Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Homes North Community Housing v Schwaiger [2020] NSWCATAP 286 Hearing dates: 11 December 2020 Date of orders: 23 December 2020 Decision date: 23 December 2020 Jurisdiction: Appeal Panel Before: Dr R Dubler SC, Senior Member J McAteer, Senior Member Decision: (1) Appeal upheld (2) Order 4 of the orders of the Tribunal on 13 October 2020 is set aside and in lieu thereof the following order is made: "(4) the respondent is to pay the applicant compensation in the sum of $1260.99." Catchwords: RESIDENTIAL TENANCY – whether the Tribunal erred in finding that an application for compensation for damage to the premises cannot arise while the tenancy remains on foot. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 80 Residential Tenancies Act 2010 (NSW), s 90; ss 187- 189; s 190(1); s 190(2) Residential Tenancies Regulation 2019 (NSW), r 39(9) Cases Cited: Micalleff v Constantin and Marcer (tenancy) [2013] NSWCTTT 102 Trevallion v Puccini-Scuderi [2014] NSWCATCD 81 Texts Cited: None cited Category: Principal judgment Parties: Homes North Community Housing (Appellant) Brett Schwaiger (Respondent) Representation: M Saxby (Authorised Officer) (Appellant) Respondent (No Appearance) File Number(s): AP 20/44851 Publication restriction: None Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 13 October 2020 Before: P Harris, Member File Number(s): SH 20/34456 REASONS FOR DECISION Introduction 1. The appellant is the landlord and the respondent is the tenant in respect of a residential tenancy agreement. 2. An inspection was carried out at the tenant's property, 24 Digby Court Glen Innes on 31 July 2020. Many issues were identified as needing to be attended to or fixing. This included having broken windows repaired and holes in walls patched up by the landlord. The tenant agreed to pay for these repairs, stating "add it to my bill". 3. Rectification works were completed by the contractor engaged by the landlord on 12 August 2020. 4. On 13 August 2020 the landlord filed an application in the Tribunal under the Residential Tenancies Act 2010 (NSW) (RT Act) seeking, inter alia, a specific performance order not to breech the tenancy agreement clause 15.4, not to intentionally or negligently cause or permit any damage to the premises and seeking compensation for repairs done to the value of $1260.99. 5. At the hearing of the matter on 13 October 2020, the Tribunal dismissed the application for compensation for damage to the premises "as no cause of action in compensation arises while the tenancy remains on foot". 6. By this appeal, the landlord contends that this involved an error of law and the Tribunal ought to have made an order for compensation in the amount sought. 7. For the reasons which follow, we have decided to uphold the appeal. The Decision of the Tribunal 1. The application to the Tribunal concerning 24 Digby Court, Glen Innes NSW 2370, in proceedings SH20/34456 was determined by the Tribunal on 13 October 2020. 2. The landlord was represented by Ms M Saxby. There was no appearance by the tenant. 3. The Tribunal, constituted by Member P Harris, determined the application by making orders on 13 October 2020 without reasons. 4. The evidence led by the landlord at the initial hearing included: • Ingoing Property Condition Report dated 28 November 2017 • Photos of the damage caused by the tenant dated 31 July 2020 • The Property Inspection form dated 31 July 2020 • Invoice from the contractor engaged to repair the damage dated 12 August 2020 • Scope of Works completed by a Homes North Technical Officer dated 6 August 2020. 1. The tenant did not provide any evidence to the Tribunal. 2. The orders made by the Tribunal were as follows: 1. The Tenant must comply with the terms of residential tenancy agreement by not intentionally or negligently causing or permitting any damages to the residential premises. 2. The Tenant must comply with the terms of residential tenancy agreement by informing the landlord of any damage to the residential premises. 3. The Tribunal is satisfied that the notice of the hearing has been duly served on the respondent, and the Tribunal considers that justice requires the matter be dealt with in the absence of the party. 4. The application for compensation for damage to the premises is dismissed as no cause of action in compensation arises while the tenancy remains on foot. See Micalleff v Constantin and Marcer (tenancy)[2013] NSWCTTT 102 and Trevallion v Puccini-Scuderi [2014] NSWCATCD 81 The Notice of Appeal 1. The landlord filed its Notice of Appeal which was received on 21 October 2020. 2. Ms M Saxby appeared for the landlord and there was no appearance for the tenant. 3. The landlord put before the Appeal Panel the original application; the orders made on 13 October 2020 by the Tribunal and the original evidence tendered before the Tribunal below. 4. The landlord submitted that the Tribunal made an error of law when it dismissed the landlord's claim for compensation. The landlord's submission to the Appeal Panel was that the Tribunal incorrectly derived from the case law that was cited the principle that no action for compensation for damages can be brought against the tenant until the end of the tenancy. 5. It submitted that the evidence presented to the Tribunal when properly considered and applying the relevant law and principle should have resulted in an order for compensation being awarded to the applicant. 6. In our view this ground of appeal does involve a question of law and hence the appellant is entitled to appeal to the Appeal Panel as of right pursuant to s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). Relevant legislation 1. Part 9 of the RT Act deals with the powers of the Tribunal in respect of residential tenancy agreements. Division 1 deals with the general powers of the Tribunal and is as follows: 187 Orders that may be made by Tribunal (1) The Tribunal may, on application by a landlord or tenant or other person under this Act, or in any proceedings under this Act, make one or more of the following orders-- (a) an order that restrains any action in breach of a residential tenancy agreement, (b) an order that requires an action in performance of a residential tenancy agreement, (c) an order for the payment of an amount of money, (d) an order as to compensation, (e) an order that a party to a residential tenancy agreement perform such work or take such other steps as the order specifies to remedy a breach of the agreement, (f) an order that requires payment of part or all of the rent payable under a residential tenancy agreement to the Tribunal until the whole or part of the agreement has been performed or any application for compensation has been determined, (g) an order that requires rent paid to the Tribunal to be paid towards the cost of remedying a breach of the residential tenancy agreement or towards the amount of any compensation, (h) an order directing a landlord, landlord's agent or tenant to comply with a requirement of this Act or the regulations, (i) a termination order or an order for the possession of premises, (j) an order directing a landlord or landlord's agent to give a former tenant or person authorised by a former tenant access to residential premises for the purpose of recovering goods of the former tenant or fixtures that the former tenant is entitled to remove. (2) Without limiting the Tribunal's power to make an order as to compensation, the Tribunal may order compensation to be paid for the following-- (a) loss of rent, (b) any other breach of a residential tenancy agreement, (c) loss or damage suffered by a person as a result of inaccurate, ambiguous or out-of-date information being listed about the person on a residential tenancy database. (3) An order under subsection (1)(a) or (b) may be made even though it provides a remedy in the nature of an injunction or order for specific performance in circumstances in which such a remedy would not otherwise be available. (4) The Tribunal must not make an order for-- (a) the payment of an amount that exceeds the amount (if any) prescribed by the regulations for the purposes of this section, or (b) the performance of work or the taking of steps the cost of which is likely to or will exceed the amount (if any) prescribed by the regulations for the purposes of this section. 188 General order-making power of Tribunal The Tribunal may, in any proceedings before it under this Act, make any one or more of the following orders-- (a) an order that the Tribunal may make under this Act, (b) an order that varies or sets aside, or stays or suspends the operation of, any order made in proceedings or earlier proceedings, (c) any ancillary order the Tribunal thinks appropriate, (d) an interim order. 189 Application of provisions relating to Tribunal (1) A provision of this Act that enables a landlord or tenant to apply for an order by the Tribunal and the Tribunal to make an order also applies, where appropriate, to a former landlord or a former tenant. 1. Division 2 deals with the powers of the Tribunal related to breeches of residential tenancy agreements. Section 190 provides as follows: 190 Applications relating to breaches of residential tenancy agreements (1) A landlord or a tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations. (2) An application may be made-- (a) during or after the end of a residential tenancy agreement, and (b) whether or not a termination notice has been given or a termination order made. (3) A landlord's agent may make an application on behalf of a landlord. 1. Residential Tenancies Regulation 2019 (NSW) (RT Regulation) at regulation 39(9) sets out the times for making applications to the Tribunal under s 190(1) of the RT Act. Regulation 39(9) is as follows: 39 Times for making applications to Tribunal—ss 44(2), 83(2)(a), 98(4), 115(3), 125(3), 134(3), 141(2), 175(3) and 190(1) of Act (9) For the purposes of section 190(1) of the Act, the prescribed period is within 3 months after the applicant becomes aware of the breach. Consideration 1. The Tribunal referred to two decisions: Trevallion v Puccini-Scuderi [2014] NSWCATCD 81 and Micalleff v Constantin and Marcer (tenancy) [2013] NSWCTTT 102. 2. We note that such decisions are not binding on the Tribunal and are not binding on the Appeal Panel. In any event, in our view, such decisions do not support the principle put forward by the Tribunal in the case before us. 3. In Trevallion, the claims for an order prohibiting the tenant from removing a fixture and for compensation to be paid were not pressed at the hearing: at [32]. 4. The Tribunal noted that the RT Act places on the tenant the obligation to return a property to the landlord when vacating in the same condition as when it was leased, save for wear and tear. However, the tenant had not yet vacated the property and orders for possession were sought. The Tribunal noted that the new cause of action for the landlord to claim in this regard will not arise until the tenant vacates: at [32]. 5. This does not support the proposition that an order for compensation in respect of damage done by the tenant to the property cannot be claimed until after the tenancy agreement has ended. 6. In Micalleff the landlord sought to amend the application, advising the Tribunal that the tenant had vacated the premises. The orders sought under the proposed amended application included an order for compensation for "water usage, key cutting, cleaning, rubbish removal, and damages flowing from the final inspection": at [2]. 7. The Tribunal at [5] stated that: "any cause of action regarding abandoned goods, rubbish removal and damage to property does not arise until after the tenancy is terminated and/or vacant possession has been obtained." 1. This conclusion appears to be based upon the fact that the claim for an order for possession flows from final inspection which occurred subsequently to the initial application lodged on 14 January 2013. 2. The Tribunal declined to grant leave to amend the application from an application seeking termination and vacant possession to an application seeking compensation on the ground that those causes of action were not present on 14 January 2013 when the application was initially lodged. 3. The Tribunal took the view that as the cause of action did not rise until the tenancy was terminated on 16 January 2013, a fresh application was required: at [6]. 4. Accordingly, in our view, these decisions do not support the proposition of law relied upon by the Tribunal below to the effect that an order for compensation could not be sought from the Tribunal until the residential tenancy came to an end. 5. In our view, the terms of the RT Act are clear. Pursuant to s 187(1)(d) a landlord may apply to the Tribunal for an order as to compensation. In particular s 190(2) states that in respect of applications relating to breaches of residential tenancy agreements an application may be made "during or after the end of a residential tenancy agreement" and "whether or not a termination notice has been given or a termination order has been made": see s 190(2). 6. Further by s 190(1) of the RT Act the period within which an application may be made to the Tribunal for an order in relation to a breach of a residential tenancy agreement is prescribed by the regulations. By regulation 39(9) such an application must be made within three months after the applicant becomes aware of the breach. 7. Accordingly, not only does section 190(2) expressly state that an application relating to a breach of a residential tenancy agreement can be made during the tenancy agreement if it is not made within three months of becoming aware of the breach, any application made to the Tribunal thereafter will be out of time. 8. Hence, the proposition that a cause of action for compensation only arises after the tenancy agreement has been terminated could lead to the absurd result that a landlord who has been aware of the relevant breach of the tenancy agreement for more than three months may have no claim if the tenancy agreement is not terminated until more than three months after the applicant became aware of such breach. 9. In the result, we are satisfied that the Tribunal erred in its conclusion that no cause of action for compensation arises until after the residential tenancy agreement has been terminated. We uphold the appeal. Order for compensation 1. In light of the fact that the material that was before the Tribunal is before us and there was no oral evidence or cross examination and no appearance or submissions by the tenant either at the initial hearing or before us, we are of the view that we can determine the appropriate order that should be made in respect of the landlord's claim for compensation. 2. Section 15.4 of the residential tenancy agreement requires the tenant not to intentionally or negligently cause or permit any damage to the residential premises. 3. The Tribunal was provided with the annual property report, dated 28 November 2017. Further the Tribunal was provided with photos taken on 31 July 2020 during a routine inspection. These photos show damage to the property consisting of broken windows and holes in walls. 4. A scope of works document was completed by a technical officer and dated 6 October 2020 which outlined the work required to rectify this damage. 5. Lastly, the Tribunal was provided with and which has been presented to the Appeal Panel, an invoice from the contractor who repaired this damage dated 12 August 2020 in the amount of $1260.99. 6. In our view this material justifies an order for compensation being made for the tenant to pay the amount of $1260.99. Orders 1. The orders of the Appeal Panel are as follows: 1. Appeal upheld 2. Order 4 of the orders of the Tribunal on 13 October 2020 is set aside and in lieu thereof the following order is made: "(4) the respondent is to pay the applicant compensation in the sum of $1260.99." ********** 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: 23 December 2020