Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Hoang v Duong [2021] NSWCATAP 404 Hearing dates: 29 November 2021 Date of orders: 15 December 2021 Decision date: 15 December 2021 Jurisdiction: Appeal Panel Before: The Hon Cowdroy AO QC ADCJ, Principal Member G K Burton SC, Senior Member Decision: (1) Leave to bring the appeal is refused. (2) The appeal is dismissed. Catchwords: LEASES AND TENANCIES – Retail leases – security deposit and breaches – no issue of principle Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Retail Leases Act 1994 (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17 Texts Cited: None cited Category: Principal judgment Parties: Hai Chan Hoang (Appellant) Thi Hong Nga Duong (Respondent) Representation: Solicitors: Appellant (Self-Represented) Respondent (Self-Represented) File Number(s): 2021/00268024 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 8 September 2021 Before: G Blake AM SC, Senior Member File Number(s): COM 21/14094 REASONS FOR DECISION 1. By notice of appeal dated 10 September 2021 the appellant appeals a decision of the Tribunal delivered on 8 September 2021 in proceedings COM 21/14094. The claim of the appellant related to a retail lease entered into by the appellant as lessor and the respondent as lessee. 2. By lease registered number AJ766883G made on 20 August 2015 the appellant leased premises described as folio identifier 1/546212 being the ground floor shop, at [address supplied] Belmore ("the premises") for a period of five years at an agreed rental. The lease was signed by each party and was duly registered. 3. At the termination of the lease on 17 September 2020 the respondent stated that all keys were returned to the property together with remote controls for a shutter which was installed by the appellant during the course of the lease. 4. On 2 October 2020 the agent contacted the respondent and informed her that in order to recover her bond the respondent was required to take certain action which was completed by the respondent on 8 October 2020. However, the respondent maintained that, after she surrendered possession of the premises, the landlord (appellant) claimed that there were additional expenses and therefore the bond could not be paid. 5. At the date of the surrender of the lease the respondent acknowledged that there was unpaid rent owing of $1382.95 and a water usage charge of $7.10 which the respondent instructed the agent to deduct from the bond. 6. The appellant claimed that the premises were left in unsatisfactory condition. The appellant provided a tax invoice from a repairer claiming an amount of $2200 which the appellant said was the cost of the repairs, as follows: 1. Filled all hold (sic – holes) on the wall and painting $1700. 2. Supply and install vanity and back room need toilet $300. 3. Clean the moisture on the left hand side of the wall $100. 4. Replace three broken tiles are leftist hand side $100. 1. The managing agent of the appellant attended the premises on 17 September 2020 with the appellant. Apart from the outstanding rental and water usage, the appellant did not suggest that any further issue existed. No damage was reported. On 17 September 2020 the appellant's agent sent an email to the respondent stating that, once certain remote controls were returned and the outstanding rent and water usage paid, the bond could be released. 2. The remote controls had in fact been returned and were not an issue. However, on 22 October 2020 the NSW Small-Business Commission advised the respondent that the appellant was claiming the full amount of the bond. Orders of the Tribunal 1. The Tribunal made orders that the respondent was liable to pay the amount of $1390.05 by way of unpaid rent and water charges. The Tribunal made no further allowance for the appellant. 2. The Tribunal found that the appellant was not entitled to recover any amount for cleaning, repairing or painting the premises for three reasons as follows: "(1) it can be inferred from the 5 October 2020 Nguyen invoice that cleaning, repairing and painting of the premises had been carried out by 5 October 2020; (2) there is no evidence that the applicant complied with cl 7.5 of the lease prior to 5 October 2020 by giving the lessee a notice in writing stating what the respondent had failed to do except for the 17 September 2020 at 11.58pm email which was limited to "a broken tile at the end of the left-hand side of the shop floor". The email correspondence between Mr Kostopoulos and each of the applicant and the respondent referred to at [27] to [30] above indicates that there was no notice given by Mr Kostopoulos on behalf of the applicant in respect of any of the items claimed for the cleaning, repairing and painting of the premises; (3) there is no evidence that the tile at the end of the left-hand side of the shop floor was not broken at the commencement of the lease." Notice of appeal 1. The notice of appeal states that the Tribunal's decision was not fair and equitable. The appellant asserts that the respondent as tenant was required to keep the premises in good condition; but repairs were necessary after the tenant vacated. The appellant states that she took photographs of the premises with the agent on 18 September 2020. 2. The appellant refers to the Retail Leases Act 1994 (NSW) (RLA) and especially s 72(1)(a) which empowers a tribunal, in respect of retail tenancy claims, to make an order "whether by way of debt, damages or restitution". Details of the appellant's claim are set out in the notice of appeal. Reply 1. The respondent maintains that the premises were always maintained in good condition and when the premises were returned there was no mention of any problem. The respondent has always acknowledged her indebtedness to pay the outstanding rent and water usage. The respondent also maintained that, during the term of the lease, mould was developing and she complained about it to the agent but no action was taken. Nature of appeal 1. This appeal has been instituted under s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) ("the Act"). It is an internal appeal as provided by s 80(2)(b). Pursuant to Sch 4, cl 12(1) to the Act, an Appeal Panel may grant leave under s 80(2)(b) of the Act only if it is satisfied that the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable; or (b) the decision of the Tribunal under appeal was against the weight of evidence; or (c) 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 referred to the requirements for a grant of leave and at [84] said: "…(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 fides the challenge to an issue of fact: BHP Billiton Ltd v Dunning (2013) CA NSW 421 at [19] and the authorities cited their; 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 or matters of administration or policy which might have general application; orc (c) an injustice which is reasonably clear, in the sense of going merely beyond 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." 1. In summary, it must be demonstrated that an appellant may have suffered a substantial miscarriage of justice because the decision of the tribunal was not fair and equitable; or the decision under appeal is against the weight of evidence; or new evidence has arisen that was not reasonably available at the time of the hearing. Observations 1. The appellant's appeal essentially claims that the Tribunal erred in failing to make an order in her favour for the cost of repairs. It is not apparent that there is any error of law alleged against the Tribunal findings, but the appellant relies upon the provisions of RLA, s 72. It should be observed that this section merely invests power in the Tribunal to make an order of the kind referred to in s 72. The question whether such an order is justified is a separate issue. Lease requirements 1. Clause 7 of the lease is entitled: Condition and Repairs who is to repair the property. Within cl 7 there are numerous sub-clauses. For example, cl 7.1 requires the lessor to maintain in a state of good condition and serviceable repair the roof, the ceiling, the external walls and external doors and maintain the building in a structurally sound condition. Clause 7.2 requires the lessee to maintain the property in its condition at the commencement date and to promptly do repairs needed to keep the premises in that condition. However such obligation does not extend, inter alia to, the repair of fair wear and tear (cl 7.2.3). 2. Clause 7.3 requires the lessee to, inter alia, decorate the inside of the property in the last three months of the lease, i.e. restoring the surfaces of the property in a style and to a standard finish originally used, e.g. by repainting. 3. Significantly, cl 7.5 relevantly provides: "If the lessee fails to do any work that the lessee must do the less or can give the lessee a notice in writing stating what the lessee has failed to do. After notice is given the lessee must – 7.5.1 do the work immediately if there is an emergency; and 7.5.2 to the work promptly and diligently in any other case. If the lessee does not do the work, the less or can do it and the lessee must reimburse the less or for the cost of the work." 1. The Tribunal found that no notice had been given as foreshadowed by cl 7.5. During the hearing, the appellant informed the Appeal Panel that she dealt with the agent and that she herself did not provide a notice. There is no evidence that the agent ever provided such notice. It follows that no obligation arose upon the respondent to carry out the work. Clause 7.5 provides that, if the lessee did not do the work, the lessee may carry out the work and the lessee must reimburse the lessor the cost of the work. However, the right of recovery of such cost is predicated upon the provision of a notice having first been given to the tenant as provided by cl 7.5 of the lease. In this instance, the notice was not provided. It follows that the appellant is not entitled to recover the costs from the respondent. 2. Accordingly, the Appeal Panel finds no error in the Tribunal's determination that the appellant did not comply with cl 7.5 of the lease. 3. The Tribunal also found that there is no evidence that the tile on the left side of the shop floor was not broken at the commencement of the lease. Accordingly, since the appellant bore the onus of establishing this fact, and had not discharged the onus, the appellant could not recover any cost for such repair. This is a factual finding and the Appeal Panel finds no error in such finding. 4. The Appeal Panel also observes that the broken tile may have resulted from fair wear and tear for which the lessee was not liable under cl 7.2.3 of the lease. 5. The claim by the appellant for cleaning, repairing and painting which the appellant as landlord carried out was not an issue when the respondent vacated the premises. The agent, who must be deemed to have been acting on behalf of the respondent, sent an email to the respondent 2 October 2020 at 11:45 am, stating relevantly: "The following is outstanding before we can finalise your bond 1. Rent outstanding $1382.95 2 water usage outstanding $7.10 3 return all the remote controls ( 5 outstanding) or paid the invoice attached to reprogram the shutter Once the above has been completed and paid for we can release your bond." 1. As referred to previously, the return of the remote blind controls was resolved. On 2 October 2020 the respondent replied to the agent stating that the three remote controls had been returned. The respondent requested that the balance of the deposit after deduction for outstanding rent and water charges be returned to her. 2. The Appeal Panel refers to this correspondence only to show that there was no suggestion, at the time that the premises were surrendered to the appellant, that any additional monies were owed as are now claimed by the appellant. 3. Whilst the provision of a notice by the landlord to the tenant under cl 7.5 is not stated to be in mandatory terms, the right to recover any payment made by the landlord in rectifying any tenant's damage (except fair wear and tear) is dependent upon the service of such notice. In the absence of the provision of a notice, there was no liability on the part of the respondent to make good any alleged defects. It should be noted that the Tribunal was not satisfied that the broken tile was not already in existence at the commencement of the lease. 4. We note that there was no argument on whether or not cl 7.5 operated at the termination of the lease so as to require notice, or whether it operated only during the term of the lease. We decide this appeal solely on the basis it was argued. Even if no notice was required, the result in this appeal would have been the same because, as discussed above, the facts indicated absence of proof of any liability to repair in the respondent tenant at time of exit from the lease. Finding 1. The Appeal Panel is not satisfied that the appellant may have suffered a substantial injustice. Accordingly, the Appeal Panel refuses leave to appeal. Orders 1. The Appeal Panel orders: 1. Leave to bring the appeal is refused. 2. 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: 15 December 2021