, Cetin Anaz entered into a residential tenancy agreement with landlord, Emanuel Raissis (the agreement). Twelve months later, Mr Anaz lodged an application with the NSW Civil and Administrative Tribunal (NCAT) seeking an order that Mr Raissis repay the $3000 he had paid to Mr Raissis as a bond. In July 2018, Mr Raissis made a cross-application to NCAT seeking an order that Mr Anaz pay to him $2000 as a "break lease fee". Mr Anaz has never occupied nor been given the keys to the premises the subject of the agreement (the subject premises).
Mr Raissis now appeals from a decision made by the Consumer and Commercial Division of NCAT that he pay to Mr Anaz the sum of $3,000 (the decision under appeal). The Tribunal found that by not giving possession of the subject premises to Mr Anaz, Mr Raissis repudiated the agreement. Mr Raissis contends that the Tribunal erred by finding that he had repudiated the agreement. He contends that by failing to pay to him two weeks rent in advance as required by the terms of the agreement, Mr Anaz repudiated the agreement.
For the reasons that follow we have decided to dismiss the appeal.

Ground 1: The Tribunal erred by revoking leave for Mr Raissis to be represented by his brother at the hearing on 5 September 2018

At a hearing on 11 July 2018, the Tribunal (Member Ziegler) made directions for the filing and service of documents and gave leave for Mr Raissis to be represented by his brother, Mr Spiro Raissis. At the final hearing on 5 September 2018, a differently constituted Tribunal (Member Campbell) revoked leave for Mr Raissis to be represented by his brother.
The starting point established by the NCAT Act is that a party to proceedings has the carriage of their own case and is not entitled to be represented by any person: s 45(1)(a). A party may be represented by another person only if the Tribunal grants leave for that person to represent the party: s 45(1)(b) of the NCAT Act.
The Civil and Administrative Tribunal Rules 2014 (the Rules) gives the Tribunal a discretionary power to revoke leave granted to a person to represent a party: 32 GRANTING AND REVOCATION OF LEAVE FOR A PERSON TO REPRESENT PARTY … (2) The Tribunal may revoke leave granted to a person to represent a party to proceedings only if the Tribunal is satisfied that: (a) the party no longer consents to the person representing the party, or (b) the person applied for leave to represent that party without the consent of the party, or (c) the person does not have the qualities referred to in sub rule (1) (a)(i) or (ii) to act as the party's representative, or (d) the party is, or has become, incapable of instructing the representative, or (e) any other grounds are present that the Tribunal considers sufficient to justify the revocation.
Mr Raissis contends that he was unfairly prejudiced by the Tribunal's decision to revoke leave. Expanding on this argument in oral submissions made at the hearing of the appeal, Mr Spiro Raissis asserted that he is more articulate and confident than his brother and has a better understanding of the matters that the Tribunal was required to decide. He submitted that therefore he was better placed to present his brother's case to the Tribunal. Mr Spiro Raissis points out that he and his brother are co-owners of the property the subject of the hearing.

Consideration

In certain circumstances, an error in the exercise of a discretion may give rise to a question of law. In House v The King [1936] HCA 40; (1936) 55 CLR 499 Dixon, Evatt and McTiernan JJ in a joint judgment stated at 505: If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
The discretion to revoke leave to a party to be represented by a person (other than an Australian legal practitioner) can only be exercised if the Tribunal is satisfied of at least one of the matters listed in paragraph (a) to (e) of sub-rule 32(2) of the Rules.
The Tribunal did not give reasons for its decision to revoke leave. Nor was it requested to do so. On the available material it could not be inferred that the Tribunal failed to address whether any of the pre-conditions to the exercise of the power to revoke leave had been satisfied before exercising the power to revoke leave.
Nor in our view could it be said that the decision was "unreasonable or plainly unjust". At the hearing the Tribunal asked Mr Raissis whether he was able to represent himself. Mr Raissis replied "yes" but stated that he and his brother were co-owners of the subject property. Mr Raissis did not claim nor suggest that he was unable to represent himself or that he was likely to be materially disadvantaged if the Tribunal revoked leave for his brother to represent him. (Sound recording of proceedings, Anan v Raissis, NCAT, Campbell M, 5 September 2018 at 00:01:13) In addition, a review of the sound recording of the hearing reveals that Mr Raissis actively participated throughout the hearing, made detailed submissions and gave responsive and detailed answers to questions asked by the Tribunal.
In an alternative formulation of this ground, Mr Raissis contends that by revoking leave the Tribunal failed to accord him procedural fairness as he was denied the opportunity to present his case. We reject that contention for the following reasons. First, for the reasons discussed above, there is nothing to suggest that Mr Raissis was unable to present his case to the Tribunal. Second, even if the proposition advanced by Mr Spiro Raissis is accepted - that he was better able to present the case than his brother - it does not follow that the decision to revoke leave amounted to a denial of procedural fairness. The nature of the obligation imposed by the NCAT Act is that the Tribunal is to take such measures as are reasonably practicable to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings: s 38(5)(c). The obligation does not require the Tribunal to give a party every opportunity to present their case. The assertion that Mr Raissis was denied a reasonable opportunity to be heard because of a purported inability to represent himself cannot be accepted.
This ground of appeal and its alternative formulation is rejected.

Ground 2: Failure to discharge the duty to inquire

The appellant contends that, by failing to invite Mr Spiro Raissis to give evidence about "relevant matters", the Tribunal failed to discharge the duty to inquire imposed by s 38(6)(a) of the NCAT Act, which states: Procedure of Tribunal generally … (6) The Tribunal: (a) is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings, and
He asserts that, as co-owner of the property, his brother would have been able to give evidence about various matters, each of which he argues are relevant to the central question raised by the initiating application, namely whether the agreement had been repudiated, and, if so, by whom. They include: "the appellant was at all times ready and willing to perform his obligation under the lease…"; "the respondent is not a licensed builder"; "the state of the premises, having regard to the fact that Spiro Raisssi had studied architecture". For current purposes we will assume but not decide some of the matters about which Mr Spiro Raisssi could have given evidence, may have been relevant to some facts in issue.

Consideration

There is no question that the Tribunal had power to take evidence from Mr Spiro Raissis. The NCAT Act gives the Tribunal broad powers to inquire. Among other things, the Tribunal may "inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice": s 38(2). In addition, the Tribunal can call any witness of its own motion, examine any witness on oath or affirmation, examine or cross-examine any witness to such extent as the Tribunal thinks proper in order to elicit information relevant to the exercise of the functions of the Tribunal in any proceedings, and compel any witness to answer questions which the Tribunal considers to be relevant in any proceedings: s 46(1) of the NCAT Act.
However, the issue raised by this ground of appeal is not whether the Tribunal had power to call and question Mr Spiro Raissis but whether its failure to do so constituted a breach of the obligation imposed by s 38(6)(a) of the NCAT Act. As Mr Raissis points out, the Tribunal did not invite his brother to give evidence. However, Mr Raissis did not seek to call evidence from Mr Spiro Raissis; nor did he request that the Tribunal exercise its power to take evidence from Mr Spiro Raissis. He submits in effect, that s 38(6)(a) of the NCAT Act required the Tribunal to obtain "relevant material" from Mr Spiro Raissis in circumstances where the Tribunal had neither been requested to do so, nor been informed that Mr Spiro Raissis may be able to give evidence relevant to the facts in dispute.
We are not aware of any decision which has considered the nature and scope of the duty imposed by s 38(6)(a) of the NCAT Act. Equivalent provisions to s 38(6)(a) of the NCAT Act are contained in the enabling legislation of some state Civil and Administrative Tribunals: s 28(3)(e) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) and s 43(2)(a) of the South Australian Civil and Administrative Tribunal Act 2013 (SA). However, we are not aware of any decisions where these provisions have been considered.
In the absence of considered submissions, this is not the occasion to determine the parameters of the obligation imposed by s 38(6)(a) of the NCAT Act. However, for the reasons that follow we are unable to accept the proposition that the provision required the Tribunal to obtain "relevant material" from Mr Spiro Raissis in circumstances where Mr Raissis had not requested the Tribunal to do so, and the Tribunal had not been informed that Mr Spiro Raissis may have been able to give evidence about matters relevant to the facts in issue
The interpretation of s 38(6)(a) of the NCAT Act which Mr Raissis urges us to accept is consistent with its literal meaning. On its face, the provision appears to require the Tribunal to ensure all relevant material is disclosed to it so as to enable it to determine all of the relevant facts in issue in any proceedings. The requirement to ensure that all relevant material is disclosed is unqualified.
However, for the reasons that follow we have concluded that s 38(6)(a) of the NCAT Act should not be given its literal meaning.
First, that interpretation would in our view produce a "patently unintended" result and offend the so-called "golden rule" of statutory construction. It would require the Tribunal to undertake the Herculean task of identifying all material relevant to the facts in issue and ensuring that that material is disclosed, irrespective of whether the Tribunal, or any of the parties to the proceedings were aware of its existence. The "golden rule" of statutory construction requires that "the grammatical and ordinary sense of the words must be adhered to, unless that would lead to some absurdity, or some repugnance or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity and inconsistency, but no farther": Grey v Pearson [1857] EngR 335; (1857) 6 HLC 61 at [106] per Lord Wensleydale. See also: Australian Boot Trade Employees' Federation v Whybrow & Co [1910] HCA 53; (1910) 11 CLR 311 at [341]-[342] per Higgins J. The rule is not confined to circumstances where a "mistake" has been made in the wording of an Act and is also applied to avoid construing legislation so as to produce patently unintended or absurd results: J.J. Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53 per Flick J; Footscray City College v Ruzicka [2007] VSCA 136 at [16], 16 VR 498 at [505] per Chernov JA (Warren CJ and Maxwell P agreeing).
Second, the interpretation advanced by Mr Raissis would in our view be inconsistent with the objects of the NCAT Act which include "to enable the Tribunal to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible": s 3(d) of the NCAT Act. It would inevitably extend the time necessary to dispose of applications made to NCAT. It goes without saying that to undertake the task of identifying all material relevant to the facts in issue and ensuring that that material is disclosed would require significant investment of Tribunal time and resources. A construction of a provision that would promote the purpose or object underlying the Act must be preferred to a construction that would not: s 33 of the Interpretation Act 1987 (NSW).
Section 38(6)(a) of the NCAT Act cannot, consistent with orthodox principles of statutory construction, be construed in the manner which is argued by Mr Raissis. By failing to exercise its power to call evidence from Mr Spiro Raissis the Tribunal did not breach the duty imposed by s 38(6)(a) of the NCAT Act. This ground of appeal must be rejected.

Ground 3: Admission of "illegally recorded" material

Mr Raissis contends that the Tribunal erred by admitting into evidence a recording made by Mr Anaz. The subject recording was made by Mr Anaz of a conversation between the parties on 1 April 2017 using his mobile phone (the recording).
While acknowledging that the Tribunal was not bound by the rules of evidence, Mr Raissis contends that by the combined operation of s 7 of the Surveillance Devices Act 2007 (NSW) and s 138 of the Evidence Act 1995 (NSW), it was not open to the Tribunal to admit the recording into evidence. Further, Mr Raissis contends that the recording was of limited probative value because of the poor quality of the recording. .
The Tribunal referred to the recording at [5], [6] of its reasons: 5. When the tenant attended on the 01-April-2017 he said the works were not completed. The painting was incomplete and the ceiling was unpainted. There was a hole in the ceiling for an outlet pipe. There were no skirting boards or cornices. He was unhappy with the state of the property. There was a heated discussion between the parties at the premises. The tenant took a video recording of the discussion on his mobile phone. The video was shown to the landlord today and the landlord did not object to my viewing the video. 6. The video did not show the state of the premises. It did confirm there was a discussion between the parties at that time. The landlord did not give the keys to the premises to the tenant. The landlord was heard to say that the tenant was to provide him with references, bank statements and a police "report". He said today he refused to give the tenant the keys as the tenant would not pay the two weeks rent in advance in accordance with the terms of the residential tenancy agreement.

Statutory framework

Section 7(1)(b) of the Surveillance Devices Act states that a person must not knowingly use a listening device to record a private conversation to which the person is a party. A "listening device" is defined to mean any device capable of being used to record a conversation or words spoken to or by any person in conversation: s 4. It follows that a mobile phone, which has the capacity to record a conversation is a listening device for the purposes of the Surveillance Devices Act. The prohibition imposed by s 7(1)(b) does not apply where all of the principal parties to a private conversation consent, expressly or impliedly, to the listening device being so used; or, a principal party to the conversation consents to the listening device being so used and the recording of the conversation is reasonably necessary for the protection of the lawful interests of that principal party: s 7(3).
There is no evidence to suggest that Mr Raissis was aware of, or consented to the recording being made. Nor has Mr Anaz suggested that the recording was reasonably necessary for the protection of his lawful interests. It follows that the making of the recording was prohibited by s 7(1) of the Surveillance Devices Act.
Section 138(1)(a) of the Evidence Act, provides that evidence that was obtained in contravention of an Australian law is not to be admitted in proceedings unless the desirability of admitting that evidence outweighs the undesirability of admitting that evidence. In exercising the discretion to admit or not to admit evidence obtained in contravention of an Australian law, the matters listed in s 138(3) of the Evidence Act must be taken into account (3) Without limiting the matters that the court may take into account under subsection (1), it is to take into account: (a) the probative value of the evidence, and (b) the importance of the evidence in the proceeding, and (c) the nature of the relevant offence, cause of action or defence and the nature of the subject-matter of the proceeding, and (d) the gravity of the impropriety or contravention, and (e) whether the impropriety or contravention was deliberate or reckless, and (f) whether the impropriety or contravention was contrary to or inconsistent with a right of a person recognised by the International Covenant on Civil and Political Rights , and (g) whether any other proceeding (whether or not in a court) has been or is likely to be taken in relation to the impropriety or contravention, and (h) the difficulty (if any) of obtaining the evidence without impropriety or contravention of an Australian law.
The Tribunal did not give reasons for its decision for admitting the recording into evidence. Nor was it requested to do so. It appears that a factor relevant to the exercise of the discretion was the fact, noted by the Tribunal at [5] of its reasons, that Mr Raissis consented to the Tribunal having regard to the recording.
Consistent with its power to determine its own procedure, the Tribunal was entitled to admit or to decline to admit the recording into evidence. Even if the rules of evidence applied, it would have been open to the Tribunal to admit the recording after engaging in the balancing act required to be undertaken by s 138(3) of the Evidence Act. Mr Raissis has not provided any material to support the proposition that the quality of the recording was so poor that the recording was unreliable and therefore of no probative evidence. Nor is there is it suggested that the summary of the conversation set out at [5]-[6] of the Tribunal's reasons was materially inaccurate.
We reject the proposition that the Tribunal erred in the exercise of its discretion to admit the recording into evidence.

Ground 4: The decision that Mr Raissis repudiated the residential tenancy agreement was against the weight of evidence

Mr Raissis contends that the decision made by the Tribunal that he repudiated the agreement was against the weight of evidence. He asserts that the preponderance of evidence was that by refusing to pay him two weeks rent in advance, Mr Anaz repudiated the agreement.
To put the submissions made by Mr Raissis in context it is necessary to set out the background facts.
On 25 March 2017, following an inspection of the subject premises, Mr Anaz paid Mr Raissis $3,000 and signed a residential tenancy agreement for a term of 12 months, to commence on 1 April 2017. Mr Anaz described the subject premises as a "converted garage". Mr Raissis disagrees, describing the premises as a new standalone building behind the main property. It is not in dispute that when Mr Anaz inspected the subject premises on 25 March 2017, the building work was incomplete. Nor is it in issue that Mr Raissis told Mr Anaz that the works would be completed "within the week" and would be ready for him to move in on 1 April 2017.
In its reasons at [6] (set out at [30] above) the Tribunal recorded Mr Anaz's assertion that when he attended the premises on 1 April 2017, the building work was incomplete. He asserted, among other things, that there was a hole in the ceiling, there were no skirting boards or cornices and the ceiling was unpainted.
The Tribunal made no express finding about whether, as Mr Anaz claimed and Mr Raissis disputed, the renovation of the premises was incomplete on 1 April 2017. Rather the Tribunal concluded that because Mr Raissis had repudiated the agreement because he refused to hand over the keys to the premises: I have come to the conclusion that the landlord repudiated the agreement by not handing over the keys to the tenant. The tenant was never given possession of the premises. Accordingly, the landlord cannot maintain the tenant is liable for six weeks break lease fees when the tenant was never given possession of the premises. For these reasons I dismiss the landlord's claim for the break lease fees.

Principles governing breach of contract by repudiation

Breach of contract by repudiation occurs when a party "evinces an intention no longer to be bound by the contract...or shows that [they] intend to fulfil the contract only in a manner substantially inconsistent with [their] obligations and not in any other way": Shevill v Builders Licensing Board (1982) 149 CLR 620; [1982] HCA 47 at 625-626 per Gibbs CJ.
The intention of the purported repudiator must be assessed objectively from the perspective of a reasonable person in the shoes of the "innocent" party. In Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623 Deane and Dawson JJ at 657-658 described the test in the following terms: An issue of repudiation turns upon objective acts and omissions and not upon uncommunicated intention. The question is what effect the [repudiating party's] conduct 'would be reasonably calculated to have upon a reasonable person'... It suffices that, viewed objectively, the conduct of the relevant party has been such as to convey to a reasonable person, in the situation of the other party, repudiation or disavowal either of the contract as a whole or of a fundamental obligation under it. (Citations omitted.)
In Wesiak v D&R Constructions (Aust) Pty Ltd [2016] NSWCA 353 at [109] McDougall J, with whom Beazley P and Simpson JA agreed, emphasised that the alleged repudiatory conduct must be considered in context: It must be analysed with reference to its entire factual setting. That setting is not limited... It includes all the events and correspondence leading up to [the allegedly repudiatory conduct]".

Was the decision against the weight of evidence?

The question required to be answered by the Tribunal was whether a reasonable person in Mr Anaz's situation would have understood that Mr Raissis' conduct, having regard to its entire factual setting, indicated that it was his intention to no longer be bound by his obligations under the agreement. The objective circumstances against which Mr Raissis' statements were required to be viewed included: 1. the fact that one week earlier the parties had executed a residential tenancy agreement; 2. the state of the subject premises on 1 April 2017 and any undertakings, made by Mr Raissis to Mr Anaz about the completion of the subject premises at the inspection on 25 March 2017; 3. the statements made by each party at the meeting on 1 April 2017, including the respective statements made about the state of the premises; the comment made by Mr Anaz that he refused to pay two weeks rent in advance; and the statement made by Mr Raissis that he would not give Mr Anaz the keys to the premises and now required references, bank statements and police reports.
The issue we must decide is whether the finding made by the Tribunal that Mr Raissis' comment about the keys would have been understood by a reasonable person in Mr Anaz's position as indicating that it was his intention to no longer be bound by his obligations under the agreement was "against the weight of evidence". In answering that question we adopt the meaning of that expression used by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 at [77]: [W]here 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 (citations omitted).
The Tribunal did not elaborate about why it found that Mr Raissis' comment about the keys constituted repudiatory conduct. Arguably, it would have been open to the Tribunal to find that Mr Anaz's refusal to pay two weeks rent in advance amounted to repudiatory conduct. Alternatively, it would have been open to the Tribunal to find that neither that comment nor Mr Raissis' comment about the keys constituted repudiatory conduct. While not the only conclusion available, the finding that Mr Raissis' comments constituted repudiatory conduct was one reasonably open to the Tribunal on the available material. We are not persuaded that the evidence in its totality preponderates so strongly against the conclusion that it can be said that the conclusion was not one that a reasonable tribunal could have reached.
As we are not satisfied that the impugned finding was against the weight of evidence, it is not necessary to consider whether leave to appeal should be granted. Leave to appeal is refused.

Stay of operation of agreement

On 24 October 2018, the Appeal Panel stayed the operation of the order under appeal on condition that Mr Raissis pay to the NCAT's trust account the sum of $3000. As a result of our decision to dismiss the appeal, this money will be released to Mr Anaz.

Orders 1. Leave to appeal is refused. 2. Appeal is dismissed.

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: 23 January 2019

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