Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Li v Middleton [2021] NSWCATAP 249 Hearing dates: 13 July 2021; 18 August 2021 Date of orders: 30 August 2021 Decision date: 30 August 2021 Jurisdiction: Appeal Panel Before: Cowdroy ADCJ AO QC A Boxall, Senior Member Decision: (1) Leave be granted to bring the appeal; (2) The appeal is upheld in part. (3) Order 1 made on 30 April 2021 be set aside; (4) The respondent is to pay to the appellant the amount of $1457.16 within seven days of the date of these orders. Catchwords: APPEAL - Residential Tenancies Act – breaches of act by landlord – defects in residential premises – rent relief ordered – appellant claiming that her representative at the first hearing did not present her case accurately – principles concerning a second hearing – errors in final calculations – adjustments made to correct error Legislation Cited: Civil and Administrative Tribunal Act No 2 (2013) Residential Tenancies Act 2010 Cases Cited: Al Mehdawi v Secretary of State for the Home Department [1990] 1 AC 876 Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1KB 223 Collins v Urban [2014] NSWCATAP 17 Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 House v R [1936) HCA 40; 55 CLR 499 Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611 Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611 Minister for Immigration and Multicultural Affairs; Ex-parte Applicant S 20/2002 (2003) 198 ALR 59 MZAES v Minister for Immigration and Border Protection [2015] FCA 1133 SDFDE v Minister for Immigration and Citizenship [2007) HCA 35; 232 CLR 189 Category: Principal judgment Parties: Xiaoyan Li (Appellant) Brett Middleton (First Respondent) Lisette Middleton (Second Respondent) Representation: Huan He (Agent) (Appellant) First Respondent (Self-represented) Second Respondent (Self-represented) File Number(s): 2021/00151607 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 30 April 2021 Before: J Thompson, Member File Number(s): RT21/00982 REASONS FOR DECISION 1. By Notice of Appeal filed on 27 May 2021 the appellant appeals against a decision of the Tribunal dated 30 April 2021. This hearing was fixed for hearing on 13 July 2021 but due to the absence of reasons it was necessary to adjourn the hearing until 18th of August 2021. The reasons have now been provided. Tribunal orders 1. The Tribunal ordered that the appellant, as landlord, pay to the respondents ("the tenants"), the amount of $1885.71 immediately. Such amount was calculated as rent rebate as agreed ($600); a refund of overpaid rent ($85.71); and reduction in rent ($1200). Additionally, the rental bond service was directed to pay the respondents the whole of the bond plus interest accrued on Rental Bond number S867802 – 7. The Tribunal also ordered that neither the appellant nor each agent is to list in a residential tenancy database the name of either of the tenants or of any personal information concerning either applicant. Facts 1. On 14 November 2020, a Residential Tenancy Agreement in the form prescribed by the Residential Tenancies Regulation 2019 Schedule 1 ("the lease") was entered into by the appellant as landlord and the respondents as tenants of a residential home in a gated estate in Dundas Valley ("the premises"). The term of the lease was stated to be for a period of six months, commencing on 28 November 2020 and ending on 27th of May 2021. 2. Under Condition 55 of the lease, the landlord granted the tenant a week's free rental in the following terms: Insert any other agreed additional terms here. Attach a separate page if necessary. Free Period 28/11/2020 – 04/12/2020 Special condition is attached. 1. In fact, no special condition was attached. 2. On 27 November 2020 a condition report of the premises was prepared by the agent. Such report noted certain defects which included several lights not working in the premises (clause 19.2) intercom not working (clause 32.2), keys and access to the unit from its garaged not supplied (clause 32.2). The Tribunal member found that several of the defects constituted breaches of the lease and of the Residential Tenancies Act 2010.6.On 28 November 2021 the tenant paid the bond of $2400 and rental as shown on the records of the managing agent, known as "Dream Lot" in the amount of $1,800. In return, the tenant was provided with the keys to the premises and a security controller which enabled the front gate to the estate to be opened. 3. The condition report of the premises was responded to by the tenant on 3 December 2020. The significant defects recorded were gas stove not working (clause 19.4; half-flush on toilet broken (clause 12.4.2); lack of gas supply. 4. The gas supply had been disconnected physically from the premises as result of a previous tenant failing to pay their gas bill. Whilst the landlord states she was not aware of this problem until 11 December, the condition report prepared on 27 November 2020 recorded that the gas stove was not working and accordingly the Tribunal found that the landlord was on notice from at least this date that the gas supply was not operative. 5. Accordingly, as the time of granting occupancy, the landlord and/or the agent were aware, as found by the Tribunal, that beside the trivial defects, there was no gas supplied to the premises nor was the security controller available to access the security gate. On 3 November 2020 the tenants informed the agent that circumstances had changed and that they would need to vacate the premises on 24 December 2020. They acknowledge they will be liable for the break fee of $2400 provided for in section 107 of the Residential Tenancies Act 2010. 6. The Tribunal found that the tenants endeavoured to have their gas connected on 3 December 2020 but due to the extent of the difficulty, the supplier could not arrangement to be connected until 13 December 2020, namely 11 days later. The tenants moved in immediately after the gas was connected on 14 December 2020 and remained as tenants until 24 December 2020. 7. The Tribunal found that the tenants notified the agent on the following day (15 December 2020 of other defects which were not recorded on the ingoing Condition Report such as kitchen sink plugs having no washers; shower screen falling off its track; smoke alarm signalling continuously; to lights faulty; plumbing to kitchen reverse so the hot water tap was delivering cold water and vice versa. Irrespective, the landlord's agent informed the tenant that they would be required to pay rent for the period which had been offered as a free rental period and would have to pay the break fee. 8. In view of the defects, the Tribunal made the orders set out above. The Appeal Panel will refer hereunder to two issues which require amendment to the orders. 9. The appellant was represented by her managing agent and that the tenants appeared in person. Grounds of appeal 1. The grounds of appeal, which were obviously drafted without legal assistance, do not raise any appealable ground of appeal, merely alleging that the Tribunal should not have made the orders. The notice of appeal makes numerous allegations against the tenants and claims that the tenants were not entitled to any refund or allowance and that they should pay the appellant the sum of $1000 for "mental compensation". The appellant challenges the right of the tenants to provide an early termination notice and claimed they should pay a break fee for leaving the tenancy before the lease expired. Further, the appellant claims that the tenants should not be entitled to the rental bond. Leave to Appeal 1. The Notice of Appeal alleges that the decision was not fair and equitable. This is an appeal under s80 of the Civil and Administrative Tribunal Act No 2 (2013) (NSW) ("the act"). It is an internal appeal as provided by section 80 (2). 2. Pursuant to Part 6 of Schedule 4 to the act, an Appeal Panel may grant leave under section 80 (2)(a) of the act only if it is satisfied that the appellant may have suffered a substantial miscarriage of justice because: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal is 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, the Appeal Panel considered the requirements for a grant of leave. At [84] the Appeal Panel held: "(1). In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision-maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning (2013) NSWCA 421 at [20]; Nakad v Commissioner of Police, NSW Police Force (2014) NSWCATAP 10 at [45]; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance for matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact-finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed". Consideration 1. The principal claims of the appellant relate to findings made against her in the proceedings. The submissions provided by the appellant reiterate the claims made in the notice of appeal. 2. The evidence before the Tribunal satisfied it that there were numerous defects in the rented premises, namely that: 1. there was no gas connected to the premises for a period of three weeks during which the tenants had no hot water and could not cook food; 2. the tenants were required to pay Jemena Energy $176 to remove gas pipe plugs installed in consequence of the fact that the previous tenant had not paid a gas bill, the landlord had not conducted a proper inspection of the condition of the property and repeated undertakings by the agent to send a repairer were not fulfilled; 3. the tenants paid an overpayment of rent of $85.71 by accident; 4. the property was not fit for occupation due to lack of gas and accordingly a two-week credit of $600 per week, total of $1200 was a reasonable allowance; 5. the hot and cold water mixer tap in the kitchen was plumbed incorrectly; 6. the stainless sink in the kitchen leaked as rubber seal permitting from the plugs and as a result the sinks would not hold water; 7. several lightbulbs were defective on arrival; 8. the intercom system inoperative; 9. the alarm was inoperative; and 10. the front main entrance garage door was faulty. 1. It appears from the Notice of Appeal that the appellant strongly disagrees with the findings of the Tribunal. The findings which the appellant would ask the Tribunal to make are the opposite to those found by the Tribunal in respect of the reasons why compensation was awarded to the respondent. In this respect, the Appeal Panel construes the Notice of Appeal to mean that the decision was unreasonable in the sense as referred to in Associated Provincial Picture Houses v Wednesbury Corporation [1948] 1KB 223. But to succeed in such a ground, it must be established that the conduct of the decision-maker was so unreasonable that no reasonable person could so conclude. A high level of unreasonableness might be equated to irrationality: see Minister for Immigration and Citizenship v SZMDS [2010] HCA 16; 240 CLR 611. The application however of the Wednesbury test only applies to decision-makers' discretionary decisions but not to fact-finding: see Minister for Immigration and Multicultural Affairs; Ex-parte Applicant S 20/2002 (2003) 198 ALR 59. 2. The appellant was represented at the hearing before the Tribunal by her managing agent. Accordingly, the appellant was provided with the opportunity of presenting any facts upon which she wished to rely. The Tribunal also heard the evidence of the tenants. The appellant makes her strongest complaint against her agent who represented her at the hearing claiming that the agent did not represent her competently. 3. Three considerations arise out of the procedure followed by the Tribunal: 1. Firstly, the fact that the appellant does not agree with the Tribunal's decision does not render the decision invalid. A claim for unreasonableness or irrationality may amount to no more than a disagreement with the decision. In Minister for Immigration and Multicultural Affairs v Eshetu (1999) 197 CLR 611, the High Court of Australia observed that expressions such as "illogical or unreasonable, or irrational" when used in challenging a decision may merely an emphatic way of "saying that the decision is wrong": see Gleeson CJ and McHugh J at 626. 2. Secondly, it has not been shown that the Tribunal member has not understood the circumstances of the appellant when determining the matter. If there were such evidence, it has been established that a failure to respond "to a substantial, clearly articulated argument relying upon established facts" was at least a failure to record natural justice: see Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 per Gummow and Callinan JJ (Hayne J agreeing). Such circumstances constitute a failure to exercise jurisdiction: see MZAES v Minister for Immigration and Border Protection [2015] FCA 1133 at (66). However, there is no such failure in the Tribunal decision under review before us, at least on the current evidence. 3. Thirdly, it has been held that where a party appears by its agent, as occurred in the Tribunal hearing in this matter, and the agent does not properly follow instructions of the appellant or fails to represent her property, that is not the basis for ordering a new hearing. In SDFDE v Minister for Immigration and Citizenship [2007) HCA 35; 232 CLR 189, the High Court of Australia observed at [53]: In the Full Court French J correctly emphasise that there are sound reasons of policy why a person whose conduct before and administrative Tribunal has been affected, to the detriment of that person, by bad or negligent advice or some other mishap should not be heard to complain that the detriment vitiates the decision made. 1. It follows that in the absence of any demonstrable error by the original decision maker, there is no basis to find error in the decision. In Al Mehdawi v Secretary of State for the Home Department [1990] 1 AC 876 at 898 and 901 per Lord Bridge when he said: These considerations lead me to the conclusion that a party to a dispute who has lost the opportunity to have his case heard through the default of his own advisors to whom he has entrusted the conduct of the dispute on his behalf cannot complain that he has been the victim of procedural impropriety or that natural justice has been denied to him…Here again the argument proceeds from the assumed premise that where a party has been deprived of a hearing through his own solicitors negligence there has been a breach of natural justice and a flaw in the decision-making process. I have already sought to explain why I think this premise cannot be sustained. But I would add that, if once unfairness suffered by one party to a dispute in consequence of some failure by his own advisors in relation to the conduct of the relevant proceedings was admitted as a ground in which the High Court in the exercise of its supervisory jurisdiction over inferior tribunals could quash the relevant decision, I can discern no principle which could be invoked to distinguish between a "fundamental unfairness", which would justify the exercise of the jurisdiction, and a less than fundamental unfairness, which would not. Indeed, Sir Charles Fletcher-Cook was constrained to rest on the proposition that, in the last analysis, it is all a matter of discretion and the court could be trusted only to exercise its discretion in extreme cases where justice demanded a remedy. I am of the opinion that the decision of the Court of Appeal can only be supported at the cost of opening such a wide door which would indeed seriously undermine the principle of finality in decision-making. Error of jurisdiction 1. If the appellant could show that the decision-maker misunderstood the evidence or applied a wrong principle or took into account matters which were irrelevant or failed to take into account matters which were relevant, an error of jurisdiction would occur: see House v R [1936) HCA 40; 55 CLR 499.26. The Appeal Panel finds no error in the fact-finding of the Tribunal concerning the state of the premises and the defects found therein. However, it believes there are two errors which arise out of the calculations of the financial adjustments to be made between the parties. To rectify this defect, the Tribunal will grant leave to bring the appeal as it would otherwise be a substantial miscarriage of justice. Rent calculations 1. Firstly, in assessing the two week rental allowance of $600 per week as claimed by the tenant for the period 28 November 2022 14 December 2020, the Tribunal overlooked the fact that the first week's rental had been agreed to be free of charge. Whilst the landlord, on appeal, claimed the tenant was not entitled to any free rent because the grant of the rent-free period was predicated on the basis that the tenant occupied the premises for the entire term, the fact is that the tenancy agreement provided for the first week to be rent free and there were no special conditions which would have allowed that the landlord to reclaim such offer. It follows that the allowance of two weeks free rental made by the Tribunal duplicates the offer of free rental for the first week. 2. As a result, the Appeal Panel finds that the rental position to accurately reflect the Tribunal's finding should be as follows: Period Allowance ($) Explanation 28 November 2020 to 4 December 2020 0 No rent payable because of the rent-free period allowed in the Tenancy Agreement 5 December 2020 to 11 December 2020 600 Rent for one week during which the property was uninhabitable 12 December 2020 to 14 December 2020 $257.13 Three days' rent at a daily rate of $85.71 per day, until the day on which the property was occupied 857.13 1. Accordingly the tenant is entitled to receive a rental rebate of $600 plus $257.13, totalling $857.13. Break fee 1. The tenant received repayment of the whole of the rental bond. However, such repayment overlooked the fact that a break fee of $2400 was required to be paid in accordance with section 107 of the Residential Tenancies Act 2010, namely for four weeks rental. The tenant does not dispute that there has been in effect an overpayment to him. Final calculation 1. It follows that the landlord is entitled to receive the sum of $2400 (representing the break fee) less the amount of: 1. $857.13 being the rental adjustment; and 2. an amount of $85.71, which the Tribunal found at first instance to be an overpayment of rent to which the tenant is entitled. 1. This has the consequence that the tenant's total entitlement is $942.84. When deducted from the amount of the break fee, the net amount owing to the landlord by the tenant is $1457.16. Because the bond of $2400 has already been paid to the tenant, this requires a cash payment by the tenant to the landlord, rather than an adjustment on repayment of the bond. Orders 1. The Appeal Panel orders that: 1. Leave be granted to bring the appeal; 2. The appeal is upheld in part. 3. Order 1 made on 30 April 2021 be set aside; 4. The respondent is to pay to the appellant the amount of $1457.16 within seven days of the date of these orders. ********** 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: 30 August 2021