Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Matthews v Micallef & Ors [2021] NSWCATAP 191 Hearing dates: 2 June 2021 Date of orders: 28 June 2021 Decision date: 28 June 2021 Jurisdiction: Appeal Panel Before: S Thode, Senior Member C Mulvey, Senior Member Decision: 1. Time for filing the appeal is extended to 17 February 2021. 2. Leave to appeal is refused. 3. The appeal is dismissed. Catchwords: APPEAL – LAND LAW - Residential Tenancy – failure to consider relevant evidence – assessment of damages – no issue of principle Legislation Cited: Civil and Administrative Tribunal Act 2013 Residential Tenancies Act 2010 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Italiano v Carbone (2005) NSWCA 177 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69; Pacorp Holdings Pty Ltd v Waller [2017] NSWCATAP 167; Searle v Commonwealth of Australia [2019] NSWCA 127 Texts Cited: Nil Category: Principal judgment Parties: Mark Matthews (First Appellant) Stacey Matthews (Second Appellant) Dominic Micallef (First Respondent) Louise Schembri (Second Respondent) Representation: C Matthews (on behalf of all Appellants ) D Tutti (Agent) (Respondents) File Number(s): 2021/00056111 (AP 21/07335) Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 28 January 2021 Before: S Hausfeld, Member File Number(s): RT 20/40289 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 28 January 2021. 2. The internal appeal was brought by Mark and Stacey Matthews, the tenants, against the landlords Dominic Micallef and Louise Schembri. The tenants appeal against the decision of the Tribunal to award damages in the sum of $650. For the reasons set out below we have decided to dismiss the appeal 3. For convenience we shall refer to the appellants as the tenants and to the respondents as the landlords. Background 1. The following facts are uncontroversial. The parties entered into a written residential tenancy agreement on 28 November 2019 for a fixed term of six months for premises in Wentworthville, New South Wales. After the expiration of the six months term the residential tenancy agreement continued on a periodic basis. On 11 September 2020 the tenants vacated the premises thereby terminating the tenancy. The tenants filed application RT 20/40289 on 22 September 2020 initially seeking an order regarding the payment of a rental bond under section 175 of the Residential Tenancies Act 2010. 2. The Tribunal sent a notice of conciliation and hearing by telephone (with directions) dated 1 December 2020, advising the parties that the application for the rental bond would be heard on 23 November 2020. 3. At that first conciliation and group list hearing the Member granted leave to the tenants to amend their application to "claim compensation for withdrawal of services in the sum of $300 per week for 41 weeks of the tenancy. It is noted that the problems associated with the toilet are the chief issue." 4. The matter was adjourned for a 90 minute hearing on 28 January 2021. The tenants tendered to the Tribunal, among other evidence, a points of claim setting out the orders sought: "respondence (sic) is to pay the applicant net abatement, in the sum of $12,300. Pursuant to section 43(2) Residential Tenancies Act 2010. The respondence (sic) to pay $52.21 application fee to applicant. Grounds 1. Application fee paid NCAT $52.21; 2. Leaking pool, and cracked pool pavers; 3. Loss of use of garage due to flooding and leaking; 4. Mold (sic) and smell from toilet from 1 December 2019 to 11 September 2020; 5. Mold (sic) under the home and smell of rising damp due to pool leak and flooding. $300 abatement per week from 1 December 2019 to 11 September 2020 (41 weeks). Total $12,300 1. The Member published written reasons for decision on the day of the hearing. The landlords were ordered to pay the tenants $650 compensation. The critical findings in respect of the award for damages were contained at [23] of the reasons and for convenience these are set out in full: In the matter of Micallef v Western Suburbs Housing Cooperative Ltd (2000) the Tribunal awarded the applicant an amount of $625 in damages due to the loss of use of a bathroom because of smells over a period of 8 months. Similarly in the matter of Hill & Doors v Ball (2002) the Tribunal awarded $500 for inconvenience over a six-month period associated with a toilet overflowing on several occasions in the house causing a smell and health hazard. Having regard to the circumstances in the present case being that there were smells present over a period of approximately 8 months from early December 2019 to early July 2020 which were at times intermittent, (in that the evidence was that they came and then went), the Tribunal considers that an amount of $650 is an appropriate amount of compensation for the inconvenience over the approximately 8 months period until the issue was finally rectified. 1. It is against these findings and orders that the tenants appeal. The Appeal 1. The tenants filed an appeal on 17 February 2021. The appeal against a decision made in residential proceedings is prima facie out of time. As the Tribunal gave written reasons for its decision on 28 January 2021, the appeal should have been lodged by 11 February 2021 in accordance with the 14 day time period specified in cl 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (the Rules). As the Notice of Appeal was lodged on 17 February 2021, the appellant requires an extension of time. No explanation was provided for the delay of six days as the appellant was not aware of the time limitation period. 2. Given the minor delay involved and lack of any prejudice caused to the landlords, we have decided to extend time for the filing of the appeal. 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 28 January 2021 and the tenants' material filed on 12 April 2021. * The Reply to Appeal lodged 1 March 2021 with no attachments and the respondents' submissions and evidence filed on 27 May 2021. 1. The tenants filed documents in support of the appeal that were not tendered before the Member at first instance. The tenants seek to rely on what they referred to as 'medical evidence' to support the contention that the tenants were impacted by mould contamination. The tenants sought to rely on this evidence as "significant new evidence which has arisen since the Tribunal hearing and which was not reasonably available at the time the proceedings under appeal were being dealt with" (as per cl 12 of Sch 4 to the CAT Act). An Appeal Panel may grant leave to appeal a decision under section 80(2)(b) of the CAT Act in circumstances where the Appeal Panel is satisfied that the appellant may have suffered a substantial miscarriage of justice because significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. It was submitted by the tenants that the fresh medical evidence was not reasonably available because it was not until after the hearing of the matter, and in preparation of the appeal, that the tenants thought to support their claim for damages with medical evidence. 2. We reject the tenants' submission in this regard. The evidence now sought to be relied upon is generic material printed from the internet, a blood test, a partially re-produced generic mould report, a research paper entitled 'chronic inflammatory response syndrome' and a 'mould exposure guide' relevant to premises in Alberta, Canada with no connection to the parties or the residential premises subject of this application. No explanation was provided why the material could not have been obtained in time for the hearing, other than it had not been thought of. We do not consider that the new evidence was not "reasonably available at the time the proceedings under the appeal were being dealt with". 3. It follows that we refuse to admit the new evidence on appeal. Grounds of Appeal 1. The Notice of Appeal confirmed that the tenants were proceeding only on grounds that require the leave of the Appeal Panel. 2. The grounds of appeal were particularised as follows: 1. the amount of $650 [being the award for damages] was too low; 2. the Tribunal failed to consider the rent was $525 per week and erroneously relied on case law that was too old and therefore no longer comparable; 3. the Tribunal did not give reasons or failed to consider claims for the pool and the garage; 4. it was the unchallenged evidence that the pool leaked, plumbing was not fixed and the garage and the backyard had flood issues and the Tribunal below did not give reasons for not taking those into account. 5. The decision was against the weight of evidence and no reasons were given for ignoring issues other than the toilet. Reply to Appeal 1. The Reply to Appeal identified that the landlords supported the reasons and orders of the Tribunal. Relevantly the Reply stated that the tenants had withdrawn their claim for damages in respect of the pool and the garage before the Tribunal at first instance. The appellant's submissions 1. During oral submissions the tenants' representative, Mr Clive Matthews, confirmed the tenants appealed on the grounds that the decision was not fair and equitable and against the weight of evidence and that therefore the leave of the Appeal Panel is required for the appeal to succeed. 2. The tenants' representative confirmed that he was the representative who appeared on behalf of the tenants below, and that he had withdrawn the claim for damages in respect of the pool, the yard and the garage flood and that these issues were not considered by the Member as a result of the withdrawal. Mr Matthews conceded to the Appeal Panel that in light of the earlier withdrawal, issues in respect of the pool, the yard and the garage could not be considered on appeal. The appeal proceeded on the basis that the issues in dispute were, as confirmed in directions made by the Member in the group list and conciliation hearing, limited to the issue of the toilet and mould. 3. It was submitted that the case law relied upon by the Member was too old to be considered relevant and that the damages awarded were too low when considering the evidence as a whole. Other than to assert the damages were inadequate, the tenants were unable to identify specific evidence the Member had failed to consider, nor were the appellants able to identify errors of fact on the face of the decision. The respondent's submissions 1. The landlords' agent made no submissions other than to support the findings and orders made. Determination 1. The issues for determination for the Appeal Panel are whether the submissions identify grounds of appeal that may require leave. Consideration 1. In the determination of this appeal we must consider whether the member erred in assessing the damages in the stated amount of $650. 2. The original application was brought pursuant to a claim for withdrawal of services or pursuant to section 44 of the RT Act. A claim for withdrawal of services must be brought while the tenancy remains on foot. It is not in dispute that the tenancy ended when the tenants vacated on 11 September 2021 and that the application was not lodged until 22 September 2021. The Tribunal had no jurisdiction to consider a claim for rent reduction for withdrawal of services under section 44 of the RT Act. Accordingly, at the first return date, the Tribunal granted leave to the tenants to amend the application to consider their claim as a claim for compensation for damages pursuant to section 190 of RT Act. Nothing turns on this amendment. 3. Considering the claim for compensation, the Member found in favour of the tenants. The critical findings of fact in respect of the landlord's breach are found at [20] of the written reasons for decision: "although the landlord took steps to rectify the problem with the sewerage smells that this was not adequately fixed until on or about 9 July 2020. … … With respect to the mould issue there is insufficient evidence before the Tribunal to prove on the balance of probabilities that the landlord has breached its obligations with respect to the issue of mould. There is no expert mould specialist report to assist the Tribunal and there is insufficient medical or other evidence to support a finding that the landlord has breached their obligation in relation to the mould." 1. The Member concluded the landlords breached their obligation under section 63 [of the RT Act] with respect to the issue of sewerage smells and the Tribunal went on to consider the appropriate and reasonable amount of compensation for that breach. 2. As was set out above, the tenants during oral and written submissions were unable to identify any specific evidence the Member disregarded that would impugn the critical findings. The tenants merely assert that the damages were inadequate when considering the whole of the evidence and because the Member considered case law dating back to 2001. 3. In determining what if any damages should be awarded to the tenants, the Tribunal must apply the guiding principle of putting the party in the same position it would have been, as far as money can, as if the contract had been performed, and not in a better or worse position (Commonwealth v Amman Aviation Pty Ltd [1991] HCA 54, (1991) 174 CLR 64). Loss arising by breach of contract must either (i) be caused naturally (i.e. in the usual course of events) or (ii) have been in reasonable contemplation of both parties at the time of entering into the contract as a type of loss that would probably arise from the breach (Hadley v Baxendale (1854) 9 Exch 341 at 354; 156 ER 145 at 151). The party claiming damages is under a duty to take all reasonable measures to avoid incurring loss, and is not entitled to damages for losses that reasonable measures would have avoided (known as the 'duty to mitigate'- see Clark v Macourt [2013] HCA 56 at [17], (2013) 304 ALR 220). The respondent bears the onus of proving failure to mitigate. 4. The Tribunal held there was a breach of the RT Act and particular the term implied by s 63(1), namely that the landlords had notice of the need for the repair, or ought reasonably to have known of the need for the repair and failed to rectify the issue for a period of time. 5. The proper test applied by the Tribunal was, reflecting the terms of s 63(1) of the RT Act namely, whether the landlords breached their obligation to keep the premises in a reasonable state of repair considering the age of, the rent paid for and the prospective life of the premises. The Tribunal did apply that test and considered whether the tenants had failed to mitigate any losses as they remained in the premises for 15 weeks after the fixed term of the residential tenancy agreement had expired and while the sewerage issue continued. 6. Having found a breach established the Member proceeded to assess what , if any, damages would be reasonable. The only submission on damages provided by the tenants was contained in the amended application form "mold (sic) and smell from toilet from 1-12-2019 to 11-09-2020'…"net abatement in the sum of $12,300". The claim for damages was not otherwise particularised and specific heads of damage were not identified in the evidence. 7. The principles concerning the assessment of damage are well established and were considered by the appeal panel in Pacorp Holdings Pty Ltd v Waller [2017] NSWCATAP 167 where the Appeal Panel said: [58] On the issue of quantification of the amount of compensation to be awarded, the Member's reasons indicate that he approached that issue in an orthodox way. As discussed by the Appeal Panel in Gallagher v Masters Installation Pty Ltd [2017] NSWCATAP 117, provided that some evidence of loss or damage has been produced, difficulty of assessment is not a bar to the assessment of damages, and where precise evidence is not available, the court or tribunal must do the best it can. " 1. That principle is well settled. In Searle v Commonwealth of Australia [2019] NSWCA 127 Bell P, with whom Bathurst CJ and Basten JA agreed, cited with approval the well-known passage from the judgment of Mason CJ and Dawson J in Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1994] HCA 54 at 83 "[203] In Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64; [1994] HCA 54 at 83 (Amann), Mason CJ and Dawson J said: 'The settled rule, both here and in England, is that mere difficulty in estimating damages does not relieve a court from the responsibility of estimating them as best it can. Indeed, in Jones v Schiffmann Menzies J. went so far as to say that the 'assessment of damages … does sometimes, of necessity involve what is guess work rather than estimation'. Where precise evidence is not available the court must do the best it can. And uncertainty as to the profits to be derived from a business by reasons of contingencies is not a reason for a court refusing to assess damages. (Footnotes omitted)'" 1. Some evidence of compensable inconvenience and of loss was given. There was the statutory declaration of Mr Mark Matthews informing the agent of the smell coming from the toilet for the period as found. However, in absence of any other assistance from the tenants, the Tribunal Member was entitled to consider what material and cases he could locate that considered similar facts and circumstances. Mr Matthews was unable to provide more recent case law on appeal that would demonstrate the award given by the Member was manifestly inadequate. The mere assertion that the cases were too old, in the absence of any case law to the contrary, does in our view not give rise to error. For the reasons set out, we do not find that the decision was not fair and equitable or was against the weight of evidence and leave to appeal is refused. Conclusion 1. In summary, we find no error established on the appeal. We have dismissed the appeal. Orders 1. The orders of the Appeal Panel are: 1. Time for filing the appeal is extended to 17 February 2021. 2. Leave to appeal is refused. 3. 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: 28 June 2021