Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Pak v Ka Yau Chan [2021] NSWCATAP 85 Hearing dates: 24 March 2020 Date of orders: 7 April 2021 Decision date: 07 April 2021 Jurisdiction: Appeal Panel Before: S Thode, Senior Member J Kearney, Senior Member Decision: The appeal is dismissed. Catchwords: APPEAL – LAND LAW - Residential Tenancy -– termination of residential tenancy agreement by tenant – s107 - break lease fee Legislation Cited: Civil and Administrative Tribunal Act 2013 Residential Tenancies Act 2010 Cases Cited: Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143 Collins v Urban [2014] NSWCATAP 17 Italiano v Carbone (2005) NSWCA 177 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Texts Cited: None cited Category: Principal judgment Parties: Tatiana Pak (Appellant) Quincy Ka Yau Chan (Respondent) Representation: Appellant (Self Represented) J Cai (Respondent) File Number(s): 2021/00056048 (AP 21/02623) Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 5 January 2021 Before: D Charles, Senior Member File Number(s): RT 20/35796 reasons for decision Introduction 1. This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (NCAT Act) against a decision made in the Consumer and Commercial Division of the Tribunal on 5 January 2021. 2. The internal appeal was brought by Tatiana Pak, the tenant, against the landlord Quincy Ka Yau Chan. The tenant appeals against the decision of the Tribunal to award the bond to the landlord pursuant to section 107 of the Residential Tenancies Act 2010 (the RT Act). For the reasons set out below we have decided to dismiss the appeal. 3. For convenience we shall refer to the appellant as the tenant and to the respondent as the landlord. Background 1. The following facts are uncontroversial. The parties entered into a written residential tenancy agreement on 20 July 2020 for a fixed term of six months for premises in Carlton, New South Wales. Five days later the tenant advised the landlord that she wished to vacate the premises. The landlord collected the keys on 13 August 2020. The landlord commenced proceedings on 24 August 2020, seeking an order for a break lease fee pursuant to section 107 of the (RT Act) and an order for the bond. 2. Section 107 of the RT Act relevantly prescribes: 107 Landlord's remedies on abandonment (1) The Tribunal may, on application by a landlord, order a tenant to pay compensation to the landlord for any loss (including loss of rent) caused by the abandonment of the residential premises by the tenant. (2) The landlord must take all reasonable steps to mitigate the loss and is not entitled to compensation for any loss that could have been avoided by taking those steps. This subsection does not apply in the case of a fixed term agreement for a fixed term of not more than 3 years. (3) The compensation payable by a tenant under this section in respect of a fixed term agreement for a fixed term of not more than 3 years is the amount of the applicable break fee for the tenancy calculated under subsection (4). (4) The "break fee" for a fixed term agreement for a fixed term of not more than 3 years is-- (a) if less than 25% of the fixed term had expired when the premises were abandoned--an amount equal to 4 weeks rent, or (b) if 25% or more but less than 50% of the fixed term had expired when the premises were abandoned--an amount equal to 3 weeks rent, or (c) if 50% or more but less than 75% of the fixed term had expired when the premises were abandoned--an amount equal to 2 weeks rent, or (d) if 75% or more of the fixed term had expired when the premises were abandoned--an amount equal to 1 week's rent. (5) The amount of any money paid to a landlord by a tenant on terminating a fixed term agreement before the end of the fixed term or before otherwise abandoning the premises (other than money previously due to the landlord under the residential tenancy agreement) is to be deducted from any amount payable to the landlord under this section. Tribunal proceedings and decision 1. The Tribunal proceedings were listed for a Group List and Conciliation hearing on 7 October 2020. The landlord indicated at that first return date that the claim was limited to the bond and that any additional claim for outstanding rent would not be prosecuted. The parties were unable to resolve the matter and the application was adjourned to a final hearing on 23 December 2020. The 23 December 2020 hearing was adjourned and it is unclear to the Appeal Panel whether the landlord or the tenant requested the adjournment. A new hearing notice dated 15 October 2020 was sent to the parties advising them of the new hearing date on 5 January 2021. At no stage did the tenant request an interpreter. 2. The matter was listed for hearing on 5 January 2021 and the Tribunal ordered that the bond be released to the landlord in full. Written reasons for decision were published on the same day and it is convenient that they be set out in full: 1 The respondent tenant signed a residential tenancy agreement dated 20 July 2020 with the applicant landlord in respect of residential premises at Carlton NSW. The agreement was for a fixed term 6 months tenancy commencing on 21 July 2020 and ending on 20 January 2021. 2. Rent under the agreement was $395 per week. A rental bond of $1580 was paid to the Rental Bond Board (RBB) by the tenant. The bond amount has not been paid out by the RBB and continues to be held pending orders and directions of the Tribunal in this proceeding. 3. Printed condition 51 of the agreement is the break fee provision. It reflects section 107 of the Residential Tenancies Act 2010 NSW (RTA). 4. Shortly after taking residence at the premises, the tenant contacted the landlord's agent and advised that she wanted to move out because she could not find a roommate to share the rent. The landlord responded that the respondent could find someone else to replace her lease and pay the cost; or she could pay the break fee of 4 weeks' rent because she had not lived in the premises for more than 25% of the fixed term. 5. In fact, the tenant moved out on 11 August 2020 and returned the keys to the landlord's agent on 13 August 2020. 6. Rent was paid to 3 August 2020. However, the landlord did not press a claim for rent arrears of $564.29 in the period from 4 August 2020 to 13 August 2020. The landlord's claim for today's hearing was limited to the break fee of 4 week's rent ($1580); i.e. the bond amount now held by the RBB. 7. I find that the landlord has made out a case for payment of the break fee as the tenant left the premises on 13 August 2020 in circumstances were less than 25% of the fixed term had expired: see S 107 (4) of the RTA. Clause 51 of the agreement applies in the circumstances as compensation to the landlord for the tenant abandoning the premises before the end of the fixed term. 8. For the foregoing reasons, the landlord is entitled to an order in respect of the bond amount 1. The written reasons for decision were published to the parties on 5 January 2021. Scope and nature of internal appeals 1. Internal appeals may be made as of right on a question of law, and otherwise with permission (that is, with the "leave") of the Appeal Panel: s 80(2) of the NCAT Act. 2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it. 1. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. Submissions and evidence 1. In deciding the appeal, we have had regard to the following: * The Notice of Appeal lodged on 19 January 2021 and the appellant's written submissions in support of the appeal filed on 3 February 2021. * The Reply to Appeal lodged 3 February 2021 with attachments and the respondent's written "Tribunal Report" in the form of a rental ledger. 1. The appellant provided additional written submissions dated 22 March 2021. On the morning of the hearing the agent, acting on behalf of the landlord, objected to the late tender of evidence and submissions as he had not been served with a copy. At a directions hearing dated 4 February 2021 the Appeal Panel constituted by M Harrowell, Deputy President, ordered that the appellant lodge with the Appeal Panel and give to the respondent by 26 February 2021 any evidence in support of the appeal. The appellant did not comply with the directions and failed to file any evidence in the appeal proceeding other than those provided with the Notice of Appeal. 2. In our view, the appellant was not deprived of the opportunity to provide her evidence in accordance with directions of the Appeal Panel. She indicated that she had had legal advice and that the legal adviser had neglected to file her submissions in time, although there is no evidence to support this submission. The tenant could have provided any evidence she relied upon at the first hearing to the respondent and the Appeal Panel in time, but chose not to do so. Further, we are not satisfied that the documents now sought to be relied upon are relevant to the issues before the Appeal Panel. 3. In light of the objection by the landlord to the late tender of the documents the Appeal Panel refused to admit the additional evidence and invited the appellant to make her submissions orally. The hearing proceeded on that basis and a Russian interpreter was available for the appeal hearing. Grounds of Appeal 1. The Notice of Appeal did not disclose any grounds of appeal. The sections entitled "Grounds of Appeal" and "Orders that the Appeal Panel Should Make" were left blank. The appellant checked "No" in answer to a question "Are you asking for leave?". The section entitled "Reasons why the NCAT Appeal Panel should grant leave to appeal against the decision" was also left blank. 2. The tenant indicated on the Notice of Appeal that she required a Russian interpreter for the hearing. Reply to Appeal 1. The Reply to Appeal identified that the respondent supported the reasons and orders of the Tribunal. A print out of the real estate agent's history of the tenancy, including a rental ledger, was provided to the Appeal Panel and the tenant. The appellant's submissions 1. During oral submissions the tenant submitted that she was unfairly disadvantaged because she was not supplied with a Russian interpreter at the hearing on 5 January 2021 and was "unable to defend herself". 2. The tenant further submitted that the Tribunal erred in paragraph 5 of the decision because the tenant vacated the premises on 13 August 2020 and not on 11 August 2020, as was found by the Senior Member. 3. The tenant submitted that at the time she was asked to sign the residential tenancy agreement she informed the landlord's agent that she would be unable to afford the rent unless she secured someone to occupy the other bedroom in the premises. 4. The tenant submitted that she informed the landlord on 24 July 2020 that she would vacate the premises within 14 days. 5. The tenant submitted that the landlord informed her on the same day that "a penalty" would be payable in the form of a four week break lease fee. The tenant contacted the rental bond board to prevent the bond being released to the landlord. The tenant indicated she contacted the Department of Fair Trading and also obtained legal advice, although leave had been granted, she was not legally represented at the hearing. The respondent's submissions 1. It is the landlord's position that the tenant entered into a six months tenancy agreement and that the landlord informed the tenant that she was permitted to find sub-tenants for the second bedroom. The landlord's agent confirmed that the tenant informed him on or about 24 July 2020 that she would be vacating the premises by 13 August 2020. As the residential premises were abandoned within 5 weeks of entering into the residential tenancy agreement, the landlord was entitled to a 4 week break lease fee in accordance with the legislation. The tenant returned the key on 13 August 2020. 2. It was the landlord's submission, advanced by his agent, that the Tribunal's decision was correct and that the Appeal Panel should dismiss the appeal. Determination 1. The issues for determination for the Appeal Panel are whether the submissions identify any grounds of appeal; if such grounds raise an error of law, or if the grounds of appeal do not raise errors of law, whether leave to appeal should be granted. 2. Applying the principles set out in Prendergast, above, it is incumbent upon the Appeal Panel to identify whether or not the appellant has raised an error of law. Consideration 1. We consider that a failure to provide an interpreter may constitute a denial of procedural fairness. 2. A failure to afford procedural fairness raises a question of law: Italiano v Carbone (2005) NSWCA 177; Clements v Independent Indigenous Advisory Committee [2003] FCAFC 143; (2003) 131 FCR 28 at [8]. Section 38(2) of the NCAT Act provides that whilst the Tribunal is not bound by the rules of evidence it nevertheless is subject to the rules of natural justice and ss 38(5) and (6) of the NCAT Act also embody aspects of procedural fairness. Of particular relevance is s 38(5)(c), which provides that the Tribunal must take such measures as are reasonably practicable "to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceeding". Accordingly, leave to appeal was not required. 3. The tenant did not request an interpreter before the first Conciliation and Group List hearing, as was open to her. Nor did the tenant indicate to the Member at the Conciliation and Group List hearing that she was in need of an interpreter, or that an interpreter should be booked for the final hearing. It was open to the tenant to request an adjournment of the final hearing if she required an interpreter and no application was brought. In answer to a question by the Appeal Panel, the appellant submitted that had an interpreter been provided at the final hearing, the appellant would have advanced the same submissions she made on appeal. 4. There is no evidence before us that would permit a finding that the absence of an interpreter resulted in the tenant not being able to present her case. The practical question for the Appeal Panel is whether the tenant had, at first instance, an opportunity to meet the case put against her. There the tenant's evidence was that she entered into a residential tenancy agreement although she knew she could not afford to pay rent, and that she moved out of the premises before the expiration of the fixed term. It is apparent from the written reasons that the tenant had, in fact, been able to present her case without an interpreter, and had an interpreter been present, the same evidence and submissions would have been presented to the Member at first instance. We are not satisfied that the tenant was denied procedural fairness. 5. In respect of her second ground of appeal, the tenant submitted that she Tribunal erred in finding that she moved out on 11 August 2020 when she vacated on 13 August 2020. There is no error established. The tenant and landlord agreed that the keys were returned on 13 August 2020 and that the parties met at the premises on that date. This is reflected in the findings made at [5] of the Tribunal's published written reasons. In any event, the finding is entirely irrelevant to the issues raised in this appeal. The vacate date in this instance does not alter the operation of s 107 of Act, or the critical finding that less than 25% of the fixed term had expired. Conclusion 1. Accordingly we do not find an error of law established and decline to vary or set aside the orders of the Tribunal. We are also not satisfied that the tenant may have suffered a substantial miscarriage of justice or that there is any basis on which leave to appeal should be granted. Orders 1. The orders of the Appeal Panel are: 1. The appeal is dismissed. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 07 April 2021