This appeal incorporates two appeals from two decisions in separate matters between the same parties arising from disputes governed by the Residential Tenancies Act 2010 NSW (RTA). A common and significant issue in both appeals was a contention by the appellant that the fixed term tenancy agreement she had entered into in 2016 was void for illegality.
The dispute arises from the appellant's occupancy of a "granny flat" in the downstairs portion of the respondents' house in Port Macquarie, New South Wales (the Flat). In respect of that occupancy, the appellant and the respondents had entered into a residential tenancy agreement on 25 January 2106 for a fixed term of 26 weeks ending on 24 July 2016 (Tenancy Agreement).
Orders were made in the first of these two decisions on 9 August 2016 with written reasons issued on 22 September 2016. The second decision, accompanied by written reasons, was made on 19 December 2016. The first decision was concerned with termination of the Tenancy Agreement and possession of the Flat (Termination Decision). The second decision was concerned with a claim for recovery of the rent the appellant had paid up to and including 3 July 2016 (after which date she ceased to pay rent) or, as an alternative to that claim, a claim for compensation (Compensation Decision).
By the time orders were made in the Termination Decision on 9 August 2016, the appellant had discovered that the conversion of the downstairs area into a granny flat had occurred without the consent of the relevant Council (Council). Before that time, the appellant and the respondents had been in dispute about various aspects of the appellant's occupancy of the granny flat. By the time of the hearing in respect of the Termination Decision on 9 August 2016, those disputes had already given rise to two earlier proceedings in the Tribunal, which are not the subject of this Appeal.
The appellant's appeal from the orders made in the Termination Decision is brought out of time. The appellant seeks an extension of the time in which to appeal. However, as we explain below, there is no utility in that appeal and we refuse that application for an extension of time. Accordingly, that part of the appeal does not succeed..
As to the Compensation Decision, that part of the appeal raises questions of law concerning the consequences of the illegality of the conversion into a granny flat. In that part of the appeal there is also an application for leave to appeal in respect of other points that do not raise any question of law. We do not agree with the appellant's contentions that as a consequence of the illegality the Tenancy Agreement was void and unenforceable and that as a consequence the rent she paid should be refunded to her. We also do not agree that the appellant's other contentions warrant the grant of leave to appeal. Our reasons for these conclusions are set out below, Accordingly, to the extent that leave to appeal is required we refuse to grant such leave and otherwise dismiss the appeal.
The appeal was part heard on the first hearing date for the appeal on which occasion the appellant indicated that she had more material that she wished to rely upon. The timing for the resumed hearing (by telephone) was arranged having regard to surgery that the appellant underwent after the first hearing date.
[2]
Background facts
We set out below the uncontroversial facts concerning the appeals. This is not an attempt to identify all the relevant facts. Much of what we set out below emerges from documents placed before the Tribunal at one or other of the hearings. The appellant deposed to many more facts than we refer to. By way of illustration, as we understand it, at the hearing on 25 October 2016, in respect of the Compensation Decision, four affidavits of the appellant were before the Tribunal. These affidavits do more than set out her evidence. They include allegations and submissions. For the purpose of determining these appeals, it is unnecessary for us to set out facts in any more detail than what we refer to below.
In about August or September 2015 the appellant returned to Australia from the United Kingdom where she was a post graduate student.
In November 2015 the appellant was placed on the surgical waitlist of a hospital on the North Coast. She decided to look for a tenancy in the Port Macquarie area, rather than continue with more expensive holiday accommodation she had obtained. She saw an advertisement by LJ Hooker (LJH) for the Flat at a rental of $240 per week. After viewing the Flat, submitting a tenancy application (in which she requested a six month lease), and discussion with LJH, the appellant signed the Tenancy Agreement on 25 January 2016.
The Tenancy Agreement was for a fixed term of 26 weeks commencing on 25 January 2016 and ending on 24 July 2016. Clause 40 of the Tenancy Agreement concerned swimming pools. It stated that the clause was to be crossed out if there was no swimming pool provided under the tenancy. The clause was crossed out and the crossing out was initialled by the parties.
On or about 23 June 2016, a Notice of Termination by the landlord requiring delivery up of vacant possession on 25 July 2016 was delivered to the Flat. The ground stated for termination was the forthcoming expiry of the fixed term. The timing of the notice complied with the requirement in s 84 (2) of the RTA concerning the end of a fixed term tenancy under which the specified termination date had to be no earlier than 30 days after the date on which the notice was given.
Prior to that date, there had been disputes between the parties in relation to the Flat commencing from soon after the appellant took up occupancy. This included, but was not confined to:
1. A Notice of Termination dated 10 February 2016 given by the landlord on the ground of alleged smoking in the premises in breach of the tenancy and subsequent proceedings by the landlord for termination on these grounds. The allegation was disputed by the appellant. The application by the landlord was dismissed by the Tribunal on 27 June 2016.
2. In early March 2016, the appellant commenced proceedings in the Tribunal for orders that the landlord carry out repairs as had been identified by her at the commencement of the tenancy.
3. Two further Notices of Termination issued by the landlord in May 2016 for alleged arrears of rent.
Prior to the Notice of Termination for expiry of the fixed term, on 13 May 2016, the appellant had knee replacement surgery. She was discharged from hospital on 31 May 2016 and returned to the Flat.
On 29 June 2016, the appellant commenced the application in the Tribunal that led to the Compensation Decision (proceedings RT 16/29905). That step was, apparently, provoked by her discovery of the lack of development consent in respect of the conversion to a granny flat.
At that stage, the orders sought in that application were:
Section 11 - An order that an agreement is or is not a residential tenancy agreement under the Act
A short hand reference was also made in the application to s 49 of the Act - a section (see below) dealing with the landlord's obligation to take reasonable steps to ensure that at the time of the tenancy agreement there is no legal impediment to occupancy by the tenant during the period of the tenancy.
By letter dated 30 June 2016, the Council informed the respondents that the Council was investigating a concern raised regarding works undertaken at their property which resulted in a separate dwelling being created on the downstairs level. The letter referred to an inspection of the premises having revealed that the downstairs area had been converted into a bedroom/living area and kitchen, creating a separate dwelling and that the stairs to that downstairs area had been blocked off. It was noted that there was a tenant living in the downstairs dwelling. It was said that such works required development consent and that it appeared that such consent had not been sought nor granted. The letter gave the respondents 28 days in which to show cause why the Council should not take further action. The letter was copied to the appellant.
The appellant paid rent up until 3 July 2016, but not after that date. In an email to LJH dated 11 July 2016, she explained that she had paid "to the week in which an illegal residence was confirmed".
The respondents replied to the Council's letter by letter dated 7 July 2016. By reference to a building consent obtained in 1994 they said that they were not aware of the need to apply for development consent in relation to the granny flat. The letter referred to some telephone discussions with Council from which it was clear that the blocking of the internal stairs had meant that they had created a separate dwelling and that they had been advised that this needed to be a complying development. It was said that they now intended to obtain a complying development certificate for the granny flat which they hoped would comply with Council's requirements. It was said that the lease for the tenant had been terminated due to end of lease and that the tenant was due to vacate at the end of July. The letter said that once the property was vacant they proposed to rectify the fixed wall at the bottom of the stairs at which point they would take action to approve the dwelling prior to renting the property again. They said it was hoped that the letter provided due cause for Council to take no further action.
On or about 18 July 2016, a fifth Notice of Termination requiring delivery up of vacant possession of the premises on 1 August 2016 was delivered to the Flat. The ground stated in the Notice was alleged non-payment of rent.
At various points after 3 July 2016, at a time when the appellant was no longer paying rent for the Flat, the appellant pressed LJH for defects with the Flat to be rectified, namely repair of the washing machine, repair of a lock, reinstatement of the clothesline and repair of a heating unit in the bathroom.
The fixed term of the Tenancy Agreement expired on 24 July 2016. On 26 July 2016, the respondents brought the application in the Tribunal for termination that led to the Termination Decision. The ground of the application was that the Tenancy Agreement had come to the end of its fixed term. That application was heard on 9 August 2016. Orders for termination and possession were made on that date, including an order that such possession was suspended until 23 August 2016.
A "Notice of intention to Serve - Order" under s 121B of the Environmental Planning & Assessment Act 1979 (EPA) dated 16 August 2016 was issued to the respondents by the Council on the basis that the premises had been converted into two separate dwellings by the closing off of the stairway to the lower section of the building, and the lower section being rented out to a tenant, without development consent. The notice stated that the action necessary to comply with the order would be to remove the part of the building that had been erected to close off the stairwell and return the building to the configuration as per approved plans and to cease use of the premises as two separate dwellings. It was stated that representations could be made up until 2 September 2016 regarding why the proposed Order should not be issued, or as to its terms or period of compliance.
The notice was sent with a covering letter from the Council which noted that the owners were considering seeking development consent for the premises to include a granny flat. The letter stated that should an application be received, this would be taken as representations to the orders and that the issuing order would be suspended whilst the application was considered.
The appellant gave up possession of the Flat on 23 August 2016.
By letter from the Council to the respondents dated 20 September 2016, it was stated that, following an inspection of the premises, the author of the letter was satisfied that the unauthorised works had been removed and the property had been returned to its approved configuration. It was said that, accordingly, the Council had concluded its investigation into the matter.
We are not aware that any orders under s 121B were ever issued by the Council to the respondents.
[3]
The Termination Decision (RT 16/3397)
On 9 August 2016, following a hearing that day, the Tribunal ordered:
1. The Residential Tenancy Agreement is terminated in accordance with: s 84 of the Residential Tenancies Act 2010, as the landlord has served a termination notice for termination at the end of the fixed term.
2. The Residential Tenancy Agreement is terminated immediately and possession is to be given to the landlord on the date of termination.
3. The order for possession is suspended until 23 August 2016.
In the Tribunal's reasons for decision dated 22 September 2016 (provided as a result of a request from the appellant under s 62(2) of the Civil and Administrative Tribunal Act 2013 (NCAT Act)) the Tribunal concluded that the fixed term of the Tenancy Agreement ended on 24 July 2016; a termination notice in respect of the expiry of the fixed term was served on 23 June 2016 requiring vacant possession to be given on 25 July 2016, and the tenant was still residing in the premises. In the circumstances, the Tribunal was satisfied that the elements of s 84 had been established and that the section required that the Tribunal must make a termination order. The Tribunal concluded that the only discretion available to it concerned the date of possession and, having regard to the fact that the appellant was recovering from knee replacement surgery, delivery up of possession was suspended until 23 August 2016.
Earlier in the reasons, the Tribunal had referred to the appellant's evidence that she was getting medically stronger each day, was thus becoming more able to move out of the premises, but she did not want to be homeless and sought a period of three weeks to vacate the premises: at [11].
The Tribunal referred to the appellant's allegation that the subject termination notice was the fifth notice which the landlords' agent had served on her and that the circumstances had become an harassing process: at [10].
The Tribunal also referred to the appellant's claim that the residential premises were illegal and that the landlords had rented them to her knowing that this was so: at [12] and [15]. As to this, the Tribunal noted that this issue was the subject of a separate application that was to be determined on a future date. Plainly, this was a reference to the proceedings in RT 16/29905 brought by the appellant on 29 June 2016.
There is no suggestion in the reasons that the appellant had raised with the Tribunal any of the matters in s 115 (2) (a), (b) or (c) of the RTA that might be found to be retaliatory reasons for the respondents' termination notice or for the application for a termination order or that the appellant had made an application under that section for the termination notice to be declared of no effect or for the termination order to be refused.
Nor is there any suggestion in the reasons that the appellant was herself seeking a termination order for breach by the landlord. On the contrary, it appears from the reasons that the appellant's position was that her occupancy should not be terminated, at least, for a period of three weeks.
As to the statutory requirement that the Tribunal must make a termination order, s 84 provides:
84 End of residential tenancy agreement at end of fixed term tenancy
(1) A landlord may, at any time before the end of the fixed term of a fixed term agreement, give a termination notice for the agreement that is to take effect on or after the end of the fixed term.
(2) The termination notice must specify a termination date that is on or after the end of the fixed term and not earlier than 30 days after the day on which the notice is given.
(3) The Tribunal must, on application by a landlord, make a termination order if it is satisfied that a termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice.
(4) This section does not apply to a residential tenancy agreement if the tenant has been in continual possession of the same residential premises for a period of 20 years or more and the fixed term of the original fixed term agreement has ended.
A "termination order" is defined in s 80 as follows:
termination order means an order terminating a residential tenancy agreement together with an order for possession of the residential premises.
Clearly, the Tribunal had in mind s 84 (3) when it expressed the conclusion that it must make a termination order in the circumstances presented to it.
[4]
The Compensation Decision (RT 16/29905)
In the Compensation Decision dated 19 December 2016 a differently constituted Tribunal ordered that the whole of the rental bond plus interest be paid to the appellant along with the sum of $96 for recovery of laundry costs due to a failure by the landlord to repair a washing machine and clothes line. The landlord's separate application for unpaid rent (RT 16/36234) for the period from 4 July 2016 to 23 August 2016 was dismissed.
By the time of the hearing in respect of the Compensation Decision on 25 October 2016 the appellant's claim in RT 16/29905 had expanded to seek the orders set out in paragraph 24 of her affidavit dated 8 October 2016, namely:
1. Section 103 Termination pursuant to RTA 2010 for breach by respondent.
2. January 2016 Contract void ab initio.
3. Restitution for ss 13(1) and 49 illegality in the amount of $5,520.00.
4. In the alternative remedy pursuant to ss 44(1)(b), 43(2)(b), 47(5), 50(2), 115 and 187(1)(d) of RTA 2010.
5. Section 175 Order to repay Rental Bond P210867 in the amount of $960.00.
6. Declaration pursuant to ss 11 & 212 of the RTA 2010.
7. Section 187 Orders for compensation for non economic loss in the amount of $3500.00 (Xuereb 2011) or as the Tribunal pleases for disappointment distress loss of a bargain inconvenience and harm (CLA 2002, s 3B(1)(a)).
8. Section 187 Order for costs on an indemnity basis.
9. Section 187 Order for professional costs in the amount of $2854.47.
10. An order for interest up to judgment is claimed (UCPR 2005-REG 6.12 Legal Profession Uniform Law Application Act 2014-SECT 59).
11. In the alternative I plead division 4 ss74 (2) & (3) of the Fair Trading Act 1987 (NSW)/s 220 of the RTA 2010 and part 2 relief under sss 7 and (of the contracts (sic) Review Act 1980 (NSW). She also claimed expenses set out at annexure L to her affidavit including removalist costs and accommodation from August to October, professional costs, replacement airfare and UK storage expenses.
It can be seen that the appellant's claims were many and varied. There was an inconsistency between the claim that the Tenancy Agreement was void giving rise to a claim for return of the rent paid and claims for compensation based upon breaches of the Tenancy Agreement, including a claim for breach of the tenant's right to quiet enjoyment (s 50 (4) of the RTA). This explains why the latter was stated to be an alternative claim.
There was also an inconsistency between the Termination Decision which assumed validity of the Tenancy Agreement and the claim that the Tenancy Agreement was void ab initio for illegality and that a declaration should be made under s 11 of the Act that the Tenancy Agreement was not a residential premises agreement within the meaning of the Act.
In the Compensation Decision the claims referred to below were treated as having been made by the appellant and were dealt with by the Tribunal in the manner we now indicate:
1. A claim for a refund of the rent paid, based on illegality, was rejected for the same reasons as given by the Tribunal in Bygrave v Harris and O'Brien [2012] NSWCTTT 268. According to that decision, the claim for return of rent paid in that case fell to be dealt with under s 47 of the RTA on the basis that the rent was not required to be paid because of the illegality. In Bygrave's case, the Tribunal concluded that under s 47 (5) it had a discretionary power to order repayment of the rent, which it declined to order in view of the benefit the tenant had enjoyed by occupancy of the rental premises. Otherwise, as the Tribunal in Bygrave's case remarked, the tenant would have the benefit of having lived in the premises without paying anything. The Tribunal in the Compensation Decision also referred to the decision of the High Court subsequent to the decision in Bygrave in Gnych v Polish Club Limited [2015] HCA 23; 255 CLR 414 and said that it was clear from that decision that not every lease entered into in breach of statute was void for illegality: at [9]-[11].
2. Claims in respect of the swimming pool, including for rent reduction for withdrawal of facilities under s 44 (1) (b), were rejected because the pool was not part of the premises or facilities supplied under the Tenancy Agreement: at [12].
3. Claims for rent reduction under s 44(1) (b) for loss of supply of the washing machine, clothesline and the heating unit in the bathroom were rejected. This was because these facilities only became unavailable during the period from 4 July 2016 during which the appellant stopped paying any rent. Accordingly, no claim for rent reduction in respect of the loss of these facilities was available: at [13].
4. A claim for reduction of rent for the non-supply of a television was rejected because a television did not form part of the inventory of items to be supplied under the Tenancy Agreement: at [13].
5. A claim for reduction of rent because one of the two locks on the external door to the Flat was unworkable was rejected because the premises were secure without the use of this lock and, hence, there was no withdrawal of services in this regard: at [13].
6. Claims for deficiencies with kitchen cupboards, rubbish disposal and electricity supply were rejected because they did not amount to a withdrawal of services to be supplied: at [13].
7. A claim for breach of the appellant's right to quiet enjoyment was rejected because the respondents were entitled to serve the Notices of Termination that they did serve and the other matters complained about did not establish any financial loss so as to warrant an award of compensation even if the Tribunal was satisfied there was some breach: at [14].
8. The claims for the following orders:
1. the Tenancy Agreement was not a residential tenancy agreement to which the RTA applied, or that the premises were not premises to which the RTA applied;
2. a termination order for breach by the respondents of the Tenancy Agreement;
3. under s 212 of the RTA concerning listing personal information about a tenant in a residential tenancy database;
were rejected because the claims were said to be misconceived: at [15].
1. A claim for compensation for non-economic loss was rejected because:
1. Much of the appellant's distress was due to the knee problems and surgery she underwent and the Tribunal was not persuaded that the delay in having her surgery was due to any breach by the respondents;
2. In any event, the Tribunal was not satisfied that any disappointment or distress from any breach passed the threshold of 15% of a most extreme case, as required by the Civil Liability Act;
3. The Tribunal was not satisfied that any acts done by the respondents were done with intent to cause injury or death so that the exemption from the threshold provisions for non-economic loss in s 3B(1)(a) of the Civil Liability Act were satisfied: at [16].
1. Claims for accommodation expenses after 23 August 2016, for moving expenses, and in respect of an airfare and UK storage expenses were rejected because they did not arise from any breach by the respondents: at [18].
2. Claims for breach of the owners' repair obligation:
1. In respect of the washing machine was allowed and a sum of $96 awarded for the appellant's laundry costs.
2. In respect of pest repellents, was rejected because the amounts claimed were not support by the production of "receipts".
3. In respect of an emergency appointment, was rejected because this did not flow from any breach.
4. In respect of the faulty lock, was rejected because the Tribunal was not persuaded that this was a necessary emergency repair: at [19].
1. A claim for relief under the Contracts Review Act 1980 was rejected because the Tribunal had no power to make orders under that Act.
2. A claim for relief under the Fair Trading Act 1987 was rejected because it was never properly articulated and seemed to be misconceived.
3. A claim for interest under the Uniform Civil Procedural Rules was rejected because those rules do not apply in the Tribunal.
In rejecting the appellant's claim for return of the rent by applying the approach of the Tribunal in Bygraves (at [10]) it appears that the Tribunal accepted that the Tenancy Agreement was void for illegality and that as a consequence the appellant was not required to pay the rent that was paid within the meaning of s 47(1) and (5) of the RTA. Nevertheless, the Tribunal proceeded to deal with the appellant's claims for damages for breach of the tenancy agreement on the basis that it was an agreement that was enforceable by the tenant.
Importantly for the appeal, the Tribunal dismissed the appellant's claims for compensation for costs incurred as a result of the termination of the tenancy such as accommodation, removalists and storage costs because these did not arise from any breach by the landlord: at [18]. Connected to this conclusion was the Tribunal's finding that the landlord was entitled to serve the various notices of termination that it did serve: at [14]. Clearly, this was a reference to the notice to terminate for expiry of the fixed term as well as a reference to the other notices.
The Tribunal dismissed the respondents' application for the rent unpaid after 3 July 2016. It did so on grounds connected with illegality saying that in accordance with the decision in Bygrave's case the landlord has little or no basis upon which to pursue this claim: at [11].
The respondents do not appeal from that decision or any other aspect of the Compensation Decision.
[5]
The right of appeal
Under the NCAT Act (s 80(2)(b)) the appellant has a right of appeal on a question of law and otherwise with leave. Because this was an appeal from a decision of the Consumer and Commercial Division a grant of leave could only be given where (clause 12 of Schedule 4 of the NCAT Act):
12 Limitations on internal appeals against Division decisions
(1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:
(a) the decision of the Tribunal under appeal was not fair and equitable, or
(b) the decision of the Tribunal under appeal was against the weight of evidence, or
(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
[6]
Grounds of Appeal
On the appeal, we did not understand the appellant to challenge the result in respect of, at least, the claims referred to in (3), (4), (5), (6), (8) (c), (9), (12) and (14) of paragraph 47 above.
On 3 January 2017, the appellant lodged a Notice of Appeal covering appeals from both the Termination Decision and the Compensation Decision. The Notice was substantially incomplete. The Notice of Appeal contained an explanation for the extension of time sought to appeal from the Termination Decision.
On 27 January 2017, the appellant lodged a completed Notice of Appeal covering appeals from both the Compensation Decision and the Termination Decision.
The orders sought on the appeal were:
I would like the s 84 Termination Order quashed and an Order of s 103 Termination for Breach by Landlord substituted
I seek Restitution or s 187 Compensation for the Landlords' contractual breach
S 60 (2) Costs
The Grounds of Appeal were:
RT 16/29905 [The Compensation Decision]
The contract was vitiated for illegality from 25 January 2016. At no time and by admission did the Landlord possess the power to grant a Lease. The Member has erred by viewing the contract as voidable rather than void ab initio.
Where there is a vitiating factor such as illegality there is a prima facie obligation to make restitution. The Landlord has not discharged that obligation. At no time did the Landlord submit a defence.
At all material times the definition of a "home" in NSW law may be said to be a premises that may lawfully be used as a residence. I believe this to be the definition applicable under the Residential Tenancies Act 2010.
The cited case law does not support the Member's conclusions.
There are numerous errors of material fact throughout the 19 December Decision. Procedural fairness has not been afforded due to the Member's drawing of adverse conclusions based on that error.
The Member has failed to consider evidence admitted to RT 16/29905 by the Directions of Gilson M on 15 August 2016 (RT 16/11022). This has led inter alia to the Member failing to account for key statutory documents forming the 25 January 2016 contract such as the Condition Report dated 1 February 2016.
The Member has failed to take into account a matter that the Act implicitly or explicitly requires the decision-maker to take into account where ss 49 and 52 are invoked which is the safety of illegal premises. The premises were not fire-rated, there was a fire-conducting staircase, the premises were in breach of Code, and I was severely immobilised by surgery and disability. The Decision fails to account for these factors that were drawn to the Tribunal's attention.
Lack of impartiality / irrelevant consideration: In all of the circumstances my profession was of little use because the contract was inherently defective and this defect was unknown to me. The Landlords were a) a Company Director and b) an Electrician, and these facts were drawn to the attention of the Tribunal in oral evidence on 25 October. I was an innocent party in the 25 January transaction.
Failure to take into account a relevant consideration: all of the premises physical and existential defects, which were raised from 4 March 2016 onwards to the Members in my RT 16/11022 and RT 16/29905 Applications and Affidavits flow from the Landlords' statutory and contractual breach. The statutory and contractual problem extended to affecting my ability to obtain a replacement property and this situation was not resolved until 5 October 2016.
In all of the circumstances the Member's discretion has miscarried.
RT 16/33997 [The Termination Decision]
Did the Member err on 9 August 2016 by granting a s 84 Termination in circumstances where s 115 was pleaded and s 49 illegality was apparent to the Tribunal by 27 June? Did the Member err in refusing a grant of legal representation to me on (sic)
Failure to accord procedural fairness: I cannot be certain that the Landlords served documents as per Directions. This may of course relate to s 71 below. In any case I did not receive the Landlord's submissions in RT 16/33997 until 30 August 2016. There were other procedural fairness issues which may have affected the case under s 3 and s 36 Civil and Administrative Tribunal Act 2013.
S 71, CATA 2013
The Respondent Landlord / Landlord's Agent perjured themselves on the following occasions: by Oath dated 31 March 2016, by document dated 22 July 2016, by document dated 26 July 2016, by Application dated 26 July 2016, by document dated 22 August 2016, by document dated 24 August 2016, by verbal evidence in Hearings dated 27 June 2016, 9 August 2016, and on 25 October 2016. This is not an exhaustive list. I await receipt of the sound recordings for 27/06, 12/07, 09/08, 15/08 and 25/10.
The Respondents misled by omission of documents in RT 16/33997.
In connection with the grounds of appeal, the Notice of Appeal made reference to a number of documents that were relied upon, including three affidavits sworn by the appellant in connection with proceedings in the Tribunal dated 27 July 2016, 22 August 2016 and 8 October 2016 and material that was described in various ways as landlord bundles.
The Notice of Appeal included an application for leave to appeal in respect of which it was stated:
This may be belt and braces given error of law above, but I submit this Application of Leave for the Appeal Panel's consideration because there are equitable issues in this case:
The crux of this matter is and has always been that no reasonable person in my position would have entered into a contract for illegal premises due to their inherent instability and thus complete unsuitability for purpose. I contracted for premises that would sustain a surgical period of at least 6 months plus extension: the premises due to their illegality, and the actions and conduct of the Landlords to conceal that illegality, rendered the premises defective as of 25 January 2016 and thus consideration failed completely. At all material times the reason for taking the premises was disclosed and known to the Landlord and their Agent as was my financial vulnerability.
The Tribunal at first instance appears to have had some considerable difficulty accepting the vulnerability of my circumstances throughout the events of February to December 2016. There was reluctance to accept medical and surgical evidence as to disability (Sound Recordings). In the 19 December 2016 Decision the probative medical evidence has again not been given sufficient weight including Port Macquarie Base Hospital and other third-party papers attesting to the fact that but for the Landlord's lodging of proceedings in the Tribunal the surgery of 8 April would have gone ahead. The Landlords' actions have in fact compromised the whole course of surgery.
I am very concerned by the Tribunal's failure to recognise that I was under a significant disadvantage in these proceedings due to medical disability and the suffering that has been caused to me by the Landlords' irresponsibility and dissembling.
I had no means to safely remove myself away from the problem created for me by the Landlords and Landlords' Agent's actions for reason of 1) financial distress up to and including 13 May and then 2) immobilisation from 31 May up to 17 August 2016. The Landlord and Agents' blanket refusal to conciliate during the course of these events meant that by reason of being unable to move I was forced into expending monies necessary to my current and future medical treatment upon their poor conduct.
There is a substantial inequality of arms in circumstances where a vitiating defect such as illegality has tainted the entirety of the contract. Actual knowledge and constructive knowledge of that defect has informed the Landlord and Agents' actions in the Tribunal. I have brought this Appeal because I can see no good reason why the Member's discretion asks that I should bear the loss and I can see no good reason why under the common law and statute and in all of the circumstances restitution / compensation should not be ordered.
As to the ground for leave that the decision was not fair and equitable, the Notice of Appeal stated:
Consideration failed on 25 January 2016 due to the illegality of the premises and the stated reason for which I contracted for them.
As to the ground for leave that the decision was against the weight of evidence, an extensive variety of material was referred to in the Notice of Appeal often at a high level of generality. The section requesting identification of the evidence that the other party gave stated:
Unsworn emails and correspondence; communications containing defamatory statements; three Oaths affected by s 71; Lease with pages deleted; a blank Condition Report; misleading photographs; perjury on Oath at the Hearings; Respondent's statements during the Hearings which are contradicted by evidence contained within their own documents; perjury by omission eg. my offers of conciliation; oral breach of Privilege by raising and dissembling about Conciliation settlement offers.
The Landlords and Landlords' Agent submitted incoherent and disordered documents disclosing no defence and no case in law. In RT 16/3997 they blatantly lied to the Tribunal. Overall their evidence was so inherently unreliable that no reasonable person could accept it as being true and I did my best during the Hearings to draw this to the attention of the presiding Members.
As to the section requesting identification of the evidence the Tribunal should have given more weight to and why, the Notice of Appeal stated:
I provided sworn Affidavits with probative evidence including 3rd-party evidence and documents attached. My evidence disclosed the objective facts in sequence.
So far as new evidence was concerned, it was stated that the appellant wished to submit Council papers unavailable in 2016 and to submit medical and social services evidence unavailable at the time of the "Directions of 2016".
To a significant extent, the Notice of Appeal failed to identify for the Appeal Panel the specific errors in the reasons of Tribunal about which the appellant complained and the specific matters relied upon, particularly in the Compensation Decision.
Nevertheless, it was clear enough that a central contention made by the appellant on the appeal was that the Tenancy Agreement was void for illegality from which it was contended it followed from the circumstances that she should receive a refund of the rent she paid or she should receive compensation related to the vulnerable position in which she contended she was placed as a result of the illegality. In this connection, a prominent contention made by the appellant was that there was loss of a bargain.
Since the above Notice of Appeal, in addition to oral submissions, the appellant has supported her appeal by the following written material:
1. Written submissions headed "AP 17/00085 Grounds of Appeal" addressing the subjects of "Time", "Fresh Evidence", "Excluded Evidence", "RT 16/33997 & RT 16/29905", "RT 16/29905", "Costs", "RT 16/29905 - Grounds of Appeal, Decision Dated 19/12/2016" (with 11 sub-headings addressing "Vitiated Contract", "Not in pari delicto", "Fundamental Breach", "Failure of Consideration/Loss of a Chance", "Public Policy", "Voluntariness", "Repudiation by Conduct", "Equity: Recovery of Money Paid on an Illegal Contract", "No Defence to a prima facie claim in Restitution", "Fettering of Discretion/House v The King 1936 HCA 40", "Loss of quiet enjoyment") and "Material Facts - Against Weight/No Evidence/Section 71/Substantial Unfairness". These submissions were supported by documents contained in six separate Tabs, including tabs containing the appellant's evidence and affidavits in the proceedings below and her fresh evidence sought to be relied upon in the appeal.
2. Reply submissions dated 4 April 2017.
3. Submissions as to damages and costs dated 31 May 2017, along with a bundle of documents identified as Annexure A consisting of a copy of Council's compliance investigation file in relation to the property. The appellant's submissions on costs were summarised as a claim in restitution for $4,560 plus interest and costs or a claim for "economic loss" for $7,386.94 plus costs. The claim for loss was said to exclude any amount for non-economic loss. The largest items of "economic loss" were for public swimming pool, insect repellents, removalists costs, short-term accommodation after vacating the Flat, costs of having to furnish unfurnished premises after vacating the Flat, the replacement cost of a flight to the UK, removalists charges to transfer goods between storage facilities in the UK, and loss of opportunity to avoid storage costs in London.
4. An affidavit by the appellant dated 31 May 2017 containing submissions, principally, concerning the claim in restitution resulting from illegality and the powers of the Tribunal to determine such a claim.
5. Further submissions concerning economic loss and costs sent by letter from the appellant dated 30 October 2017, accompanied by invoices and receipts relating to expenses.
In addition to the Reply to the Appeal and oral submissions, the Appeal Panel was supplied with written material and submissions from the respondent dated 17 and 24 March 2017 and 20 June 2017.
[7]
Contentions by the Appellant
As we understood them, the appellant's contentions challenging the Termination Decision were:
1. The Tribunal erred in law in making the termination orders because the Tenancy Agreement was void ab initio for illegality, and also because the Tribunal should not have assisted the party that had acted unlawfully by making these orders.
2. The Tribunal should have ordered termination of the Tenancy Agreement under s 103 of the RTA for breach by the respondents of s 49(1) of the RTA instead of termination because of expiry of the fixed term.
3. There was a denial of procedural fairness by the refusal of her application made at a hearing on 12 July 2016 for legal representation once she had become aware of the illegality.
4. (Whilst couched in her submissions as a question rather than a firm contention) there was a failure to afford her procedural fairness at the hearing on 9 August 2017 because the Tribunal was alleged to have been critical of her in some respects, the Tribunal doubted that she was disabled or had had surgery, the Appellant had difficulty presenting her case due to interruption and adverse material was submitted by the respondent that she was given no opportunity to address.
[8]
Extension of Time
Subject to the grant of an extension of time under s 41 of the NCAT Act, an appeal from the Termination Decision and Compensation Decision was required to be lodged within 14 days of the day on which the appellant was notified of the decision or given reasons for the decision (whichever is the later): Rule 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (Rules). This is because these were appeals from decisions made in residential proceedings. We accept the appellant's unchallenged statement that she did not receive the written reasons for the Termination Decision until 30 November 2016. Nevertheless, her appeal was lodged out of time whether her appeal was treated as lodged on 30 December 2016 (the date for which she contends) or was lodged on 3 January 2017, as is revealed by the stamp of the registry on the first Notice of Appeal.
The appellant applies for an extension of time. It seems that her reason for delay was that she was waiting for the Compensation Decision in the hope that this would address the injustice she believed she had suffered and by the time this was issued legal advice was not available until the new year. Even if we were to regard that as a reasonable explanation, we are not prepared to grant an extension of time because the appeal has no utility, as explained below.
Firstly, proceedings RT 16/33997 were solely concerned with termination of the Tenancy Agreement (by reason of the expiry of the fixed term) and as a consequence retaking of possession by the respondents. Since the making of the orders in those proceedings there has not been any issue between the parties as to who is entitled to possession of the premises and as to the continuation of the Tenancy Agreement. The appellant left the Flat on 23 August 2016 and has never sought to be entitled to possession of the Flat after that date. Furthermore, following the involvement of the Council, the Flat was no longer configured as a granny flat and ceased to be capable of being rented out.
Secondly, we do not see how the orders made in the Termination Decision stand in the way of any relief truly available to the appellant, for the reasons explained below concerning the illegality argument. In saying this, we accept there is an inconsistency between the orders made by the Tribunal and the appellant's claim that the Tenancy Agreement was void ab initio. However, as will be seen, we reject that contention.
From these reasons, it is apparent that if we had granted an extension of time, we would not have allowed the appeal.
[9]
The Compensation Decision - Consideration - Illegality
Prominent amongst the appellant's arguments on the appeal from the Compensation Decision was her contention that the Tenancy Agreement was void because of illegality. Founded upon that contention the appellant has mounted a number of arguments concerning her complaint of inadequate consideration by the Tribunal of her claim in restitution for return of the rent she paid and with regard to the exercise of a discretion under s 47 of the RTA to refuse that relief.
This challenge by the appellant to parts of the Compensation Decision raises questions of law as to whether the Tenancy Agreement was void for illegality and, if so, as to the impact of such a conclusion on her ability to recover the rent she paid under the Tenancy Agreement. In the circumstances, in our opinion, her appeal in relation to those parts of the decision affected by the illegality issues is an appeal on a question of law within the meaning of s 80 (2) (b) of the NCAT Act in respect of which she has a right of appeal.
As we explain below, in respect of the illegality issues, in our opinion:
1. The illegal action by the respondents in contravening the planning legislation, by making the conversion into the Flat without Council's consent, did not make the Tenancy Agreement void and unenforceable;
2. The Tenancy Agreement was a "residential premises agreement" within the meaning of the Act;
3. The appellant had no claim in restitution to recover the rent she had paid, nor did she have a cause of action for recovery of the rent under s 47 of the Act;
The Tribunal's conclusion as to illegality in the Compensation Decision was (at [8]):
The erection of that wall and the use of the flat as separate premises was not authorised by the local council and was therefore illegal.
No argument was advanced by the respondents on appeal that there was no illegality.
So far as the appellant's claims in relation to illegality are concerned, there is no suggestion that she was anything other than an innocent party to the respondents' contravention of the planning legislation.
We refer below to the key legislative provisions concerning the illegality issue. Before doing so, we refer to what appear to us to be important aspects of the decision in Gnych v Polish Club Limited [2015] HCA 23; 255 CLR 414, whilst recognising that the decision concerns different prohibited conduct and a different regulatory regime.
Firstly, the outcome in Gnych was that a lease was found to be valid despite a contravention by the liquor licensee of the prohibition against the grant of such a lease without the approval of the relevant liquor authority contained in s 92(1)(d) of the Liquor Act 1997.
Secondly, there are two sources from which the effect of illegality is to be determined, namely the relevant statute(s) and the common law. Even if a statute does not expressly or impliedly deny legal operation to an agreement, the common law might intervene to refuse to enforce the agreement, more commonly in modern times, on the basis that a person ought not to be assisted by the law to benefit from an illegal act: per Gageler J in Gynch at [62], [70], [71], [73] and [74].
Thirdly, whilst, perhaps, not comprehensive, the effect of illegality can be considered by reference to the categories identified by the plurality in Gynch as follows (at [35] and per Gageler J at [59] - [60]):
In Equuscorp Pty Ltd v Haxton, French CJ, Crennan and Kiefel JJ explained that an agreement may be unenforceable for statutory illegality in three categories of case, where:
"(i) the making of the agreement or the doing of an act essential to its formation is expressly prohibited absolutely or conditionally by the statute;
(ii) the making of the agreement is impliedly prohibited by statute. A particular case of an implied prohibition arises where the agreement is to do an act the doing of which is prohibited by the statute;
(iii) the agreement is not expressly or impliedly prohibited by a statute but is treated by the courts as unenforceable because it is a 'contract associated with or in the furtherance of illegal purposes'.
In the third category of case, the court acts to uphold the policy of the law, which may make the agreement unenforceable. That policy does not impose the sanction of unenforceability on every agreement associated with or made in furtherance of illegal purposes. The court must discern from the scope and purpose of the relevant statute 'whether the legislative purpose will be fulfilled without regarding the contract or the trust as void and unenforceable'." (footnotes omitted).
Fourthly, whichever category applies, there remains the question of statutory construction as to whether it is the legislative intention that a contract prohibited by statute or associated with an illegal purpose is void and unenforceable: Gynch, plurality at [36] - [39] and per Gageler J at [77]. There is no reason why an implied statutory consequence cannot stop short of what can be seen as a "blunt and drastic rule" to render all contracts unenforceable in all circumstances: per Gageler J at [65] and [82].
Fifthly, two particular factors that militate against a statutory implication of nullification of contracts are:
1. The adverse effect of such a consequence on innocent parties: Gynch at [45] (although, the importance of this factor in the circumstances addressed in Gynch was not accepted by Gageler J because of the ability of the innocent party to ascertain the details of the regulatory regime before entering into the lease, amongst other matters).
2. The provision in the statute of other means to sanction and remedy the illegality apart from nullification of agreements. This diminishes the need for nullification and can lead to incoherence or inconsistency in the law if nullification were to be imposed: Gynch at [47] - [57] and per Gageler J at [83].
Whilst not precisely identified in the reasons in the Compensation Decision, the illegality in this case must have been a contravention by the respondents of s 76A(1) of the Environmental Planning & Assessment Act 1979 (EPA) which, relevantly, provides:
76A Development that needs consent
(1) General
If an environmental planning instrument provides that specified development may not be carried out except with development consent, a person must not carry the development out on land to which the provision applies unless:
(a) such a consent has been obtained and is in force, and
(b) the development is carried out in accordance with the consent and the instrument.
(2) For the purposes of subsection (1), development consent may be obtained:
(a) by the making of a determination by a consent authority to grant development consent, or
(b) in the case of complying development, by the issue of a complying development certificate.
The relevant planning instrument was the Local Environmental Plan for the Port Macquarie - Hastings area, which provided that in areas zoned R1 (in which the respondents property was located) consent was needed for relevant development other than home occupations, which was not applicable to the granny flat.
Section 121B of the EPA provides:
121B Orders that may be given by consent authority or by Minister etc
(1) An order may be given to a person by:
…
(a) a council, or
(b) any other person who exercises functions as a consent authority, except in relation to complying development for which a complying development certificate has been issued,
to do or to refrain from doing a thing specified in the following Table if the circumstances specified opposite it in Column 2 of the Table exist and the person comes within the description opposite it in Column 3 of the Table.
Column 1 Column 2 Column 3
To do what? In what circumstances? To whom?
1 To cease using premises for a purpose specified in the order … Owner of premises, or person by whom premises are being used for the purpose specified in the order
(b) Premises are being used for a purpose for which development consent is required but has not been obtained…
[10]
Other relevant aspects of the EPA are:
5 Objects
The objects of this Act are:
(a) to encourage:
(i) the proper management, development and conservation of natural and artificial resources, including agricultural land, natural areas, forests, minerals, water, cities, towns and villages for the purpose of promoting the social and economic welfare of the community and a better environment,
(ii) the promotion and co-ordination of the orderly and economic use and development of land…
24 Making of environmental planning instruments
Without affecting the generality of any other provisions of this Act, an environmental planning instrument may be made in accordance with this Part for the purposes of achieving any of the objects of this Act…
26 Contents of environmental planning instruments
(1) Without affecting the generality of section 24 or any other provision of this Act, an environmental planning instrument may make provision for or with respect to any of the following:
…
(b) controlling (whether by the imposing of development standards or otherwise) development,
121ZJ Failure to comply with order - carrying out of work by consent authority
(1) If a person fails to comply with the terms of an order given to the person under this Division, the person who gave the order may do all such things as are necessary or convenient to give effect to the terms of the order, including the carrying out of any work required by the order.
123 Restraint etc of breaches of this Act
(1) Any person may bring proceedings in the Court for an order to remedy or restrain a breach of this Act, whether or not any right of that person has been or may be infringed by or as a consequence of that breach.
125 Offences against this Act and the regulations
Where any matter or thing is by or under this Act, other than by or under the regulations, directed or forbidden to be done, or where the Minister, the Secretary, a council or any other person is authorised by or under this Act, other than by or under the regulations, to direct any matter or thing to be done, or to forbid any matter or thing to be done, and that matter or thing if so directed to be done remains undone, or if so forbidden to be done is done, a person offending against that direction or prohibition shall be guilty of an offence against this Act.
The EPA prohibited the carrying out of the development (the building of the wall blocking off the stairs) which converted the downstairs area into a separate dwelling without the relevant consent. The Act did not expressly prohibit the making of the Tenancy Agreement or the occupancy of premises for which development consent was required but had not been obtained. Nor did the Act say anything about the enforceability of an agreement made for the use of premises for which development consent was required but had not been obtained.
Occupancy of premises for which development consent was required but had not been obtained might become prohibited if and when a cease to use order was issued by or on behalf of the consent authority pursuant to the discretionary power conferred by s 121B (1).
In our opinion, the EPA did not impliedly prohibit the making of the Tenancy Agreement. The Tenancy Agreement was not an agreement for doing the act which was prohibited under s 76A. Furthermore, whether use of the Flat had to cease depended upon whether or not the Council exercised the discretionary power to so order under s 121B (1).
Yet further, the factors against a statutory implication that the Tenancy Agreement was void and unenforceable next referred to also operate against an implied prohibition from making the Tenancy Agreement.
In any event, in our opinion, there is no statutory implication that the Tenancy Agreement is void and unenforceable because:
1. The statute has established sanctions that do not include prohibition and nullification of tenancy agreements.
2. Those sanctions include a powerful array of measures designed to discourage and correct illegal development.
3. The adverse impact on innocent parties could be substantial and disproportionate to the extent to which prohibition and nullification might aid the objective of controlling development. Nullification is a much more severe consequence than the frustration of a tenancy agreement that will occur if, but only if, orders are issued for removal of the development or for use of the developed area to cease.
4. Under the regime of enforcement, a variety of steps might or might not be taken by the relevant local Council. It would be inconsistent with that flexibility to prohibit and nullify tenancy agreements.
For these reasons, we do not agree that the appellant is entitled to a refund of rent in restitution based upon illegality. In our opinion, contrary to her contention, the Tenancy Agreement was valid and enforceable.
For the same reasons, the illegality here does not affect the conclusion that otherwise arises on the facts that the Tenancy Agreement is a "residential tenancy agreement" within the meaning of s 13 of the RTA. That section provides:
13 Agreements that are residential tenancy agreements
A residential tenancy agreement is an agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence.
Residential premises is defined in s 3 of the RTA as:
residential premises means any premises or part of premises (including any land occupied with the premises) used or intended to be used as a residence.
It also follows from our conclusions that we disagree with the conclusion of the Tribunal in the Compensation Decision that, subject to the discretion of the Tribunal to refuse such relief, s 47 of the RTA was applicable because the rent was not required to be paid due to the illegality.
Section 47 of the Act provides:
47 Tenant's remedies for repayment of rent and excess charges
(1) Requests to landlord
A tenant may make a written request to the landlord that the landlord repay to the tenant any rent, or other amounts, paid by the tenant that are not required to be paid under this Act or the residential tenancy agreement.
(2) A request may be made during or after the termination of a residential tenancy agreement.
(3) A landlord must, within 14 days of a written request by a tenant, repay to the tenant the amount of any rent or other amount paid in excess of the amount payable by the tenant under this Act or the residential tenancy agreement.
(4) Tribunal orders
A tenant may apply to the Tribunal for an order for the repayment of rent or any other amount paid by the tenant if a written request by the tenant for payment is not complied with by the landlord within 14 days.
(5) The Tribunal may order that rent or any other amount be repaid to the tenant if it finds that the rent or amount was not required to be paid by the tenant under this Act or the residential tenancy agreement.
It is apparent from our conclusions that, in our opinion, the rent paid by the appellant was required to be paid under the Tenancy Agreement. Furthermore, there was nothing in the RTA or its operation in this case (such as a ruling that the rent was excessive or abatement of rent for various reasons) that meant that she was not required to pay the rent that she did pay.
As appears above, in determining the impact of illegality on a tenancy agreement governed by the RTA it is important to examine closely the legislative provisions creating the illegality and those that bear upon the intention of the legislature concerning the effect of the illegality. The illegality in issue in other cases may be materially different to that arising in the specific circumstances of this case.
Furthermore, we are aware that our conclusions might cast doubt upon a number of previous decisions of the Tribunal in this area. None of these are decisions of the Appeal Panel. However, caution needs to be exercised in coming to a conclusion that these decisions were incorrect. This is because the precise legislative provisions or circumstances may not have been set out in the decision or those and other aspects (such as the relief being sought) may differ from the present circumstances.
One illustration of this is that we have not been concerned with a situation in which a cease to use order had been issued by the Council before or during the tenancy. Another illustration is that we have not been concerned with a claim by the landlord for an order from the Tribunal that it be paid the amount of unpaid rent. In respect of such a claim, additional considerations may need to be addressed, including the degree of wrongdoing by the landlord associated with the illegality in issue, because the landlord seeks the Tribunal's assistance to recover this money.
It is also apparent from our conclusions that there was an enforceable term of the Tenancy Agreement imposed by s 49(3) of the RTA that:
A landlord must take all reasonable steps to ensure that, at the time of entering into the residential tenancy agreement, there is no legal impediment to the occupation of the residential premises as a residence for the period of the tenancy.
(See s 49 (1) of the RTA)
As will be seen below, it is unnecessary for us to decide whether in this case there was a breach by the landlord of this term of the Tenancy Agreement because we can resolve the appeal on the assumption there was such a breach.
We turn now to deal with the remaining issues in the appeal in respect of the Compensation Decision. We are not persuaded that the Tribunal has made any error of law or, if not an error of law, an error of fact which warrants the grant of leave to appeal in relation to the dismissal of her claims for compensation that are challenged on the appeal.
The appellant argued that there was a fundamental breach of the Tenancy Agreement by the illegality (presumably, a breach of the term set out in s 49(1) of the RTA) in failing to supply the security and stability of tenure that she bargained for.
However, from our conclusion as to validity of the Tenancy Agreement and the circumstances that occurred it can be seen that the appellant did obtain the benefit of the contractual rights in respect of the premises that she bargained for. At the core of these rights was her right to occupy and have quiet enjoyment of the Flat for a fixed term of six months. The appellant had no right to any longer term. These rights were not disrupted at any stage by any action by the Council (or anyone else) concerning the illegality.
In this connection the appellant argues that she did not obtain quiet enjoyment of the premises and that she was harassed in her occupancy and suffered losses as a consequence. She contends that numerous notices of termination were issued which could have no prospect of success or for which the landlord had no supporting evidence.
However, the appellant has not pointed to any specific error of law or fact by the Tribunal in reaching its conclusion that the landlord was entitled to serve the various notices of termination that it did serve, none of which were expressed to be upon grounds related to the illegality. In this connection the appellant argues that the actions of the landlord were all carried out because of the known illegality of the premises and that but for the illegality she would not have experienced such harassment and the fixed term would have been extended.
However, these contentions concerning the alleged real reason for the notices of termination that were issued by the landlord do not rise above assertion. The appellant did not identify any specific evidence in support of the contention that the illegality was the cause of the various notices of termination that might have justified a conclusion of error by the Tribunal and that she had suffered a substantial miscarriage of justice.
Further in connection with her argument based upon illegality, the appellant contended that the Flat as rented to her contained fire hazards. Leaving aside the issue as to how this is connected to a breach of the s 49 (1) term (more likely, an allegation of a breach of s 52 of the RTA) and the issue of proof of breach, the appellant does not point to any loss arising from any such breach.
In arriving at these conclusions about this alternative claim for compensation based upon illegality, we have assumed (but without deciding) that there was a breach by the landlord of the obligation imposed by s 49 (1) of the RTA to take reasonable steps to ensure that at the time the tenancy agreement was entered into there was no legal impediment to the occupation of the premises for the period of the tenancy.
In the appellant's written submissions the question is asked: "Has the learned Member failed to consider that the Applicant could have had settled premises elsewhere had she not been wrongfully induced to enter into the contract for the illegal premises?" We respond to this as follows (treating the question as a submission that the Tribunal did err in this manner) :
1. We do not accept that the Tribunal erred in failing to consider such an allegation. In this respect, we note that the Tribunal found that the claim for relief under the Fair Trading Act 1987 seems misconceived and was never properly articulated; at [17]. The appellant does not directly challenge the conclusion that such a claim was never properly articulated or point us to specific material demonstrating that the Tribunal erred in so concluding.
2. In any event, we reject the allegation contained within the submission for each of the following reasons:
1. The allegation proceeds from the false premise that the appellant did not obtain the contractual and statutory rights that she would have obtained under the Tenancy Agreement had it not been void for illegality. That alone is a sufficient reason to reject such an allegation.
2. The appellant seeks to support the allegation by an unsupported assertion that "On the basis of the Respondents' representations the appellant believed she had contracted for clean, quiet, residential premises in which she could live undisturbed for as long as was reasonably necessary to accomplish two major surgeries of potentially significant length."
3. In any event, whilst it can be accepted that any losses resulting from the various notices of termination and any harassment could well have been avoided if the appellant had rented different premises, any wrongful inducement to rent the Flat (assuming, without deciding, that had that been established) would only have provided the occasion for such losses and not the cause of such losses.
The appellant has made reference to a number of alleged errors in the reasons of the Tribunal in the final section of her written submissions in chief under the heading "Material Facts". We have considered each of these. To the extent that the matters raised have not been already dealt with and are sufficiently specific we deal with them as follows:
1. The appellant says that the Tribunal erred in finding that she was admitted as a legal practitioner and stating that her evidence was that she was a legal practitioner in New South Wales when her evidence was that she was on the Roll but had never practiced: at [5], [8] and [12]. However, the only relevance of such a finding was to the swimming pool issue about which we see no material error in the reasons in view of the undisputed fact that the clause concerning the provision of a pool was deleted from the agreement and such deletion was initialled by the appellant.
2. The appellant denies that it was her evidence that she had been told that she had access to the swimming pool: at [6]. As we understand it, her case was that she was misled by an omission to disclose to her that the pool was not part of the lease in a context where advertisements showed the premises in a setting with the pool. However, even if that be correct, any such error does not warrant the grant of leave to appeal in view of the deletion of the swimming pool clause from the Tenancy Agreement.
3. The appellant submits that misinformation was provided to the Tribunal by or on behalf of the landlord involving a contravention of s 71 of the NCAT Act and that to have given weight to that information was unfair to the appellant. However, it is not part of our jurisdiction on the appeal to deal with an alleged contravention of s 71. Secondly, the matters specifically complained about were references to evidence from the landlord's agent about alleged offers made to the appellant to leave the premises without penalty and as to an alleged amount that the appellant had paid for holiday accommodation. The Tribunal did not make any finding which relied upon such evidence. In the circumstances, it can only be seen as immaterial to the outcome.
4. The appellant challenges the Tribunal's rejection of the claim for pest repellents on the ground that "no receipts have been produced", even assuming that this arose from such breach by the landlord: at [19]. The appellant says that she informed the Tribunal twice at the hearing that she had the receipts in the originals with her. However, she does not dispute that she had the opportunity to present all her evidence at the hearing as indicated in the reasons and that such receipts were not amongst such evidence: at [1]. In the circumstances, we are not satisfied that there has been some procedural defect amounting to an error of law.
5. In relation to the refusal of the appellant's claim for compensation for a defective lock on the ground that the Tribunal was not persuaded that this was an emergency repair (at [19]), the appellant says that she did not say it was an emergency repair. The appellant does not identify how this defect amounted to a breach of another term of the agreement, such as that imposed by s 52 or s 63 of the RTA, in circumstances where the Tribunal accepted the evidence from the landlord's agent that there was another lock on the door that did work and the premises were secure with the use of that lock. In the circumstances, we are not satisfied that there has been a substantial miscarriage of justice in relation to this issue warranting a grant of leave to appeal.
6. The appellant contends that it was illogical to award her compensation of $96.00 for failure to repair the washing machine and to replace the clothes line on the basis of a post 4 July 2016 breach: at [19]. We understand her point to be that she was refused relief for withdrawal of services after 4 July 2016 on the basis that she did not pay any rent after that date: at [13]. We do not agree that this was illogical. The withdrawal of services claim was concerned with a claim for reduction of rent under s 43 of the RTA, whereas the claim the Tribunal was dealing with in paragraph 19 of its reasons was a claim for compensation for breach of the Tenancy Agreement which was still on foot after 4 July 2016.
As was foreshadowed in the Notice of Appeal, the appellant sought to adduce fresh evidence on the appeal, including the Council's compliance investigation file in respect of the property. We have considered this evidence for the purpose of the appellant's application for leave to appeal. We refuse leave to appeal on the basis of this evidence. We assume that the evidence was not reasonably available at the time of the hearings in the Tribunal but we do not accept that the evidence is significant. None of the evidence bears upon the reasons why we have rejected the appellant's contentions on the appeal.
In oral submissions on 22 November 2017, the appellant submitted that she did not receive a fair hearing in respect of the Compensation Decision held on 25 October 2017 because she contends she was continually interrupted. This contention had not been outlined in the Notice of Appeal. Significantly, the appellant did not identify any particular item of evidence or submission that she did not have the opportunity to present at that hearing. In the circumstances, we do not accept that there has been any procedural unfairness in respect of this decision.
[12]
Costs of the appeal
The respondents have asked for costs in relation to the appeal made up of loss of business income, some legal advice obtained in the amount of $495 and travel costs to Sydney for one of the hearings of the appeal.
Loss of business income is not recoverable under the power of the Tribunal to award costs. As to recoverable costs, each party is to pay their own costs unless the Tribunal is satisfied that there are special circumstances warranting an award of costs: s 60 (1) and (2) of the NCAT Act. The modification of that position in respect of matters in the Consumer and Commercial Division does not apply because the amount claimed by the appellant was not more than $30,000: Rule 38 of the Civil and Administrative Tribunal Rules 2014.
The respondents say that they incurred the costs of legal advice because they needed to understand the "jargon" used in the Grounds of Appeal. This might be an argument that there were special circumstances due to the "nature and complexity "of the proceedings: s 60 (3) (d) of the NCAT Act. Otherwise, the respondents do not point to any of the other factors that could amount special circumstances listed in s 60 (3) of the Act.
Whilst the issue of illegality did raise points of complexity, we do not think that an order for the payment of any costs should be made in favour of the respondents. In this regard, although the respondents have succeeded on the appeal, the appellant's principal arguments on appeal concerned illegality which arose from a latent issue relating to the Flat and in respect of which the rights of the parties were the subject of some uncertainty. In the circumstances, we do not think it would be fair for the appellant to bear these extra costs.
[13]
Orders on the appeal
For the above reasons, we order that:
1. The application for an extension of time to appeal from the orders made in proceedings RT 16/33997 is refused.
2. To the extent that leave to appeal from the orders made in proceedings RT 16/29905 is sought that application is refused.
3. The appeal is dismissed.
4. No order as to costs.
[14]
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: 21 September 2018