This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act (NSW) 2013 (the NCAT Act) against a decision made in the Consumer and Commercial Division of the Tribunal on 8 November 2022.
The dispute concerns a residential tenancy agreement which came to an end in September 2022.
The application to the Tribunal was brought by the tenants, Mr O'Leary and Ms Trayner, who are the respondents to the appeal, against the landlord Ms Srisivalingam, who is the appellant in this appeal.
For convenience, we will refer to the appellant as "the landlord" and to the respondents as "the tenants".
For the reasons that follow we have decided to allow the appeal in part and to remit the matter to the Tribunal for reconsideration.
Whilst upholding the appeal in part, we recognise the difficulties faced by Tribunal members having to hear and decide a high volume of matters, which frequently raise complex issues of fact or law, with limited hearing time.
[2]
History of the proceedings
On 22 September 2022 the tenants lodged an application in the Tribunal seeking an order under s 175 of the Residential Tenancies Act 2010 (NSW) the RT Act) for a refund of the rental bond.
On 10 October 2022 the matter was listed for a conciliation and group list hearing at which the Tribunal made procedural directions for the exchange of evidence and adjourned the matter to a final hearing.
The matter was listed for a 90 minute final hearing on 8 November 2022. The Tribunal published its orders and reasons on the day of the hearing.
In its reasons for decision the Tribunal states that the tenants' application was, in addition to a claim for the bond, "a claim for compensation pursuant to section 187(c) and (d) of the [RT Act]" and that the total amount claimed was $272,383.05, comprising the bond, compensation in respect of a water leak, overpaid rent, compensation for excessive water usage charges, and costs.
Having reviewed the materials available to the Appeal Panel, it does not appear that the tenants were at any stage of the proceedings given formal leave to amend their claim to include a claim for compensation. We will deal with this issue later in these reasons.
The landlord challenged the tenants' claim for a refund of the bond, alleging that she was entitled to $445 from the bond for rental arrears, as well as compensation for end of tenancy cleaning and repair costs, including $700 for the cost of repairing walls.
The Tribunal found that the landlord was entitled to $445 from the bond for rent arrears but rejected the balance of the landlord's claim for the bond.
The Tribunal found partially in favour of the tenants in respect of the balance of their claim and ordered the landlord to pay the tenants compensation of $15,000 in respect of the water leak, noting that this was the "maximum compensation". We understand this to be a reference to the Tribunal's monetary jurisdictional limit under s 187(4) of the RT Act and cl 40 of the Residential Tenancies Regulation (2019) (NSW) (the RT Regulation).
The Tribunal dismissed the tenants' claims for overpaid rent, excessive water usage and costs.
In the appeal the landlord challenges the Tribunal's decision to award the tenants compensation in the sum of $15,000, as well as the decision to refuse the landlord's claim for $700 of the rental bond in respect of repairs to walls.
[3]
Timing
The Notice of Appeal was lodged on 25 November 2022, which is three days outside of the 14-day time period specified in cl 25(4) of the Civil and Administrative Tribunal Rules (NSW) 2014 (the Rules). Therefore the landlord requires an extension of time pursuant to s 41 of the NCAT Act for the lodging of the appeal. We will deal with this issue later in the decision.
[4]
Background
The relevant background to the appeal, which is based on information contained in documents filed in the appeal proceedings and told to us during oral submissions, is as follows.
The parties entered into a residential tenancy agreement on 13 November 2015 for premises in Blacktown, New South Wales. The fixed term of the agreement was 26 weeks from 13 November 2015 to 12 May 2016, following which the tenancy continued as a periodic tenancy agreement.
On 14 May 2021, during a routine inspection, a leak was identified at the premises by the landlord's agent. Although some steps were taken in an attempt to repair the leak, the leak was not resolved prior to the tenants vacating the premises.
On or about 18 May 2022 the landlord served a "no grounds" notice of termination on the tenants.
The tenants returned vacant possession of the premises to the landlord on 7 September 2022.
The rent payable was $445 per week.
[5]
Scope and nature of internal appeals
Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2) NCAT Act.
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.
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 Schedule 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:
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).
In Cominos v Di Rico [2016] NSWCATAP 5 (Cominos), the Appeal Panel stated at [13]:
It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. The Appeal Panel has taken such an approach in a number of cases, for instance, Khan v Kang [2014] NSWCATAP 48 and Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. However, this must be balanced against the obligation to act fairly and impartially (Bauskis v Liew [2013] NSWCA 297 at [68] citing Hamod v State of New South Wales [2011] NSWCA 367 at [309]-[316]). Relevantly, s 38(2) provides that that Tribunal "may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice".
[6]
Grounds of Appeal
The notice of appeal and submissions of the landlord do not clearly identify the grounds of appeal.
However, having considered the landlord's written and oral submissions, and taking account of the principles expressed in Cominos, we understand the grounds of appeal to be as follows:
1. There was a denial of procedural fairness because the tenants did not formally amend their claim to include a claim for compensation, and had not been formally given leave to do so;
2. The Tribunal did not provide adequate reasons for its decision to award compensation of $15,000 for breach of the residential tenancy agreement (the Compensation Decision);
3. There was no evidence to support a finding of fact; and
4. The Tribunal misapplied s 52 of the RT Act.
Each of the above grounds involve questions of law for which leave to appeal is not required.
The landlord also seeks leave to appeal on the grounds that:
1. The landlord might have suffered a substantial miscarriage of justice because the Compensation Decision was not fair and equitable and was against the weight of evidence; and
2. The landlord might have suffered a substantial miscarriage of justice because significant new evidence relevant to the Compensation Decision is now available that was not reasonable available at the time of the hearing.
The other issues raised by the landlord in the appeal, including in relation to the Tribunal's decision regarding the bond claim, are, in substance, the landlord seeking to re-argue her case at first instance and do not establish an error of law or an error of a type that leave to appeal should be granted.
[7]
Procedural unfairness
The landlord says that there was a denial of procedural fairness because the Tribunal considered the tenants' application for compensation even though the tenants had made no such claim, and hadn't been granted leave to amend their claim, to include a claim for compensation.
Having reviewed the materials available to the Appeal Panel, including the tenants' application form lodged in the Tribunal, and the procedural directions made on 10 October 2022, it is apparent that the only claim made by the tenants when they applied to the Tribunal was a claim for a refund of the bond. The tenants were not at any stage of the proceedings given formal leave to amend their claim to include a claim for compensation. Nonetheless, in the reasons for decision, the Tribunal member states that the tenants' claim included not only a claim for the bond, but also a claim for compensation under s 187(1)(c) and (d) of the RT Act. The Tribunal proceeded to consider and decide the compensation claim.
It is well established that the Tribunal has a duty to conduct its hearings in a procedurally fair manner and to take such measures that are reasonably practical to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings (s38(2) and (5)(c) of the NCAT Act).
Procedural fairness requires that both parties have a reasonable opportunity to present their case (Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 at [40]; Sullivan v Department of Transport [1978] FCA 48; (1978) 20 ALR 323 at 343).
Whilst formal pleadings are not required in the Tribunal (per s 38 NCAT Act), there may be a denial of procedural fairness if a claim not made in the initial application, and for which leave to amend has not been granted, is nonetheless allowed to be ventilated and considered at the final hearing. Generally, procedural unfairness will arise if the other party was not on notice of the change, and did not have a reasonable opportunity to present their case in relation to it.
In this case, as neither party has provided us with a copy of the sound recording of the hearing, or a typed transcript of the sound recording, we do not know what happened at the hearing in relation to this issue. Similarly, we do not have a recording or transcript of what was said at the conciliation and group list hearing on 10 October 2022. Therefore we do not know if or how the proposed amendment to the claim was raised. However, we have reviewed the adjournment notes prepared by the Tribunal member who presided at the group list and conciliation hearing on 10 October 2022. Those notes briefly allude to the tenants' intention to make a compensation claim. It seems therefore that it is likely that the landlord was put on notice at that time that the tenants intended to pursue a claim for compensation in addition to their claim for return of the bond. This is also supported by the fact that the landlord's documentary materials submitted to the Tribunal at first instance included evidence in defence of the tenants' compensation claim.
Moreover, even if there was any procedural unfairness, what must be shown is that the landlord has suffered a practical injustice as a result of the denial of procedural fairness. That is, that as a result of any such procedural malfeasance, the landlord was denied an opportunity to make submissions material to the Tribunal's decision (see Minister for Immigration and Border Protection v SZMTA (2019) 264 CLR 421 at 443 [38]; Re Minister for Immigration and Multicultural and Indigenous Affairs: Ex parte Lam (2003) 214 CLR 1 at 14 [37]).
In this instance the landlord has not explained how the evidence or submissions put to the Tribunal would have been materially different had the tenants formally amended their claim. Indeed as noted above, the landlord's materials which were before the Tribunal included many documents relevant to the tenants' compensation claim.
For these reasons we are not satisfied that the landlord has suffered any practical injustice as a result of the tenants not having formally amended their claim to include a claim for compensation, or been given leave to do so.
[8]
Adequacy of reasons
The essence of the landlord's submission regarding the Compensation Decision is that the Tribunal did not provide adequate reasons for the decision to award the tenants $15,000.
The relevant part of the decision is as follows.
36. The Tribunal's power to make an order requiring a party to a residential tenancy agreement to pay compensation is found in subsection 187(1)(d) of the RT Act. However, this order making power does not exist in abstract. It is only enlivened when an entitlement to compensation is established under a substantive provision of the RT Act. In this case the relevant provision is section 190 of the RT Act which empowers a landlord or a tenant to apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement.
37. In this case, the tenants' claim for compensation rests on the landlord's alleged breach of section 52 of the RT Act.
38. In relation to the tenants' compensation claim, any damage and loss claimed by the tenants must be a reasonably foreseeable consequence of the landlord's breach of the agreement (assuming that is established): Hadley v Baxendale [1854] 9 Ex 341. The purpose of an award of damages for breach of an obligation under a residential tenancy agreement is compensatory, just as it is in other types of contracts. It is designed to put the injured party in the position in which they would have been in had the obligation been performed (or if the breach had not occurred), so far as money is capable of doing so.
…
BREACH OF SECTION 52
42. The tenants submit that during the course of the tenancy there was a leak in the plumbing beneath the bathroom which would leak into the downstairs internally near the front door for the premises. The tenants stated that this would result in sewerage and water leaking into the downstairs area.
43. This leak is noted by the landlord at a routine inspection on 14 May 2021 and then again on 23 February 2022 and the landlord confirmed that the problem had not been fixed during the period of the tenancy.
44. The Tribunal notes that this became a problem in 2019 but was addressed by the landlord at that time and there is no evidence before the Tribunal that the landlord was on notice of the problem between 2019 and May 2021.
45. An application by a party to a residential tenancy agreement for an order for compensation based on the alleged breach of the agreement must be made within three months of the applicant becoming aware of the breach: subsection 190(1) of the RT Act and Regulation 22(9) of the Residential Tenancies Regulation 2010 (the Regulation). In this case the tenants' complaints concern events that the landlord became aware of in May 2021, and which have recurred up to the end of the tenancy in September 2022. As this was a continual breach of the tenancy agreement, the Tribunal is satisfied that the application is in time.
46. The landlord gave evidence that a repairer was meant to attend the property in June 2021 however was prevented from attending due to the Covid lockdowns and at the request for the tenants that no parties attend during the restrictions. The landlord also gave evidence that a handyman was arranged in May 2022 however the handyman informed the landlord that he felt threatened by the landlord so left the premises.
47. There is no further evidence before the Tribunal of any additional steps taken by the landlord from May 2021 until September 2022 to rectify the sewerage leak in the premises.
48. The Tribunal finds that the presence of leaking sewerage is a breach of section 52 of the Act and the landlord has failed to provide the premises with adequate plumbing and drainage making the property unfit for habitation.
49. Given the length of time of the breach and the failure of the landlord to take any steps to remedy the breach, the Tribunal awards the tenants the maximum compensation of $15,000.
The NSW Court of Appeal in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 (per Bell P) set out the principles relevant to adequacy of reasons at [66] - [77]. They were recently summarised by the Appeal Panel in Volkswagen Group Australia Pty Ltd v Saad [2022] NSWCATAP 133 at [58] as follows:
(1) The function of the appeal court is to determine not the optimal level of detail required in reasons for a decision but rather the minimum acceptable standard.
(2) The quantity (or detail) of reasons, necessary for those reasons to be adequate may vary both with the nature of the decision maker, i.e. whether or not it is a court or tribunal, and, if the latter, possibly the type of tribunal, and the nature of the question being decided.
(3) As to the quality of reasons, it is generally accepted that the sheer volume of work undertaken by tribunals is such that a perhaps more relaxed standard of review of reasons is appropriate than may be the case when an appellate court is hearing an appeal from another court.
(4) Even in the less formal setting of a tribunal there are certain minimum characteristics that a Tribunal's reasons must possess. These are supplied, in relation to the Tribunal, by s 62(3) of the NCAT Act which, requires there to be set out in reasons (when requested by a party):
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,
(b) the Tribunal's understanding of the applicable law, and
(c) the reasoning processes that lead the Tribunal to the conclusions it made.
(5) At least a basic explanation of the fundamental reasons which led the Tribunal to its conclusion is necessary.
(6) It is not necessary for a judge to detail each factor which he or she has found to be relevant or irrelevant. Nor is a judge required to make an explicit finding on each disputed piece of evidence. It will be sufficient if the inference as to what is found is appropriately clear.
(7) Reasons need not be elaborate.
(8) Expression of conclusions in a certain sequence does not indicate a failure to consider the evidence as a whole.
(9) The court should not read passages from the reasons for decision in isolation from others to which they may be related.
(10) The reasons must be read fairly and as a whole.
(11) The reasons recorded ought not to be inspected with a fine tooth-comb attuned to identifying error.
(12) There should be a degree of tolerance for looseness in the language of the Tribunal, unhappy phrasing of the tribunal's thoughts or verbal slips.
Applying these principles, we are not satisfied that the Tribunal has provided adequate reasons for its decision to order the landlord to pay compensation of $15,000. Our reasons for this are as follows.
Firstly, after concluding at [48] that the landlord has breached s 52 of the RT Act, the Tribunal goes on to award the tenants "the maximum compensation of $15,000". The only explanation provided for this award of damages is "the length of time of the breach and the failure of the landlord to take any steps to remedy the breach" (at [49]).
Earlier in the decision (at [38]) the Tribunal correctly points out that "an award of damages for breach of an obligation under a residential tenancy agreement is compensatory" and that it is "designed to put the injured party in the position in which they would have been … had the obligation been performed". This is an enunciation of the general rule at common law, expressed in Robinson v. Harman [1848] EngR 135 and approved by the High Court in Commonwealth v Amann Aviation Pty Limited (1991) 174 CLR 64 that:
"where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed" (per Mason CJ and Dawson J at 80).
However, the reasons do not contain an explanation of the reasoning process which led the Tribunal to conclude that $15,000 was an appropriate sum of money to compensate the tenants for the loss suffered by reason of the landlord's breach. In particular, there are no findings of material fact relevant to this decision. If the rent was $445 per week, the sum of $15,000 would represent more than half the weekly rent for the period commencing when the leak was first identified in May 2021. The reasons do not explain how such a figure was arrived at. For example, there are no findings as to the size of the premises, the seriousness of the leak, the portion of the premises affected by the leak, how the leak affected the tenants' use or enjoyment of the premises or what amenities existed in the area where the leak occurred. In the absence of any such findings, or any explanation as to how the figure of $15,000 was arrived at, it is not possible to evaluate the Tribunal's conclusion that the loss to the tenants was $15,000.
Secondly, whilst not explicitly stated, we have inferred from paragraphs [47] and [48] of the decision that the Tribunal made a factual finding that the plumbing issue at the premises involved a sewerage leak. The finding regarding sewerage was a material fact because, reading the decision as a whole, it appears to have been relevant to the Tribunal's conclusion that the landlord had breached the agreement. Also, whilst not clear on the face of the decision, this finding is also likely to have been relevant to the Tribunal's assessment of damages. However, other than a reference to a statement by the tenants that the plumbing beneath the bathroom "would result in sewerage and water leaking into the downstairs area", the Tribunal has referred to no evidence or other materials on which this important finding was based.
Moreover, the landlord has referred us to evidence which was before the Tribunal which was inconsistent with there having been a sewerage leak at the premises. This includes a tax invoice from a plumber who carried out repairs in December 2021. The invoice dated 5 January 2022 states "No issue with sewer line".
There is no reference in the Decision to this evidence. It is not clear to us whether, or how, the Tribunal took this evidence of the landlord into account, or on what evidence the Tribunal's conclusion regarding the sewerage leak was based.
Similarly, the landlord has referred us to evidence which was before the Tribunal in relation to the tenants' alleged actions in thwarting the landlord's efforts to repair the leak. Indeed, in the decision the Tribunal at [46] refers to the landlord's evidence that the tenants had prevented the landlord's repairer from accessing the premises and that a handyman who attended the premises in May 2022 left because he "felt threatened by the landlord". Having reviewed the evidence and submissions we understand this to be a typographical error and that the Tribunal intended to say that the handyman "felt threatened by the tenants".
We understand this evidence to have been relevant to a submission made to the Tribunal the effect of which was that the tenants had failed to act reasonably to mitigate any loss they may have suffered as a result of the water leak. As the Appeal Panel said in Rockwall Constructions Pty Ltd v Nayak [2017] NSWCATAP 226 at [71]:
It is well established that damages cannot be recovered for any loss which could have been prevented by reasonable mitigation action of the injured party: [23.41] Cheshire and Fifoot 9th Edition. A loss which is attributable to the failure to mitigate can be regarded as an aspect of causation: Castle Constructions Pty Ltd v Fekula Pty Ltd [2006] NSWCA 133 at [21].
Whilst referring to the landlord's evidence regarding mitigation, the Tribunal's reasons do not grapple with it. They include no findings of fact in relation to the tenants' conduct, and do not expose whether, and if so why, the Tribunal did not take account of that conduct when assessing the tenants' claim.
For all of these reasons we have concluded that the Tribunal's reasons for decision were inadequate.
[9]
Misapplication of s 52
The landlord contends that the Tribunal misapplied s 52, because the landlord's obligation in s 52 applies in relation to the condition of the premises at the commencement of the tenancy and the leak did not arise until later in the tenancy.
The Tribunal found at [48] that "the presence of leaking sewerage is a breach of section 52 of the Act and the landlord has failed to provide the premises with adequate plumbing and drainage making the property unfit for habitation".
Section 52 relevantly says:
(1) A landlord must provide the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant.
(1A) Without limiting the circumstances in which residential premises are not fit for habitation, residential premises are not fit for habitation unless the residential premises -
…
(e) have adequate plumbing and drainage, and
(f) are connected to a water supply service or infrastructure that supplies water (including, but not limited to, a water bore or water tank) that is able to supply to the premises hot and cold water for drinking and ablution and cleaning activities
The Appeal Panel has held that a landlord's obligation under s 52 to provide premises which are fit for habitation arises at the beginning of the tenancy and therefore that the question as to whether the residential premises comply with that requirement must be assessed as at the commencement of the residential tenancy agreement: Bhandari v Laming [2015] NSWCATAP 224 at [37].
In this case the tenancy commenced in November 2015 but the Tribunal's reasons do not make any findings, or refer to any evidence, which established that the problem dated back to that date. On the contrary, the Tribunal specifically found that the leak was not first observed until later in the tenancy.
Accordingly, it appears that the Tribunal has misapplied s 52.
We note however that whilst s 52 may not have been an available remedy in this instance, the Tribunal could nonetheless have considered the tenants' claim under another provision of the RT Act, such as s 63 (and we note that brief reference to s 63 is made at the commencement of the decision).
Section 63 requires landlords to "provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises".
Although the obligations of landlords under ss 52 and 63 are not identical, there is significant overlap between the two provisions and it may ultimately have made little practical difference to the outcome had the claim been considered under s 63 instead of s 52.
[10]
No evidence to support a finding of fact
The landlord contends that the Tribunal's finding at [49] that there was a "failure of the landlord to take any steps to remedy the breach" was not supported by the evidence.
The landlord says that there was ample evidence before the Tribunal of steps taken to attempt to remedy the leak, including file notes prepared by the managing agent in relation to arrangements for tradespersons to attend the premises, text messages between the tenants and the managing agent regarding such arrangements, quotes obtained from various tradespersons, an invoice from a plumber who attended the premises in January 2022 to repair the leak, and a letter from a tradesperson dated 3 May 2022 which states "I did not want to work in an unsafe and aggressive environment and I left … I felt very much threatened by the way and manner the tenant was talking". The Tribunal refers to some of that evidence earlier in the decision (at [46]).
In view of the ample evidence which was before the Tribunal of the landlord having taken steps to remedy the leak, some of which the Tribunal alluded to in the decision, the Tribunal's finding that the landlord had failed to take any steps to remedy the breach is not a finding which was rationally open to the Tribunal on the basis of the evidence before it.
This is an error of law.
[11]
Conclusion in relation to Compensation Decision
Given the deficiencies in the Tribunal's decision which we have outlined above, we are satisfied that the appeal in relation to the Compensation Decision should be upheld.
[12]
Leave to Appeal
As we have concluded that the Tribunal made errors of law in relation to the Compensation Decision, it is not necessary to consider whether to grant leave to appeal.
[13]
Bond claim
The landlord's submissions and grounds of appeal mostly focus on the Compensation Decision. While the landlord also challenges the decision to refuse to award the landlord $700 from the bond to cover end of tenancy wall damage, the landlord has not clearly identified any appealable error in relation to that part of the decision.
The landlord had claimed $700 from the bond to cover damage to the walls and paintwork. The Tribunal found that the tenants had caused such damage and, by implication, found that this was a breach of s 51(3)(b) of the RT Act which requires the tenant to " leave the residential premises as nearly as possible in the same condition, fair wear and tear excepted, and, if there is a condition report, as set out in the condition report applicable to the premises when the agreement was entered into". This obligation is a term of every residential tenancy agreement: s 51(5).
However, the Tribunal found that the landlord was not entitled to compensation in respect of this breach. Reading the decision as a whole, our understanding of the Tribunal's reasoning is that whilst the Tribunal was satisfied that the tenants had breach the agreement, it was not satisfied that the landlord had suffered any compensable loss as a consequence of the breach.
The landlord's submission that she was entitled to compensation simply because there had been a breach by the tenants is simply incorrect.
In reaching the conclusion that no loss had been suffered by the landlord, the Tribunal had regard to the deteriorated condition of the paintwork at the commencement of the tenancy, the fact that the landlord had not painted the walls during the tenancy, and the length of the tenancy, and concluded that "the cost of painting had been fully depreciated".
In this context, we consider the Tribunal's reference to depreciation was a reference to the usual deterioration over time of building work such as painting, rather than a reference to the Australian Taxation Office's depreciation schedule for fixtures and fittings.
The Tribunal was entitled to take account of such deterioration when assessing whether the landlord had suffered any loss as a result of the tenants' breach.
For these reasons we see no error in the Tribunal's approach.
[14]
Timing
As mentioned earlier, the appeal was lodged out of time and therefore the landlord requires an extension of time in which to lodge the appeal.
The Appeal Panel has power to extend time under s 41 of the NCAT Act.
The principles on which an extension of time to bring an appeal would be granted were set out by the Appeal Panel in Jackson v NSW Land & Housing Corporation [2014] NSWCATAP 22 at [21]-[22]:
"Time limits, including the specification of the time within which an appeal from an internally appealable decision to the Appeal Panel of the Tribunal must be lodged, are established by legislation for the purpose of promoting the orderly and efficient conduct of proceedings in the Tribunal, providing certainty for the parties to proceedings, especially the party in whose favour orders have been made, and achieving finality in litigation. For these reasons, these time limits should generally be strictly enforced. That is not to say, however, that exceptions should not be made where the interests of justice so require. The express power in s 41 of the Act to grant extensions of time allows the Tribunal to prevent the rigid enforcement of time limits becoming an instrument of injustice."
The criteria for assessing an extension application can be summarised from Jackson as follows:
1. the appellant must demonstrate that strict enforcement of the time limit will work an injustice on the appellant;
2. the respondent, having obtained a favourable primary decision, can be thought of as having a "vested right" to retain the benefit of that decision after the normal time for appeal has expired;
3. Consistent with the foregoing, the factors to be considered are the length of the delay, the reason for the delay, the prospects of success ("that is usually where the applicant has a fairly arguable case"), and the extent of any prejudice suffered by the respondent to the appeal;
4. It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable.
In this case, applying the factors identified in Jackson:
1. The appeal was lodged three days out of time. This is not a significant delay in circumstances where the time for lodgement of the appeal was 14 days.
2. We accept the landlord's explanation for the delay which includes that she received incorrect information from her managing agent that the 14-day time limit did not include weekends.
3. The tenants have not identified any prejudice which they might suffer if an extension of time is granted and indeed specifically state in the Reply to Appeal that they do not object to an extension being granted.
4. For the reasons given, the substantial merits of the appeal favour the landlord's position for the setting aside of order 1 made on 8 November 2022.
5. All the above matters operate in circumstances where strict enforcement of the time limit would work an injustice on the landlord.
For these reasons, we extend time for the lodgement of the appeal to 25 November 2022.
[15]
Conclusion
For the reasons given, we have decided to uphold the appeal in part and to set aside order 1 made by the Tribunal on 8 November 2022.
We are not satisfied that in accordance with s 81(1)(d) of the NCAT Act, we can fairly determine the dispute on the basis of the materials before the Appeal Panel and therefore, in accordance with s 81(1)(e) of the NCAT Act, we are remitting the matter back to the Consumer and Commercial Division for a differently constituted Tribunal to reconsider the tenants' application for compensation.
For the avoidance of doubt, the only issue to be considered on remittal is the tenants' claim for compensation arising from the water leak. There is to be no further consideration of the tenants' claim for costs, overpaid rent, excessive water usage or the return of the bond.
[16]
Stay
At a callover hearing on 9 December 2022, the Appeal Panel made an order staying the operation of order 1 until further order of the Tribunal or finalisation of the appeal, whichever is the earlier. That order was conditional upon the landlord paying $5,000 to the tenants, in partial satisfaction of the judgment sum, by 16 December 2022.
At the hearing of the appeal the parties confirmed that the landlord had complied with that condition. The question of whether part or all of the $5,000 should be repaid by the tenants to the landlord will be a matter to be considered by the Tribunal when deciding the matter on remittal.
[17]
Address of premises
Finally, we refer to a minor procedural issue raised by the landlord's representative during the hearing, and that is that the header of the notice of order issued by the Tribunal contains an incorrect address for the tenanted premises. This appears to be because, when completing the Tribunal application form, the tenants inadvertently inserted their new home address in the section of the form entitled "Residential Premises in Dispute". The parties agree that this was an oversight and that the notice of order should be amended to reflect the correct address of the rented premises. As the matter is to be remitted to the Consumer and Commercial Division of the Tribunal, it seems to us that this issue can be addressed by the Tribunal when the file is remitted.
[18]
Orders
For the reasons given we make the following orders:
1. Application for extension of time to lodge the appeal to 25 November 2022, is granted.
2. The appeal is upheld in part.
3. Order 1 made by the Tribunal on 8 November 2022 is set aside.
4. The proceedings are remitted back to the Consumer and Commercial Division of the Tribunal, differently constituted, for reconsideration in accordance with these reasons and otherwise according to law.
5. Whether any further evidence is to be allowed in the remitted proceedings is to be determined by the Tribunal.
6. The appeal is otherwise dismissed.
[19]
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
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Decision last updated: 15 February 2023