Sayadi v Karimbla Properties

Summary

1. On 24 August 2023, the Tribunal in its Consumer and Commercial Division decided to extend time for the appellant tenants to bring an application against the respondent landlord under s 61(2) of the Residential Tenancies Act 2010 (NSW)('RTA').
2. Section 61(2) of the RTA provides that: 61 Tenant's remedies relating to access to premises … (2) The Tribunal may, on application by a tenant, order the landlord or the landlord's agent to pay compensation to the tenant for damage to or loss of the tenant's goods caused by any person in the exercise of a power of the landlord or landlord's agent to enter residential premises under this Act or the residential tenancy agreement.
3. The nature of the appellants' complaint was simple and largely uncontested. When they rented the residential premises from the landlord there was a document attached to the residential tenancy agreement, described as an addendum, under which they also rented an allocated storage cage situated in the building in which the residential premises are located. Within that storage cage they stored property of a significant value, including personal items and other equipment they had purchased and imported as stock for a proposed business. Notwithstanding their agreement with the landlord, during the term of the tenancy the building manager who represented the landlord's interests as agent, authorised removal of the appellants' lock on the storage cage and the removal and disposal of the goods, without notice to the appellants. It appears that no explanation for that conduct was ever forthcoming.
4. The appellants complained to the landlord but were unable to resolve the issue. They then brought their claim to the Tribunal. The Tribunal was satisfied that it should extend time, as required, to allow the appellants to bring the claim. It also accepted the factual issues outlined above. However, in respect of the assessment of damages, and despite the appellants having provided invoices, receipts and other evidence as to the original value of the items that had been disposed of, the Tribunal made a finding that because the appellants had failed to prove the second-hand value of those items, it should only award nominal damages. It did so in the sum of $250.
5. The appellants lodged their appeal in time. The crux of their appeal was that the Tribunal erred in awarding them only nominal damages. They say that was contributed to by inconsistency in what they were told by the Tribunal, through the process of directions to facilitate preparing the matter for a hearing, and that the Tribunal failed to provide those directions in a timely manner. In any event, the appellants maintain that the Tribunal erred in the application of the relevant principles in assessing their damages. The appellants seek leave to appeal on the basis that the decision was not fair and equitable and that, as a result, they suffered a substantial miscarriage of justice. The appellants' claim at first instance had been in the sum of $15,712.94, as particularised in the invoices and other evidence they provided.
6. For reasons will come to, we are satisfied that the Tribunal did err in its application of the relevant principles as to the assessment of damages and that led to a substantial injustice that requires correction. We will grant leave to appeal and redetermine that issue on the evidence as to the appellants' loss that was before the Tribunal.
7. We have redetermined the appellants' damages by way of re-hearing in the sum of $11,767.10, noting the parties acknowledge that the respondent has paid part of that sum, in the amount of $250. The name of the respondent was incorrectly identified in the proceedings at first instance and we will correct it.

Scope and nature of internal appeals

1. An appeal to the Appeal Panel does not simply provide a losing party in the Tribunal below with the opportunity to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. To succeed in an appeal, the appellant must demonstrate either an error on a question of law, which, except in an appeal from an interlocutory decision, may be argued as of right; or that permission (that is, "leave") to appeal should be granted to bring the appeal: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 80(2).
2. The principles governing an application for leave to appeal under the NCAT Act are well-established and are repeated in many decisions of the Appeal Panel, often quoting Collins v Urban [2014] NSWCATAP 17. They are the same principles applied by the courts. It is enough as a summary to refer to Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206, where the Court said at [28] (citations omitted): Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted. Ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable. It is well established that it is not sufficient merely to show that the trial judge was arguably wrong.
3. Where the appeal is from a decision made in the Consumer and Commercial Division (other than in respect of interlocutory decisions), there is a further qualification to the possible grant of leave in that we may only go on to consider a grant of leave in the broader sense if we are first satisfied that the elements of cl 12(1) of Sch 4 of the NCAT Act are made out, in that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
4. We agree with the Appeal Panel in Collins v Urban where it said, at [76], that a substantial miscarriage of justice for the purposes of cl 12(1) of Sch 4 of the NCAT Act may have been suffered where: ... [T]here 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."
5. We may decide to conduct a new hearing if we are satisfied that the grounds for appeal warrant it: NCAT Act, s 80(3)(a). A new hearing under s 80(3) of the NCAT Act is a hearing de novo, or "from the beginning": Yuen v Thom [2016] NSWCATAP 243 at [17].
6. The Notice of Appeal and the submissions in support of it were not drafted in the manner that might be expected of legally represented parties. Nonetheless, we should do the best we can to identify the appellants' grounds of appeal, providing we do not unreasonably prejudice the respondent in doing so: Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69; Cominos v Di Rico [2016] NSWCATAP 5.
7. A thorough review of the Notice of Appeal and the material filed by the appellants with it shows that the appellants seek leave to appeal on each basis set out in cl 12(1) of Sch 4 of the NCAT Act. In doing so, the appellants have sought to rely on new evidence relating to the value of the goods lost, including depreciation schedules designed to address the deficit in evidence concerning the second-hand value of the goods which concerned the Tribunal. All this information was reasonably available to the appellants at the time of and before the initial Tribunal hearing.
8. The test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [23]; see too Elsayed v Tassone [2022] NSWCATAP 69 at [18]. That is not the case here. Therefore, the new evidence relied on by the appellants will not be allowed in the appeal. We have confined our consideration to evidence and material that was before the Tribunal at first instance.
9. Whilst we may decide to conduct a new hearing, the parties did not ask us to do so here, and we were not satisfied that the grounds for appeal warranted it. To the extent the appeal proceeded by way of rehearing, it proceeded on the basis that the Tribunal's factual findings that are not specifically challenged are to be accepted unless glaringly improbable.

Consideration

1. No question of law is raised by the appellants' material. Whilst there is a suggestion that they received the Tribunal's directions for the preparation of their evidence only one day before it was due to be lodged, no practical injustice would seem to arise. It is not suggested that the appellants would have been a better position to prepare their case, by provision of the evidence of the second hand value of the goods, as opposed to new value, had they received the directions earlier.
2. We also accept that the Tribunal, by reference to the decisions of Gallagher v Master Installation Pty Ltd [2017] NSWCATAP 117, Commonwealth v Amann Aviation Pty Ltd [1991] HCA 54 and Gerard V Slamar [2004] WASC 253, asked itself the right question and applied the correct principles in respect of the assessment of the appellants' damages. We are satisfied, though, that despite the difficulty it faced in doing so, the Tribunal was in possession of sufficient evidence to calculate real, as opposed to nominal damages with respect to most of the items in issue, even if, in doing so, there was an aspect of guesswork.

Was the finding that s 61(2) of the RTA had no application, correct?

1. Before explaining further why we are satisfied the Tribunal erred in the assessment of damages, we also need to deal with the fact that, despite awarding nominal damages, the Tribunal made a finding, approximately halfway down the third page of its decision, that the storage cage did not meet the definition of 'residential premises' in section 61(2) of the RTA. If that were correct, the appellants' claim could not succeed. That finding is incongruous with the Tribunal's ultimate order awarding $250 by way of nominal damages.
2. It is the Tribunal's order, and not its findings, which is the subject of the appeal. The respondent landlord has lodged no appeal of its own in respect of this issue and, in any event, we are satisfied that the storage cage was part of the residential premises for these brief reasons: 1. It was let with the balance of the residential premises and as part of the same residential tenancy agreement between the parties. Whilst the agreement in relation to the storage cage was described as an addendum, it was also expressed to be "interdependent" with the balance of the residential tenancy agreement; 2. The evidence indicates the storage cage belongs to the landlord and was not, in that sense common property; 3. The landlord, through the agreement, gave the tenant sole use of the storage cage to the exclusion of all others; and 4. The use of the storage cage was clearly part of the broader use of the balance of the premises let to the appellants, which included what was otherwise, uncontroversially, residential premises as defined in the RTA.
3. Before us, the respondent conceded that the storage cage formed part of residential premises and confirmed the appellants' assertion that neither party had raised the issue at first instance. The Tribunal's finding that the storage cage did not meet the definition of residential premises was incorrect. In any event, that finding was immaterial to the Tribunal's ultimate order, for reasons that were not explained in the reasons.

Did the Tribunal have sufficient evidence to assess more than nominal damages?

1. As we set out earlier, we are satisfied that the Tribunal, albeit briefly, did identify the correct principles in terms of the assessment of damages where those damages are uncertain on the state of the evidence before it. Somewhat more thoroughly, those principles include: 1. That the applicable measure of damages where goods are lost to their owner due the unauthorised exercise of rights of ownership by another is the market value of the goods at the time and place of their loss: Electricity Trust of South Australia v O'Leary (1986) 42 SASR 26. In Ewer v National Employers' Mutual General Insurance Association Ltd [1937] 2 All ER 193, MacKinnon J explained the assessment of lost goods for insurance purposes: Many an assured who has had an armchair burned to pieces has put forward the proposition, "Well, I want an armchair to sit upon. This one is destroyed and I can only get one to sit upon by buying a new one." In some circumstances, if the law were otherwise, that might be very reasonable, but very often it is not recognised and he realises to his chagrin that all he can recover is not his armchair to sit upon but the reasonable value of the second-hand armchair that has been destroyed. 1. For a plaintiff to receive more than nominal damages they must demonstrate, on the balance of probabilities, "assessable damage" that is capable of being assessed in monetary terms: The Commonwealth of Australia v Amann Aviation Pty Ltd (1991) 174 CLR 64, 118; [1991] HCA 54, per Deane J; 2. Where the precise quantum of damage is not known, mere difficulty in estimating damages does not relieve a court (or the Tribunal) from the responsibility of estimating them as best it can: Fink v Fink; (1946) 74 CLR 127; [1946] HCA 54 per Dixon and McTiernan JJ; 3. Assessing damages in this manner may involve more guesswork than actual estimation: Jones v Schiffmann (1971) 124 CLR 303 at 308; [1971] HCA 52, per Menzies J; 4. "[I]n many cases" damages are "no more than an approximation lacking in mathematical or economic accuracy or sufficiency": Pennant Hills Restaurants Pty Ltd v Barrell Insurances Pty Ltd (1981) 145 CLR 625; [1981] HCA 3 (at 636) per Sir Garfield Barwick J. 5. However, such guesswork or estimation should only be exercised where precise evidence is not available: Biggin and Co Ltd v Permanite Ltd [1950] 2 All ER 859 at 870 per Devlin J; 6. Consequently, if a plaintiff proves that damage has occurred but has led evidence that is not sufficient for a court (or the Tribunal) to use as a basis for the estimation of damages, then that plaintiff cannot be awarded substantial damages: JLW (Vic) Pty Ltd v Tsiloglau and Anor [1994] (Vic) Rp 16 ('JLW') per Brooking J at [9].
2. In Schindler Lifts Australia Pty Ltd v Debelak (1989) 89 ALR 275 at 319, Pincus J noted that, "if the evidence called by the plaintiff fails to provide any rational foundation for a proper estimate of damages the court should simply decline to make one."
3. That approach was approved by Brooking J in JLW and later endorsed in Troulis v Vamvoukalis [1998] NSWCA 237, with Gleeson CJ observing that, where damages were susceptible of evidentiary proof but there was an absence of raw material to which good sense may be applied, "justice does not indicate that… a figure should be plucked out of the air".
4. The issue was again considered by the Court of Appeal in McCrohon v Harith [2010] NSWCA 67. In that case McColl JA, with whom Campbell and Handley JJA agreed, quoted with approval Devlin J in Biggin & Co Ltd v Permanite Ltd [1951] 1 KB 422 at 438 ('Biggin') where his Honour stated, "where precise evidence is obtainable, the court naturally expects to have it. Where it is not, court must do the best can."
5. In State of New South Wales v Moss (2000) NSWLR 536 having cited that statement by Devlin J, Hayden JA added: "As MacPherson J said in Nilon v Bezzina [1998] 2 Qld R 420 at 494, "the degree of precision with which damages are to be proved is proportionate to the proof reasonably available".
6. Hayden JA also approved what Bowen LJ had said in Ratcliffe v Evans [1892] 2 QB 524 at 532-3 that, "as much certainty and particularity must be insisted on … in … proof of damage, as is reasonable, having regard to the circumstances and the nature of the acts themselves by which damage is done."
7. In JLW, Brooking J essayed several decisions on this issue, and found: "There is no rigid dividing line between cases in which guesswork is permissible in assessing damages and cases in which it is not. The borderline between guesswork and rational assessment is itself indistinct, as is the line between evidence that is "precise" (the Permanite Case dictum) and evidence that is not. In Enzed Holdings Ltd v Wynthea Pty Ltd [1984] FCA 373; (1984) 57 ALR 167, at 182-3, (to which Tadgell J. has drawn my attention) the Full Federal Court thought the case to be one in which precise evidence of the loss was not obtainable, so that if the trial judge found that the plaintiffs had suffered some loss he must do his best to quantify the loss even if "a degree of speculation and guesswork" was involved.
8. Put simply, we disagree with the Tribunal that the evidence in this matter was insufficient to allow for a rational assessment of all the appellants' damages. We agree that a rational assessment was not possible with respect to some aspects of the damages only.
9. It is convenient to deal with the various goods disposed of by the respondent in two categories: art works purchased for resale and goods purchased for the appellants' personal use.

The Art Works

1. Wholesale goods described as art works were purchased by the appellants and imported from China with a view to reselling them in a new business in 2020. The business did not proceed. The art works were stored in their original packaging and were unused. The appellants produced a detailed invoice for the purchase of these items which totalled $USD 7,051.38. The USD to AUD exchange rate prevailing at date the goods were ordered was $AUD 1.54 to $USD 1.00. The $USD7,051.38 costs of the art works, therefore, equates to $AUD 10,859.12.
2. Given that these were bulk goods, unused and in their original packaging, the Tribunal's conclusion that the tenants were entitled to nominal damages only is unfair and inequitable. They were less than two years old and untouched. We are not persuaded that their current value would have been significantly different from their acquisition value. Even if that were not the case, the absence of evidence of their second-hand value should not have resulted in an award of nominal damages only. There was unambiguous evidence of their acquisition cost, and the Tribunal could readily have dealt with the difficulties of assessing a used value by, for example, applying a suitable rate of depreciation. Any such calculation would clearly have resulted in a value significantly above the $250 in nominal damages awarded.
3. We think that on the available evidence an appropriate amount to award for the art works is $10,000, allowing for exigencies such as wastage and breakages.

Other goods purchased by the appellants.

1. The evidence before the Tribunal from the appellants relating to items purchased for their own use consisted of: 1. A paid invoice for the purchase of a Flyline Portable Carport Garage Shelter on 26 May 2022 for $299.00. 2. A paid invoice for the purchase of a Deep Cycle Lithium Rechargeable Battery on 12 July 2021 for $599.00. 3. A paid invoice for the purchase of two doom (scil dome) top tents on 7 April 2022 for $98.00. 4. A paid invoice for the purchase of DJ and lighting equipment from DJ City on 25 June 2022 for $2,518.20. 5. Paid invoices from Bunnings for the purchase of unspecified tools: 1. dated 13 May 2018 for $268.95; 2. 9 August 2020 for $99.00; and 3. December 2020 for $177.93; 1. A paid invoice for the purchase of a Brother printer from Officeworks on 12 October 2022 for $139.00. 2. A paid invoice for the purchase of solid-state drives from UMart Online, undated, for $496.00. 3. Four undated invoices for bike parts and accessories, totalling $46.29.
2. There was no evidence of the second-hand value of the goods at the time of their loss or subsequently. We do not agree that, in the absence of such evidence, the appellants were entitled to recover nominal damages only for all these items. Given the evidence relating to the acquisition costs of the lost goods, we think that there was sufficient evidence upon which the Tribunal could reach a reasonable estimate of the values of some of the goods, even if the process proved difficult and involved elements of judgement and estimation.
3. Items (1), (2), (3), (4) and (6) were all purchased new in the year prior to their loss. Doing the best we can, we accept it is probable that those items would have each significantly diminished in value following their purchase. However, we consider it unlikely that this would have exceeded 50% of their purchase price in the first year following sale. The purchase price of these goods totalled $3,514.20. Half of that is $1,757.10. In the absence of any other evidence, we are satisfied that the loss suffered by the appellants with respect to those goods is $1,757.10 which we assess as being their market value at the time and place of loss.
4. The tools in items (5) were between three and five years old at the time of their loss. They are not identified or described. Their combined cost was $545.88. Assorted tools are not items that one would expect to retain any significant value and are frequently found, cheaply, in recycle and charity stores. We think it likely that their market values at the time they were lost would have been minimal. The purchase date of items (7) - solid state drives - and (8) - bike parts - are not shown on the invoices. Their combined acquisition cost was $542.92. Not knowing their age or history of use makes the task of assessment extremely difficult. The unknowns with respect to each of these items makes the task of rational assessment impossible and renders any estimate of loss we might reach no better than a figure "plucked out of the air." We therefore propose to award only nominal damages for these items, which we fix at $10.00.

Orders

1. Our Orders are as follows: 1. The name of the Respondent in the appeal and proceedings at first instance is corrected to Karimbla Properties (No 35) Pty Ltd. 2. Leave to appeal is granted. 3. The appeal is allowed. 4. The order 1 of the Tribunal in proceedings RT 23/23499 made on 24 August 2023 is set aside and, in its place, the following order is made: 1. The Respondent is to pay the Applicants, the sum of $11,767.10.

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

Amendments 06 November 2023 - Coversheet - file number for original matter, added. 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: 06 November 2023