Zhu v Elrem Property No 2 Pty Limited

Notice of Appeal, Directions for Appeal

1. The Notice of Appeal was filed on 20 August 2024, being within the prescribed 14 day period and is therefore filed within time (r 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW)).
2. The appeal was listed for a callover on 4 September 2024 and directions made for the parties to submit their documents and submissions for the appeal hearing.
3. The landlord has provided a bundle of documents filed 2 September 2024.
4. The tenant has provided a bundle of documents filed 25 September 2024.
5. The parties agreed that the above documents which they have filed in the Appeal were all before the Tribunal except 1 document which was page 10 of the tenant's bundle. This document is a typed transcript of part of the hearing in the termination proceedings between the parties on 12 September 2024, before another member. The member in those proceedings has noted in reasons dismissing the termination proceedings that there was "persuasive evidence that the landlord agreed to commence rent owing from 9 May 2023…". We note that neither the Tribunal whose decision is under appeal, nor the Appeal Panel is bound by this notation.
6. The tenant appeals Order 2 that she is to pay the landlord the full amount of $4714.29. At the hearing the tenant confirmed that the correct amount for the balance of the rent arrears (after application of the bond) should be $2428.57.
7. The tenant said she had calculated this amount according to the following formula - the full rent payable from the beginning of the tenancy to the end of the tenancy at $1000 per week, less all rent payments made by the tenant during the tenancy, less the 2 agreed deductions of $3000 and $300 and less the additional 2 week rent waiver of $2000. These calculations were not disputed by the landlord.
8. In the Notice of Appeal the tenant seeks leave to appeal on the grounds that she has suffered a substantial miscarriage of justice on the following bases: 1. The decision was not fair or equitable; 2. The decision was against the weight of evidence; 3. There is significant new evidence that was not reasonably available at the time of the hearing, from a previous hearing.

Background

1. We summarise the background as follows: 1. The parties entered into a tenancy agreement on 4 April 2023 for a fixed term ending on 5 April 2024 with a weekly rent of $1000; 2. The leased premises were a brand new apartment on the 10th floor; 3. By the time this tenancy began the developer had not yet installed curtains/blinds into the leased premises; but the ingoing condition report noted that curtains would be installed by 24 April 2023; 4. The tenant listed a number of defects on the ingoing condition report such as switchboard defects, some broken lights, cleaning issues and other issues; 5. By email dated 15 April 2023 from the agency to the tenant the landlord agreed to waive rent for the first 3 weeks of the tenancy due to the curtains issue; 6. There was no issue between the parties that the full rent waiver for the first 3 weeks of the tenancy in the sum of $3000 was passed on to the tenant and taken into account in the rent arrears order made by the Tribunal; 7. There was also no issue that there was an agreed reduction of $300 on account of the tenant paying for an NBN installation from her own funds, which the landlord agreed to pay and this has been passed on; 8. Curtains were installed by the developer's contractor on 24 April 2023; however a couple of them were mistakenly short by 100mm; 9. The short curtains were replaced on 9 May 2023; 10. There were other defect issues which were the subject of emails between the parties at the time and then became the subject of other proceedings but these issues are not the subject of this appeal; 11. On 4 July 2023 the landlord filed termination proceedings against the tenant on the grounds of rent arrears; 12. The termination proceedings were listed for hearing on 12 September 2023 and dismissed by the Tribunal with the written reason that the Tribunal member was not satisfied that there were any rent arrears at that time and also noting that there was persuasive evidence that the landlord had agreed to rent commencing on 9 May 2023; 13. On 22 April 2024 the tenant returned vacant possession of the premises to the landlord and both parties agreed at the appeal hearing that this was the last date of the tenancy; 14. The landlord filed proceedings 2024/135035 for an order for the rent arrears and the bond to be applied to those arrears.

Scope and nature of internal appeals

1. An appeal is not an opportunity for the party who was unsuccessful before the Tribunal to run their case again: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. As stated in NCAT Guideline 1, Internal Appeals (which can be found on the Tribunal's website), "an appeal is not an opportunity to have a second go at a hearing".
2. Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80(2) NCAT Act.
3. In Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 at [24]-[40], the Appeal Panel set out the principles concerning questions of law within s 80 of the NCAT Act. An appellant is required to identify a pure question of law which then becomes the subject matter of the appeal (Wilson v Chan & Naylor Parramatta Pty Ltd atf Chan 7 Naylor Paramatta Trust [2020] NSWCA 62 at [4] and [11]; Orr v Hunter Quarries Pty Ltd [2022] NSWCCA 39 at [12, [14]; Orr v Cobar Management Pty Ltd [202] NSWCCA 220).
4. Clause 12(1)(b) of Schedule 4 of the NCAT Act, provides that for the Appeal Panel to grant leave to appeal from decisions made in the Consumer and Commercial Division, it must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 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).
5. The principles of whether leave should be granted are set out in Collins v Urban [2014] NSWCATAP 17 (Collins v Urban).
6. In Collins v Urban the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: "… there was a 'significant possibility' or a 'chance which was fairly open' that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance."
7. However, even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) (Collins v Urban [81]).
8. In Collins v Urban, the Appeal Panel held at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; or 3. 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; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. 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.

Issue on appeal

1. The central issue on this appeal is the quantum of the rent arrears.
2. A document headed Tenant Payment History is at page 1 of the landlord's documents (and at other parts of the evidence). Both parties agreed that this document accurately shows all rent payments made by the tenant during the tenancy and the 2 agreed deductions of $3000 and $300.
3. The tenant contended before the Tribunal and in this appeal that in an email dated 16 June 2023 the landlord agreed to an additional waiver of 2 weeks rent ($2000) which has not been passed on to her. In the appeal, the tenant also relied on the reasons of the Tribunal in the termination proceedings, namely that there was persuasive evidence that the landlord had agreed to commence rent from 9 May 2023.
4. The landlord contended before the Tribunal and in this appeal that the agreement from the landlord as set out in the email dated 16 June 2023 was made relying on the tenant's alleged misleading representation to the agency that the curtains had not been installed on 24 April 2023 but were installed on the later date of 9 May 2023. The landlord relied on a statutory declaration of Colin Segal (from the office of landlord's agent) dated 11 August 2023 in which he states: "In endeavouring to resolve this I spoke to Wei Zhu who said the blinds were only installed on 9th May and not the 24th April. This being the case based on the owner agreeing to waive the $1k weekly rent, the additional $2k was offered, namely from 24th April to 9th May. Subsequent communication I had with the person who installed the curtains from No Bull Blinds, I was informed that the curtains were installed on 24th April and that he left the curtains on the windows until he fitted the new curtains on 9th May. So based on this Wei Zhu did have blinds on the windows from 24th April, and she incorrectly stated to me that the blinds only arrived on 9th May. The reason why he had to redo the blinds was because the two installed on 9th May were 10cm short…"
5. The tenant denies making the misrepresentation and says she never informed the agency including Mr Segal that the curtains were not installed until 9 May 2023. She says the agency knew at the time that the curtains had been installed on 24 April 2023 as they were required to be under the ingoing condition report and that there are other communications between her and the agency to establish that the agency knew.

Consideration

1. The main findings for the decision on the quantum of rent arrears are set out in the Tribunal's reasons at paragraphs [17] to [19] as follows: "[17] On 16/6/23 the tenant phones Mr Colin Segal who represented the landlord and told him, incorrectly, that the curtains had not been installed until 9/5/23. [18] Mr Seghal (sic) followed up by email of 16/6/23 to the tenant, and relevantly stated: 'Rent only commences being paid from when the curtains installed being 9 May.. The owner has authorised for the rent to be compensated for a further 2 weeks, equivalent to $2000 resulting in your rent starting on 9th May 2023…' which was based on a misleading statement by the tenant, as she well knew, that the curtains had been installed on 26/4/23 but 2 were short by 100mm and were to be replaced by 9/5/23. In other words, it was misleading as the tenant led Mr Segal to believe there were no curtains, when if (sic) fact there were curtains, but 2 were marginally short by 100mm. The Premises were on the 10th floor of the building and there is no evidence of any adverse privacy issue or other prejudice to the tenant. The landlord's offer of a further 2 weeks was based on the tenant's misleading statement. [19] By email of 16/6/23 to the tenant, the Agent stated: 'I confirmed what you said to Colin on the phone, the curtains were installed on 9/5/23' which was also incorrect date, as you can see on the facts above."
2. The tenant has not made a submission that the Tribunal member made an error on a question of law. As the tenant is self-represented, we have considered ourselves whether the decision and the documents before us may reveal an error on a question of law (in accordance with the principles of Cominos v Di Rico [2016] NSWCATAP 5 at [13]). We do not consider there has been.
3. It follows that the tenant requires the Appeal Panel's leave to appeal on any of the basis set out in cl 12(1)(b) Schedule 4 of the NCAT Act (noted above).
4. In the proceedings before the Tribunal and in this Appeal the landlord's agent has contended that they were told by the tenant in a phone conversation that the curtains were not installed until 9 May 2023, and that this was a misrepresentation as the curtains had been installed earlier on 24 April 2023. Therefore the landlord disputes it is bound to grant a further 2 week rent waiver until 9 May 2023.
5. The Tribunal has given considerable weight to the statutory declaration of Mr Segal, who was not cross-examined at the hearing because he did not attend the hearing. The Tribunal has also given considerable weight to the rent ledger. The landlord's agent could not confirm which rent ledger was before the Tribunal, but she stated the document titled Tenant History Payment was before the presiding member. Whether this document is the rent ledger or not, remains unknown. The Tenant History Payment commenced with the first entry on 27 April 2023 which is not an accurate record given that the tenant paid a week's rent in advance at the beginning of the tenancy in early April 2023. There was not a sufficient explanation from the agent at the appeal as to why a rent ledger in the commonly used format which shows rent payments from the beginning of the tenancy and the paid-to dates, was not in the evidence.
6. In any event, it was agreed by both parties that the Tenant History Payment recorded all the tenant's payments as well as the agreed reductions of $3000 and $300, but not the reduction of $2000.
7. Having considered the documentary evidence before the Tribunal and the parties' submissions on the appeal, we consider that the weight of the evidence before the Tribunal establishes that the agency knew that installation of the curtains had been done on 24 April 2023, but a couple needed to be replaced.
8. That evidence is as follows: 1. Ms Fox of the agency emailed representatives of the landlord on 26 April 2023 stating: "I spoke with the curtain company today and they said curtains were made 100 mm (10cm) short. They said the curtains were installed in 1001 but new ones are getting made and will be installed on 9th May at 2 PM. The installer will need 2 hrs to finish the installation. I spoke with the electrician today. They are getting back to me when they can come out next. I will contact the tenant to let her know that although the curtains were not perfect, still they got installed on time. Therefore the rent will start on the 24th of April as agreed." 1. This email also attaches 2 photos to show the curtains installed. 2. At page 94 of the tenant's documents is a copy of a text message from the tenant to Ms Fox dated 24 April 2023 as follows: "I emailed you earlier. Also the installer now advised both curtains need to be remade and reinstalled as they are faulty. The little one on the side seems to be OK. He said he will report back to his office, get both of them remade and come to install again. Please follow up. And the bedroom should also have the white layer? Two layers, one makes it completely dark. One for privacy and block some uv, but still have light." 1. At page 30 of the tenant's documents is a copy of an email from Ms Fox to the tenant dated 5 May 2023 which contains the text of an email from the tenant in black font and the text of Ms Fox's reply in red font. In that email Ms Fox writes: "I do acknowledge the curtains weren't installed at the time and when they brought them, they were 10cm narrower. However, they were installed on the 24/4/2023 and you got well compensated ($3000) for the waiting. Again, this is out of my control as they were not my tradespeople on us so it wasn't my fault." 1. Further down in that email of 5 May 2023 Ms Fox writes: "Curtains install of the correct curtains is 9th May at 2pm". The tenant has written: "Please respond with confirmation of dates for rent waiver. Ms Fox answers: "Waiting on owner's instructions, perhaps we should wait until next week when everything has been fixed and confirmed." The tenant has written: "I hope the issues get resolved without further headache". Ms Fox answers: "Me too :(" 1. Also in that email of 5 May 2023 Ms Fox states: "Not on brand new building where everyone knows that there will be some defects, as Jason mentioned all tenants are experiencing the same issues, but you seem to be the only, been unfamiliar with this."
9. We are satisfied that this email dated 5 May 2023 establishes: 1. There were a number of issues with apartments in the new building, including the leased premises and other tenants were also having issues; 2. By 26 April 2023 at the latest, the agency knew that the curtains had been installed in the leased premises on 24 April 2023, but some would be replaced as they were 10cm too short; 3. The agency also knew as at 26 April 2023 that the correct curtains would be installed on 9 May 2023; 4. That there was an outstanding request by the tenant for a further rent waiver which the agent noted that she was waiting on the landlord's instructions for.
10. We consider that the Tribunal's finding that the tenant misrepresented the date of installation of the curtains was against the weight of the evidence at the hearing. This finding was fundamental to the conclusions the Tribunal reached. It follows that the decision by the Tribunal to, in effect, void the landlord's agreement to allow a further waiver of $2000 (as per the email dated 16 June 2023) was against the weight of evidence.
11. As we consider this finding of the tenant's misrepresentation was fundamental to the conclusions the Tribunal reached, we accept in accordance with the principles set out in Collins v Urban that a substantial miscarriage of justice may have been suffered by the tenant. This is for the reason that there is a significant possibility or a chance that was fairly open to the tenant that she may have achieved a more favourable result (namely a rent arrears order for $2000 less) if the finding as to the misrepresentation had not been made and instead the decision was made in accordance with the weight of evidence before the Tribunal (Collins v Urban [76] and [77(2)]
12. However, as noted above even if an appellant has satisfied the requirements of cl 12 of Schedule 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) (Collins v Urban at [81]). We are satisfied that it is appropriate that leave be granted because we consider that this matter involves an injustice which is reasonably clear, it goes beyond what is merely arguable, it is a plain and apparent error central to the decision of the Tribunal and it would be unjust to allow the finding to stand. For this reason it is appropriate that leave be granted and the appeal allowed.
13. We do not need to consider the other 2 bases for leave to appeal, as leave is granted on the basis of the decision being against the weight of the evidence and the appeal allowed.
14. In determining an appeal, the Tribunal has power to vary the order made by the Tribunal (s 81(2) of the NCAT Act): 81(2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.
15. We believe it is appropriate to exercise that power in this case, rather than remit the proceedings to the Tribunal for redetermination of the quantum of rent arrears. It is not the task of the Appeal Panel to undertake its own calculations of the rent arrears. However, the tenant did not identify any other basis for an error in the calculation of the rent arrears which was ordered in Order 2 other than the additional 2 week rent waiver in the sum of $2000. Accordingly, we consider the appropriate outcome of the appeal is that the rent arrears amount in Order 2 is simply varied by way of reduction in the sum of $2000.00 to $2714.29 and not to the sum of $2428.57.

ORDERS

1. We make the following orders: 1. Leave to appeal is granted. 2. The appeal is allowed in part. 3. The amount in Order 2 dated 15 August 2024 in 2024/00135035 of $4714.20 is varied to $2714.20. 4. Any costs application to be filed and served within 14 days of these orders. 5. Any response to the costs application to be filed and served within 28 days of these orders.
2. The tenant has also sought costs of the appeal, and we make directions for costs. The parties are to note that costs are governed by s 60 of the NCAT Act which provides that each party should pay its own costs unless there are special circumstances.

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

Amendments 09 December 2024 - Member title updated 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: 09 December 2024