van Brugge v Foresto

NCAT Appeal Panel|2022-03-21|Before: Blake AM

Introduction

As we understand the position, the tenant contends that: 1. his eviction from the premises was illegal for the following reasons: 1. the 8 July 2021 termination notice, which was issued with a view to avoiding the predicted moratorium, was retaliatory; 2. at the time of the 9 August 2021 termination notice was issued he owed rent of $3,400.00. The landlords failed to make an application for $3,000.00 available under the residential tenancy support package. If they had done so and had used the rental bond of $2,400.00, then he would not have been in arrears on 30 August 2021; 3. Mr Millane had falsely stated on 3 September 2021 that the Sheriff would forcibly evict him at 9.00am on 4 September 2021; 1. the damages for cleaning and rubbish removal were occasioned by the misrepresentation of Mr Millane that the Sheriff would evict the tenant at 9.00am on 4 September 2021. He relied on this misrepresentation in vacating the premises and thereby lost the opportunity to clean the premises and remove his belongings.

Ground 3: the Tribunal erred in awarding damages for the repair of the rip in the carpet and the kitchen benchtop

Introduction

As we understand the position, the tenant contends that: 1. the rip in the carpet was fair wear and tear; 2. the landlords agreed to the alteration of the kitchen benchtop; 3. damages should not have been awarded for the repair of the carpet and the kitchen benchtop when the landlords had not carried out the repairs.

Consideration

The Tribunal considered and rejected the tenant's contention that the rip in the carpet was fair wear and tear. This was a factual finding. We are not satisfied that this finding was not fair or equitable or against the weight of evidence within cl 12(1)(a) and (b) of Sch 4 of the NCAT Act. In the absence of the documents received into evidence at the hearing and a complete transcript of the hearing, we are not in a position to consider whether the evidence in its totality preponderates so strongly against the conclusion found by the Tribunal at first instance that it can be said that the conclusion was not one that a reasonable Tribunal member could reach.
As the tenant has not provided a complete transcript of the hearing we are not satisfied that the contention the landlords agreed to the alteration of the kitchen benchtop was the subject of evidence at the hearing. Further, this contention is not mentioned in the Tribunal Decision. It follows that this contention cannot be considered in this appeal.
In Ellis's Town House Pty Ltd v Botan Pty Ltd [2017] NSWCA 20 (Ellis) the appellant landlord submitted that damages should not be awarded on a 'cost of cure' basis in a case where the painting and repair work had not been done by the tenant, and where there was an absence of evidence that the tenant had any intention to do the work. This meant the work was not necessary and the tenant had not suffered any loss. Gleeson JA at [25]-[26] set out the following principles (Leeming JA at [47] and Simpson JA at [61] agreeing): "[25] … It is not in dispute that the ordinary principles of contract law, including those of damages for breach of contract, apply to a lease: Progressive Mailing House v Tabali (1985) 157 CLR 17 at 29; [1985] HCA 14. It is also common ground that the 'ruling principle' with respect to damages at common law for breach of contract is that stated by Parke B in Robinson v Harman (1848) 1 Exch 850 at 855; 154 ER 363 at 365: … The rule of the common law is, that where a party sustains a loss by reason of a breach of contract, he is, so far as money can do it, to be placed in the same situation, with respect to damages, as if the contract had been performed. … See Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272; [2009] HCA 8 (Tabcorp) at [13]; Clark v Macourt (2013) 253 CLR 1; [2013] HCA 56 at [10] (Hayne J), [27] (Crennan and Bell JJ), [60] (Gageler J), [106]-[107] (Keane J). [26] The corollary of the principle in Robinson v Harman is that a plaintiff is not entitled, by an award of damages, for breach of contract, to be placed in a superior position to that which he or she would have been in had the contract been performed: The Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 82; [1991] HCA 54; Tabcorp at [27] (Crennan and Bell JJ), [60] (Gageler J). However that does not mean, as Ellis seemed to suggest, that Botan had suffered no loss because it had not yet incurred any expenditure in connection with painting and repairing the leased premises."
In Ellis Leeming JA at [47]-[59] in making additional comments provided a detailed analysis for rejecting the landlord's submission that the tenant was entitled only to nominal damages, rather than damages measured by the cost of performing the work promised to be undertaken by the landlord, which the tenant had not incurred and might never incur.
Having regard to the principles in Ellis, the question of whether the landlords have actually or intend to repair the carpet and the kitchen benchtop is not a relevant consideration in determining the measure of damages recoverable by the landlords.
For these reasons we reject ground 3.

Ground 4: the Tribunal erred in rejecting the tenant's claim for $15,000.00 for the unauthorised disposal of his belongings

Ground 5: the Tribunal erred in taking into account the notional storage costs in determining the tenant's claim for compensation for the unauthorised disposal of his belongings

Introduction

As we understand the position, the tenant contends: 1. that he is entitled to $15,000.00 for the unauthorised disposal of his belongings because he should recover their replacement value; 2. that the notional storage costs are not relevant in determining his claim for compensation for the unauthorised disposal of his belongings.

Consideration and determination

The UC Act contains the following provisions: 1. section 3 which contains definitions: 3 Definitions In this Act - … depositor means the person who gives possession of goods (whether or not the person is the owner of the goods), and includes a bailor. dispose of includes sell or destroy. goods means all chattels personal, other than things excluded from this definition by the regulations. … receiver means the person who takes possession of goods, and includes a bailee. … 1. section 20 which deals with low value uncollected goods: 20 Low value uncollected goods (1) This section applies to uncollected goods with a value of less than $1,000 (low value uncollected goods). (2) A receiver may dispose of low value uncollected goods in an appropriate manner if the depositor - (a) has been given oral or written notice of the receiver's intention to dispose of the goods, and (b) has been given at least 14 days, from the date when notice was given, within which to collect the goods. (3) The receiver may move or store low value uncollected goods in an appropriate manner. 1. section 24 which deals with perishable goods and rubbish: 24 Perishable goods and rubbish (1) Nothing in this Part prevents a receiver from disposing of rubbish or perishable uncollected goods. (1A) A receiver is not required to give a depositor notice of the receiver's intention to dispose of the goods. (2) Goods may be disposed of under this section in such manner as the receiver considers appropriate. 1. section 31B which deals with orders by the Tribunal relating to uncollected goods: 31B Orders by Tribunal relating to uncollected goods (1) The Tribunal may, on application by a depositor or a person who has an interest in uncollected goods, make any of the following orders - (a) an order requiring the receiver to pay compensation for uncollected goods disposed of by the receiver otherwise than in accordance with this Act, …
The tenant's claim for compensation for the unauthorised disposal of his belongings was made under s 31B(1)(a) when read with the definitions of "depositor", "dispose of", "goods" and "receiver" in s 3 of the UC Act. It was common ground that the landlords did not give to the tenant the notice required under s 20(2)(a) of the UC Act. The goods the subject of this claim did not include rubbish or perishable uncollected goods pursuant to s 24 of the UC Act. There was no limit to the amount of compensation recoverable by the tenant.
In Powercor Australia Ltd v Thomas (2012) 43 VR 220; [2012] VSCA 87 (Powercor) at [28] Osborn JA noted that there was no appeal against following general principles (Warren CJ at [1] and Bongiorno JA at [2] agreeing): "B. That in general it is appropriate in determining damages which are to be awarded for the replacement of an item which is destroyed or damaged beyond repair to allow the cost of a new replacement. In the event that this leads to a superior replacement then an allowance should, if practicable, be made for that improvement or betterment. The onus of proving the level of improvement or betterment lies with the Defendant. C. Where the Defendant contends that it is practicable to replace the damaged or destroyed items with a substitute (other than a new replacement) then the Defendant bears the onus of establishing: (a) that a market exists for an available substitute; (b) the cost of such a substitute can be obtained at less than the replacement cost."
In Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 196 ALR 257 (Placer) at [38] Hayne J said (Gleeson CJ, McHugh and Kirby JJ at [6] agreeing): "[38] It may be that, in at least some cases, it is necessary or desirable to distinguish between a case where a plaintiff cannot adduce precise evidence of what has been lost and a case where, although apparently able to do so, the plaintiff has not adduced such evidence. In the former kind of case it may be that estimation, if not guesswork, may be necessary in assessing the damages to be allowed. References to mere difficulty in estimating damages not relieving a court from the responsibility of estimating them as best it can may find their most apt application in cases of the former rather than the latter kind. …" (footnotes omitted)
Having regard to the general principles noted in Powercor at [28], we accept that the tenant was entitled to recover the cost of the replacement of his belongings subject to the landlords establishing an allowance for improvement or betterment, or the cost of substitute belongings. However, in circumstances where the tenant did not adduce any evidence of the value or replacement cost of his belongings as set out in the Tribunal Decision at [35], then in accordance with Placer at [38] the tenant did not establish any loss.
We are satisfied that the Tribunal made an error of law in taking into account the notional storage costs of the tenant's belongings. As the belongings were not stored there was no warrant to take storage costs into account.
In the light of the agreement of the parties as recorded in [28] above the tenant is entitled to recover $1,000.00 as compensation for the unauthorised disposal of his belongings. This amount should be set off against the amount that the tenant owes to the landlords. It is appropriate to allow the appeal in part, and with respect to the orders made by the Tribunal on 7 December 2021 to vary order 1 so that the tenant is to pay $898.60 to the landlords and to set aside the first subparagraph of order 2.

The landlords' application for the costs of the appeal

Introduction

The landlords' application is that the tenant should pay two-thirds of their costs of the appeal. The landlords submitted that there were three issues in the appeal, being the alleged illegal eviction of the tenant, the damages recoverable by the landlords for repairs, cleaning and rubbish removal, and the tenant's claim for compensation for the unauthorised disposal of his belongings. As they would be successful on the first two of these issues, the tenant should pay two-thirds of their costs of the appeal.

Consideration and determination

In considering and determining this issue it is appropriate to set out the applicable statutory provisions and legal principles, and to summarise the submissions of the parties.
The NCAT Act contains the following provisions: 1. section 4 which contains definitions: 4 Definitions (1) In this Act - … procedural rules means each of the following - (a) the Tribunal rules, … Tribunal rules means the rules of the Tribunal made by the Rule Committee. … 1. Part 4 Division 1 (ss 35-38) which contains introductory provisions relating to the practice and procedure of the Tribunal. Section 35 deals with the application of Part 4: 35 Application of Part Each of the provisions of this Part is subject to enabling legislation and the procedural rules. 1. Part 4 Division 5 (ss 56-63) which contains provisions dealing with the determination of issues and proceedings. Section 60 deals with costs: 60 Costs (1) Each party to proceedings in the Tribunal is to pay the party's own costs. (2) The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs. (3) In determining whether there are special circumstances warranting an award of costs, the Tribunal may have regard to the following - (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36(3), (g) any other matter that the Tribunal considers relevant. (4) If costs are to be awarded by the Tribunal, the Tribunal may - (a) determine by whom and to what extent costs are to be paid, and (b) order costs to be assessed on the basis set out in the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014) or on any other basis. (5) In this section - costs includes - … (b) the costs of, or incidental to, the proceedings giving rise to the application or appeal, as well as the costs of or incidental to the application or appeal.
The NCAT Rules contain the following provisions: 1. rule 38 which deals with costs in the Consumer and Commercial Division of the Tribunal: 38 Costs in Consumer and Commercial Division of the Tribunal (1) This rule applies to proceedings for the exercise of functions of the Tribunal that are allocated to the Consumer and Commercial Division of the Tribunal. (2) Despite section 60 of the Act, the Tribunal may award costs in proceedings to which this rule applies even in the absence of special circumstances warranting such an award if - … (b) the amount claimed or in dispute in the proceedings is more than $30,000. 1. rule 38A which deals with costs in internal appeals: 38A Costs in internal appeals (1) This rule applies to an internal appeal lodged on or after 1 January 2016 if the provisions that applied to the determination of costs in the proceedings of the Tribunal at first instance (the first instance costs provisions) differed from those set out in section 60 of the Act because of the operation of - (a) enabling legislation, or (b) the Division Schedule for the Division of the Tribunal concerned, or (c) the procedural rules. (2) Despite section 60 of the Act, the Appeal Panel for an internal appeal to which this rule applies must apply the first instance costs provisions when deciding whether to award costs in relation to the internal appeal.
We are satisfied that pursuant to s 35 when read with the definitions of "procedural rules" and "Tribunal rules" in s 4 of the NCAT Act r 38(2)(b) of the NCAT Rules did not apply to the RT 21/42985 proceedings and the RT 21/43989 proceedings. This is because the amount claimed by each of the tenant and the landlords did not exceed $30,000. Pursuant to r 38A of the NCAT Rules r 38(2)(b) of the NCAT Rules does not apply to the costs of the appeal. It follows that the position of each party paying their own costs specified in s 60(1) of the NCAT Act is applicable to the appeal unless the landlords can establish that they are entitled to an order for costs pursuant to s 60(2) of the NCAT Act.
"Special circumstances" in s 60(2) of the NCAT Act are circumstances that are out of the ordinary; they do not have to be extraordinary or exceptional circumstances: CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [32].
In considering whether special circumstances exist for the purposes of s 60(2) of the NCAT Act: 1. each case will depend upon on its own particular facts and circumstances: Brunsprop Pty Ltd v Joanne Hay & Wes Davies [2015] NSWCATAP 152 at [27]; 2. the discretion to award costs must be exercised judicially and having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs: eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]; 3. mere success (or failure) of an application does not give rise to special circumstances: The Owners - Strata Plan 5319 v Price [2020] NSWCATAP 245 (Price) at [46]; 4. where special circumstances are found to exist, the Tribunal has a discretion to exercise in deciding what, if any, order should be made. Relevant to the exercise of that discretion are those facts upon which the finding of special circumstances was based. However, those findings do not constitute the whole of the relevant matters to be considered in deciding what, if any, order for costs should be made. Rather, the principles applicable to awarding costs generally must also be taken into account: Brodyn Pty Ltd v Owners Corporation Strata Plan 73019 (No 2) [2016] NSWCATAP 224 at [24].
In the tenant's costs submissions the tenant refers to s 60(1), (2) and (3)(c) and (e) of the NCAT Act and submits that there are no special circumstances that are significantly material to warrant an award of costs: "The primary part of the appeal was in relation to the failure of cousins to follow the uncollected goods act when they disposed of belongings within 48 hours of taking vacant profession. The secondary part of the appeal is in relation to the recovery of costs associated with cleaning, rubbish removal and repairs which relies in some part as to whether permission was obtained verbally from cousins for work done to the bench. The major part of the evidence was to demonstrate the deceptive behaviour of cousins in their dealings with the appellant and that where conflicting accounts of events occur, the behaviour of the respondent should have significant sway in determining the most likely version. The disposal of furniture under the uncollected goods act was overturned by the appeal in favour of the Appellant. I believe that these claims which make up the vast majority of the compensation claim do not represent a special circumstance in any of the items (c) or (e). In relation to the eviction being illegal, while this was dismissed due to the appeal not being made against the right hearing, I don't believe that this is significant enough to justify special circumstances for the following reasons: • this only represents a compensation claim of $1408 from the rental variation agreement that was not applied to the rental ledger (8% of the total claim) • This did not place a significant additional burden on the respondent in preparing for the appeal, • I was successful in the main issue before the appeals panel"
In the landlords' costs submissions the landlords refer to s 60 of the NCAT Act, and submit that there are special circumstances arising primarily out of the tenant's allegations - lacking in substance - of illegality, fraud, dishonesty and deceit: "Costs should be awarded to the landlords for the following reasons: • The issues upon which the landlords succeeded were not a minor part of the appeal, were significant and clearly dominant or separable. • The tenant should not be rewarded for making allegations - lacking in substance - of illegality, fraud, dishonesty and deceit. • The landlords took reasonable efforts to narrow the issues by making the concession referred to above. • A significant amount of time was taken up dealing with the tenant's unsuccessful issues." (footnotes omitted)
The determination of the landlords' application for the costs of the appeal involves answering the following two questions: 1. whether there are special circumstances warranting an award of costs in favour of the landlords; 2. if so, whether the discretion should be exercised to award costs.
We are not satisfied that there are special circumstances warranting an award of costs in favour of the landlords within s 60(2) of the NCAT Act as none of the factors in s 60(3)(a) to (g) of the NCAT Act are applicable. A compelling factor against any such finding is that the tenant has been partially successful in the appeal. None of the reasons relied on by the landlords constitute special circumstances warranting an award of costs in favour of them having regard to the factors in s 60(3)(a) to (g) of the NCAT Act. It is not surprising that the tenant did not understand the principles of res judicata, Anshun estoppel and abuse of process, and their application meant that his contention that he was entitled to damages for cleaning and rubbish removal on account of the misrepresentation of Mr Millane could not arise for determination in the appeal. The hearing of the appeal was not unreasonably prolonged by the need to consider the arguments of the tenant. The narrowing of issues arose at our initiative. The question of the separability of issues to be determined in an appeal, while relevant to the question of costs under rr 38 and 38A of the NCAT Rules, is not a special circumstance.
As we have not been satisfied of the condition in s 60(2) of the NCAT Act that there are special circumstances warranting an award of costs in favour of the respondent, then the question of whether the discretion should be exercised to award costs does not arise for decision. It follows that the landlords' costs application should be dismissed.

Orders

We make the following orders: 1. the appeal is allowed in part; 2. order 1 made by the Tribunal on 7 December 2021 is varied so as to omit "which is $1898.60" and to substitute "and minus $1,000.00 (being the agreed value of the tenant's goods) which is $898.60"; 3. the first subparagraph of order 2 made by the Tribunal on 7 December 2021 is set aside; 4. the appeal is otherwise dismissed; 5. leave to appeal is refused; 6. the respondents' application that the appellant should pay two-thirds of their costs of the appeal is dismissed.

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: 12 April 2022

Residential Tenancies (COVID-19 Pandemic Emergency Response) Amendment Regulation 2021(NSW)

ern Murray Irrigation Ltd [2014] NSWCATAP 69 Quader v Bell [2017] NSWCATAP 24 Ravenscroft v Skinner [2016] NSWCATAP 107 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Smits v Loel [2014] FCA 1341 Smits v Loel (No 3) [2015] FCA 77 The Owners - Strata Plan 5319 v Price [2020] NSWCATAP 245 Texts Cited: None cited Category: Principal judgment Parties: Chris van Brugge (Appellant) Anthony Foresto (First Respondent) Steve Foresto (Second Respondent) Representation: Appellant (self-represented)

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