Yan v Yan

NCAT Appeal Panel|2024-02-21

Introduction

The Appellant and Respondents are landlord and tenants. Accordingly, we will refer to the Appellant as the landlord and the Respondents as the tenants. The parties entered into a residential tenancy agreement (the Agreement) on 20 February 2023 for a period of 12 months and the tenancy commenced on 20 February 2023.
In the Tribunal at first instance, the tenants sought an order under s 103 of the Residential Tenancies Act 2010 (NSW) (the RT Act) that the Agreement be terminated on the basis that the landlord had breached the residential tenancy agreement. Specifically, the tenants alleged that the landlord had breached his obligation to repair and properly maintain the air-conditioning unit at the premises. The tenants also sought orders under ss 175 and 187 of the RT Act for the return of the bond and compensation for the broken air-conditioner.
The landlord applied under ss 106, 107, 175 and 187 of the RT Act seeking an order declaring that the tenants had abandoned the premises, and compensation for the following items: 1. A break-fee of three weeks rent, $5,100; 2. Cleaning, $1067; and 3. Three swipe cards, $300.
The Tribunal on 30 October 2023 decided and ordered that the landlord pay $2,210 by way of compensation under s 187 of the RT Act, that the bond be returned to the tenants, and that the landlord's application be dismissed (the Decision).
The landlord now appeals from the Tribunal's Decision. Whilst the landlord raised a number of issues, the main issue seriously in contention was the decision of the Tribunal to make an order terminating the Agreement under s 103 of the RT Act.
The order terminating the Agreement was made even though the tenants had already left the premises on or about 20 May 2023 (i.e., the day after their tenants lodged their application in the Tribunal), and the landlord had relet the premises by the time of the final hearing before the Tribunal on 8 September 2023.
For the reasons which follow, we have decided to uphold the landlord's appeal in part, set aside the order for termination made under s 103 of the RT Act, and order that the tenants pay a break fee to the landlord for the abandonment of the premises.

The Decision under appeal

The Tribunal was satisfied that the landlord was in breach of his obligations under s 63 for his failure to repair the air-conditioner for three months: [86]. The Tribunal found that the air-conditioner was not working for the whole of the time the tenants lived there: [86].
The Tribunal found that the various excuses put forward by the landlord for not repairing the air-conditioner did not provide any proper or lawful defence to the claim: [87] - [89]. The Tribunal found that the air-conditioner was mentioned in the ingoing report as to be repaired but it was not repaired: [91].
In respect of the tenants' application for an order for termination under s 103 of the RT Act, the Tribunal considered the seriousness of the breaches found against the landlord.
Apart from the failure to repair the air-conditioner, the Tribunal also found that the landlord had breached s 162(3) of the RT Act by not lodging the bond within the 10-day timeframe: [97]. The Tribunal found that the landlord was in breach of s 33(2) of the RT Act in demanding and obtaining three months' rent in advance: [96]. The Tribunal found that the landlord was in breach of s 37 of the RT Act by not keeping a record of rent received: [100].
The Tribunal, on the basis of these breaches, was satisfied that the circumstances justified termination of the tenancy 'which I find was terminated on the date the tenants gave formal notice on 20 May 2023 with possession given on 29 May 2023 when the keys were obtained': [101].
On that basis the Tribunal stated at [101]: I make a termination order to that effect under s 103. It follows that the tenants did not abandon the tenancy and are not liable to pay the break fee.
The Tribunal found that the tenants were entitled to compensation in the amount of $2,210 by reason of the landlord's breach in respect of not repairing the air-conditioner: [102] - [103].
The Tribunal found that in respect of the landlord's claim for compensation in respect of the swipe cards that the claim should not be allowed as the swipe cards were returned: [104] - [106].
In respect of the landlord's claim for cleaning costs, the Tribunal found that the landlord had failed to discharge his onus of proof that the premises were left in a worse state when the tenants vacated in relation to cleaning and rubbish compared to when they moved in: [112].

The nature and scope of the landlord's appeal

An appeal to the Appeal Panel does not simply provide a losing party in the Tribunal below with the opportunity to run the case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. To succeed in an appeal, the appellant must demonstrate either an error on a question of law, which may be argued as of right; or that permission (that is 'leave') to appeal should be granted to bring the appeal: The Civil and Administrative Tribunal Act 2013 (NSW), s 80(2) (the NCAT Act).
The Appeal Panel has a discretion whether to grant leave under s 80(2) of the NCAT Act. The principles governing an application for leave to appeal under the NCAT Act are well established and are repeated in many decisions of the Appeal Panel, often quoting Collins v Urban [2014] NSWCATAP 17. They are the same principles as applied by the Courts. It is enough of a summary to refer to the Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206, where the Court said at [28] (citation omitted) Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted. Ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable. It is well established that it is not sufficient merely to show that the trial judge was arguably wrong.
We note that as this is an appeal from a decision of the Tribunal's Consumer and Commercial Division, the Appeal Panel can only give leave if it is satisfied that the Appellant may have suffered a substantial miscarriage of justice because: 1. The Decision was not fair and equitable; 2. The Decision was against the weight of evidence; or 3. Significant new evidence is now available that was not reasonably available at the time of the hearing.
We note that both the landlord and the tenants were self-represented in this appeal. 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. In such circumstances and having regard to the guiding principles in s 36(1) of the NCAT Act, it is appropriate for the Appeal Panel to review the landlord'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.
The landlord has tendered or produced on appeal the following material: 1. A bundle of documents styled the 'landlord's bundle'; 2. A set of written submissions with further documentary material attached as part of those submissions; and 3. The audio recording of the hearing before the Tribunal.
We have reviewed carefully all of this material with a view to attempting to discern intelligible grounds of appeal and also whether they raise questions of law or a basis for leave to appeal.
The appellant landlord's materials are very lengthy, poorly organised and do not clearly articulate the grounds of appeal. They largely consist of a commentary as to why the landlord disagrees with the decision rather than a clear articulation of arguments supporting viable grounds of appeal. The materials include a recitation of grounds that could arguably raise questions of law but without any meaningful argument in support.
As McCallum JA in Mendonca v Legal Services Commissioner [2020] NSWCA 84 stated at [21]: [T]here may be cases in which it is appropriate for the Court to give the correct legal construction to an arguable point poorly articulated by a self-represented litigant. However, the Court is not required to undertake a partisan analysis of lengthy, unstructured assertions and misconceptions with a view to ensuring that a self-represented litigant has not missed some arguable point.
We accept the landlord has done the best he can as an unrepresented litigant in difficult circumstances. We have, after carefully reviewing the large amount of material supplied by the landlord, sought to give a beneficial construction to the grounds of appeal and submissions put forward and attempted where possible to distil relevant contentions.
As we understand it, the landlord seeks to raise three grounds of appeal which we accept involve questions of law as follows: 1. The Tribunal misapplied the law under s 103 of the RT Act and thereby failed to properly to deal with his claim for a break-fee; 2. The Tribunal demonstrated apprehended biased; and 3. The Tribunal provided inadequate reasons.
Further, as we understand the landlord's submissions, he seeks leave to appeal the findings as to the air-conditioning unit and the cleaning costs as not being fair and equitable and being against the weight of the evidence.

The relevant provisions of the RT Act

Part 5 Division 1 (ss 80 - 83) contains general provisions dealing with the termination of a residential tenancy. Section 81 deals with the circumstances of termination of residential tenancies, and relevantly provides: 81 Circumstances of termination of residential tenancies (1) Termination only as set out in Act A residential tenancy agreement terminates only in the circumstances set out in this Act. (2) Termination by notice and vacant possession A residential tenancy agreement terminates if a landlord or tenant gives a termination notice in accordance with this Act and the tenant gives vacant possession of the residential premises. (3) Termination by order of Tribunal A residential tenancy agreement terminates if the Tribunal makes an order terminating the agreement under this Act. (4) Other legal reasons for termination A residential tenancy agreement terminates if any of the following occurs - … (d) the tenant abandons the residential premises, (e) the tenant gives up possession of the residential premises with the landlord's consent, whether or not that consent is subsequently withdrawn,
Section 103 of the RT Act provides as follows: 103 Breach of agreement--termination by Tribunal (1) The Tribunal may, on application by a tenant, make a termination order if it is satisfied that-- (a) the landlord has breached the residential tenancy agreement, and (b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement. (2) In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following-- (a) the nature of the breach, (b) any previous breaches, (c) any steps taken by the landlord to remedy the breach, (d) any steps taken by the tenant about the breach, (e) the previous history of the tenancy. (3) The Tribunal may refuse to make a termination order if it is satisfied that the landlord has remedied the breach. (4) A tenant may make an application under this section without giving the landlord a termination notice. (5) The Tribunal may make a termination order under this section that takes effect before the end of the fixed term if the residential tenancy agreement is a fixed term agreement.
Part 5 Division 4 (ss 106 - 107) contains provisions dealing with the abandonment of residential premises. Section 106 confers power on the Tribunal to make an order declaring that the tenant abandoned the residential premises, and relevantly provides: 106 Abandoned premises … (4) In determining whether a tenant has abandoned the residential premises the Tribunal may consider (but is not limited to considering) the following - (a) the failure by the tenant to pay rent under the residential tenancy agreement, (b) any evidence that the tenant no longer resides at the premises, (c) any failure by the tenant to carry out any obligations relating to the residential premises under the residential tenancy agreement.
Section 107 of the RT Act provides as follows: 107 Landlord's remedies on abandonment (1) The Tribunal may, on application by a landlord, order a tenant to pay compensation to the landlord for any loss (including loss of rent) caused by the abandonment of the residential premises by the tenant. (2) The landlord must take all reasonable steps to mitigate the loss and is not entitled to compensation for any loss that could have been avoided by taking those steps. This subsection does not apply in the case of a fixed term agreement for a fixed term of not more than 3 years. (3) The compensation payable by a tenant under this section in respect of a fixed term agreement for a fixed term of not more than 3 years is the amount of the applicable break fee for the tenancy calculated under subsection (4). (4) The "break fee" for a fixed term agreement for a fixed term of not more than 3 years is - (a) if less than 25% of the fixed term had expired when the premises were abandoned--an amount equal to 4 weeks rent, or (b) if 25% or more but less than 50% of the fixed term had expired when the premises were abandoned--an amount equal to 3 weeks rent, or (c) if 50% or more but less than 75% of the fixed term had expired when the premises were abandoned--an amount equal to 2 weeks rent, or if 75% or more of the fixed term had expired when the premises were abandoned--an amount equal to 1 week's rent. (5) The amount of any money paid to a landlord by a tenant on terminating a fixed term agreement before the end of the fixed term or before otherwise abandoning the premises (other than money previously due to the landlord under the residential tenancy agreement) is to be deducted from any amount payable to the landlord under this section.

Consideration

As summarised above, the Tribunal found that the tenants informed the landlord on or about 20 May 2023 that they were leaving the premises, that the tenants vacated the premises on or about the same day, and that possession was effectively given back to the landlord on 29 May 2023 when the keys were obtained. There was no dispute about these findings.
The Tribunal considered all of the circumstances of the case and in particular considered the matters in s 103(2), the nature of the breach, any previous breaches, any steps taken by the landlord to remedy the breach, any steps taken by the tenant in respect of the breach and the previous history of the tenancy: [90].
The Tribunal, in purported exercise of its discretion under s 103, made a termination order on the basis of the circumstances of the landlord's breach. The Tribunal then stated that 'it follows that the tenants did not abandon the tenancy and are not liable to pay the break-fee':[101].
At the hearing we raised with the parties a potential difficulty with the termination order under s 103 of the RT Act and the reasoning that no break-fee should be paid to the landlord. We did so as the Tribunal, in our view, may have lacked jurisdiction to make a termination order pursuant to s 103 at a time when the Agreement had already terminated pursuant to s 81(4)(d) of the RT Act by reason of the abandonment of the premises by the tenants.
The Appeal Panel has an obligation to be satisfied that the orders under appeal were made within the jurisdiction of the Tribunal.
The submissions of the landlord may have raised this issue in substance but not in the form we have articulated above. We invited the parties to address this issue. We further invited the parties to submit whether or not, in the case of a finding by us that the termination order was wrongly made, the Appeal Panel should re-decide the application under s 107 for a break-fee or whether the matter should be remitted to the Tribunal to decide the application for a break-fee under s 107 in accordance with the law.
Both of the parties submitted that the Appeal Panel should for itself consider that issue. Accordingly, we have decided to accede to that request.
We note that neither the landlord nor the tenants in oral addresses to us made any substantial submissions as to whether or not the Tribunal lacked jurisdiction to make a termination order under s103 of the RT Act. The tenants, quite understandably being unrepresented, were not in a position to advance any arguments of substance justifying the order of termination under s 103.
In Darren and Julia Patterson v David Dawson [2015] NSWCATAP 31 (Patterson) at [56] the Appeal Panel held that abandonment occurs when a tenant vacates within the fixed term of the lease without the consent of the landlord or without a Tribunal order.
There seems little doubt that this is what occurred here, and we are satisfied that there has been a termination of the Agreement by abandonment of the premises within the meaning of s 81(4)(d) of the RT Act by reason of the tenants' vacation of the premises within the fixed term of the lease without the consent of the landlord and without a Tribunal order. We note here that s 81 contemplates circumstances of termination other than abandonment which involve a tenant vacating the premises without the consent of the landlord or an order of the Tribunal. However, none of those circumstances are applicable in this case.
Accordingly, in our view, at the time of the hearing of the tenants' application for an order terminating the Agreement pursuant to s 103, the Agreement had already terminated by reason of the tenants' abandonment. We further note, and it was not in dispute between the parties, that the tenants paid no further monies to the landlord from 20 May 2023 and that it took more than three weeks for the landlord to relet the premises and even then, at a lesser rent.
Accordingly, it is not in dispute that the landlord suffered a loss by reason of the abandonment of the premises by the tenants in at least the amount of three weeks of lost rent.
Further, in our view, the consequence of this is that the Tribunal lacked jurisdiction to make a termination order pursuant to s 103 at a time when the Agreement had already terminated pursuant to s 81(4)(d) of the RT Act by reason of the abandonment of the premises by the tenants. Accordingly, the Tribunal erred in purporting to make such a termination order under s 103.
Although it is not in dispute that the landlord has suffered loss equivalent to at least three weeks of lost rent, , even in the instance of proven loss, the Tribunal has a discretion as to whether or not to make an award for the payment of a break-fee under s 107 of the RT Act: Abdel-Messih v Marshall [2017] NSWCATAP 136 at [25]-[29].
During the hearing of the appeal, we raised with the parties, and invited submissions in relation to, the possible argument that the failure to repair the air-conditioner could provide a basis for exercise of the discretion not to award a break-fee under s 107 of the RT Act.
The landlord's submission in this regard was brief. He submitted that whether or not the Tribunal ordered three weeks or some lesser sum, he was content to leave that to the judgment of the Appeal Panel. The tenants in effect submitted, without elaboration, that a break-fee should not be granted given the totality of the circumstances of the landlord's breaches as found by the Tribunal.
In our view the discretion under s 107(1) should not be exercised substantially on the basis that the Tribunal, in its careful decision, awarded the tenants compensation for the non-working air-conditioner. In our view, it would not be appropriate in circumstances where the tenant had already been compensated for such breach by the landlord, to deny the landlord his losses upon the tenants' abandonment of the fixed term Agreement.
In this regard we also think it relevant that the tenants could have sought and obtained an order from the Tribunal for the landlord to repair the air-conditioning unit, and the tenants could have remained in possession and paid rent until the application for a termination order was decided by the Tribunal.
Accordingly, we find and will order that the tenants are to pay the landlord a break-fee of three weeks rent in the amount of $5,100 under s 107 of the RT Act.

Apprehended bias

The landlord in his written submissions contended that the Tribunal and the Member constituting the Tribunal exhibited apprehended bias by reason of prior decisions of the Member in favour of tenants. Such contention does not provide a proper basis for the ground that the decision and orders of the Tribunal should be set aside for apprehended bias.
In oral submissions, the landlord referred to the way he was treated by the Tribunal and referred to the latter portions of the audio of the hearing tendered by the landlord. No further elaboration was given or particulars of how the landlord said he was unfairly dealt with by the Tribunal so as to exhibit apprehended bias.
We have listened to the audio and in particular the latter parts of the hearing and find no basis to support this ground of appeal and accordingly it shall be dismissed.

Inadequate reasons

The landlord submitted that the Tribunal's reasons were inadequate. The arguments in support, however, largely centred around complaints about the conclusions reached and failure to give proper weight to the landlord's evidence rather than truly putting forward the contention that the reasons given by the Tribunal were inadequate as understood by the law.
We have reviewed the Decision below and find that the Tribunal dealt with the relevant evidence before it, stated the law, applied its understanding of the law and then drew conclusions from the evidence and its understanding of the law to come to its ultimate outcome.
In our view there is no substance to the contention that the reasons of the Tribunal were inadequate.
Accordingly, we should dismiss this ground of appeal.

The order that the landlord pay the sum of $2,210

The landlord sought to dispute the order that he pay the sum of $2,210 for breach of s 63 by reason of a failure to repair the air-conditioning unit.
The only argument of any substance put forward in support of this contention was that the Agreement did not expressly include any statement about there being an air-conditioning unit or a working air-conditioning unit. We further note, as stated by us above, that leave to appeal is required to raise this ground of appeal.
It is plain that the air-conditioning unit was there at the time of commencement of the lease. Further, as found by the Tribunal, the air-conditioner was mentioned in the ingoing report 'as to be repaired', but it was not: [91].
Accordingly, we are not satisfied that there is any basis to warrant the grant of leave to raise this ground of appeal.
In the result, we refuse to grant leave to raise this ground of appeal.
The landlord on appeal also contended that the Tribunal failed to give proper weight to the landlord's evidence in declining to allow the landlord to deduct $1,067 from the bond for cleaning costs and rubbish removal.
The landlord's submission in this regard essentially recanvassed the evidence before the Tribunal and sought to re-argue the matter.
In its Decision, the Tribunal dealt with these issues at [107] - [112] as follows: 107 There are no official photos attached to the ingoing and outgoing condition reports with which to compare the premises at the start of the tenancy. 108 The only photos in evidence are a sample taken by the landlord on 23 February 2023 and a further sample he took on 29 May 2023 of allegedly dirty areas at the end of the tenancy and some cardboard boxes said to have been left behind. It is unclear if the tenants received these photos when they moved in/vacated. 109 The landlord's photos of 29 May 2023 do not demonstrate overwhelming uncleanliness so as to warrant a $1,067 cleaning bill. The standard is not perfection. 110 The tenant has also provided photographic evidence of dirty premises, but the photos are undated. 111 The text of the ingoing report (tenants' version) refers to existing dirtiness when they moved in, some of which the landlord admits. I am prepared to accept the Premises were unclean in part at the start. 112 I find that the landlord has failed to discharge his onus of proof that the Premises were left in a worse state when the tenants vacated in relation to cleaning and rubbish, when compared to when they moved in. I disallow this claim for insufficient evidence.
We have reviewed the evidence in question which was summarised by the Tribunal in its Decision. In our view, the conclusion of the Tribunal in this regard was well open on the evidence before it.
We are not satisfied that the Decision is attended with sufficient doubt to warrant its reconsideration on appeal. We note that this ground of appeal does not involve an issue of principle or a question of general public importance or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable.
Accordingly, we refuse to grant leave to appeal to raise this ground of appeal.

Conclusion and disposition

We note that the bond has been paid to the tenants. We also note that, as security for a stay of execution granted by the Local Court pursuant to s 67 of the Civil Procedure Act 2005 (NSW) in respect of the Tribunal's money order, the landlord has paid $2,319 into Court.
The orders of the Appeal Panel are as follows: 1. Appeal allowed in part. 2. Set aside the order for termination of the residential tenancy agreement made by the Tribunal pursuant to s 103 of the Residential Tenancies Act 2010 (NSW) in the tenant's application RT 23/23449 on 30 October 2023. 3. Set aside the orders of the Tribunal made in the landlord's application RT 23/29452 on 30 October 2023 and in lieu thereof make the following orders: (1) The tenants, Ziyu Yan and Jiaming Lin and Liang Wang, are to pay the landlord Chenyang Yan the sum of $5,100 within seven days pursuant to s 107 of the Residential Tenancies Act 2010 (NSW). (2) Otherwise the application 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: 04 March 2024

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