These are written reasons for orders made in this matter on the day of the hearing, 28 September 2016. On that day I gave oral reasons. These reasons are a slightly revised version of my reasons given orally on 28 September 2016.
This is an application for the reimbursement of rent paid in respect of premises in Homebush West of which the applicants were tenants under a Residential Tenancy Agreement between 5 June 2016 and 6 August 2016.
The applicants appeared in person. The respondent landlord was represented by Ms Natolo, an employee of the managing agent. Both applicants and Ms Natolo gave evidence on oath.
The applicants' claim was that the premises were uninhabitable from 5 June 2016 when there was water penetration into the bedrooms and living room of the premises. It is not in dispute and clearly established by photographs that water had penetrated the premises, saturated the carpets, which had to be removed, and caused damage to the applicants' possessions.
The photographs tendered by the applicants further demonstrate that mould had started growing on the premises.
The carpets were removed by a contractor retained by the respondent, leaving bare concrete floors. The tack strips by which the carpets had been held in position were left in place within each of the bedrooms.
The carpets had not been replaced by 6 August 2016 when the applicants finally terminated the tenancy. The evidence was that the landlord had been awaiting confirmation from the Strata Body Corporate that the problem which had led to the water penetration had been repaired.
It is not in issue that the water penetration was not a result of any breach of the lease by the landlord. The problem stemmed from something, presently unidentified, outside the unit.
The landlord's agent submitted that the premises remained habitable as the kitchen, bathrooms and living room remained functional.
Section 43 of the Residential Tenancies Act 2010 (NSW) (RTA) provides in sub-section (2) that:
"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. .."
A residence is not fit for habitation, that is it is uninhabitable if it is in such a state that "by ordinary user damage may be naturally be caused to the occupier either in respect of personal injury to life or limb or injury to health." Summers v Selford Corporation [1943] AC 283 at 289.
To be habitable, premises must be able to be "used and dwelt in not only with safety but with reasonable comfort" Proudfoot v Hart (1890) 25 QBD 42 at 51. (See also NSW Land and Housing Corporation v Woodward [2015] NSWCATAP 164 at [10] and [17], Bannister v Cheung [2014] NSWCATCD 105 at [16] to [20] and Elsom & Taylor Parker v Coroneos [2016] NSWCATCD 47).
I find the premises were not habitable from 5 June 2016. The premises could not be occupied with reasonable comfort. The bedrooms could not be utilised as the carpets had been removed.
I note the landlord's agent's submission that the bedrooms could have been occupied regardless of the absence of carpets, however the presence of the tack strips rendered the use of those rooms unsafe. The tack strips have nails pointing vertically and any person stepping on those would sustain a serious injury. I would find it hard to be satisfied that a room without carpet was inhabitable, particularly in circumstances where it appears from the applicants' evidence that the water penetration had occurred again on subsequent occasions. But the presence of the tack strips renders the conclusion, that the premises were uninhabitable, unavoidable.
I therefore find that the rent should be abated pursuant to s43(2) from that date, 5 June 2016.
The evidence of the applicants is that they ceased to inhabit the residential premises on that date and stayed with friends until they found alternative accommodation at which time they terminated the tenancy. They did however leave many of their possessions in the living room.
The questions which remain to be determined are: whether the rent wholly abated and, if not, to what extent the rent was abated; and, secondly, whether the proceedings were commenced in time and if not whether time should be extended. I will address the latter of those questions first.
Pursuant to clause 23(3)(b) of the Civil and Administrative Tribunal Rules 2014 (the Rules), where a time for the commencement of proceedings is not laid down in the enabling legislation, that is the legislation which enables the Tribunal to determine a matter, then the proceedings must be commenced within 28 days "from the day on which the applicant became entitled under the enabling legislation to make the application". Neither the RTA nor the Residential Tenancies Regulations 2010 (NSW) lay down any time for the commencement of proceedings pursuant to ss43 or 45 of the RTA. Accordingly these proceedings were required to be commenced within 28 days from the day on which the applicants became entitled pursuant to ss43 and 45 of the RTA to make this application.
In this case that time was either 5 June 2016, when the premises became uninhabitable, or, alternatively, 14 or 15 July 2016, which was the first time the applicants paid any further rent after departing from the premises on 5 June 2016.
The proceedings were commenced on 21 August 2016. Thus, whether the applicants became entitled to bring the proceedings on 5 June 2016 or on 14 July 2016, the proceedings were commenced out of time.
In those circumstances I must consider whether to extend the time for the bringing of proceedings pursuant to s41 of the Civil and Administrative Tribunal Act 2013 (NSW) which 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.
I dispense with the requirement imposed by Rule 8 of the Rules that such an application be brought in writing.
I raised with Ms Natolo whether the landlord had suffered any prejudice by reason of the applicants not bringing these proceedings within 28 days either from 5 June 2016 or 14 July 2016. Ms Natolo was not able to point to any prejudice. It seems clear that, as the landlord has not taken steps to repair the premises, the landlord would not have been able to re-let the premises regardless of whether the tenancy had been terminated at an earlier time. The only possible prejudice that the landlord could have pointed to would have been that she did not terminate the tenancy pursuant to s109 of the Residential Tenancies Act at an earlier time.
Section 109 permits either the landlord or the tenant to terminate a tenancy immediately if the premises become wholly or partly uninhabitable, otherwise than as a result of a breach of an agreement.
As I have noted, the landlord would not have been able to re-let the premises. The landlord is awaiting rectification of the issue that caused the original water penetration before expending money on replacing the carpets.
I also note that the extension of time required for the applicants' claim to be within time is not a significant extension of time being a matter either of 6 weeks or 2 weeks depending on when the cause of action arose.
Therefore, pursuant to s41 of the Civil and Administrative Tribunal Act, I extend the time within which the application is to be brought to 21 August 2016.
I turn now to the first question I identified earlier, that is whether the rent abated wholly or partly and if partly, by how much.
Section 43(2) of the RTA merely provides that the rent abates. In its ordinary meaning the term 'abate' would mean abate fully. However s45 of the RTA provides:
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).
The provision in s45 for the Tribunal to determine the amount of rent payable and, in particular, the provision that empowers the Tribunal to order that rent from the residential premises must not exceed a specified amount from a specified day, would have very little, if any, work to do if the abatement of rent pursuant to s43 was limited to total abatement. I therefore consider that the Tribunal is empowered to determine the extent to which the rent should abate by reason of the premises becoming wholly or partially uninhabitable. In the ordinary case where tenants are not occupying the premises to any extent, it would usually be appropriate that rent abate fully. In this case, however, the tenants did utilise the premises for the storage, for want of a better term, of their possessions during the period from 5 June 2016 to 6 August 2016. It was clear that the tenants were not prepared to terminate the tenancy until such time as they had found other premises to live in. In my view that demonstrates clearly that the tenants saw there was benefit to them in having a tenancy over the premises during that period.
I note that in correspondence the tenants agreed that they would pay $50 per week to have the benefit of the premises to keep their possessions. There is some ambiguity in the correspondence between the tenants and the landlord. The relevant email from Ms Natolo to the applicants stated:
"The owner has advised the following regarding compensation:
- can you give one weeks free rent then 50 per week until fixed.
As this is the case, you still pay the rent as normal and owner will credit your rent with the compensation amount."
In my view, on an objective interpretation of that document, it clearly indicates that what the landlord was offering was one week rent free and then a reduction of $50 a week until fixed.
However, the applicants gave evidence that they had understood the offer to be that the rent would be only $50 per week until the repair was fixed. This matter was the subject of subsequent email correspondence between the applicants and the landlord's agent in which the applicants made clear that their construction of the agreement was that the rent would be only $50 per week.
Mr Vashisht gave evidence that he had spoken to Ms Natolo and that she had said to him "the rent is $50 a week until the unit is fixed". Ms Natolo denied making any such statement, she stated that she had said "the compensation is $50 a week reduction in rent until the unit is repaired".
The matter was not finally clarified in written correspondence until 12 July 2016 when Ms Natolo stated to Mr Vashisht in an email:
"further to our recent conversations the owner has agreed to compensate you one week's rent, $460, and thereafter the rent will be reduced by $50 per week - $410 per week, until the repair has been fixed. The $50 is a reduction of the current rent, not the new weekly amount."
Shortly after that email the applicants made rental payments in accordance with the tenancy agreement. They gave evidence that they had done so because, without being able to produce a rent ledger showing they were up to date with their rent, they would not be able to obtain a tenancy over alternative premises.
I do not need to determine whether the confusion over the construction of the offer from the landlord was resolved or clarified before 12 July 2016. What I find is that $50 per week was fair rent for the use which the applicants had of the premises.
Therefore I find that the rent for the premises abated to $50 a week from 5 June 2016 to 6 August 2016 and I will make orders for the reimbursement to the tenants of the difference between that rent and the amount they have paid.
At the conclusion of delivering my oral reasons on 28 September 2016, and in discussion with Ms Natolo and the second applicant, Ms Sharma, the amount of rent to be reimbursed was calculated as $3,330. That was the amount included in the orders made at the conclusion of the hearing.
D Robertson
Senior Member
Civil and Administrative Tribunal of New South Wales
20 October 2016
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
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Decision last updated: 15 December 2016