Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Azeem v Dannoui [2021] NSWCATAP 12 Hearing dates: 9 October 2020 Date of orders: 21 January 2021 Decision date: 21 January 2021 Jurisdiction: Appeal Panel Before: P Durack SC, Senior Member Dr J Lucy, Senior Member Decision: (1) The appeal is allowed. (2) Orders 1, 2, 3, 4, 5 and 6 of the Orders made 28 July 2020 are set aside. (3) The proceedings are remitted to a differently constituted Tribunal at first instance for redetermination according to law. Catchwords: LANDLORD AND TENANT – residential tenancy – failure to pay rent – termination – claim by tenants that financial situation adversely affected by COVID-19 pandemic APPEALS – error of law – apprehended bias Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Regulation 2013 (NSW) Residential Tenancies Act 2010 (NSW) Residential Tenancies Amendment (COVID-19) Regulation 2020 (NSW) Residential Tenancies Regulation 2019 (NSW) Cases Cited: British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283 Cominos v Di Rico [2016] NSWCATAP 5 Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 Johnson v Johnson (2000) 201 CLR 488 Re: JRL; Ex parte CJL [1986] HCA 39; 161 CLR 342 R v Magistrates' Court at Lilydale; Ex parte Ciccone (1973) VR 122 Texts Cited: Nil Category: Principal judgment Parties: Muhammad Azeem & Rafia Azeem (Appellants) Julie Dannoui (Respondent) Representation: Solicitors: Appellants (Self Represented) J Pellizzeri (Agent) (Respondent) File Number(s): AP 20/34224 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 28 July 2020 Before: F Holles, General Member File Number(s): RT 20/28876 REASONS FOR DECISION Overview 1. In this residential tenancy matter, the appellants (the Tenants) appeal from orders that their residential tenancy agreement with the respondent (the Landlord) be terminated and for possession of the premises be given up to the Landlord. Following the lodging of the appeal, these orders were stayed on condition that payments were made by the Tenants, including the payment of an occupation fee. 2. The Tenants were also ordered to pay a sum of money consisting of arrears of rent. There was no challenge to that order on the appeal. 3. For the reasons set out below, we have decided that the appeal should be allowed and that the Landlord's application for termination of the residential tenancy agreement and possession of the premises be remitted to a differently constituted Tribunal for a new hearing and redetermination. Background 1. On 1 December 2014, Mr Azeem, of the Tenants, was granted a Temporary Work (Skilled) (subclass 457) Visa by the Department of Immigration and Border Protection. His sponsored position was as a Customer Services Officer. 2. A standard form residential tenancy agreement was made by the parties on 21 January 2019. It provided for a weekly rent of $470.00. An office of Century 21 Combined Real Estate was named in the agreement is the landlord's agent. Mr Pellizzeri from that office appeared for the Landlord at the hearing of the appeal, as well as at the hearing at first instance. 3. Mr Azeem occupied the rental premises with his wife and two children. 4. Amongst a number of communications from the Tenants in 2019 and 2020 concerning problems with the residential premises, there were the following emails. On 14 January 2020, Mr Azeem sent an email to Century 21 which stated that there were various issues needing urgent attention. He requested 20% of a year's rent as compensation for being unable to use the dining room. On 18 March 2020, Mr Azeem sent an email to Century 21 which stated that the Tenants could not pay the rent when they could not use the dining room and so that week they would pay only $420.00 and they expected rent compensation from the date they moved in and a permanent rent decrease. 5. A tenant ledger report from the real estate agency showed that arrears of rent first occurred in the second half of March 2020. 6. On 1 April 2020, Mr Azeem sent an email to the agency in which he said: "Covid 19 affects my employment, because I lost my job and also my employer deregistered the business and I am not getting any payment from anywhere. Rent payment is not possible for me in these days, I am struggling to resolve this issue. Please do cooperate with me. Thanks." 1. On 6 April 2020, the Landlord gave notice of termination of the tenancy and for vacation of the premises to be given up on 21 April 2020. The grounds of termination were arrears of rent for at least 14 days. As will be seen, this notice was given before the commencement of COVID-19 legislative measures concerning the eviction of residential tenants. 2. Also, on 6 April 2020, the Landlord commenced proceedings in the Tribunal (RT 20/15821) seeking a termination order, including under s 89 (5) of the Residential Tenancies Act 2010 (NSW) (the RTA) which provides that a termination order may be made even if the Tenants paid all arrears of rent or fully complied with a repayment plan on the ground that the Tenants had frequently failed to pay rent. 3. There followed various communications between the Landlord's agents and the Tenants, including the provision by the Tenants to Century 21 of a Tenant Financial Hardship Application and various financial documents and a proposal from the Landlord for a reduced rent to be paid for a period of time. The proposal was not accepted by the Tenants. 4. On 15 April 2020, the NSW government legislative measures concerning eviction of tenants during the COVID-19 pandemic commenced (see further below). 5. In defence of the Landlord's application, the Tenants lodged written material, including material concerning a submission that they faced financial hardship due to the COVID-19 pandemic. 6. At a telephone hearing on 1 June 2020, at which the Tenants did not appear, the Tribunal made various orders in RT 20/15821, including that the residential tenancy agreement was terminated immediately, possession was to be given on the date of termination and that the order for possession was suspended until 9 June 2020. 7. The Tribunal's reasons for decision included that the Tenants were, currently, 53 days in arrears, they had frequently failed to pay the rent on time, the Landlord relied on the rent to meet mortgage and other obligations in respect of the property, there was no evidence which provided a reasonable explanation for the Tenants' failure to pay the rent and the Tribunal was satisfied that the breach of the residential tenancy agreement was sufficient to justify an order for termination and possession. 8. The Tenants successfully applied to set aside these orders, based upon the orders being made in the absence of their appearance at the hearing (RT 20/25022) pursuant to Regulation 9 of the Civil and Administrative Tribunal Regulation 2013. The orders setting aside all the orders made on 1 June 2020 were made by the Tribunal on 3 July 2020. The Tribunal's reasons included that the Tenants had provided information which was not considered by the Tribunal in the previous hearing which ought to be considered before a final decision was made. 9. The Landlord's reactivated proceedings for termination (now RT 20/28876) were set down for hearing on 28 July 2020. 10. On that day (28 July 2020), the Tenants commenced proceedings in the Tribunal (RT 20/32164) seeking compensation from the Landlord in an amount $34,516.60 (along with other relief) because of alleged defects in the residential premises. The Residential Tenancies legislation 1. The Landlord sought termination for breach pursuant to s 87 of the RTA. Relevantly, that section provides: (4) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that— (a) the tenant has breached the residential tenancy agreement, and (b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement, and (c) the termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice. (5) In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following— (a) the nature of the breach, (b) any previous breaches, (c) any steps taken by the tenant to remedy the breach, (d) any steps taken by the landlord about the breach, (e) the previous history of the tenancy. 1. Section 88 of the RTA dealt with termination notices for non-payment of rent and utilities. 2. Where, as here, the breach is failure to pay rent, in respect of which a notice of termination had been given, s 89 of the RTA was applicable. Relevantly, it provides: 89 Repayment of rent and charges owing following issue of non-payment termination notice (1) This section applies if a landlord gives a tenant a non-payment termination notice. (2) The Tribunal must not make a termination order on the ground set out in the notice if the tenant pays all the rent, water usage charges or charges for the supply of electricity, gas or oil (utility charges) owing or enters into, and fully complies with, a repayment plan agreed with the landlord. (3) A termination of the residential tenancy agreement solely on the ground of non-payment of rent, water usage charges or utility charges, and any warrant for possession issued as a result of any order for possession, cease to have effect if the tenant pays all the rent, water usage charges or utility charges owing or enters into, and fully complies with, a repayment plan agreed with the landlord and the tenant has not vacated the residential premises. (4) If a tenant repays all the rent, water usage charges or utility charges owing or enters into, and fully complies with, a repayment plan agreed with the landlord, the landlord must notify— (a) the Tribunal, if the landlord has applied to the Tribunal for a termination order on the ground of non-payment of rent, water usage charges or utility charges and the application has not been finally dealt with, or (b) the Sheriff, if a termination order has been made and a warrant for possession of the residential premises has been issued but has not been enforced by the Sheriff. Maximum penalty—20 penalty units. (5) The Tribunal may, on application by a landlord, make a termination order despite subsection (2) or (3) if it is satisfied that the tenant has frequently failed to pay either or both of the following amounts owing to the landlord for the residential premises— (a) rent, on or before the day set out in the residential tenancy agreement, (b) water usage charges in accordance with section 39. …. (6) If the Tribunal makes a termination order as referred to in subsection (5), a warrant for possession may be issued as a result of that order, even if the tenant has paid all rent, water usage charges or utility charges owing or complied with a repayment plan. 1. At all relevant times from 15 April 2020 and, including 28 July 2020 (the date of the hearing at first instance), the legislative measures concerning the impact of COVID-19 on residential tenancies were either wholly or largely, contained in Part 6A of the Residential Tenancies Regulation 2019 (NSW) introduced by the Residential Tenancies Amendment COVID-19 Regulation 2020 (NSW). These included a prohibition, during the moratorium period, against a landlord giving an "impacted tenant" a termination notice for non-payment of rent or applying to the Tribunal for a termination order on such a basis [our emphasis]. 2. At all relevant times the prohibition was set out in Regulation 41C, which, relevantly, provides: 41C Prohibition on landlords terminating agreements or recovering possession during moratorium period (1) …., a landlord is prohibited from doing any of the following during the moratorium period— (a) giving an impacted tenant a termination notice under section 87 of the Act on the ground specified in section 88 of the Act, (b) applying to the Tribunal for an order under section 83(2) of the Act relating to a termination notice given under section 87 of the Act on the ground specified in section 88 of the Act to an impacted tenant, (c) otherwise applying to the Tribunal for a termination order in relation to a residential tenancy agreement on the ground specified in section 88 of the Act if the tenant under the agreement is an impacted tenant. Note— Section 88 of the Act relates to a termination notice given by a landlord on the ground of a breach of the residential tenancy agreement arising solely from a failure to pay rent, water usage charges or utility charges payable by the tenant. 1. The "moratorium period" was six months from 15 April 2020. 2. An "impacted tenant" was defined to be a tenant who is a member of a household impacted by the COVID-19 pandemic. Regulation 41B (and from 14 May 2020, s 228B of the RTA) set out the meaning of a household so impacted, as follows: 41B When a household is impacted by the COVID-19 pandemic (1) For the purposes of this Part, a household is impacted by the COVID-19 pandemic if— (a) any 1 or more rent-paying members of the household have— (i) lost employment or income as a result of the impact of the COVID-19 pandemic, or (ii) had a reduction in work hours or income as a result of the impact of the COVID-19 pandemic, or (iii) had to stop working, or materially reduce the member's work hours, because of— (A) the member's illness with COVID-19, or (B) another member of the household's illness with COVID-19, or (C) the member's carer responsibilities for a family member ill with COVID-19, and (b) as a result of any of the matters stated in paragraph (a), the weekly household income for the household has been reduced by at least 25% compared to the weekly household income for the household before the occurrence of any of the matters. (2) In this clause— weekly household income means the total of the weekly income, including any government payments, received by each rent-paying member of the household. The hearing and the Tribunal's decision under appeal 1. The Tribunal's reasons for decision were set out in a short form fashion. They stated that the Tribunal was satisfied in accordance with s 89(5) of the RTA that the Tenants had frequently failed to pay rent and that they were in arrears in the amount of $2,747.00 covering the period from 15 June 2020 to 28 July 2020. The ground for termination was stated to be the failure to pay rent in accordance with the agreement. 2. Despite an error in the language of the order for termination, it is clear enough that orders were made that the residential tenancy agreement was terminated on 19 August 2020 and that possession was to be given to the Landlord on that date. The Tenants were ordered to pay a daily occupation fee from 20 August 2020 until vacant possession was given to the Landlord. The Tenants were ordered to pay the sum of $2,747.56 by 18 August 2020. 3. The reasons make no reference to the Tenants' claim of financial hardship due to the COVID-19 pandemic. They also make no reference to a consideration whether the breach was sufficient to justify termination in the circumstances of the case, as provided for in s 87(4)(c) of the RTA and the exercise of the discretion to terminate in such circumstances. 4. At the forefront of the Tenants' defence of the termination proceedings was a submission that they had been seriously affected financially by the COVID-19 pandemic. The Landlord did not take issue with the potential applicability of the above legislative measures concerning eviction of tenants affected by the COVID-19 pandemic. However, the Landlord contended that the Tenants had not established that there was a relevant decline in the household income of the Tenants. 5. The transcript of the hearing indicates that the Tribunal, incorrectly, understood that the COVID-19 regulation did not affect enforcement action against tenants who were temporary residents only. 6. Consistently with the reasons for decision, the transcript of the hearing also suggests that the Tribunal saw itself as having no discretion but to order termination once it was satisfied that the Tenants had frequently failed to pay the rent. In this regard, we note that on two occasions near the end of the hearing the Tribunal remarked that it had "no alternative" but to make the order for termination given that the Landlord had established the grounds for the making of such an order. 7. The transcript reveals that for a short period of time before the Tenants, by Mr Azeem, joined the hearing by telephone, the Tribunal and the Landlord's representative, Mr Pellizzeri, a real estate agent with Century 21, had a discussion. This occurred because Mr Pellizzeri was the first of the parties to join the telephone call. Unfortunately, the discussion went beyond the identification of Mr Pellizzeri as the representative of the Landlord and extended to some discussion in which Mr Pellizzeri made some broad, albeit short submissions, about the merits of the Landlord's application and the Tenants' defence of the application. 8. Although the transcript is not as clear as it might have been, it reveals the following in relation to this discussion before Mr Azeem joined the telephone hearing: 1. After a brief discussion about the time set aside for hearing, the Tribunal Member asked what the basis of the application was and referred to a claim for relief because the Tenants were affected by the COVID-19 pandemic. 2. Mr Pellizzeri responded by saying that the Tenants were claiming that they were affected by the COVID-19 pandemic but from the Landlord's point of view the claim was not substantiated, his great concern was that the proceedings would be adjourned and the Landlord was going to suffer hardship which was totally unfair. 3. After some further enquiry from the Tribunal Member about making orders for termination, Mr Pellizzeri said that he had seen no evidence of any hardship suffered by the Tenants from the COVID-19 pandemic. 4. The Tribunal Member then expressed the view that the Tenants were not entitled to protection under the legislation. 5. Mr Pellizzeri went on to say that they were concerned about the transparency and validity of the submissions. He said they had provided evidence and documents that the Landlord had reached out for her superannuation, she had quite a large mortgage and she was also on Centrelink benefit because of her current circumstances. 6. The Tribunal Member then said he would get Mr Azeem on the telephone. Grounds of appeal 1. The appellants have a right of appeal on a question of law and otherwise require leave to appeal on the basis prescribed for the grant of leave to appeal from a decision of the Consumer and Commercial Division of the Tribunal: s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NSW) and cl 12 of Schedule 4 of that Act. 2. The appellants were self-represented. In Cominos v Di Rico [2016] NSWCATAP 5 (Cominos) at [13], the Appeal Panel stated that it may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. In doing so, the Appeal Panel must, of course, afford procedural fairness to the respondent. 3. In the Notice of Appeal and in written submissions, the appellants complained about the Tribunal's statement at the hearing that they were not covered by the COVID-19 legislative measures concerning eviction of residential tenants and about the fact that there had been a discussion between the Tribunal member and the Landlord's agent at the start of the hearing in the absence of Mr Azeem. 4. The latter issue was a matter that the Tenants complained about after they had obtained the sound recording and a transcript of the hearing. The discussion had not, previously, been disclosed to them. In their written submissions about this opening discussion between the Tribunal and Mr Pellizzeri they emphasised what they described as "the friendly way of establishing the case we considered that favourism (sic) was there". 5. We treat these complaints as raising errors of law first, that the Tribunal misunderstood the scope of the COVID-19 legislative measures. Secondly, that the discussion at the commencement of the hearing which took place in the absence of Mr Azeem established that there was apprehended bias by the Tribunal in arriving at its decision. 6. A number of other points were put forward in the Notice of Appeal and written submissions of the appellants, including that eviction should not have been ordered because their financial situation was affected by the COVID-19 pandemic, they had been reliable payers of rent until this event, they had taken significant steps to reduce expenses, they had been making a regular payment toward repayment of the arrears of rent and that the Tribunal did not take into account their claim about defects with the residential premises. 7. However, in view of the errors of law that we have identified, it is unnecessary for us to consider these additional matters raised by the appellants. Consideration 1. We are satisfied that the Tribunal erred in law in taking the view that the COVID-19 regulation did not apply to protect the Tenants because of their residency status. There was no such restriction on the application of the regulation. The Landlord did not submit otherwise. 2. As a result of the Tribunal's error, important issues of both law and fact were not ventilated at the hearing and ruled upon. One issue of law was whether the COVID-19 regulation was applicable given that both the relevant Notice of Termination and the commencement of proceedings in the Tribunal occurred before the commencement of the COVID-19 regulation on 15 April 2020. At least two issues of fact were whether Mr Azeem lost employment because of the COVID-19 pandemic and, if so, whether the household income of the Tenants was reduced by 25% or more because of such an event. 3. We are also of the opinion that the decision was affected by the apprehended bias of the Tribunal resulting from the discussion that occurred between the Tribunal and Mr Pellizzeri the absence of Mr Azeem. At the hearing of the appeal, Mr Pellizzeri made no submission against this conclusion other than that he had not intended to act unfairly. However, that is not the test as to whether there exists a reasonable apprehension of bias. 4. We think our conclusion is supported by the decision of the High Court in Re: JRL; Ex parte CJL [1986] HCA 39; 161 CLR 342. 5. In that case both Gibbs CJ (at [4]) and Mason J (as he then was) referred with approval to the following remarks from McInerney J in R. v Magistrates' Court at Lilydale; Ex parte Ciccone (1973) VR 122: "The sound instinct of the legal profession - judges and practitioners alike - has always been that, save in the most exceptional cases, there should be no communication or association between the judge and one of the parties (or the legal advisers or witnesses of such a party), otherwise than in the presence of or with the previous knowledge and consent of the other party. Once the case is under way, or about to get under way, the judicial officer keeps aloof from the parties (and from their legal advisers and witnesses) and neither he nor they should so act as to expose the judicial officer to a suspicion of having had communications with one party behind the back of or without the previous knowledge and consent of the other party. For if something is done which affords a reasonable basis for such suspicion, confidence in the impartiality of the judicial officer is undermined." 1. Justice Mason (as he then was), in that case, said that the problem was governed by the principle that a judge should disqualify himself from hearing, or continuing to hear, the matter if the parties or the public entertain a reasonable apprehension that the judge might not bring an impartial and unprejudiced mind to the resolution of the issues. 2. In Ebner v Official Trustee in Bankruptcy (2000) 205 CLR 337 at 344 [6], four members of the High Court affirmed that the test for disqualification for apprehended bias is that a fair-minded lay observer might reasonably apprehend that the judge (or other decision-maker) might not bring an impartial and unprejudiced mind to the resolution of the question that he or she is required to decide. That test has been accepted by the High Court in subsequent decisions (see, for example, Johnson v Johnson (2000) 201 CLR 488 at [11]; British American Tobacco Australia Services Ltd v Laurie (2011) 242 CLR 283 at [104]). 3. We consider that a fair-minded lay observer might reasonably apprehend that the Tribunal member might not have brought an impartial and unprejudiced mind to the resolution of the Landlord's termination application, in circumstances where the Tribunal member held a discussion with the Landlord's representative about matters of substance in the absence of Mr Azeem, and did not disclose the discussion to Mr Azeem. 4. We have also referred above to our concerns about the Tribunal's remarks at the hearing that it had no alternative in the circumstances but to order termination. However, in view of the errors of law we have already identified it is unnecessary for us to explore this issue any further. Orders 1. For these reasons, we make the following orders: 1. The appeal is allowed. 2. Orders 1, 2, 3, 4, 5, and 6 of the orders made on 28 July 2020 are set aside. 3. The proceedings are remitted to a differently constituted Tribunal at first instance for redetermination according to law. 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 January 2021