Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Choi v Khan [2022] NSWCATAP 76 Hearing dates: 17 March 2022 Date of orders: 22 March 2022 Decision date: 22 March 2022 Jurisdiction: Appeal Panel Before: G Sarginson, Senior Member D Ziegler, Senior Member Decision: (1) Leave to appeal is refused. (2) The appeal is dismissed. Catchwords: LEASES AND TENANCIES - bond claim - break fee – APPEALS – party bound by case ran at first instance - whether decision against the weight of evidence. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 Residential Tenancies Act 2010 (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17 Coulton v Holcombe [1986] HCA 33 Hall v Hawkins [2015] NSWCATAP 197 Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 Panico v Crompton & Jennings [2015] NSWCATAP 110 Pholi v Wearne [2014] NSWCATAP 78 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 Texts Cited: Nil Category: Principal judgment Parties: Kyong Houan Choi (Appellant) Mohammad Ashraf Khan (Respondent) Representation: Appellant (Self Represented) Respondent (No appearance) File Number(s): 2021/00349397 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 12 November 2021 Before: S Sutherland, General Member File Number(s): RT 20/32120 REASONS FOR DECISION 1. This is an appeal from a decision of the Tribunal dated 12 November 2021 involving a bond dispute under the Residential Tenancies Act 2010 (NSW) (RT Act). 2. The appellant is the landlord and the respondent is the tenant. Appearances 1. The appellant Mr Choi attended the telephone hearing of the appeal in person and was assisted by a Korean language interpreter. 2. There was no appearance by the respondent. There appears on the file a notice of hearing addressed to the respondent notifying him of the time and place of hearing. Having reviewed the file we are satisfied that the respondent is on notice of these proceedings and of the appeal hearing. 3. In the absence of any explanation from the respondent for his non-attendance, the hearing of the appeal proceeded in the absence of the respondent. Timing 1. The landlord filed the appeal with the Appeal Panel on 8 December 2021. Under Reg. 25 (4) (b) of the Civil and Administrative Tribunal Rules 2014, the time to appeal a residential tenancy decision is 14 days from the date on which the appealing party was given or notified of the decision. 2. The appeal in this matter was filed 26 days after the date of the decision. If an appeal is filed out of time, the Appeal Panel has discretion to extend the time period under s 41 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), subject to the principles set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [22]. Submissions and documents 1. In deciding the appeal, we have had regard to the following: 1. The Notice of Appeal lodged on 8 December 2021 with attached documents; 2. Further documents lodged by the appellant on 28 January 2022; 3. The Tribunal's reasons for decision; 4. The procedural directions made at call over; 5. The application lodged in the Tribunal on 28 July 2020; and 6. The oral submissions made by the appellant during the appeal hearing. 1. No documents were submitted by the respondent. 2. The matter was listed for directions at the Appeal Panel on 14 January 2022. One of the directions was that the appellant was to file and serve a copy of the sound recording of the hearing, or a transcript of the hearing. The reason for such a direction is so that the Appeal Panel can identify exactly what evidence and submissions were given at the Tribunal hearing, and what the Tribunal member said at the hearing. The appellant failed to comply with this direction. Background 1. The parties (and two other persons as co-tenants, who vacated the property before the end of the lease) entered into a written residential tenancy agreement on 22 August 2019. The agreement was for a fixed term ending on 23 August 2019. The rent was $1,180 per fortnight. 2. The tenancy ended when the tenant vacated the premises on or about 16 July 2020. 3. The landlord did not deposit the rental bond with NSW Rental Bond Services, nor did the landlord serve an ingoing condition report on the tenant at the commencement of the tenancy. The bond amount was $2,320. 4. Prior to the end of the tenancy there were various text message exchanges between the tenant and the landlord. In essence, the tenant sought to move out of the premises because other occupants had moved out and he and his partner were struggling to pay the rent. The tenant had identified a cheaper property into which he sought to relocate. 5. The contemporaneous text messages indicated that the landlord consented to the tenant moving out subject to the tenant ensuring the premises were reasonably clean. The landlord asserts he did not waive the right to seek a break lease fee under the residential tenancy agreement and s 107 of the RT Act. 6. The tenant commenced proceedings in the Tribunal on 28 July 2020 seeking re-imbursement of the bond. No cross application was filed by the landlord. 7. The hearing in the Tribunal occurred on 9 July 2021. The Tribunal issued a written decision on 12 November 2021. 8. The Tribunal made the following findings: 1. The landlord had claimed rent arrears for the period 24 July 2020 to 22 August 2020. However, the tenancy had ended on 16 July 2020 when the tenant vacated the property. The Tribunal, having examined the tenant ledger, was satisfied that the tenant had paid rent on time and that there were no rent arrears. 2. The Tribunal noted that it was "unclear" whether the landlord was claiming a break fee as a basis for retaining the bond, and that the issue had not been raised at previous interlocutory hearings. However, the Tribunal was satisfied in any event that the landlord had consented to the tenant vacating the property early without seeking to enforce a break fee. The Tribunal accepted the evidence of the tenant supported by the contemporaneous text messages between the parties that the landlord had agreed to allow the tenant to vacate the premises early without penalty. 3. Other than minor cleaning and repairs, the Tribunal was not satisfied that the landlord had established a breach of the tenant's obligations under s 51(3) of the RT Act regarding the condition of the property at the end of the tenancy. 4. The Tribunal noted the landlord claimed that that he expended $2,020 to clean and internally repaint the residential premises. The Tribunal noted that there was divergence of evidence between the tenant and the landlord as to whether damage to the property existed prior to the tenant moving in, and noted that there was no ingoing condition report. 5. The Tribunal was not satisfied that the landlord had proved the damage occurred during the tenancy, other than in respect of carpet cleaning and minor repairs to an amount of $145.46. 6. The Tribunal found that the tenant should be reimbursed $2,214.54 from the bond with the landlord retaining $145.46. As the landlord had not deposited the bond with NSW Rental Bond Services, the Tribunal made a money order against the landlord. Legal framework 1. Although the Tribunal's reasons do not refer in detail to the applicable legal principles, it is well established that the bond is property of the tenant held on trust by the landlord, and that the legal onus is upon the landlord to prove a legal entitlement to the bond or any part of it. 2. Under s 51(3) of the RT Act, the tenant has obligations at the end of the tenancy. These include leaving the premises as nearly as possible in the same condition they were in at the commencement of the tenancy (fair wear and tear excepted), and as set out in any applicable ingoing condition report, and returning the property in a reasonably clean condition. "Fair wear and tear" means damage or deterioration that arises from the reasonable use of the house for its intended purpose and the ordinary operation of natural forces. The test is objective and should not be approached from the perspective of a "fastidious and obsessive landlord" (Panico v Crompton & Jennings [2015] NSWCATAP 110 at [24]). 3. The lack of an ingoing condition report does not prevent the landlord from raising a claim based on the condition of the property at the end of the tenancy, but the absence of such a report goes to the weight of the evidence (Hall v Hawkins [2015] NSWCATAP 197). 4. Clause 41 of the standard form residential tenancy agreement and s 107 of the RT Act set out the landlord's remedies when residential premises have been abandoned. For residential tenancies entered into before 23 March 2020, the compensation payable for a fixed term agreement which provided for a break fee was 6 weeks rent if less than half of the fixed term had expired at the time of abandonment, or 4 weeks rent in any other case. In this case the written residential tenancy agreement provided for a break fee, and more than half the term of the tenancy agreement had expired when the tenant vacated. Grounds of appeal 1. The grounds of appeal identified by the landlord were not easy to decipher. Many of the grounds were simply the landlord re-arguing the case before the Tribunal rather than identifying any legal error made by the Tribunal. 2. However, we understand that it may be difficult for a self-represented to articulate grounds of appeal and that we must take a benevolent approach to identifying what if any, are the grounds of appeal (Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69). 3. We understand the grounds of appeal to be as follows: 1. The landlord did not waive the right to a break lease fee. 2. The decision of the Tribunal not to make a more substantial deduction from the bond for cleaning and repairs was against the weight of evidence. 3. The Tribunal member had given a different decision orally at the hearing to that given in the notice of order and written reasons for decision. Scope and nature of internal appeals 1. Internal appeals may be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel: s 80(2) of the NCAT Act. 2. Internal appeals involve consideration of whether there has been any error of law; or any error other than an error of law sufficient to grant leave to appeal under Sch. 4 Cl. 12 of the NCAT Act. 3. An appeal is not simply an opportunity for a dissatisfied or aggrieved party to re-argue the case they put at first instance: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. 4. 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 Sch. 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. 1. Even if an appellant from a decision of the Consumer and Commercial Division requiring leave to appeal has satisfied the requirements of cl. 12(1) of Sch. 4 of the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b) of the NCAT Act. 2. In Collins v Urban, the Appeal Panel stated at [84] that 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; (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. 1. Even if the appellant establishes that it may have suffered a substantial miscarriage of justice in the sense explained above, the Appeal Panel retains discretion whether to grant leave under s 80(2) of the NCAT Act. The appellant must demonstrate something more than the Tribunal was arguably wrong (Pholi v Wearne [2014] NSWCATAP 78 at [32]). 2. We are not satisfied that any error of law has been established; nor that the appellant has established any error of a type that leave to appeal should be granted under the principles of Collins v Urban. Our reasons for this are as follows: 1. The appellant failed to provide a sound recording of the hearing, or a transcript of evidence. Accordingly, we cannot be satisfied that the landlord did raise a claim at the hearing for a break fee under Cl. 41 of the residential tenancy agreement or s 107 of the RT Act. The reference in the reasons to the landlord claiming "rent arrears" is a different issue to whether a break fee is payable. If the claim was not made before the Tribunal, then the landlord cannot raise the claim in the Appeal Panel proceedings, as a party is bound by the case they ran at first instance and cannot raise matters that were not raised at the hearing (either deliberately or by inadvertence) unless there are the "most exceptional circumstances" (Coulton v Holcombe [1986] HCA 33 at [9]). No such "exceptional circumstances" exist. 2. If the landlord did raise in substance a break fee claim at the hearing, the member has dealt with it by way of the factual finding that the landlord agreed to allow the tenant to vacate the premises before the expiry of the fixed term without penalty. Although the landlord disputes that he waived his potential right to a break fee, the Tribunal made a factual finding on the basis of the evidence of the tenant and the contemporaneous text messages. It is not enough that the landlord disagrees with that factual finding. To succeed on appeal, the landlord must establish that either there was no evidence to support the factual finding (an error of law) or that the finding was substantially against the weight of the evidence in the sense that the evidence in its totality preponderates so strongly against the conclusion found that it can be said that it was not one a reasonable Tribunal member could have reached (Collins v Urban at [77]). We are satisfied there was evidence to make the factual finding and we are not satisfied that the finding was substantially against the weight of evidence such that leave to appeal should be granted. 3. In the absence of a recording or transcript of the first instance proceedings, we cannot be satisfied that the Tribunal member gave a decision orally at the hearing, nor that if such a decision was given, it diverged from that set out in the notice of order and written reasons for decision. 4. The other issues raised by the landlord in the appeal are, in substance, the landlord seeking to re-argue his case at first instance and do not establish an error of law or an error of a type that leave to appeal should be granted. 1. As the landlord has failed to establish any ground of appeal, it is unnecessary for us to consider whether the appeal was filed out of time and whether an extension of time should be granted. ORDERS 1. For these reasons we make the following orders: 1. Leave to 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: 22 March 2022