Taylor v Reilly

THIS HEARING

1. In accordance with the Tribunal's response to the current COVID-19 pandemic emergency, this hearing was conducted by telephone and lasted about 90 minutes.
2. The tenant appeared on her own behalf. The landlord was represented at the hearing by managing agent, Ferhata Akin from PPD Real Estate at Coogee (the managing agents).
3. At the start of the hearing the tenant stated that: 1. she did not contest the landlord's claim for $400 from the bond for the costs of repairing damage to a wall in the premises; 2. the amounts she claimed were: 1. a refund of the bond ($2,000) less the $400 for that damage ($1,600); 2. compensation for failing to disclose the construction work to the tenant at the start of the tenancy agreement ($3,738), comprising: 1. moving costs - $418; 2. moving boxes - $48; 3. pain and suffering - $2,000; and 4. a rent reduction - $1,542; 1. the tenant disputes the landlord's claim for rental arrears (said to cover the period from 18 December to 29 December 2020 at $71.43 per day).
4. The tenant bases her claim for compensation on the following provisions of the RT Act: 1. s 26 - that the landlord or the managing agent induced her to enter into the tenancy agreement by a false statement or by knowingly concealing a material fact of the kind prescribed by the regulations; 2. s 43 - that the premises became wholly or partly uninhabitable otherwise than as a result of a breach of an agreement; and 3. s 50 - that the landlord breached the tenant's right to quiet enjoyment.
5. Mr Akin confirmed that the landlord pressed his claims for the wall damage and those rent arrears and that the landlord disputed the tenant's claims. He disputed that he or the landlord had known about or failed to disclose the construction works to the tenant, or that the construction works rendered the premises unfit for habitation. Mr Akin also argued that the tenant's claim for a rent reduction was also out of time, as it related to periods in 2019 and early 2020, and that the tenant's claim for pain and suffering was not justified or evidence, and was not caused by the landlord.

THE COMMON GROUND BETWEEN THE PARTIES

1. It was common ground between the parties (and I find accordingly) that: 1. The parties entered into a written residential tenancy agreement for the premises on 23 August 2019. The tenancy agreement was generally in the form prescribed under the RT Act and provided for: 1. a term of 52 weeks from 23 August 2019 to 20 August 2020; 2. rent at the rate of $1,000 per fortnight; and 3. the bond was to be $,2000. 1. The tenant paid the bond at the start of the tenancy agreement. The bond was deposited with NSW Rental Bond Services, where it remains pending the determination of these proceedings. 2. The sum of $400 should be deducted from the bond and paid to the landlord to cover the landlord's claim for wall damage. 3. The landlord does not own the adjoining property that is under construction, as referred to in these proceedings.

THE ISSUES TO BE DETERMINED

1. The issues to be determined in these proceedings are therefore as follows: 1. Whether the tenant's claim for a rent reduction under s 43(2)(a) of the RT Act is out of time? 2. If no to (1), or if the issue of time is cured by an extension of time, whether the premises became wholly or partly uninhabitable under s 43(2)(a) of the RT Act as a result of the noise coming from the nearby construction site, and for what period? 3. If yes to (2), by what amount did the tenant's rent abate under s 43(2) and 45 of the RT Act in respect of that period? 4. Having regard to (3), whether the tenant is in arrears of rent for the period 18 December 2020 to 29 December 2020, as alleged by the landlord? 5. Whether the landlord is entitled to deduct those rent arrears from the tenant's bond, in addition to the $400 for the wall damage, before the balance of the bond is refunded to the tenant? 6. Whether the landlord and/or the managing agent knew of the construction works to be conducted at the adjacent premises and were obliged to disclose that information to the tenant? 7. Whether the landlord and/or the managing agent failed to disclose that information to the tenant in accordance with that obligation (if any)? 8. If yes to (7), whether the tenant is entitled to compensation in the amounts that she has claimed?
2. Except for the bond, each party who is making a claim has the burden of proving their claim to the civil standard, being the balance of probabilities. Separately, the landlord has the burden of proving his claim on the bond to that same standard because of the special nature of the tenant's bond (see below). Each party also has the burden of proving any affirmative defence that he or she raises to the other party's claims, to the same standard.
3. When proof of a fact is required, the Tribunal must feel an actual persuasion of the occurrence or existence of that fact before it can be found. Actual persuasion is achieved where the affirmative of an allegation is made out to the reasonable satisfaction of the Tribunal. Reasonable satisfaction should not be produced by inexact proofs, indefinite testimony or indirect inferences: Warner v Hung, in the matter of Bellpac Pty Limited (Receivers and Managers Appointed) (In Liquidation) (No 2) [2011] FCA 1123 at [48], per Emmett J, citing Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-2.

THE EVIDENCE

1. The tenant relied on 2 bundles of documents provided to the landlord and lodged with the Tribunal on about 17 December 2020 and 2 February 2021, which were marked as exhibits T1 and T2 respectively. The tenant's documents included: 1. in exhibit T1: 1. the tenant's statement, including as the orders sought, which I have treated as the tenant's witness statement and her submissions; 2. an email from the tenant to the managing agents dated 8 June 2020, concerning the building works; 3. a bundle of extracts of documents from Waverley Council concerning development application DA 469/2018 in respect of XXX, Queens Park (No 13); 4. a bundle of photographs of the completed construction said to be taken from the premises or nearby; 5. a bundle of copy of photographs said to be taken inside the premises on 13 January 2021, marked with hand written notes to show what is said to be construction does; 6. a copy of Waverley Council's notice of determination of a development application, dated 6 May 2019 in respect of the construction works at 13 Manning St; 7. emails passing between the tenant and the managing agents on 18 December 2019, 15 January 2020, 14 December 2020 and 15 September 2020 concerning the possibility of a rent reduction; 8. the tenant ledgers for the tenancy agreement, covering the period 26 August 2019 to 30 March 2020; 9. a letter from Catherine Cahill, clinical psychologist, dated 11 December 2020; 10. a letter from Dr Penelope Willcoxson, general practitioner, dated 15 December 2020; 11. a character reference for the tenant from a Renata Field, dated 5 July 2019; 12. a character reference for the tenant from a Sandra Grice, Nursing Unit Manager (undated); and 13. a character reference to the tenant from a Hayley Foster, Chief Executive Officer of Women's Safety NSW, dated 5 July 2019; and 1. in exhibit T2: 1. an updated statement from the tenant dated 27 January 2021, which I have treated on a similar basis; 2. a copy of the landlord's written submissions, with handwritten notations on it; 3. an email from the managing agent to the tenant dated 14 April 2020, concerning the possibility of a rent reduction; 4. a quote from Super Easy Storage, dated 9 December 2020; 5. receipts from Super Easy Storage, dated 10 December 2020 and 11 January 2021; 6. a tax invoice from The Reject Shop for boxes and bubble wrap, dated 7 December 2020; 7. further copies of the letters from Catherine Cahill and Dr Willcoxson, referred to above.
2. The landlord objected to exhibit T1 on the ground of relevance however I decided that I would allow the exhibit to be used in evidence to the extent that it was relevant. The landlord did not object to exhibit T2.
3. The tenant gave oral testimony in support of her application. Mr Akin questioned her on her evidence.
4. The landlord similarly relied on the 2 bundles of documents provided to the tenant and lodged with the Tribunal on about 14 January and 14 February 2021, which were marked as exhibits L1 and L2 respectively. The landlord's documents included: 1. in exhibit L1: 1. the landlord's written submissions; 2. a bundle of email correspondence between the managing agent and the tenant, dated between 20 August 2019 and 15 January 2020; and 3. the tenant ledgers for the premises covering the period 26 August 2019 to 14 January 2021, including the period covered by the ledgers contained in exhibit T1; and 1. in exhibit L2: 1. another copy of the landlord's written submissions contained in exhibit L1; 2. an outgoing condition report for the premises prepared by Mr a can on 22 December 2020, comprising 7 pages of comments and 4 pages of photographs, which was written on an extract of part of the ingoing condition report, dated 21 August 2019; and 3. another copy of the tenant ledgers for the premises as contained in exhibit L1.
5. The landlord also produced a copy of the tenancy agreement between the parties.
6. The tenant objected to exhibit L2 on the ground of relevance. I similarly allowed those documents to be used to the extent that they were relevant to an issue in dispute. The tenants did not object to exhibit L1.
7. The landlord did not adduce any oral testimony in support of his position.

JURISDICTION

1. Section 45 of the RT Act gives the Tribunal power to make an order determining the amount of rent payable if the rent is abated under s 43(2) of the RT Act - including because the premises have become wholly or partly uninhabitable otherwise than as a result of a breach of the tenancy agreement.
2. Section 187(1) of the RT Act gives the Tribunal power to make an order for the payment of money and compensation in respect of a residential tenancy agreement that is regulated by the RT Act.
3. Section 175 of the RT Act also gives the Tribunal jurisdiction to make orders concerning payment of the rental bond on application pay a landlord, a tenant or any other person who has an interest in the payment of the bond.
4. I am satisfied on the evidence that there was a residential tenancy agreement between the parties that was regulated by the RT Act and that the Tribunal has jurisdiction to hear and determine this dispute. I am also satisfied that the amounts claimed by the parties are within the monetary jurisdiction of the Tribunal.
5. I will deal with the issue of limitation periods below.

THE APPLICABLE LAW

1. The proceedings arise under sections 26, 33, 43, 45, 50, 157, 166, 175, 187 and 190 of the RT Act, and the regulations established under that Act.
2. Section 26 relates to the disclosure of information by the landlord or his or her agent to a tenant that might induce the tenant to enter into a residential tenancy agreement. The section provides (relevantly): 26 Disclosure of information to tenants generally (1) False representations A landlord or landlord's agent must not induce a tenant to enter into a residential tenancy agreement by any statement, representation or promise that the landlord or agent knows to be false, misleading or deceptive or by knowingly concealing a material fact of a kind prescribed by the regulations.
3. Section 7 of the Residential Tenancies Regulation 2010 (NSW) (the 2010 Regulation) applied when the tenancy agreement was entered into. That section set out the material facts that must not be knowingly concealed by a landlord or landlord's agent to induce a tenant to enter into a residential tenancy agreement at that time. The section provided (my underlining): 7 Disclosure of information to tenants generally: s 26 (1) of Act For the purposes of section 26 (1) of the Act, the following are prescribed as material facts that must not be knowingly concealed by a landlord or landlord's agent to induce a tenant to enter into a residential tenancy agreement-- (a) the residential premises have been subject to flooding or bush fire in the preceding 5 years, (b) the residential premises are subject to significant health or safety risks that are not apparent to a reasonable person on inspection of the premises, Note : Disclosure under this provision does not affect the legal obligations of the landlord with respect to the residential premises. (b1) the residential premises are listed on the LFAI Register, (c) the residential premises have been the scene of a serious violent crime within the preceding 5 years, (d) council waste services will be provided to the tenant on a different basis than is generally applicable to residential premises within the area of the council, (e) that because of the zoning of the land, or other laws applying to development on the land, the tenant will not be able to obtain a residential parking permit (in an area where only paid parking is provided), (f) the existence of a driveway or walkway on the residential premises which other persons are legally entitled to share with the tenant.
4. Section 33 of the RT Act provides (amongst other things) that a tenant must pay the rent under a residential tenancy agreement on or before the day set out in the agreement. This requirement is a term of every residential tenancy agreement.
5. Sections 43(2) and 45 of the RT Act contain provisions for the abatement of rent if residential premises under a tenancy agreement (amongst other things) became wholly or partly uninhabitable other than as a result of a breach of an agreement. Those sections relevantly provide: 43 Rent reductions (1) … (2) Premises unusable The rent payable under a residential tenancy agreement abates if residential premises under a residential tenancy agreement are-- (a) otherwise than as a result of a breach of an agreement, destroyed or become wholly or partly uninhabitable, or … (3) (4) Effect of section This section does not limit the rights of landlords and tenants to agree to reduce the rent payable under a residential tenancy agreement. (5) This section is a term of every residential tenancy agreement. and: 45 Remedies for reduction of rent on frustration of residential tenancy agreement (1) The Tribunal may, on application by the landlord or tenant, make an order determining the amount of rent payable if the rent is abated under section 43(2). (2) The Tribunal may order that-- (a) from a specified day, the rent for the residential premises must not exceed a specified amount, and (b) the landlord must repay to the tenant any rent paid by the tenant since the specified day that is in excess of the specified amount. Note : The residential tenancy agreement may also be terminated in these circumstances (see section 109).
6. Section 50(1) sets out the landlord's obligation to provide premises that are reasonably clean and fit for habitation. This requirement is also a term of every residential tenancy agreement.
7. Section 157 of the RT Act defines a rental bond to be: "an amount of money paid or payable by the tenant or another person as security against any failure by a tenant to comply with the terms of a residential tenancy agreement." Accordingly a rental bond is money that belongs to the tenant. It is only paid into Rental Bond Services as a security for any obligation that may arise on the tenants' part. Absent any breach of the tenancy agreement or another obligation by the tenants the bond is to be repaid to the tenants at the end of the tenancy.
8. Section 166 of the RT Act entitles a landlord to claim from the rental bond for, amongst other things, unpaid rent and the reasonable cost of repairing or restoring any part of the premises not left by the tenant in the same condition at the start of the tenancy agreement, having regard to the condition of the premises at the commencement of the tenancy, fair wear and tear excepted.
9. I have referred to sections 175 and 187 above, under "Jurisdiction".
10. Section 190 establishes a landlord or a tenant's right to apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within a certain time period. The section provides: 190 Applications relating to breaches of residential tenancy agreements (1) A landlord or a tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations. (2) An application may be made-- (a) during or after the end of a residential tenancy agreement, and (b) whether or not a termination notice has been given or a termination order made. (3) A landlord's agent may make an application on behalf of a landlord.
11. Section 39 of the Residential Tenancies Regulation 2019 (NSW) (the 2019 Regulation) applied when the tenant's application was lodged. That section set out the relevant limitation periods as follows (my underlining): 39 Times for making applications to Tribunal--ss 44(2), 83(2)(a), 98(4), 115(3), 125(3), 134(3), 141(2), 175(3) and 190(1) of Act … (8) For the purposes of section 175(3) of the Act, the prescribed period is within 6 months after the rental bond is paid out. (9) For the purposes of section 190(1) of the Act, the prescribed period is within 3 months after the applicant becomes aware of the breach.
12. Lastly, s 41 of the Civil and Administrative Tribunal Act 2013 (NSW) (the CAT Act) permits the Tribunal to extend the time for the doing of anything under the RT Act. That section provides: 41 Extensions of time (1) The Tribunal may, of its own motion or on application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legislation. (2) Such an application may be made even though the relevant period of time has expired.
13. I have considered the parties' claims and defences claims in accordance with these principles.

THE BACKGROUND FACTS

1. Having weighed and considered the competing evidence before the Tribunal, I am satisfied on the balance probabilities that the background facts of the matter are as follows:
2. The premises is a residential apartment constructed at the rear of XXX, Queens Park (No 11), over the garage for that property, and was numbered as "11A". The premises included (amongst other things) an entrance hall and stairs. The premises was accessible from the front/side of the house at No 11, which was at the front of the block. There was a detached garage underneath the premises which faced a rear lane, known as Newland Lane. The landlord lived in the house at number 11.
3. On about 14 December 2018 the architect for the neighbouring property at No 13 lodged development application number DA-469/2018 with Waverley Council. The development described in the development application was "construction of detached garage with a studio above fronting Newland Lane, and in-ground pool and removal of 1 tree (to be replaced)". According to the documents obtained by the tenant from the Council and produced in exhibit T1, the works involved demolishing the existing garage and pool at the rear of No 13 and constructing (amongst other things) a new garage, studio and raised garden in the same position, immediately adjacent the garage at No 11 and the premises above it. One of the cross-section plan in that bundle showed the proposed works against the outline of the garage and apartment at No 11 and the existing garage structure which was to be removed.
4. The Council gave consent to the development application on 6 May 2019. Consent was given subject conditions which included, in condition 32:

• demolition and building work must only be undertaken between the hours of 7 AM and 5 PM on Mondays to Fridays and 8 AM to 3 PM on Saturdays with no to be carried out on Sundays, public holidays for the weekend which formed part of a public holiday weekends;
• excavation works involving the use of heavy earthmoving equipment must only be undertaken between the hours of 7 AM and 5 PM on Mondays to Fridays with no such work to be carried out on Saturdays, Sundays or public holidays; and
• acknowledgement construction activities shall comply with the Protection of the Environment Operations (Noise Control) Regulation 2000.

1. The tenant submits that I should accept the Council must have notified the owners of adjoining properties, including the landlord, of the development application between the date it was lodged (14 December 2018) and the date it was approved by the Council (6 May 2019). The landlord submits to the contrary; that he did not have notice of the development by the time the tenancy agreement was entered into. No evidence was led to directly demonstrate that the landlord was given notice of the development application between 14 December 2018 and start of the tenancy agreement. That said, I am aware that the planning and construction laws in this state are such that I can consider it likely that the landlord was at least sent a notice of the proposed development at some time during that period.
2. I accept the tenant's evidence that she inspected the premises at about 5 PM on one night in August 2019 and that it was dark when she carried out that inspection. I accept that she entered the property from the front/side of the house on Manning Street and that she did not see any yellow tape across the neighbouring garage at No 13. I accept that she was not made aware during that inspection that building works would take place next door.
3. On about 20 August 2019 the tenant paid a holding fee of $500 to the managing agents. At 5:26 PM that day the managing agents wrote an email to the tenant acknowledging the holding fee and confirming that the tenant had been approved for tenancy at the premises for a term of 52 weeks proposed to start on 23 August 2019 and requiring one thousand dollars rent in advance (less the holding fee). The email also instructed the tenant how to pay the bond and that Mr Akin would be meeting the tenant and walking the tenant through the lease agreement. The email made no mention of the construction works at No 13.
4. On 21 August 2019 Mr Akin conducted an ingoing inspection of the premises. The ingoing condition report prepared as a result of that inspection (the ICR) was not produced in evidence in these proceedings. A small part of it was extracted in the outgoing condition report prepared by Mr Akin on 22 December 2020, referred to below (the OCR). The OCR contained a panel titled "Special Reporting at Entry Condition Report", which set out various statements about the premises, including statements about "Health issues". The item "Additional comments on health issues, communication facilities, water efficiency devices" in that panel was left blank. Given that other answers from the ICR were repeated in this panel I am satisfied that the "additional comments" item was also left blank on the ICR.
5. The tenancy agreement was prepared by the managing agents and signed by the tenant in Mr Akin's presence on 23 August 2019, in the managing agents' office at Arden Street, Coogee. I accept the tenant's uncontested evidence that she spoke to Mr Aiken about her concerns concerning the garage and the landlord's plan to lease it out to another user before she signed the tenancy agreement, including the possibility that noise would come from the garage into the premises when it was accessed. I similarly accept that the tenant explained to Mr Akin that she was a nurse and worked unsocial hours and needed peace and quiet, and that she worked from home doing domestic violence consultancy work and ran a not-for-profit charity. I also accept her evidence, which was not contradicted by Mr Akin, that he assured her that the property at No 11 was a peaceful area where she would not be disturbed and if there were any issues with the garage the managing agents would speak to the landlord to ensure quiet and privacy. I accept her uncontested evidence that she was not informed about the construction works that would be taking place next door.

The limitation period issue

1. The landlord argues that the tenant's claim for a reduction of rent under ss 43(2)(a) and 45 of the RT Act is out of time as it relates to events in 2019 and early 2020. In putting that assertion forward, the landlord did not identify any particular limitation period as applying to that claim.
2. Sections 43(2)(a) and 45 apply together only if residential premises under a residential tenancy agreement are destroyed or become wholly or partly uninhabitable "otherwise than as a result of a breach of an agreement". A claim under those sections therefore does not relate to a breach of the tenancy agreement and does not arise "consequent to" a breach, to adopt the words from s 190.
3. Consequently, s190 of the RT Act and the limitation period in s39(9) of the 2019 Regulation do not apply to a claim under s 45. In fact, the RT Act and the 2019 Regulation do not set any period in which an application may be brought under s 45 in respect of premises becoming wholly or partly inhabitable under s 43(2)(a) of the Act.
4. Rule 23 of the Civil and Administrative Tribunal Rules 2014 (NSW) (the CAT Rules) therefore applies. Pursuant to sub-rule 23(3)(b) an application for which enabling legislation (such as the RT Act) does not specify the period in which the application is to be made must be made "within 28 days from the day on which the applicant became entitled under the enabling legislation to make the application.
5. In the case of s 45 of the RT Act, the tenant became entitled to make the application when the premises first became wholly or partly uninhabitable within the meaning of s 43(2)(a). That subsection anticipates the total or partial loss of use of the premises by the tenant. That is ultimately a question of fact: once the finding is made that the premises became uninhabitable from a particular date, the rent abates from that date and the time to bring the application begins to run from that date.
6. In the present case, the tenant seeks to assert that the premises were uninhabitable in 2 periods: from 21 August to 15 November 2019 (12 weeks and 2 days), and from 13 to 27 April 2020 (2 weeks). Both of those time periods occurred more than 7 months before the tenant filed her application on 4 December 2020. The tenant's application for an order under s 45 reducing the amount of rent payable in those periods is therefore out of time.
7. As identified above, s 41 of the CAT Act gives the Tribunal power to extend the period of time for bringing such an application even though the relevant period of time has expired. Rule 8 of the CAT Rules provides, however, that application for an extension of time made under that section must be made in writing unless the Tribunal dispenses with that requirement.
8. The tenant has made no application extend time for bringing her claim under s 45, whether in writing or otherwise. Her only statement on point at the hearing was to say in reply to the landlord's submission that she did not believe she was out of time and to then assert that the landlord and the managing agent kept changing the goalposts. That notwithstanding, the Tribunal also has discretion to extend time of its own motion.
9. It must be remembered that the time limits set for the doing of things under both the RT Act and the CAT Act in respect of tenancy matters provide important protections for tenants, landlords and some third parties against claims being asserted against them in relation to matters that arose outside the range of those time limits. Those time limits limit the risk and liability of parties in tenancy relationships. The broad policy of the legislation might therefore be viewed as requiring tenancy disputes to be asserted promptly and brought to finality quickly.
10. The discretion to extend time under s 41 of the CAT Act is unfettered, but it must be exercised judicially and with regard to the statutory command in section 36 of the CAT Act, which is to the effect the guiding principle applying to the Tribunal's procedure "is to facilitate the just, quick and cheap resolution of the real issues in the proceedings": Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [18] (Jackson). As stated in Jackson at [21], time limits 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, and achieving finality in litigation. For these reasons, time limits should generally be strictly enforced.
11. The discretion to extend time is therefore given for the sole purpose of enabling the Tribunal to do justice between the parties. The object is to ensure that the rules which fix times for doing acts don't become instruments of injustice: Chen v Baxter [2014] NSWCATAP 50 at [34]-[35]. This means that the discretion can only be exercised in favour of an applicant on proof that strict compliance with the rules will work an injustice to the applicant. The grant of an extension of time is not automatic.
12. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for an extension of time: Gallo v Dawson [1990] HCA 30; [1990] 93 ALR 479 at [2], per McHugh J.
13. Generally, in considering an extension of time the Tribunal will be required to consider: 1. The length of the delay in bringing the action; 2. The reason for the delay in bringing the action; 3. The applicant's prospects of success - that is usually whether the applicant has a fairly arguable case; and 4. The extent of any prejudice suffered by the respondent: Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 at [55] (per Basten JA); Jackson at [22].
14. The evidence discloses that the application was brought at least 7 months after the end of the construction works and about 15 months after they were first noticed by the tenant, in September 2019. The tenant was aware of the noise and dust from the building site within 2 weeks of moving into the premises on 23 August 2019. She made her first claim for a reduction of rent by email in mid-November 2019, about 3 months later.
15. By January 2020 she had received advice to seek a rent reduction under s 45, as disclosed in her correspondence, yet she took note steps to bring the action until December of that year. In the meantime the landlord had offered, and she had accepted, reductions of rent or credits because of the construction noise. The tenant has provided no reasons for the delay in bringing her claim until December 2020- just after she gave notice terminating her tenancy - even though the works were conceded (on her evidence) in April 2020 and the fixed term of her tenancy had expired in August 2020.
16. Conceptually I consider that the tenant would have a fairly arguable case to say that she has been adversely affect by noise coming from the construction site and the nearby street. That does not mean, however, that the premises were necessarily unfit for habitation. As set out in De Soleil v Palmhide Pty Ltd [2010] NSWCTTT 464, the test of uninhabitability is a difficult one to satisfy and it should not be lightly found by the Tribunal that premises are not fit for habitation.
17. "Fit for habitation" or "habitable" are terms that have been used in leases and tenancy agreements for over 150 years. For example, it was said in Proudfoot v Hart (1890) 25 QBD 42 that "The habitability standard would be concerned with the minimum safety standards echoed in the above cases [not reproduced here], going to both structural and health issues". Separately, it was also held that premises are habitable where that the state of the premises does not represent a threat to life, limb or health of the tenant: Morgan v Liverpool Corporation [1927] 2 KB 131 at 145. Elsewhere, it was held that the term habitable "[imported] some reference to what we call humanity or humaneness" and is of "wide and elastic" meaning to take account "the needs and circumstances of poor people living in confined quarters": Summers v Salford Corporation [1943] AC 283 at 292. In more recent times, the Queensland Supreme Court concluded in Gray v Queensland Housing Commission [2004] QSC 276 that "if the state of repair is such that injury is to be expected, or will naturally occur, from the ordinary use of the premises, they cannot be regarded as fit for human habitation.
18. In Finn v Finato [2004] NSWCTTT 179 the Tribunal held that the requirement for "fit for habitation must import such a state of repair that the premises might be used and dwelt in, not only for safety, but for reasonable comfort, by the class of persons by whom and for the sort of purpose for which, they were to be occupied". Similarly, Milsteed J stated in Hampel v South Australian Housing Trust [2007] SADC 64 at [63]: "In my opinion, a house is unfit for human habitation if an occupier could be expected to suffer physical injury or injury to health from the ordinary use of the premises. It may be so unfit for any reason. The risk to health or safety may arise because the premises are in a state of disrepair or dilapidation or because of a lack of facilities such as the provision of adequate water, light, ventilation, and so on."
19. It is possible that noise and dust from an adjacent construction site could render premises uninhabitable, but much depends on the strength of the evidence that supports the claim. For example, the premises in Hector v Payne [1997] NSWRT 87 were located next to a local primary school, where a new wing was being constructed. As reported in the decision: Uncontroverted evidence was produced to show that construction using heavy machinery took place at all hours, including early mornings and weekends and on at least one occasion in the very early hours of the morning of the 19th of December 1996. Windows and doors could not be opened because of noise and dust; washing could not be hung out to dry due to the dirt in the air; and access to the back yard and was impossible due to noise and dust and the fact that it was from time to time flooded with chemicals flowing into it from the construction site next door. Attempts to negotiate with the builders proved fruitless with the response to the tenants' pleas ranging from the negative to the abusive. The Tribunal determined in that case that the rent would abate from the date the tenants gave the notice of termination to the landlord.
20. The evidence adduced by the tenant in this case is similarly uncontroverted. It was not contradicted and it was not discredited in questioning. It addressed many of the elements set out in that passage in Hector, quoted above. In short, the claim is at least fairly arguable.
21. Lastly, the landlord has not provided any evidence or made any submission that he would suffer any prejudice if time was extended to permit the claim to be made.
22. Balancing these factors I am satisfied that it is appropriate for time to be extended to allow the tenant to bring her claim under s 45 of the RT Act.

Consideration of the claim

1. The tenant's uncontroverted evidence was that building and demolition works started in September 2019, although she could not remember the exact date. It is possible that the works started earlier than that, and may have been underway when the tenant first inspected the premises certainly it was open for the neighbour to have started those works given that development consent had been given several months earlier, in May 2019.
2. As noted in the facts as found, the works involved the demolition of a large garage structure and an existing swimming pool immediately adjacent to the premises, which was very close to the common boundary. After that the works involved the construction of a 2-story garage and studio building, retaining walls, stairs, elevated gardens and a new swimming pool, with on-site water detention systems below. The plans show that the works concerned were quite substantial.
3. The tenant's uncontroverted evidence, which I have accepted, was that instruction work took place 6 or 7 days a week for very long hours, and that it often generated or involved loud noise outside the hours approved by the Council. The tenant worked as a nurse and worked regular shift work. On the days when she was not working shift work she was often involved in consultancy work and charity work, which she did from home.
4. The tenants uncontroverted evidence, which was also supported by a small number of photographs, was also that the premises were constantly full of dust and dirt coming from the premises, including brick dust, and that the windows of the premises were filthy.
5. I am satisfied on the tenant's evidence that she was unable to sleep at the premises during the day because of the noise and the dust coming from the construction site next door. I am also satisfied that the tenant's attempts to complain to the managing agents, the landlord and to outside authorities about the noise and the dust were fruitless: they did not result in any abatement of the noise or the dust.
6. In my view this is a case where, like Hector, the safety and the reasonable comfort of the tenant was significantly adversely affected by the construction work. On the tenant's uncontroverted evidence this continued from early September to about 24 December 2019 and again from about 13 January to about mid-April 2020, when the builders completed jobs at the site. The tenant continued to live at the premises throughout this time although, as she stated in her, she was unable to sleep or work at the premises during daylight hours while much of the work was conducted.
7. I am satisfied on the whole of the evidence that has been put before the Tribunal that the premises were partly rendered uninhabitable as a result of the building works from about start of the tenancy agreement on 23 August 2019 to about 15 April 2020 (a period of 237 days, or 33 weeks and 6 days) and that the rent payable by the tenant automatically abated under s 43(2)(a) of the RT Act proportionately to that part.

Quantifying the claim

1. By her calculations in exhibit T2, tenant claims a rent reduction for only 2 distinct parts of that period, on the basis that she has already received a rent reduction has proffered by the landlord for other parts of the period.
2. I am satisfied that the tenant is entitled to a rent reduction for the 2 parts that she has set out in her claim, namely from 21 August 2019 to 15 November 2019 - for 12 weeks and 2 days; and from 13 to 27 April 2020 - for 2 weeks. That is a total of 14 weeks and 2 days, or 100 days.
3. The tenant claims that the rent reduction should be $100 per week, which was the amount that the landlord previously proffered to her. In the absence of evidence to the contrary, I agree that is a reasonable rate to apply in this case. That rate represents 20% of the weekly rental payable by the tenant and amounts to $14.29 for each day in that period.
4. I therefore finds that the tenant is entitled to the benefit of a reduction of rent in the total sum of $1,429.

THE TENANT'S CLAIM FOR COMPENSATION FOR MISREPRESENTATION IN SIGNING THE TENANCY AGREEMENT (S 26)

The limitation period issue

1. This part of the tenant's claim seeks compensation for breach of s 26(1) of the RT Act, for knowingly concealing a material fact of a kind prescribed by the regulations. While the claim seeks compensation, the claim does not arise "in relation to a breach of a residential tenancy agreement", within the meaning of s 190. Accordingly that section, and the limitation period applicable to it, do not arise on this part of the claim. As no other limitation period is established by the RT Act or the 2019 Regulation, the limitation period in rule 23 of the CAT Rules also applies to this claim.
2. On the applicant's case, the applicant became entitled under the RT Act to apply for compensation when she first suffered loss or damage as a result of the false or misleading conduct. In my assessment that occurred when she entered into the tenancy agreement based on that conduct (if the conduct occurred). At that point tenant submitted herself to a raft of legal liabilities and obligations as set out in the tenancy agreement and the RT Act more generally. On that analysis, the 3 month period for bringing a claim for breach of s 26(1) would have expired on 23 November 2019, just over a year before the tenant filed her application in these proceedings.
3. The considerations that I have set out above in relation to an extension of time also apply here. Again, the tenant has not made any application (written or otherwise) for an extension of time. As a matter of discretion, the Tribunal can again extend time of its own motion and on the principles set out above.
4. The factors that I have set out above concerning the length of the delay, the reason for the delay and prejudice to the landlord are also relevant to this part of the claim in much the same way. This leaves me with the question of whether the claim is fairly arguable.
5. As noted by the Appeal Panel in Lewer v Smith [2016] NSWCATAP 76 at [23], the factual matters which the Tribunal is required to address when determining whether the landlord had breached s 26(1) of the RT Act through the making of a statement, representation or promise, are that: 1. the landlord or landlord's agent induced a tenant to enter into a residential tenancy agreement; (the first material question of fact) 2. the inducement was by way of a statement, representation or promise; (the second material question of fact) 3. the landlord or agent knew that statement, representation or promise to be false, misleading or deceptive (the third material question of fact). The landlord may also be liable for misleading statements made by an agent if "the representations related to the core function of the managing agent to obtain a tenant for the property": Lewer v Smith at [29].
6. Similar factual matters arise in relation to whether the landlord or the agent had induced a tenant to enter into the tenancy agreement by knowingly concealing a material fact kind prescribed by the regulations: 1. the landlord or landlord's agent induced a tenant to enter into a residential tenancy agreement; (the first material question of fact) 2. the inducement was by way of concealing a material fact of the kind prescribed by the regulations; (the second material question of fact) 3. the landlord or agent knew that he or she was concealing a material fact of the kind prescribed by the regulations (the third material question of fact).
7. The tenant does not assert that the landlord or his agent made a statement, representation or promise about the construction works (or the lack thereof) at No 13. Broken down, the tenant's case is that: 1. the construction works were a material fact of the type described in s 7 of the 2010 Regulation - ostensibly that they subjected the premises to a significant health or safety risk that was not apparent to a reasonable person on inspection of the premises (s 7(b) of the 2010 Regulation); 2. the landlord or the agent "must have known" (firstly) of the construction works and the approval of them by the Council and (secondly) of the "fact" that the construction works subjected the premises to significant health or safety risks that were not apparent to a reasonable person on inspection of the premises; 3. the landlord or the agent concealed those facts; and 4. the landlord or the agent knew that they were concealing those fact.
8. It is not enough for the tenant to merely assert that the landlord or the agent knew about and concealed the fact that the construction works were approved and might be carried on during the term of the tenancy agreement. To succeed under s 26(1) the tenant must show on the balance of probabilities that the landlord concealed one or more of the fact prescribed in s 7 of the 2010 Regulation. Further, it is not enough for the tenant to merely assert that the landlord or the agent "must have known" that the proprietor of No 13 had sought and/or obtained consent from the Council to undertake the construction works. As indicated at the outset, the tenant has the burden of proving her claim on the balance of probabilities and this involves proving knowledge of the relevant facts and knowledge that the landlord or the agent were concealing those fact.
9. The evidentiary case proffered by the tenant does not rise that high. It is ultimately based on conjecture or supposition about what the landlord or the agent "must have known" and it does not address the issue of whether the risks referred to in s 7 would be objectively apparent to a reasonable person on inspection of the premises.
10. As a result I am not satisfied that this part of the claim has sufficient prospects of success for an extension of time be granted in respect of it. I therefore decline to extend time in respect of this part of the application.

Consideration of the claim

1. As time has not been extended it is not necessary for me to consider this part of the application any further and I have done above.

THE TENANT'S CLAIM FOR COMPENSATION FOR BREACH OF QUIET ENJOYMENT (S 50)

The limitation period issue

1. This part of the tenant's claim seeks compensation for breach of clause 14 of the tenancy agreement, as stipulated by s 50 of the RT Act. Contrary to the previous claim, this claim does arise "in relation to a breach of a residential tenancy agreement". Accordingly s 190 and the limitation period applicable to it under s 39 (9) of the 2019 Regulation applied to limit the time for bringing the application to 3 months after the applicant becomes aware of the breach. As the application was lodged on 4 December 2020 the applicant would have had to have become aware of the breach by 4 September 2020 at the earliest in order for the claim to have been brought within time.
2. The considerations that I have set out above in relation to an extension of time also apply here. Again, the tenant has not made any application (written or otherwise) for an extension of time. As a matter of discretion, the Tribunal can again extend time of its own motion and on the principles set out above.
3. The factors that I have set out above concerning the length of the delay, the reason for the delay and prejudice to the landlord are also relevant to this part of the claim in much the same way. This leaves me with the question of whether the claim is fairly arguable.
4. For clause 14 to have been breached the interruption or interference with the tenant's quiet enjoyment, or reasonable peace, comfort or privacy, must have been committed by one or more of the landlord, the landlord's agent or a person claiming by, through or under the landlord or having superior title to that of the landlord, or the landlord's "other neighbouring tenants". The construction work and the noise for dust generated by the builders next door fall into none of these categories.
5. While the tenant also asserts in paragraph 14 of her statement that the landlord carried out building works on Friday 21st - Saturday 22nd of February 2020 in his garden, that assertion is vague and generalised and it is not sufficient to persuade me on the balance of probabilities that the prohibition on interfering with the tenant's reasonable peace, comfort and privacy. It is also not supported by any other evidence.
6. I am therefore not satisfied that this part of the claim has sufficient prospects of success for an extension of time to be granted in respect of it. I also consider the delay in bringing this part of the claim to be excessive. I therefore decline to extend time in respect of this part of the application.

Consideration of the claim

1. As time has not been extended it is not necessary for me to consider this part of the application any further and I have done above.

THE LANDLORD'S CLAIM ON THE BOND FOR UNPAID RENT (S 33)

1. The landlord asserts that the tenant did not vacate the premises until she returned the keys to the managing agent on 29 December 2020. The tenant disagrees, arguing that she vacated the premises on 18 December and that she was delayed in returning the keys by other reasons.
2. As noted above, the tenancy agreement stipulated in no less than 3 places that the tenant was required to return to the landlord all keys and other opening devices when the agreement ended. It further stated in one of the special conditions in Addendum A that additional rent would be due if the tenant did not return the keys on the date of vacating the premises. As such, it was a contractual term agreed between the parties that the rent would be due and payable by the tenant until the latter of the date when the tenant vacated the premises and returned the keys.
3. Separately, in Stuart v Leonardo [2021] NSWCATAP 111 (which was decided on 3 May 2021) the Appeal Panel recently said the following in relation to ending the tenancy and returning the keys (at [60]): "The tenancy ends when possession is given up to a landlord. This is a question of fact. Matters relevant to determining whether possession has been given up include whether a tenant has left the premises and met their obligations under clause 17, including delivery up of the keys. This is because the performance of these obligations before the tenancy ends is consistent with a tenant relinquishing use and control of the premises and returning possession of the premises to the landlord in the state as required by the agreement."
4. The Appeal Panel also referred to Phoenix v Guangyue Chen [2020] NSWCATAP 255, a decision of the Appeal Panel (differently constituted) in December 2020, where it was said at [72]-[77]: 72 The significance of the delivery of keys in the context of the giving of possession was considered by the English Court of Appeal in Thomas v Metropolitan Housing Corporation Ltd [1936] 1 All ER 210. That case concerned the question whether a tenant was protected by the English Rent Restriction Acts. Under legislation enacted in 1923, where a landlord came into possession of a dwelling, to which the Rent Restriction Acts had previously applied, at any time after the passing of the 1923 legislation, then the Rent Restriction Acts ceased to apply to the dwelling. "Possession" was defined as meaning "actual possession", with the result that a landlord did not come into possession by reason only by reason of a change of tenancy made with the landlord's consent. 73 The facts giving rise to those proceedings were that a tenant who was entitled to the protection of the Rent Restriction Acts had moved her furniture out of the premises on the middle of the day on a Saturday and left the key to the premises at the landlord's agent's offices on the Saturday afternoon. The incoming tenant had occupied the premises over the weekend but only signed a lease on the following Monday. The trial Judge held that the protected tenancy came to an end on the Saturday and that the landlord had entered into actual occupation upon delivery of the key . That conclusion was upheld by the Court of Appeal. 74 Slesser LJ held, at 214: "There are many cases ... to the effect that the giving of a key giving access to the premises may amount to actual possession; and, when this is done with the intention to give possession, that possession will be an actual possession". 75 Scott LJ held, at 216: "Actual possession of empty premises, or of chattels which are locked up within a building or in a package of some sort, is retained by retaining the key . Possession of the key gives actual possession. The reason why there is so little law on the point is, I think, that it is difficult to imagine that anything to the contrary could ever have been contended ... the evidence is ... quite clear that the key of the premises was left with the landlord by the tenant going out on Saturday, October 17. That was a symbolical giving up of possession, leaving the actual possession in the landlords until the landlords parted with possession to somebody else." 76 Thomas v Metropolitan Housing Corporation was applied, in relation to a residential tenancy governed by the [RT Act], by P Taylor SC DCJ in NSW Land & Housing Corporation v Quinn (No 2) [2018] NSWDC 161. His Honour held that, in circumstances where a tenant had not returned the keys and there was no evidence of the date when he had vacated the premises, the tenant was liable for an occupation fee until the date of execution of a warrant for possession. At [258]-[259] his Honour held: 258 Although Mr Quinn may have vacated the premises earlier, there is no evidence that he returned the key , and, at least until late July 2014, the evidence is to the contrary. Having retained the key , he retained actual possession. Any presumption that he acted in accordance with the order of the Tribunal cannot displace the evidence that he had not returned the key by late July 2014, the presumption of continuity and an available Jones v Dunkel inference arising from his unexplained failure to give evidence on the subject. 259 As there is no evidence that vacant possession was earlier "given to the landlord", Mr Quinn is liable for the occupation fee until possession was proved to be taken by the Corporation. ... 77 It is clear that the question whether a tenant has given vacant possession of premises is a question of fact in each case. However, in our view, as Taylor DCJ held in NSW Land & Housing Corporation v Quinn, ordinarily a tenant does not give up vacant possession of premises until they return the keys to the landlord or the landlord's agent.
5. The Appeal Panel continued in Phoenix, stating at [78]-[82]: "78 Any other conclusion would create a difficulty for a landlord who knows that a property subject to a residential tenancy is empty. If the keys have not been returned, the landlord could not be confident that the tenant had abandoned the property or intended to terminate the tenancy. 79 In circumstances where a tenant appears to have abandoned the property, the landlord is entitled to approach the Tribunal for a declaration pursuant to s 106 that the tenant has abandoned the premises. Having obtained such a declaration, the landlord would be entitled to enter the premises. In the absence of such a declaration, a landlord would be at risk of committing an offence under s 120 of the [RT Act] if they were to enter the premises in circumstances where the tenant had not returned the keys. 80 There may be cases where a tenant gives notice that they have vacated the property and have in fact left the property empty but haven't handed over the keys. In those circumstances the landlord would generally be entitled to act upon the tenant's notification and enter the property and change the locks on the basis that the tenant had communicated an intention to deliver vacant possession. 81 There is no evidence in this case that the appellant gave any notice to the respondent or the respondent's agent that she had vacated the premises prior to 8 February 2020. 82 In our view the Tribunal did not make an error of law in concluding that the tenant did not give vacant possession until she returned the keys on 11 February 2020, nor could it be said that that conclusion was against the weight of evidence or not fair and equitable."
6. After examining the facts, the Appeal Panel in Stuart also determined that possession was effectively given to the landlord when the keys were returned, stating "At this point, the tenant ceased to have access to the premises and ceased to be able to exercise rights associated with possession" at [66].
7. The tenant has proffered no evidence to establish that she gave any notice to the landlord or the managing agent that she had vacated the premises and had left the property empty but hadn't handed over the keys, as referred to by the Appeal Panel in Phoenix at [80]. On that basis, the relevant facts are that the tenant continued to retain the keys and exercise control over the premises until she returned the to the managing agent on 29 December. The ordinary situation referred to in Phoenix at [77] and adopted in Stuart at [66] also applies here.
8. I therefore find that for both these reasons (the terms of the special condition and on the application of the principles described above to the facts of this case) the tenant continued to be liable to pay rent until 29December 2020.
9. The rate of $1,000 per fortnight is equivalent to a rate of $71.428 per day. The rental ledger shows that the tenant's rent was paid up to and including 17 December 2020 with a part payment of $221.79. The period from 18 December 2020 to 29 December 2020 amounts to 12 days which, at that daily rate, amounts to $857.14. From that must be deducted the part payment, leaving a balance of $635.35 due and payable by the tenant, as claimed by the landlord.
10. That amount and the amount conceded by the tenant for the damaged wall ($400) should be set off against the amount payable by the landlord to the tenant as decided above ($1429). That leaves a net balance of $393.65 payable by the landlord to the tenant.

PAYMENT OF THE BOND

1. As the amount payable by the tenant to the landlord has been accounted for by way of set off, there is no need for the landlord to be paid out of the bond. I am therefore satisfied that the whole of the bond should be repaid to the tenant.

CONCLUSION AND ORDERS

1. For the reasons described above, the tenant has been successful on establishing a claim against the landlord for the net amount of $393.65, and for recovery of the bond.
2. I therefore make the following orders: 1. the respondent landlord, Paul Reilly of c/- TPD Real Estate, XXX, Coogee NSW 2034 Australia, must pay to the applicant tenant, Nadine Taylor of XXX, Queens Park NSW 2034 Australia the net amount of $393.65 immediately. 2. The Rental Bond Service is directed to pay the whole of rental bond number XXX to the applicant tenant.

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: 03 September 2021