In this appeal, Mr Udy, a tenant, challenges a decision of the Consumer and Commercial Division of the Tribunal (the Tribunal) made on 14 April 2016 under the Residential Tenancies Act 2010 (RTA).
Mr Udy entered into a residential tenancy agreement with Ms Tilley, the owner, to occupy a dwelling in Katoomba commencing on 23 July 2013. Based on photographs shown to us, it is a small two level timber dwelling.
The rent was set at $350 per week. Since an early date after taking possession of the premises on 23 July 2013, the appellant raised concerns about the adequacy of various aspects of the premises, most importantly the hot water system. There was debate at the Tribunal hearing about the contents of his ingoing condition report as to defects and steps taken by the landlord to repair the defects.
Mr Udy is in dispute with Ms Tilley over the scope of the landlord's obligation to repair, especially in relation to attributes of the premises that existed at the time of entry into the lease. In his application to the Tribunal, Mr Udy alleged that the landlord, Ms Tilley, had consistently failed to repair the premises. Based on this alleged withdrawal of amenities, he sought reduction in rent pursuant to section to s 44 of the RTA, and, in the alternative argued that the rent should be declared excessive due to a withdrawal of services and amenities.
The Tribunal made three orders. Order 1 (not in dispute in this appeal) required four repairs to be undertaken by the landlord. Order 2 dismissed an application by the tenant for an order that a rent increase was excessive. Order 3 dismissed an application for reduction of rent.
Mr Udy appeals against Orders 2 and 3. As to Order, his position is that it did not go far enough. He contends that the Tribunal should have made a wider order in his favour in respect of a number of other repair items that he put in issue. He seeks an order permitting him to reagitate those matters. In addition he seeks the setting aside of the other two orders.
The appeal is brought under s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NCAT Act), s 80(2)(a). An appeal may be made in relation to 'any question of law', and, with the leave of the Appeal Panel, may extend to 'other grounds'. The Appeal Panel may only grant leave to extend the appeal to other grounds (i.e. grounds that do not raise questions of law) in respect of appeals from the Consumer and Commercial Division if one or more of the criteria found in cl 12 of Sch 4 of the NCAT Act is satisfied.
Mr Udy's notice of appeal has many points, some of which raise questions of law, and there is also an application for leave to appeal on other grounds.
We heard the appeal on 21 November 2016. Mr Udy appeared in person. Ms Howarth, an agent, appeared with leave for the respondent landlord, Ms Tilley.
[2]
Background
The Tribunal's hearing took place on 14 April 2016, and it delivered its decision at the conclusion of the hearing. The Registry issued an official Notice of Order dated the same day, 14 April 2016, that included some short explanations of the rulings.
Its text was as follows:
1. The tribunal orders that the respondent Monique Tilly is to carry out the following work on before 28 April 2016 in a proper and workmanlike manner.
Details of work order
that the screen door be repaired.
That the oven light be repaired.
That the front door be repaired.
That the clothes dryer be repaired.
With regard to section 44(1)(a) the application is clearly out of time and is dismissed.
2. With regard to section 44(1)(b) regarding the rent reduction. Section 191 of the residential tendencies Act 2010 states "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 the tenant becomes aware of the breach or within such other period as may be prescribed by the regulations.
Regulation 22(9) specifies the time limit for such applications as three months from the landlord or tenant becoming aware of the breach.
Section 41 (1) of the Civil and Administrative Tribunal Act 2013 states: "the Tribunal may of its own motion or an application off any person extend the period of time for these so doing of anything under any legislation in respect of which the Tribunal has jurisdiction.…
Such an application may be made even though the relevant period of time had expired.
However this must be read in conjunction with section 44 (6) which allows a tribunal to make an order for not more than 12 months. The tenant must still be in possession of the premises.
The tribunal will take a wider reading off the section and as the Act specifies the limitation of 12 months the tribunal will not apply clause 20(9) in the circumstances.
However, many of the alleged breaches relate to the commencing of the lease on the 26 July 2013.
However as the applicant bears the onus on the balance of probabilities the Tribunal is not satisfied from the evidence presented that the issues were put to the landlord in a timely and written manner on all issues raised.
With regard to the hot water system the Tribunal does not have sufficient evidence to order that the unit be replaced as faulty, the unit was inspected by licensed plumber who saw no issue with the hot water system.
With regard to the remaining issues the Tribunal accepts the evidence of the respondent with regard to proper notification and that part of the application was dismissed.
On 28 April 2016, Mr Udy applied to the Registry of the Tribunal for a statement of written reasons under s 62 of the NCAT Act. Section 62 provides:
62 Tribunal to give notice of decision and provide written reasons on request
(1) The Tribunal (including when constituted as an Appeal Panel) is to ensure that each party to proceedings is given notice of any decision that it makes in the proceedings.
(2) Any party may, within 28 days of being given notice of a decision of the Tribunal, request the Tribunal to provide a written statement of reasons for its decision if a written statement of reasons has not already been provided to the party. The statement must be provided within 28 days after the request is made.
(3) A written statement of reasons for the purposes of this section must set out the following:
(a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based,
(b) the Tribunal's understanding of the applicable law,
(c) the reasoning processes that lead the Tribunal to the conclusions it made.
(4) Nothing in this section prevents the Tribunal from giving oral reasons or a written statement of reasons for a decision it makes even if it has not been requested to do so by a party.
The Registry emailed him on 4 May 2016 advising that the request had been referred to the Tribunal Member and a copy of the written reasons would be forwarded to all parties on completion.
However on 6 May 2016 the Registry sent a letter to him informing him that the presiding member had advised that the orders issued by him had included reasons which satisfy the requirements of s 62(2) of the NCAT Act and no further reasons would be made available.
[3]
Extension of Time to Appeal.
Under the rules (Civil and Administrative Tribunal Rules 2014, cl 25(4)(b)) an appeal must be lodged:
(b) in the case of an internal appeal against a decision made in residential proceedings - within 14 days from the day on which the appellant was notified of the decision or given reasons for the decision (whichever is the later)
The Tribunal may extend times allowed for the doing of things: NCAT Act, s 41.
It will be seen that Mr Udy applied for written reasons under s 62 on or about the last day of the appeal period (we had no precise evidence as to the date on which he received the notice of order). He ultimately lodged his notice of appeal on 20 May 2016, 14 days after receiving notice from the Registry that no reasons would be supplied in response to his request under s 62.
The Appeal Panel accepts the appellant's submissions that his failure to meet the original deadline was attributable to the fact that he was awaiting the provision of written reasons for decision to enable him to prepare his appeal. In our view, for the reasons that follow, his application for written reasons was a reasonable one in the circumstances, and should have been granted. Had written reasons been supplied, instead of being refused on 6 May 2016, his appeal would have been in time by virtue of the second part of cl 25(b). Accordingly, at the hearing we allow time to be extended. There was no objection to this course from Ms Howarth.
[4]
Grounds of Appeal
Mr Udy's notice of appeal is very detailed. In our opinion, his three main grounds of appeal are:
1. That the Tribunal erred in law because its reasons were inadequate;
2. That the Tribunal erred at law because it took into account an irrelevant consideration;
3. That the decision to dismiss the application under s 44(1)(b) was not fair and equitable.
[5]
Which Set of Reasons are being Appealed
We have set out above the reasons contained in the Notice of Orders issued 14 April 2016.
On or about 25 May 2016, the Registry sent the parties a second set reasons for decision prepared by the Member who heard the matter. Moreover, the appeal papers provided to the Appeal Panel indicated that the second set of reasons were the reasons to which the appeal related.
There was no explanation on the Registry file as to why a second set of reasons was issued, given the communication of 6 May 2016.
The second set of reasons contains 41 paragraphs. They are significantly different and somewhat inconsistent with the reasons issued 14 April 2016.
In our view, they must be disregarded.
The issuance of written reasons after lodgment of a Notice of Appeal in a situation where a timely request for written reasons has been rejected would, we think, give rise to an apprehension of partiality or bias in the mind of a reasonable observer. Whether actually the case or not, the impression is created that the Member may have issued the second written reasons in response to the lodgment of the Notice of Appeal.
It may appear to the independent observer that a second set of reasons was created to bolster any weaknesses, and perhaps respond directly to the grounds of appeal. 'The fear that is expressed in an assertion of apprehended bias, whatever its source, is of a deviation from the true course of decision-making': per Kiefel, Bell, Keane and Nettle JJ in Isbester v Knox City Council [2015] HCA 20 at [21] citing with approval the observations of Hayne J in Minister for Immigration and Multicultural Affairs v Jia Legeng (2001) 205 CLR 507 at 563 [183]. There was, plainly here, a deviation from the true course of decision-making.
Mr Udy advised us at hearing that he had tried to obtain a CD recording of the hearing from the Registry, but was told that the relevant CD was blank and the Member's copy had been deleted.
So he only had the explanation given in the Notice of Order of 14 April 2016 on which to base his appeal grounds. In his submissions, he had understandably took into account the reasons issued 25 May 2016 thinking they might now be the applicable reasons.
In the circumstances, there has been a failure of due process in the procedures followed by the Tribunal in acting inconsistently in relation to the provision of written reasons (the conflicting communications of 4 and 6 May 2015), and in doing so in a manner which might create an apprehension of bias on the part of the Tribunal in the mind of a reasonably minded observer.
Accordingly we will only consider the set of reasons contained in the notice of order in relation to the objections raised by the notice of appeal.
[6]
Adequacy of Reasons
At common law, judicial officers have a duty to give adequate reasons arising from their office as a judge: see, for example, Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 269-70; Pettitt v Dunkley [1971] 1 NSWLR 376; and for a recent synopsis see Keith v Gal [2013] NSWCA 339 esp per Gleeson JA. Judicial officers, such as judges or magistrates, who serve in Tribunals therefore have that duty.
Arguably, the common law obligation also applies today to all 'administrative tribunals which, by the statutes creating them, are required to give reasons for their decisions': see Absolon v NSW TAFE [1999] NSWCA 311 at [66] per Powell JA. NCAT has a statutory obligation to give reasons.
Moreover, it is accepted that s 62 of the NCAT Act does not exhaust the scope of this Tribunal's duty to give adequate reasons. The fact that a decision at first instance is appealable casts an implied obligation, at the least, on the Tribunal at first instance to issue adequate reasons. See further, Assadourian v Roads and Maritime Services (GD) [2013] NSWADTAP 46 at [41]-[45]; Collins v Urban [2014] NSWCATAP 17 at [43]-[64]; JCD Ideas Holdings Pty Ltd T/AS Cafeideas v Poole & Poole [2015] NSWCATAP 122.
Whether considered in the context of the obligation under s 62 of the NCAT Act or in the context of the common law obligation to provide reasons, in our opinion the reasons that accompanied the notice of order were not adequate. They did not explain why the s 44 claim was dismissed. They do not refer to any relevant material findings of fact. They provided no basis for the conclusion that the 'the application is clearly out of time'. Nor did those reasons delineate between different heads of damages.
Accordingly, we uphold Mr Udy's main ground of appeal. In the interests of justice, the orders should be set aside and Mr Udy's application remitted for reconsideration.
[7]
Other Grounds of Appeal
It is therefore strictly not necessary to deal with the other grounds of appeal. To assist the reconsideration of the matter we make the following observations.
In respect of Order 1 (that the landlord undertake repairs in relation to four items) the short note of reasons provided with the Notice of Order refers to the repair of the hot water system and does not contain any explanation for dismissal of the other claims for repairs made by the tenant.
In relation to Order 2 (dismissal of claim under s 44(1)(a)) there is no explanation as to why that conclusion was reached, though it may be inferred that the problem had to do with the time limits placed on excessive rent applications by s 44(2) of the Act.
The reasons do go further in explaining Order 3 which dismissed the tenant's application for a rent reduction (the s 44(1)(b) application).
They began by referring to s 190(1) of the RTA which provides, relevantly, that a tenant 'may apply for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after ... the tenant becomes aware of the breach or within such other period as may be prescribed by the regulations'.
The reasons then refer to Regulation 22(9) which, it is said, specifies that the time limits for such applications is 3 months from the tenant 'becoming aware of the breach'. The reasons then recite s 41 of the NCAT Act, the general power to extend time provisions found in legislation under the jurisdiction of the Tribunal such as the RTA.
The reasons then include a narrative which does shed some light on the issues in the proceedings. The section has five paragraphs starting with 'However, this must be read ...' and ends with the 'application is dismissed', and is set out above.
In our view, Mr Udy's three categories of claim need to be clearly divided into the s 44(1)(a) claim (excessive rent); the s 44(1)(b) claim (reduction or withdrawal of services); and s 187 (general claims in these proceedings, such as applications for orders for compensation). This is because each category of claim carries different time limits.
There need to be clear findings of fact as to the time alleged breaches of the tenancy agreement were known to the tenant. In determining each of the tenant's claims, the Tribunal may consider distinguishing between a claim for compensation for a breach of a tenancy agreement, and a claim for reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises.
The former may be considered as a claim under s 190, the latter as a claim pursuant to section 44. Each attract different time limits in accordance with clause 22 of the Residential Tenancies Regulations 2010 as was touched upon by the Tribunal. A tenant may bring a claim for compensation within 3 months of becoming aware of the breach (see clause 22(9)).
A claim for an excessive rent increase for the purpose of section 44 (2) of the Act must be brought within 30 days after the notice of the increase is given. A claim for rent reduction must be brought before the end of a tenancy (s44(3)).
The Tribunal, on rehearing of the matter may also consider whether an amenity or service that was not provided from the beginning of the tenancy, can give rise to a claim for rent reduction pursuant to s 44(1)(b). Each of the tenant's claims by the tenant should be considered either as a claim for compensation, identifying the breaches alleged, and the time of each breach; or a claim under s 44, necessitating findings about the reduction or withdrawal of a particular service or amenity and the date of the said withdrawal.
[8]
Order
1. Time for lodgment of appeal extended.
2. Orders 2 and 3 made on 14 April 2016 are set aside.
3. Application RT 16/02862, including claims for relief dismissed by Order 1 made 14 April 2016, is remitted to the Consumer and Commercial Division, differently constituted, for redetermination.
4. Orders purportedly made on 25 May 2015 set aside.
[9]
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: 15 February 2017