Vasales v Li

NCAT Appeal Panel|2021-09-27

Introduction

The appellant Ms Vasales (the landlord) appeals from decisions of the Civil and Commercial Division of the Tribunal (Tribunal) of 25 June 2021 in matters RT 20/33410 and RT 20/43610 (Decision).
In matter RT 20/33410 (the tenants' claim), the respondents (the tenants) sought an order for the return of a bond paid to the appellant (the landlord) including interest ($2,520), for rent paid in advance ($1,643), being a total amount claimed of $4,163.
In matter RT 20/43610 (the landlord's claim), the landlord sought orders that the tenants pay her rental arrears of $3,547.14, and compensation for damage to the property in the amount of $7,541.60.
The two matters were heard together and the Tribunal ordered the landlord to pay the tenant Ms Li $1,520 and the tenant Ms Wang $1,000. The balance of the tenants' claims was dismissed, as was the landlord's claim.
For the following reasons, the appeal is dismissed.

Summary of Decision

There were two issues before the Tribunal.
The first issue was the landlord's claim for compensation for damage to the property. The landlord claimed compensation as follows: 1. $1,760 for a "shower glass"; 2. $1,320 for painting; 3. $599.80 for the replacement of damaged drawers in a wardrobe; 4. $3,539.80 for the replacement of a bathroom cabinet and Ceasarstone benchtop; 5. $352 for cleaning.

Notice of Appeal

It is clear from the Notice of Appeal and was confirmed at the hearing that the landlord was in fact only appealing in respect of matter RT 20/43610. The landlord says that the Decision in respect of that matter was not fair and equitable, and against the weight of the evidence, because:

the Tribunal failed to take into account relevant evidence including photographs and quotations and discriminated against her in failing to do so;
the Tribunal erred in accepting some of the damage was "wear and tear";
the Tribunal misapplied the Residential Tenancies Act 2010 (NSW) (RT Act);
no ingoing or outgoing condition reports were completed;
the tenancy lasted for three years "where the probability for damages is high".

Reply to Appeal

The tenants give a detailed response to each of the matters raised by the landlord. They correctly note that the burden of proof in relation to the property damage rests with the landlord. They say it was the landlord's responsibility to prepare ingoing and outgoing condition reports, not theirs. They reject other aspects of the appeal as conjecture and not being based in evidence. They also state in the Reply: Other reasons not given by the Tribunal which we say support the original orders: 1. The appellant's original application for alleged damages was lodged seven (7) months after the termination of the tenancy. The Residential Tenancies Act 2010 and Residential Tenancies Regulation 2019, s 39 (9) clearly indicate the statute of limitations on claims is three (3) months. The appellant's claim was not lodged within the prescribed period and we submit the claim should not be considered. 2. Though implicit in the Tribunal Orders of 10 June 2021, we reiterate the appellant is claiming costs for damages that have not been incurred. 3. Bonds were collected twice for the same premises, and were never lodged with NSW Fair Trading.
As there is no reference in the Decision to the application being filed out of time, we assumed that this point was not raised before the Tribunal. Mr Reubenstein confirmed that this was the case at the appeal hearing.
As the Appeal Panel noted in Bartel v Ryan [2018] NSWCATAP 231 at [25], the High Court of Australia said in Coulton v Holcombe [1986] HCA 33 at [9] that it is elementary that a party is bound by the conduct of their case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against them, to raise a new argument which, whether deliberately or by inadvertence, the party failed to put during the hearing when they had an opportunity to do so: see too Palm Homes Pty Ltd v Kav's Constructions Pty Ltd [2015] NSWCATAP 113 at [27].
We conclude that it is too late for the tenants to raise this point on the appeal.

Nature of an appeal

Section 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) sets out the basis upon which appeals from decisions of the Tribunal may be brought. That section states that an appeal may be made as of right on any question of law or with leave of the Appeal Panel on any other grounds (s 80(2)(b)).

A question of law

In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, without listing exhaustively possible questions of law, the Appeal Panel considered the requirements for establishing an error of law giving rise to an appeal as of right.
In Prendergast the Appeal Panel also stated at [12] that, in circumstances where an appellant is not legally represented, it is appropriate for the Tribunal to approach the issue by looking at the grounds of appeal generally, and to determine whether a question of law has in fact been raised (subject to any considerations of procedural fairness to the respondent that might arise).
The appellant has identified an error of law, namely that the Tribunal misapplied the RT Act. For the reasons stated below, we reject that ground of appeal. Accordingly, the landlord needs the leave of the Appeal Panel.

Leave to appeal

Clause 12 of Sch 4 of the NCAT Act provides that, in an appeal from a decision of the Consumer and Commercial Division of the Tribunal, an Appeal Panel may grant leave to appeal only if satisfied that the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel conducted a review of the relevant cases at [65]-[79] and concluded at 84 that: Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) Issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) 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; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) 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.
Even if an appellant establishes that they may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains a discretion whether to grant leave under s 80(2) of the NCAT Act. An appellant must demonstrate something more than that the Tribunal was arguably wrong: Pholi v Wearne [2014] NSWCATAP 78 at [32].

Appellant's submissions

Attached to the Notice of Appeal were lengthy submissions prepared by the landlord. There can be divided into two sections: a section making general submissions, and a section setting out specific submissions in relation to each item of damage rejected by the Tribunal.
The primary general submissions are as follows:

the Tribunal was wrong when it decided to make the orders based on not relying on the evidence and favouring the tenants;
the damages claimed should not be classified as 'wear and tear';
the Tribunal discriminated against the landlord and did not take into consideration her evidence including quotations from professional and qualified tradesmen;
the Tribunal "did not take into consideration of comparing costs for custom made fittings and the costs for the materials [sic]";
during COVID-19 it was difficult to get additional quotations to support her claims. "This also applies to their obligation to have incoming and outgoing reports completed".

In relation to the specific items claimed, the landlord summarises the evidence she relied on at the hearing. She emphasises that the shower glass was custom made and brand new at the start of the tenancy, that the wardrobe was custom made, and that the bathroom cabinet was unique.
All these matters were repeated at the appeal hearing.

Respondent's Submissions

The effect of the respondent's submissions is adequately summarised in their Reply to Appeal, set out above. Additional written submissions were provided prior to the appeal hearing, which were amplified in oral submissions at the hearing.

Consideration

It is common ground that there was a residential tenancy agreement between the parties, although the Decision does not set out all of its terms.
Regardless of the terms of any agreement, s 51(3) of the RT Act relevantly provides that, on giving vacant possession of the residential premises, a tenant must:

remove all the tenant's goods from the residential premises: s 51(3)(a);
leave the residential premises as nearly as possible in the same condition, fair wear and tear excepted, and, if there is a condition report, as set out in the condition report applicable to the premises when the agreement was entered into: s 51(3)(b);
leave the residential premises in a reasonable state of cleanliness, having regard to the condition of the premises at the commencement of the tenancy: s 51(3)(c).

The principles which the Tribunal applies in considering claims of damage to the property include the following: 1. a tenant, for the term of the residential tenancy agreement, is bound to keep the premises in a satisfactory condition, but is not liable for damage or deterioration of condition due to fair wear and tear; 2. if any want of repair is alleged and proved in fact, it lies on the tenant to show that it comes within the exception. Fair wear and tear means the reasonable use of the house by the tenant and the ordinary operation of natural forces: Regis Property Co Ltd v Dudley [1959] AC 370 (referred to with approval by the NSW Court of Appeal in Alamdo Holdings Pty Limited v Australian Window Furnishings (NSW) Pty Ltd [2006] NSWCA 224); 3. The requisite standard is that commonly prevailing among the tenants of comparative premises and that the issue should not be approached from the standpoint of the fastidious and obsessive landlord: Pancio v Crompton & Jennings [2015] NSWCATAP 110. In Pancio v Crompton & Jennings [2015] NSWCATAP 110 the Appeal Panel at [24] applied the principles set out in Adoncello v Sazdanoff [2006] NSWCTTT 577 where the Tribunal referred with approval to the following statement in Fitzpatrick v Wu (RT 01/16425): "… It is the concept of "fair wear and tear " which causes the disputes in these matters and in particular whose standards determine whether wear and tear is fair" ... Given that the section is intended to have application to premises generally in NSW, Parliament could not have intended that the standard of "fair" wear and tear be the subjective standard of each individual landlord. Presumably Parliament had in mind something more objective in nature. In the absence of any guidance on the point from the Supreme Court and having regard to the apparent absence of consideration on the point in other decisions of the Tribunal, the present Tribunal takes the view that the requisite standard is that commonly prevailing among the tenants of comparative premises and that the issue should not be approached from the standpoint of the fastidious and obsessive landlord." 1. Secondly, where the cost of restoring or replacing property is disproportionate to the extent of the damage, the measure of damages is the actual loss in value. In some cases, there can be a significant difference between the cost of restoring damaged property and the loss of capital value associated with that loss. In such cases, the Tribunal will assess the loss by reference to the lesser of the cost of restoration and the loss in capital value. Often the latter will be substantially less that the former and will need to take into account depreciation values.
Carbery v Warringah Rugby Club Ltd [2021] NSWCATAP 153 is a recent decision of the Appeal Panel which considered an appeal similar to this appeal, in that the landlord sought to set aside claims for damage which the Tribunal had rejected.
The Appeal Panel stated at [36] that "the first task" for the Tribunal was to determine the condition of the premises at the commencement of the tenancy. This is done through evidence which should be constituted by an ingoing condition report (ICR), preferably signed by both parties, which sets out the condition including the cleanliness of each room of the premises and the external areas. The Appeal Panel noted that the absence of an ICR does not preclude a landlord bringing a claim for compensation due to the condition of the premises at the end of the residential tenancy, but the absence of an ingoing condition report goes to the weight of evidence: Hall v Hawkins [2015] NSWCATAP 197 at [59]-[66].
In this appeal there was no ICR. The landlord however relied on photographs taken at the conclusion of the tenancy as well as photographs taken at commencement of the tenancy three years earlier.
In the Decision the Tribunal stated: 4. The landlord has provided no evidence in the usual form of completed incoming and outgoing reports. There are photographs and quotes. 5. Shower glass, $1,760. The landlord relies on a quote dated 19 March 2020 upon which the author has written "damage caused by scratches and bad cleaning maintenance". The photographs show that there is some discolouration on the shower glass. It is insufficient to evidence damage reasonably justifying replacement. The Tribunal is not satisfied that there is a cogent basis for awarding the replacement cost. The claim is rejected. 6. Painting, $1,320. The landlord relies on a quote dated 21 March 2020 for repainting walls and woodwork, upon which the author has written "repaint walls and woodwork in the bedroom and hallway. Damage from furniture." The Tribunal is not satisfied that such damage as there is, is not fair wear and tear, and is not satisfied in any event that a full repaint is justified. The claim is rejected. 7. Wardrobe, $569,80. The landlord relies on a quote dated 20 March 2020 for replacement of damaged drawers. The Tribunal is not satisfied that such damage as there is, is not fair wear and tear, and is not satisfied in any event that a full repaint is justified. The claim is rejected. 8. Bathroom cabinet and Cesarstone bench top, $3,539,80. The landlord relies on a quote dated 20 March 2020. The tenants deny liability and in any event contend that the quote is too high to be accepted. The landlord responded in writing "The cabinet quoted is unique and the Cesarstone made to measure. It is not a standard size hence the cost." That is insufficient to address the tenants' contention. The Tribunal finds in any event that any damage to the Cesarstone is insufficient to justify replacement. The claim is rejected. 9. Cleaning, $352. This is based on an online quote for a two bedroom apartment for $352 to $440. A tenant's obligation is [to] leave the premises in a reasonable state of cleanliness, having regard to the condition of the premises at the commencement of the tenancy. The quote is insufficient to provide cogent evidence of breach or that what is sought is reasonable. This is the more so in circumstances where each relevant agreement was characterised as, and was regarded by the parties as, a flatmate agreement, as what is reasonable is necessarily bound up in the continuing presence of the remaining head tenant, ie in these reasons the landlord. The claim is rejected.
We will consider each item in turn.
Shower glass. There were at least two photographs of the shower glass at the commencement of the tenancy before the Tribunal. We agree with the Tribunal that the photographs show that there is some discolouration on the shower glass, but that that is insufficient to justify its replacement. Even if some damages were to be ordered, allowance would have to be given for the fact that the shower glass was three years old.
Painting There was a quotation and some photographs before the Tribunal, which were provided with the Notice of Appeal. The quotation is from Akram Azizov and is dated 21 March 2021. It is expressed as being for "Repaint walls and woodwork at the bedroom and hallway. Damages from furnituer [sic]." At the bottom of the quote is the following note: "That I Previously painted this premises in April 2017". The quotation does not establish that any damage caused by furniture exceeded fair wear and tear. Photographs provided support a conclusion that marks were caused by furniture, but do not suggest that the marks exceeded fair wear and tear. We consider that the Tribunal was correct in rejecting this claim as being nothing other than fair wear and tear.
Wardrobe The landlord claims that the wardrobe drawer was damaged due to ink leakage and scratches. While these claims are supported by the photographic evidence, we consider that the Tribunal was correct to view these matters as fair wear and tear.
Bathroom cabinet and Cesarstone bench top There were photographs before the Appeal Panel. The Cesarstone bench top is chipped, at least in one place, but we consider that this is simply fair wear and tear. As for the cabinet, we are unable to discern any damage at all. The landlord submitted that the cabinet was "bent" and could not close. We think the Tribunal was correct in rejecting these claims. In any event, as we explained at the hearing, if either claim were allowed, as with the shower glass, an allowance would need to be made for the age of the items.
Cleaning We infer from the reasons that the Tribunal was not satisfied on the evidence before it that the tenants failed to leave the premises in a reasonable state of cleanliness. This appears to be a conclusion reasonably available to the Tribunal.

Conclusion

NCAT Guideline 1 "Internal Appeals" (November 2019) states that, generally, an appeal is not an opportunity to have a "second go" at a hearing, and that parties to an appeal are not usually allowed to rely on evidence that was not given to the Tribunal at the original hearing.
To the extent that the landlord has raised any error of law, namely the misapplication or interpretation of the RT Act, we find no error of law has been established.
To the extent that leave is required in respect of any other matter agitated by the landlord, we would not grant leave. We are not satisfied that any ground involves an issue of principle, a question of public importance, an injustice which is reasonably clear or that the Tribunal has gone about its fact finding process in such an unorthodox manner that it is likely to have produced an unfair result.

Orders

The Appeal Panel orders: 1. Application for leave to appeal dismissed. 2. Appeal otherwise 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: 29 September 2021

At a glance

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Judgment (13 paragraphs)

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Legislation Cited (2)

Cases Cited (10)

Cited By (5)