Tang v Grondin

NCAT Appeal Panel|2018-06-22

REASONS FOR DECISION

This is an appeal by a landlord against a decision of the Tribunal ordering her to pay the sum of $1,800 to two of four co-tenants in relation to premises at Ryde, NSW.
The Tribunal found that there was a written term of the residential tenancy agreement that, if the tenants ended the agreement before the end of the fixed term of the tenancy, the tenants must pay two weeks rent ($1,800) (the "two-week break fee") to the landlord. As the tenants had paid four weeks bond to the landlord ($3,600), the Tribunal ordered the landlord pay one half of that sum to the respondents. The net effect of that order would result in the landlord having been paid the two-week break fee the Tribunal found had been agreed.
The Tribunal erred in its construction of the agreement. The written term of the agreement was that if the fixed term of the agreement was for three years or less (which it was), and less than half of the term had expired (which was the case), then the tenants were required to pay six weeks rent to the landlord.
The written term further provided that the tenants need only pay a two-week break fee if half or more of the fixed term of the agreement had expired. Only five of the 24 weeks of the fixed term had expired when the tenants ended the agreement. Accordingly, this part of the written term did not apply.
At the conclusion of the appeal we made Orders 1 - 4 and said that we would deliver reasons later. These are those reasons.

Background

The Tribunal found that on 4 March 2018 the respondents and two others, Emrick Ardisson and Lucie Milewski, all being residents of France, signed a residential tenancy agreement with the appellant. The agreement was for a fixed term of 24 weeks commencing on 4 March 2018.
The agreement nominated an address for the landlord in North Sydney. Rent was agreed at $1,800 per fortnight. A rental bond of $3,600 was agreed and paid by the tenants.
Emrick Ardisson and Lucie Milewski returned to France earlier than anticipated and so the tenants decided to terminate the tenancy early. The parties agreed that the tenancy was terminated about five weeks after its fixed term commenced.
The respondents commenced an application in the Tribunal claiming that it was written in the agreement that: "... if I had to brake the contract I will be refund only two weeks (1800$)." (sic)
This was an assertion that it was a written term of the agreement that the break fee payable by the tenants to the landlord for early termination of the agreement by the tenants was the sum of $1,800, being for two weeks rent.
The respondents' application was sent to the landlord's address as nominated in the agreement. The landlord said that, to the knowledge of the tenants, that address was no longer used by her at that time.
At the hearing before the Tribunal the respondents tendered a hard copy of the agreement, and an electronic form the of that agreement. The Tribunal was satisfied that the agreement: "... shows the break lease fee is agreed at being reduced to two weeks."
In the absence of any appearance by the landlord, and any evidence to the contrary, the Tribunal said it accepted the evidence given by the respondents.
Accordingly, on 24 May 2018, the Tribunal ordered the landlord to pay $1,800, being one half of the bond of $3,600 paid by the tenants, to the respondents.
Upon being notified of the decision of the Tribunal the landlord paid that sum to the respondents on 31 May 2018.

Grounds of Appeal

The landlord appeals from that order of the Tribunal. That appeal was lodged with the Tribunal on 1 June 2018 and is within time.
The landlord appealed on a number of grounds. One ground is that the Tribunal erred in finding that it was a term of the agreement that if the tenants terminated the agreement before the end of the fixed term the break lease fee was two weeks.
As the landlord is successful on this ground her other grounds of appeal, including not receiving the tenants' application because it was sent to an address not used by her at the time, need not be considered.
A party has a right to appeal from an internally appealable decision of the Tribunal on a question of law. The decision of the Tribunal in this case was an internally appealable decision.
The proper construction of vital agreements and contracts gives rise to a question of law. [1] This is the question of law relied upon by the landlord.
On the appeal we had before us a copy of the residential tenancy agreement. Both parties agreed that clause 41 as it appears in that copy was the same as was in their agreement. The respondents also agree that clause 41 in this copy was the same as had been placed before the Tribunal. [2]
Clause 41 said: "Additional term - break fee [Cross out this clause if not applicable] 41. The tenant agrees that, if the tenant ends the residential tenancy agreement before the end of the fixed term of the agreement, the tenant must pay a break fee of the following amount: 41.1 if the fixed term is for 3 years or less, 6 weeks rent if less than half of the term has expired or 4 2 weeks rent in any other case, or [3] 41.2 if the fixed term is for more than 3 years; [specify amount]:"
As we have already noted, the tenants ended the agreement after about five weeks. This was less than one half of the fixed term. Accordingly, the terms of clause 41.1 provided that tenants were obliged to pay six weeks rent to the landlord, and not two weeks rent.
In those circumstances the Tribunal erred in construing the terms of the agreement and the appeal is upheld.

Other Matters

There are two further matters relevant to the orders we make.
The first is that in their oral submissions on the appeal the respondents said they had an oral agreement with the landlord that the break fee would be two weeks rent no matter when the tenant may terminate the lease before the end of its fixed term.
On the material placed before us, that was not part of their case before the Tribunal below. The respondents did not comply with the Tribunal's directions to lodge on this appeal the evidence relied upon below, nor a sound recording of the hearing at first instance. The Tribunal's reasons refer solely to a claim by the respondents relying upon the written terms of the agreement.
The alleged oral agreement is denied by the appellant.
In Coulton v Holcombe [1986] HCA 33; (1986) 162 CLR 1 Gibbs CJ, Wilson Brennan, and Dawson JJ said (citations omitted): "To say that an appeal is by way of rehearing does not mean that the issues and the evidence to be considered are at large. It is fundamental to the due administration of justice that the substantial issues between the parties are ordinarily settled at the trial. If it were not so the main arena for the settlement of disputes would move from the court of first instance to the appellate court, tending to reduce the proceedings in the former court to little more than a preliminary skirmish. The powers of an appellate court with respect to amendment are ordinarily to be exercised within the general framework of the issues so determined and not otherwise. In a case where, had the issue been raised in the court below, evidence could have been given which by any possibility could have prevented the point from succeeding, this court has firmly maintained the principle that the point cannot be taken afterwards ..."
As this alleged oral agreement was not raised by the respondents before the Tribunal, and as evidence could have been given by the landlord in relation to it, we decline to entertain that point on this appeal.
The second matter is that the landlord has commenced other proceedings in the Tribunal seeking monies she says are owed to her by the tenants. In those proceedings the appellant is applicant and the first respondent is the respondent. They are numbered RT 18 / 25700.
Given the respondents are not legally trained, are unrepresented, are from a country with a legal system different to ours (France) and for whom English is their second language, we have decided that the original proceedings should be re-heard by the Tribunal against the event the tenants may have other claims for the return of part or all of the bond that have not been heard or determined.
Those proceedings should be joined to and heard with proceedings numbered RT 18 / 25700 in order that all disputes between the landlord and tenants are resolved in the most just, quick and cheap manner.

Orders

We make the following orders: 1. Appeal allowed. 2. The orders of the Tribunal made on 24 May 2018 are set aside. 3. The original proceedings are to be re-heard by the Tribunal. 4. The respondents are to pay the appellant the sum of $1,800 immediately. 5. These proceedings are to be joined to and heard with proceedings RT 18 / 25700 in the Tribunal.

Endnotes

Re R [2000] NSWSC 886 at [25], cited with approval in C v W [ [2015] NSWSC 1774 at [48].
The respondents did not comply with the directions made in relation to this appeal on 12 June 2018 that they were to provide all the evidence provided to the Tribunal below. They did not provide the hard or electronic copy of the agreement to which we have referred.
In the document tendered the number 2 appeared directly above the crossed-out number 4 in sub-clause 41.1. 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: 09 July 2018

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