Torpey v Stewart

Grounds and scope of appeal

1. Under s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), a party may appeal as of right to the Appeal Panel in an internal appeal on any question of law. In respect of any other grounds, in the case of an appeal from the Consumer and Commercial Division of the Tribunal, as this is, the appellant must satisfy the Appeal Panel that leave to appeal should be granted under cl 12 sch 4 of the NCAT Act on the basis that: …..the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with)
2. Furthermore, as outlined by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 at [84(2)], ordinarily leave to appeal will only be granted in matters that involve: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; or 3. an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. the Tribunal having gone about the fact- finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.
3. In her Notice of Appeal the appellant set out as "Grounds of Appeal" a lengthy series of criticisms of the Tribunal's reasons for decision by reference to sequential paragraphs of those reasons. These did not refer to alleged errors of law and were not arranged as contentions in support of arguments directed at satisfying the conditions for the grant of leave to appeal.
4. At the hearing of the appeal, Mr Medin, who appeared as the appellant's representative (by leave earlier granted), clarified that the appeal was confined to the following claims (identified by reference to the claims outlined in [9] of the Tribunal's reasons): 1. Claim for loss of career prospects and income in the sum of $1,100.00. 2. Claim for compensation for illegal lockout including trauma in the sum of $15,000. 3. Claim for refund of the rental bond in the sum of $760. 4. Claim for repayment of overpaid rent in the sum of $700. 5. Claim for a rent reduction for two years due to non-approved granny flat and lack of services and facilities in the sum of $13,200.
5. The appellant had no legal representation. In Cominos v Di Rico [2016] NSWCATAP 5 at [13], the Appeal Panel stated that it may be difficult for self-represented appellants to clearly express their grounds of appeal and that in such circumstances 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. We have approached the appeal in this manner.

Claim (2), compensation for breach of the quiet enjoyment obligation-consideration

1. We deal, firstly, with claim (2).
2. As we have said, the Tribunal awarded the appellant the sum of $2,500.00 in respect of non-financial loss for breach of the covenant of quiet enjoyment. The Tribunal made it clear that this sum was awarded because of the "inconvenience, embarrassment and frustration, and loss of the use of the premises" that the appellant had suffered as a consequence of the respondents' breach of contract (at [50] of the reasons).
3. As we will, shortly, examine the Tribunal did not include in this award any damages for mental distress.
4. On appeal, the appellant complained that she had suffered more than what was acknowledged by the Tribunal. She referred to the stressful situation she found herself in, exacerbated by the COVID-19 lockdown. She also described the situation as a frightening and traumatic one. She said she suffered trauma, panic and high anxiety.
5. It is clear that recovery of damages in respect of matters identified by the Tribunal in awarding the sum of $2,500.00 is available for breach of the landlord's obligation concerning quiet enjoyment in accordance with the approach to the recovery of such damages in Baltic Shipping Co v Dillon (1993) 176 CLR 344; [1993] HCA 4 (Baltic Shipping) and that limitations of recovery in Part 2 of the Civil Liability Act 2002 (NSW) (CLA) are not applicable to such a claim: Moore v Scenic Tours Pty Ltd (2000) 268 CLR 326; [2020] HCA 17; (Moore's case); Makowska v St George Community Housing Ltd [2020] NSWCATAP 159.
6. It is also clear that damages for mental distress fall within the same category of recoverable damage. In Moore's case, the plurality of the High Court (at [56]-[57]) approved of the following statement by Spigelman CJ in New South Wales v Ibbett (2005) 65 NSWLR 168 at [21]; [2005] NSWCA 445: "The concept of 'personal injury' ... has rarely, if ever, been used to refer to harm to reputation, deprivation of liberty, or to injured feelings such as outrage, humiliation, indignity and insult or to mental suffering, such as grief, anxiety and distress, not involving a recognised psychological condition. (See, for example, Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 359‑363.)"
7. The plurality in Moore's case said that this statement reflected a correct appreciation of the effect of the decision in Baltic Shipping that a claim of the kind made by Mr Moore stood separately and apart from a claim for damages for disappointment and distress associated with physical injury.
8. Hence, mental distress unassociated with physical injury of the kind referred to in these cases is not a "personal injury" within the meaning of Part 2 of the CLA.
9. A distinction previously drawn between damages for loss of enjoyment in respect of residential tenancy premises and damages for mental distress resulting from breach of the residential tenancy agreement to which the CLA will apply is no longer a valid one in view of the decision in Moore's case: see, for example, Tralee Technology Holdings Pty Limited v Yun Chen [2015] NSWSC 1259 at [61].
10. It was apparent that a claim for mental distress of this nature was included in the case presented to the Tribunal. The Tribunal dealt with it in the following way: 1. It noted that the appellant submitted that she suffered trauma and distress from the respondents' actions (at [39]). 2. It noted that the appellant tendered evidence of the impact the lockout had on her health and that she said she was emotionally scarred for life and would need costly medical and psychological treatment (at [42]). We note that this reference to the tendered evidence may have been a reference to a medical certificate from a doctor at the Belrose Medical Centre dated 7 July 2020 which referred to stress and anxiety suffered by the appellant. 3. The Tribunal concluded that any claim for non-economic loss related to compensation for personal injury and no award could be made in this application (at [43]. 4. Presumably, because of the conclusion in (3), it made no factual findings as to what the appellant had, if anything, suffered in this regard.
11. Although not spelt out, it would seem that the Tribunal concluded that the appellant's claim in respect of mental suffering was "personal injury" within the meaning applied in Part 2 of the CLA and was "non-economic loss" falling within s 16(1) of the CLA. Hence, no award for such loss could be awarded unless the severity of the non-economic loss was at least 15% of the most extreme case and there was no basis upon which to make such a finding.
12. In view of what we have said about the appellant's claim for mental distress and the decision in Moore's case, in our opinion, the Tribunal erred in law in rejecting this element of her claim on such a basis. The Tribunal made no reference to the decision in Moore's case and erred by not recognising that her claim for mental distress was an available one, as to which the necessary factual findings needed to be made about its merits.
13. In saying this, we make no comment at all about the factual merits of the appellant's claim in respect of mental distress. The Tribunal's reference to her evidence that she said she was emotionally scarred for life might suggest it was concerned that her claim may suffer from exaggeration. However, the Tribunal did not resolve the claim on the basis of any factual findings in relation to it.
14. It is also the case that in arriving at the award of $2,500.00 the Tribunal rejected the appellant's claim for aggravated damages. In part, it may have done so because of the conclusion we have already addressed that her claim for mental suffering was precluded by the operation of Part 2 of the CLA. We say this because the Tribunal's conclusion that it dismissed the claim for aggravated damages is expressed in the same paragraph and immediately after its conclusion about non-economic loss and personal injury that we have referred to in paragraph 29(3) above (at [43] of the reasons). If that was the case then its rejection of the claim suffers from the same error of law that we have already identified.
15. However, earlier in the reasons (at [41]), the Tribunal said it accepted that the respondents illegally evicted the appellant and then said: "The evidence establishes that while there was a "lock out" the Tenant was absent when the Landlords removed her belongings from the premises. There was no assault or other inappropriate conduct which aggravated the wrongful act sufficient to support an award of aggravated damages."
16. This conclusion mirrors that expressed by the Appeal Panel in Corcoran v Far [2018] NSWCATAP 13 (at [73]), a case concerning breach of the quiet enjoyment obligation, to which the Tribunal referred (at [21]).
17. The Tribunal applied the correct test concerning recovery of aggravated damages: see at [40] of the reasons.
18. We discern from the appellant's submissions on appeal a complaint that the Tribunal did not consider or fully explore a number of aspects about the "lock out", in particular, the following: 1. The appellant received an SMS demand to leave the premises within 48 hours on Easter Monday (27 April 2020) during the COVID-19 pandemic lockdown, and with no reason given. 2. Whilst she was out of the premises, the appellant's belongings were packed up by the respondents in plastic bags and placed on the carport outside the premises, she was told that these belongings would be disposed of within 48 hours, they were exposed to the elements and to the risk of theft, the electricity was cut off and the premises were turned into a shambles. 3. The respondents conduct led the appellant to seek police assistance. 4. Her eviction was contrary to the COVID-19 moratorium on evictions. 5. The respondents were warned by the Northern Sydney Area Tenants' Service that the eviction was illegal and an offence under s 120 (1) of the RTA but it was not withdrawn. 6. The eviction was ruthless, inhumane and vindictive.
19. Section 120(1) of the RTA provides: 120 Repossession of residential premises - offences (1) A person must not enter residential premises for the purposes of taking possession of those premises before or after the end of a residential tenancy agreement unless - (a) the person is acting in accordance with a warrant arising out of an order for possession of the Tribunal or a writ or warrant arising out of a judgment or order of a court, or (b) the tenant has abandoned the premises or given vacant possession of the premises. Maximum penalty - 200 penalty units.
20. It is a matter of public policy that under the law of contract a defaulting party is not to be punished for its breach and the motive or state of mind of a person who is guilty of a breach of contract is not relevant to the question of damages for the breach: Mann v Paterson Constructions Pty Ltd (2019) 267 CLR 560 at [37] per Kiefel CJ, Bell and Keane JJ; [2019] HCA 32.
21. Some of the appellant's submissions on this topic are contrary to these principles.
22. Nevertheless, the Tribunal did not explain its conclusion that there was no other inappropriate conduct involved in the manner of the breach. In our opinion, the Tribunal erred in law in failing to do so. This was a failure to provide adequate reasons: see NSW Land and Housing Corporation v Orr (2019) 100 NSWLR 578 at [71] per Bell P; [2019] NSWCA 231. The Tribunal needed to address the material evidence on this subject, make findings as to the factual contentions of the appellant and set out the reasoning that gave rise to its conclusion.
23. For the above reasons, in our opinion, there were errors of law made by the Tribunal concerning the appellant's claim for damages for mental distress and for aggravated damages in respect of the respondents' breaches of the tenancy agreement concerning the unlawful "lock out".

Claim (1), claim for the loss of career prospects-consideration

1. The appellant complained that the Tribunal in dismissing claim (1) did not take account of the movement restrictions imposed by the COVID-19 pandemic lockdown and the difficulty this caused for the appellant in finding alternative accommodation with the alleged consequence that she lost a carer job she had and other sources of income because of the unusually lengthy time required in seeking alternative accommodation.
2. The Tribunal rejected this claim because it was not satisfied that the loss allegedly suffered fell within the well-established rule in Hadley v Baxendale (1854) 156 ER 145 concerning recovery of damages for breach of contract.
3. We see no error of law by the Tribunal in this respect, or any error of the nature referred to above that would lead us to grant leave to appeal in respect of this claim.

Claim (3), a claim for refund of the rental deposit-consideration

1. The appellant's claim included a claim for the refund of the rental bond deposit paid by her in the amount of $760.00. The claims in respect of this bond were not administered in accordance with the RTA because the respondents did not deposit the bond with the Secretary as required by the RTA.
2. The Tribunal decided to reduce the refund of the bond to the appellant by an amount of $182.85 for rent arrears in respect of the 4 days from 24 April 2020 to 27 April 2020. The Tribunal said it was satisfied that the respondents' claim that the rent for these days was unpaid was correct.
3. This conclusion followed the Tribunal's conclusion, in respect of claim (4) below, that the rent was paid to 23 April 2020 (at [51]). This conclusion was said to be based upon the respondents' bank statements and the sworn evidence of Mr Stewart.
4. Resolution of this issue appears to have turned upon whether a payment by the appellant of $320.00 (the amount of weekly rent) to the respondents on 23 April 2020 was a payment in advance of the week's rent or in arrears. Some record of some rental payments received by the respondents was presented to the Tribunal by them. This showed receipt of this payment on that date (page 35 of the respondents' bundle). It is clear enough from the Tribunal's conclusions that it saw the effect of Mr Stewart's evidence to be that it was a payment in arrears.
5. At the hearing of the appeal, Mr Medin contended that a Westpac receipt for this payment, a photograph of which was in evidence before the Tribunal, showed that the Tribunal had erred in arriving at this conclusion.
6. However, the receipt shed no light on the key question whether the payment was rent in advance or in arrears.
7. In her written submissions, the appellant criticised the Tribunal's findings on this subject because the respondents had not presented to the Tribunal any actual bank statements. However, some record of the payments it had received was presented to the Tribunal and, consistently, with the Westpac receipt showed the payment of the amount of weekly rent on 23 April 2020. As we have said, the issue was whether this was a payment in advance or in arrears and, on appeal, the appellant did not present any material to show that the Tribunal was wrong in its finding, let alone that it was, plainly, wrong in this regard.
8. Accordingly, we see no appellable error in respect of the Tribunal's conclusion concerning this claim.

Claim (4), claim for return of overpaid rent-consideration

1. Before the Tribunal the appellant claimed the sum of $700.00 made up of $380.00 paid in advance at the commencement of the tenancy and $320.00, being the above amount claimed to have been paid on 23 April 2020 as rent in advance.
2. This claim was rejected by the Tribunal by its conclusions that we have already referred to about rent having been paid to 23 April 2020.
3. For the same reasons we have just given concerning claim (3), we see no appellable error in respect of the Tribunal's conclusions concerning this claim.

Claim (5), claim for reduction in rent-consideration

1. The appellant contended that the Tribunal should have awarded her the sum of $6240.00 for one year's excessive rent pursuant to s 44(1)(b) of the RTA. The claim before the Tribunal had been for twice this amount but the appellant accepted that the maximum that could be awarded was for a 12 month period: see s 44(6)(a) of the RTA.
2. In the first place, the Tribunal rejected this claim because it was out of time.
3. Under s 44(3) of the RTA the appellant's application to the Tribunal needed to be brought "before the end of a tenancy". The Tribunal referred to an application for this relief (amongst other claims) being filed on 29 April 2020: at [63]. The Tribunal then referred to its earlier finding that the tenancy ended on 27 April 2020 when the appellant accepted the respondents' repudiation of the tenancy agreement and concluded that, accordingly, the application under s 44(1)(e) for excessive rent was out of time: at [65].
4. The Tribunal went on to deal with the merits of the excessive rental application should it be wrong in its conclusion that the application was out of time. It rejected the application on the merits.
5. At the hearing of the appeal, Mr Medin contended that the Tribunal erred in concluding that the tenancy ended on 27 April 2020. He said this was based upon a conclusion that the appellant abandoned the premises when, in fact, she never abandoned the premises, rather she was evicted from them. He contended that, in truth, the tenancy never came to an end.
6. However, in arriving at its conclusion that the tenancy came to an end on 27 April 2020 the Tribunal found that the respondents had repudiated the agreement by locking out the appellant and that the appellant's acceptance of that was communicated to the respondents "on or about 27 April 2020".
7. Earlier in these reasons (at paragraph [9] above), we said we disagreed with the Tribunal's conclusion that the tenancy terminated pursuant to s 84(1)(d) of the RTA by the tenant's abandonment of the premises.
8. On appeal, the respondents did not refer to any reason to doubt the correctness of the Tribunal's finding that there was communication of the appellant's acceptance of the respondents' repudiation "on or about 27 April 2020". However, the unspecific nature of this finding raises uncertainty about whether the tenancy did come to an end prior to the claim filed by the appellant on 29 April 2020. For that reason, we have decided that we should address the appellant's contentions on appeal as to the merits of her claim for excessive rent.
9. In our opinion, the appellant's submissions reveal that her claim under s 44(1)(b) was misconceived. She contended that the Tribunal was wrong to conclude that she had not proved her case for a rent reduction and submitted: "The tenant irrefutably proved her case by demonstrating that the existing old rumpus [room] was leased at an exorbitant rent of $380/360 pw and the same rumpus room after extensive conversion to a modern studio could only be leased at $300pw….It appears that in its considerations, the Tribunal only took notice of the photos of advertisements (provided by tenant) of Council approved granny flats and units in surrounding suburbs and did not at any stage take into account nor mention the evidence presented by the tenant; that the rent paid $300pw following the extensive and complete conversion of the existing rumpus/billiard room, to a modern studio, with new kitchen facilities, fully furnished with new furniture and Council approval was less than the rent paid ($360pw ave). The attached photos…. show the premises before and after the modern studio conversion. The original premises were classified by the Warringah Council as a rumpus room and falsely advertised and leased to the tenant as a "granny flat" initially at $380pw, with no Council occupational certification, with no cooking facilities, crumbling ceiling, risky electricity wiring and power supply, tank water (no pressure and cloudy) the furniture was old and dilapidated….. Comparing to the rent paid $300pw for the fully renovated, and converted rumpus room to a modern fully furnished Studio with Council occupational approval, to the rundown rumpus room…., proves that the rent charged for the rumpus room was far in excess of a fair rental which was estimated by a local real estate agent at $200pw max; the difference being an excessive rent of $120pw paid by the tenant for 2 yrs. The studio was leased within 3 weeks following the sale of the property, June 2020 for $300pw. This highlights the exorbitant rent charged by the respondents for their dilapidated rumpus room. The tenant's claim for $6240 for 1 year max excessive rent paid for the dilapidated rumpus room be reviewed on the basis that; the converted rumpus room to a modern studio with Council approval was leased at $6240 less p.a than the original rundown rumpus room which badly needed renovation in accordance with Council building code." [Our emphasis].
10. It can be seen that this case for a reduction in rent is based upon the condition of the residential premises as originally leased. This is not the kind of claim that falls within s 44(1)(b) of the RTA. Relevantly, s 44 provides: 44 Tenant's remedies for excessive rent (1) Excessive rent orders The Tribunal may, on the application of a tenant, make any of the following orders - …… (b) an order that rent payable under an existing or proposed residential tenancy agreement is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises and that, from a specified day, the rent for residential premises must not exceed a specified amount. …….. (3) Applications on withdrawal of goods or services A tenant may, before the end of a tenancy, make an application that the rent is excessive, having regard to the reduction or withdrawal of any goods, services or facilities provided with the residential premises, even if those goods, services or facilities were provided under a separate or a previous contract, agreement or arrangement.
11. There must be a reduction or withdrawal by the landlord of goods, services or facilities originally provided under the tenancy agreement before the Tribunal can make an order about excessive rent. Furthermore, the section is concerned with a reduction or withdrawal of the physical and other facilities, goods or services, provided within, or as part of, the tenanted property: Pan v Malveholm [2021] NSWCATAP 101 at [34]-[43].
12. The appellant did not point to any claim, with supporting material, showing a basis for assessment of an amount of excessive rent founded solely upon withdrawal or reduction of specific goods, services or facilities. She made some reference on appeal to a failure by the Tribunal to refer to various changes under the lease, including, but not limited to, disallowance of a cat and ability for the tenant to provide beauty treatment services. However, as can be seen from the submissions on appeal, her claim was not based upon an assessment of the rental impact of such specific changes. Furthermore, it was not based upon identification of changes in the physical and other facilities, goods or services provided within, or as part of, the tenanted property.
13. Accordingly, in our opinion, any criticism about the manner in which the Tribunal dealt with the merits of the claim for excessive rent is not material.

Other ground of appeal

1. In her written material presented on appeal the appellant contended that she did not get a fair hearing because she was unable to fully present all of the issues relating to her case. She said she was very intimidated by the respondents during the hearing and complained that whilst on the first hearing day (there were two separate hearing days) Mr Medin was allowed to speak on her behalf this was not permitted on the second hearing day.
2. However, the appellant has not substantiated her complaint by presenting aspects of the transcript of the hearing showing what, specifically, occurred and that it amounted to procedural unfairness, nor has she identified any specific matter that she was unreasonably prevented from presenting to the Tribunal for resolution.

Orders

1. For the above reasons, we have decided that the appeal should be allowed in respect of the claims for mental distress and aggravated damages allegedly resulting from the respondents breaches of the tenancy agreement in relation to the "lock out" of the appellant from the premises on 27 April 2020.
2. These claims will need to be redetermined by a differently constituted Tribunal. This is the necessary and appropriate course in circumstances where we have not been presented with the evidence that was adduced before the Tribunal and where resolution of the claims is likely to involve an issue as to the appellant's credit. In view of the relevant conclusions that the Member has already arrived at it is appropriate that these claims are determined by a differently constituted Tribunal. We are not aware of any reason why such redetermination should not be based upon the evidence already adduced to the Tribunal. Nevertheless, we will make provision for the Tribunal to permit such further evidence as it may decide to allow.
3. Accordingly, we make the following orders: 1. The appeal is allowed in part. 2. Set aside the Tribunal's orders made on 25 March 2021 but only in so far as those orders dismissed the appellant's claim for mental distress and aggravated damages resulting from the respondents' breaches of contract relating to the "lock out" of the appellant from the residential tenancy premises on 27 April 2020. 3. Remit the claims referred to in order (2) to a differently constituted Tribunal for redetermination upon the evidence already adduced to the Tribunal at first instance and such further evidence as the Tribunal may allow.

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: 30 August 2021