Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Reid v NSW Land and Housing Corporation [2022] NSWCATAP 166 Hearing dates: 20 April 2022 Date of orders: 18 May 2022 Decision date: 18 May 2022 Jurisdiction: Appeal Panel Before: S Thode, Senior Member D Goldstein, Senior Member Decision: The Appeal is dismissed. Catchwords: LEASES AND TENANCIES –withdrawal of services, goods or facilities under s 44 of the Residential Tenancies Act 2010 (NSW) - damages for breach of covenant for quiet enjoyment Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Residential Tenancies Act 2010 (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17 Hyndes v Maddack Pty Ltd [2021] NSWCATAP 302 Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 ; Kork v Merheb [2021] NSWCATAP 349 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Re Minister for Immigration and Multicultural Affairs [2003] HCA 30 Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 Texts Cited: None cited Category: Principal judgment Parties: Kathryn Reid (Appellant) NSW Land and Housing Corporation (Respondent) Representation: Solicitors: Redfern Legal Centre (Appellant) NSW Department of Communities and Justice, Legal (Respondent) File Number(s): 2022/00059125 Publication restriction: Nil Decision under appeal Court or tribunal: New South Wales Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 31 January 2022 Before: E Sarofim General Member File Number(s): SH 21/46527 reasons for decision Introduction 1. The appellant is the tenant and the respondent is the landlord of social housing premises. The parties entered into a residential tenancy agreement dated 18 November 2021. The market rent is $760 and the tenant pays subsidised rent of $147.60 per week. The tenant and her former partner were parties to a previous residential tenancy agreement in respect of the premises and the tenant and her daughter have resided at the premises since about 2015. 2. In application SH 21/46527 filed 11 March 2021 the tenant sought orders for rent reduction under s 44(1)(b) of the Residential Tenancies Act 2010 (NSW) (RTA) and an order under s 187(1)(d) for compensation in the sum of $15,000. The tenant sought other orders that are not relevant for the purpose of this appeal. 3. The application was listed for hearing on 28 January 2022. The Tribunal made an order for compensation for $2302.56, which order also dealt with the tenant's rent reduction claim. The Tribunal declined to make an additional order for compensation for breach of quiet enjoyment. The Tribunal made the following relevant findings and orders: 1. The landlord, New South Wales Land and Housing Corporation, Pottery 31 Belvoir Street Surrey Hills NSW 2010 is to pay the tenant Kathryn Reid, xx Dowling Street Woolloomooloo NSW 2011 Australia the sum of $2302.56 immediately. Reasons: loss of amenity assessed at 30% rent reduction $2302.56 Reasons for decision: … D. Tribunal's consideration as to loss of amenity or rent reduction 24. I find that the tenant's enjoyment and use of the Premises were adversely affected. I find on the medical front that the tenant's mental or physical health was affected by mould, I accept the tenant's evidence that she has experienced distress and anxiety as set out in her evidence. 25. I find that this constituted a breach of obligations of her right to quiet enjoyment. 26. I also find that although the tenant continues to live at the Premises, there has been a withdrawal of services and facilities in terms of the physical state of the Premises as she could not fully use all of the rooms. 27. Doing the best I can on the available evidence and noting that the applicant's evidence is sparse on many of the defects claimed, I assess the loss of amenity and compensable loss flowing from the breach is to be 30% of the rent for a 12 month period. E. Tribunal's consideration of noneconomic loss for mental distress and disappointment 28. This loss is recoverable as the RTA is contract for enjoyment, pleasure and relaxation and therefore falls under the exception to the general rule that damages for distress and disappointment are not recoverable: Baltic Shipping Co v Dylan [1993] HCA 4. 29. Distress, disappointment and anxiety do not constitute a personal injury for the purposes of the Civil Liability Act 2002 (NSW) (CLA) and section 16 of the CLA does not apply: Moore v Scenic Tours Pty Ltd [2002] HCA 17. 30. However, the Tribunal can find no basis upon which to award an additional sum of money under this head of loss. The delays in the creation of a new lease are complicated by the fact that a landlord cannot take steps to remove one main tenant from a joint tenancy unless there is a lawful basis to do so and that the applicant could have invoked the domestic violence provisions herself. I consider that the Applicant herself delayed the process by insisting for some time to have her former partner be re-housed. 31. To the extent there were delays and roadblocks to attending to actual maintenance works whilst she was a joint tenant, the Tribunal considers this loss to be covered by the loss of amenity awarded above for breaches found. 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, the "leave") of the Appeal Panel: s 80(2) Civil and Administrative Tribunal Act 2013 (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. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b). 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; 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. Submissions and evidence 1. In deciding the appeal, we have had regard to the following: 1. The Notice of Appeal lodged on 1 March 2022 and attachments constituting some of the evidence filed before the Member below; 2. The appellant's written submissions filed and served on 30 March 2022; 3. The respondent's written submissions lodged on 19 April 2022; and 4. The oral submissions made by and on behalf of the parties at the appeal hearing. Notice of Appeal - Extension of time 1. The Notice of Appeal was lodged on 1 March 2022, which is outside the 14 day time period specified in cl 25(3) of the Civil and Administrative Tribunal Rules 2014 (the Rules). 2. The principles applicable to the application for an extension of time are set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [18]-[22]. These include the principle that time limits should generally be strictly enforced, with extensions granted where the interests of justice (which applies to all parties equally) require it. It is generally the case that in order for the power to extend time to be exercised in an appellant's favour there must be material upon which the Appeal Panel can be satisfied that to refuse the application for an extension of time would work an injustice. 3. Jackson says that generally, in an application for an extension of time to appeal, an Appeal Panel will be required to consider: 1. the length of the delay; 2. the reason for the delay; 3. the appellant's prospects of success; and 4. the extent of any prejudice suffered by the respondent (to the appeal). 1. In this case the length of the delay is not significant. The time to file the Notice of Appeal was 14 days, and the Notice of Appeal was filed 15 days later. 2. The reason given by the tenant is that she was not aware of her appeal rights until she contacted the Inner Sydney Tenants' Advice and Advocacy Service which in turn contacted Redfern Legal Centre, seeking legal advice. Because of a significant backlog at the Redfern Legal Centre, Ms Mackay a solicitor in the employ of Redfern Legal Centre, was unable to advise Ms Reid for several weeks, and as soon as advice was received, the Notice of Appeal was filed. We accept this explanation as reasonable and note that persons who assist tenants at the Inner Sydney Tenants' Advice and Advocacy Service are generally not lawyers and would not have been able to advise Ms Reid on the time limits attaching to an appeal or on the prospects of success of her appeal. The length of the delay is only 16 days and the respondent does not assert the existence of any specific prejudice arising from an extension of time to lodge the Notice of Appeal other than the loss of the benefit of the inevitable result should that extension of time not be granted. 3. The respondent does not oppose the extension of time. 4. Weighing all of those matters it is appropriate, in our opinion, to grant the appellant the extension of time to do justice between parties. Grounds of Appeal 1. In the section entitled 'grounds for appeal' the attachment to the appeal application states as follows: The Tribunal erred in law when conflating the remedies of a rent reduction under section 44(1)(b) and compensation for loss of quiet enjoyment of the premises under section 187(1)(d) of the Residential Tenancies Act 2010 (NSW). The Tribunal has erred in law when "finding no basis upon which to award an additional sum of money under this head of loss and of quote (loss of quiet enjoyment) at [30]. The Tribunal has conflated the remedies of a rent reduction and compensation for loss of quiet enjoyment of the premises, and found that regarding the tenant's loss of quiet enjoyment of the premises, 'the Tribunal considers this loss to be covered by the loss of amenity awarded" at [31]. A claim for a rent reduction under section 44(1)(b) of the Residential Tenancies Act and a claim for compensation for loss of quiet enjoyment of the premises (pursuant to section 187(1)(d) of the Residential Tenancies Act proceed from different bases and remedy separate losses suffered by the Appellant. An order that rent is excessive under section 44(1)(b) proceeds on the basis that the physical correct arrest 6 or qualities of the premises have been withdrawn or reduced to as to affect the tenant's use of the premises. By contrast, an order for compensation for loss of quiet enjoyment of the premises proceeds on the basis that the landlord's as breach of the tenant's quiet enjoyment of the premises caused by its failure or delay in carrying out repairs at the premises has caused the tenant to stress, anxiety and disappointment; a mental suffering short of personal injury. The Tribunal found at 24 and 25 that the tenant's right to quiet enjoyment of the premises had been breached by the landlord. It also found at [26] that there had been a withdrawal of services and facilities and that the tenant could not fully use all of the rooms in her property. Despite this, the Member erred when conflating the remedies under s 44 (1) (b) and s187(1)(d) together and declining to make an order for compensation for loss of quiet enjoyment, by reason that 'is the Tribunal considers this loss to be covered by the loss of amenity awarded above for breaches found" at [31]." 1. We have had regard to the notice of appeal signed by the solicitor for the appellant. In section A, "application for leave to appeal, are you asking for leave", the solicitor answered "no". In section B entitled "application for leave to appeal from a Consumer and Commercial Division decision are you asking for leave?" the solicitor again answered "no". Reply to Appeal 1. We have had regard to the reply to appeal filed on 22 March 2022. Even though the appellant does not seek leave to appeal, the solicitor for the landlord states: The respondent opposes leave to appeal because the notice of appeal fails to identify: 1. An issue of principle; 2. Questions of public importance or matters of administration or policy, which might have general application; 3. An injustice that is reasonably clear, going beyond what is merely 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; 4. A factual error that was unreasonably arrived at and clearly mistaken; or 5. The Tribunal went 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. Collins v Urban [2014 NSWCATAP 17 at [84]. Furthermore, in respect of the additional requirements set out in clause 12 of Schedule 4 to the Civil and Administrative Tribunal Act 2013 (NSW): 1. The Tribunal's decision was fair and equitable: cl 12 (1) (A); 2. The Tribunal's decision was not against the weight of the evidence: cl 12 (1) (b); and 3. No significant new evidence has arisen, being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with: cl 12 (1)(c). The respondent does not concede that any factual errors were made or that the decision was against the weight of the evidence. The Tribunal simply determined what weight to give the evidence and the decision does not amount to a substantial miscarriage of justice. 1. In the section entitled 'reply to extension of time' it is stated that the respondent does not accept that the appeal was lodged within time but does not object to the Tribunal extending the time for lodging the appeal. 2. The reply to appeal does not address whether any questions of law arise on the appeal. Consideration 1. At the hearing of the appeal the parties supplemented their written submissions with oral submissions. 2. The appellant's proposition that a claim for reduction of rent is a different claim to a claim for breach of the covenant for quiet enjoyment, although they may overlap and although both claims may succeed, is not in contention. This was recently discussed in the Appeal Panel decision in Hyndes v Maddack Pty Ltd [2021] NSWCATAP 302 at [45]. As Basten JA said in McCusker v St George Community Housing Ltd [2021] NSW SC 28 at [43], the description of 'a reduction or withdrawal of the facility' used in section 44 'is… [L]anguage which does not necessarily involve loss of quiet enjoyment of the premises.' It was confirmed by the appellant during oral submissions that the appellant is proceeding on a question of law only. It was confirmed by the respondent that it agrees that a claim for reduction of rent is different and distinct from a claim for damages for breach of the covenant for quiet enjoyment. 3. For the reasons that follow we are not of the view that the Tribunal conflated the two separate heads of damage. Nor are we of the view that the Tribunal fell into error when it decided at [31] of the reasons for decision that 'the Tribunal considers this loss [for compensation for the breach of the covenant of quiet enjoyment] to be covered by the loss of amenity awarded." 4. In coming to our decision we have, among other factors, considered the structure of the written reasons for decision published by the Tribunal. The Tribunal uses clear headings delineating and separating the two claims brought by the applicant. 5. In a heading entitled: "D. Tribunal's consideration as to loss of amenity or rent reduction" 1. The Tribunal adopts the wording of section 44(3) of the RTA and considers the withdrawal of services. The decision carefully sets out the failure by the landlord to repair the premises, identifies a failure under section 65(3) of the RTA and derives a finding that although the tenant continued to live at the premises there has been a withdrawal of services and facilities in terms of the physical state of the premises as the tenant could not fully use all rooms. 2. The reasons for decision noted that the appellant's evidence was sparse on many of the defects claimed and assessed the loss of amenity and compensable loss flowing from the breaches to be 30% of the rent for a 12 month period. It is clear from the heading "D" that the Member intended to award a closed period of rent reduction under s 44 of the RTA or compensation for loss of amenity arising from the same facts. On our reading of the reasons for decision, by adopting the wording "loss of amenity" and "compensable loss" the Tribunal awarded compensation calculated on the basis of a percentage of rent. It was open to the Tribunal to proceed on that basis and to incorporate an assessment of compensation for "loss of amenity" when assessing a rent reduction. In circumstances where the tenancy had ended by the time the Tribunal made a decision, it was also open to the Tribunal to award compensation for loss of amenity rather than to make an order for a rent reduction in the usual form. 3. The Tribunal then goes on to consider the breach of the covenant of quiet enjoyment under section 187 of the RTA. Under a separate heading "E. Tribunal's consideration of non—economic loss for mental distress and disappointment." the Tribunal considers this to be a separate loss recoverable as the residential tenancy agreement "is a contract for enjoyment, pleasure and relaxation and therefore falls under the exception to the general rule that damages for distress and disappointment are not recoverable see Baltic Shipping Co v Dillan [1993] HCA 4". We conclude that the Tribunal clearly understood the tenant's claim to be for compensation relating to disappointment and distress and provided for this by awarding compensation for breach of quiet enjoyment set out at [27] of the reasons for decision. 1. We consider the appellant's submissions that the use of the word "and" in paragraph [27] is evidence of the fact that the Tribunal conflated the two concepts. In paragraph [27] the Tribunal states I assess the loss of amenity and [emphasis added] compensable loss flowing from the breach is to be 30% of the rent for a 12 month period. 1. We consider that this is a narrow reading of the decision and a failure by the appellant to read the decision as a whole. We are satisfied that the reference to compensation at [27] refers to compensation for multiple breaches by the landlord to repair the premises in a timely manner. The Tribunal found that these breaches resulted in a loss of amenity and a withdrawal of goods, services and facilities, which justified an award of compensation calculated on the basis of 30% of the rent over a 12 month period. Not to read the decision in that manner would ignore the headings "D" and "E" which, as said elsewhere in these reasons, clearly delineate between the different heads of compensation. 2. We have come to this conclusion reading the reasons fairly and as a whole and without inspecting the reasons with a fine tooth comb, in accordance with the well-known principles enunciated in Re Minister for Immigration and Multicultural Affairs [2003] HCA 30 at [147] per Kirby J and Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at [30] – [31] where the court stated "The reasons for the decision under review are not to be construed minutely and finely with an eye keenly attuned to the perception of error. These propositions are well settled. They recognise the reality that the reasons of an administrative decision-maker are meant to inform and not to be scrutinised upon over-zealous judicial review by seeking to discern whether some inadequacy may be gleaned from the way in which the reasons are expressed." In addition the court should not read passages from the reasons for decision in isolation from others to which they may be related: Maria Politis v Commissioner of Taxation [1988] FCA 739 at [14]. 3. The respondent submits that the tenant has received a substantial rent reduction which of itself is suitable compensation for the alleged breaches of the tenancy agreement and while it may have been preferable that the decision articulated a breakdown of the compensation for ease of interpretation, it is not an error of law for which interference by the Appeal Panel is required. 4. We have had regard to the effects of section 187 of the RTA which affords the Tribunal a discretion to award compensation. In the exercise of the discretion the Tribunal found no basis upon which to award an additional sum of money for loss of quiet enjoyment, having already awarded compensation for loss of amenity. Reasons for the decision not to award an additional sum for compensation are provided at [30] and [31] of the Tribunal's reasons for decision. 5. It was open to the Tribunal to award compensation for the loss of amenity calculated at 30% of the rent over a 12 month period, and for that award to also dispose of the tenant's rent reduction claim. It was also open to the Tribunal to decline to award further compensation for quiet enjoyment. There is no mandatory requirement, having found that the tenant has experienced distress and anxiety, to make an additional award of compensation for loss of quiet enjoyment. The explanation provided by the Tribunal in her reasons for decision was clear. The Tribunal declined to make an additional award for compensation partly because the tenant was found to have been partially responsible for the delay in maintenance being carried out and because of the tenant's failure to take timely steps to have the co-tenancy resolved. 6. The relevant principles were discussed by an Appeal Panel, differently constituted in Kork v Merheb [2021] NSWCATAP 349. The facts are analogous. The Appeal Panel considered that although there was a lack of clarity in the Tribunal's reasons as to the basis for the award to the tenants of $3,342.86, at times referring to it as a rent reduction pursuant to s 44 of the RTA and at other times referring to it as relating to an interference with the tenants' rights to quiet enjoyment, the Appeal Panel concluded that the Tribunal made the award on the basis of a breach of the covenant of quiet enjoyment and, having acknowledged that different damages were sought by the tenant, refused to remit the matter for further assessment of compensation. 7. As is stated elsewhere in these reasons, it is not controversial that an award may be made for loss of amenity and for breach of the covenant of quiet enjoyment. The Appeal Panel considered that claims for rent reduction and for damages for loss of quiet enjoyment are not mutually exclusive. In Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9 at [86] in a passage cited with approval by Basten J in Makowska at [46], the Appeal Panel said: "86. That is not to suggest that a claim for damages for loss of quiet enjoyment and an order for the reduction of rent are mutually exclusive forms of relief. Depending on the claims made, there may be facts common to both types of claim which would need to be taken into account in order to avoid double compensation. For example if the premises (or part thereof) cannot be used in the manner intended or its use is in some way impaired by reason of a landlord's breach, it may be inappropriate to both reduce the rent and make an award of damages for loss of use." 1. In the instant case the Tribunal considered that an additional award for distress and disappointment was not warranted. The Tribunal found that the tenant was, to some extent, responsible for the delayed maintenance and it found it was inappropriate to award additional damages if the tenant was, at least partially, responsible for the distress the delayed maintenance had caused her. 2. The Tribunal was further satisfied that the breach of the covenant of quiet enjoyment, said to have been caused partly by the anguish in the respondent's failure to remove her former partner and co-tenant from the residential tenancy agreement was also, in part, caused by the tenant's delay to take steps to resolve the tenancy. As the Tribunal noted at paragraph [4] of the decision, a domestic dispute arose between the tenant and her co-tenant and the appellant contended that the landlord's delay in creating a new tenancy in 2021, thereby dissolving the tenancy with her former co-tenant, caused distress. The Member whilst satisfied that the tenant experienced distress and anxiety nevertheless found that the delay in resolving the co-tenancy was partially caused by the tenant and that this militated against a finding for damages under section 187 of the Act. Those findings of fact contained at paragraphs [30] and [31] of the written reasons for decision are not appealed and not impugned. 3. We consider that it was within the Tribunal's discretion expressed in section 187 of the Act not to award damages for compensation after considering all of the circumstances of the case. We note that it was not a ground of appeal that the Tribunal's discretion to award damages miscarried. In summary we are not satisfied that an error of law has been established and for these reasons we dismiss the appeal. 4. It is important to note that the grounds of appeal proceeded on an error of law only. It was confirmed during oral submissions that leave to appeal was not sought and we note that the appellant was at all relevant time represented by a solicitor. On that basis it is not necessary for us to consider other grounds of appeal for which leave may be required. 5. For the above reasons, the appeal is dismissed. Orders 1. The Appeal panel orders that: 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: 18 May 2022