Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Juskey v Stanfield [2022] NSWCATAP 224 Hearing dates: 9 March 2022 Date of orders: 08 July 2022 Decision date: 08 July 2022 Jurisdiction: Appeal Panel Before: S Thode, Senior Member M Gracie, Senior Member Decision: 1. Appeal allowed. 2. The proceedings are remitted to a differently constituted Tribunal for re-determination. 3. The Tribunal is to make directions which give the parties the opportunity to serve such evidence as they may wish to rely upon in the re-determination of these proceedings. Catchwords: APPEAL — questions of law - constructive failure to exercise jurisdiction — unreasonable or plainly unjust exercise of the Tribunal's discretion — procedural fairness — failure to take into account relevant considerations — approach to assessment of damages Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW), s 80(2) Residential Tenancies Act 2010 (NSW), ss 51(1)(d), 51(3)(b) Cases Cited: Carbery v Warringah Rugby Club Ltd [2021] NSWCATAP 153 Cominos v Di Rico [2016] NSWCATAP 5 Croghan v Rees [2021] NSWCATAP 328 Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26; DVE18 v Minister for Home Affairs (2020) 276 FCR 401; [2020] FCAFC 83 Goncalves v Bora Developments Pty Ltd [2021] NSWCATAP 231 House v The King (1936) 55 CLR 499; [1936] HCA 40 Orr v Cobar Management Pty Ltd [2020] NSWCCA 22 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 STAR Training Academy Pty Ltd v Commissioner of Police (No 2) NSWCATAP 98 Vasales v Li [2021] NSWCATAP 295 ZEJ v ZEL [2018] NSWCATAP 252 Texts Cited: None cited Category: Principal judgment Parties: Agnes Juskey (Appellant) Imogen Stanfield (Respondent) Representation: Counsel: D Gattuso (Appellant) Solicitors: Stephen Ware & Associate, Lawyers (Appellant) Respondent (self-represented) File Number(s): 2021/00361706 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 7 December 2021 Before: J Rose, Tribunal Member File Number(s): RT 21/44011 REASONS FOR DECISION Introduction 1. This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) from a decision of the Consumer and Commercial Division of the Tribunal on 7 December 2021 made under the Residential Tenancies Act 2010 (NSW) (RT Act). 2. The appellant was the landlord of premises of which the respondent was a tenant (the premises) pursuant to a written residential tenancy agreement under the RT Act dated 5 July 2019 (tenancy agreement). 3. The respondent vacated the premises on 15 October 2021, thereby ending the residential tenancy agreement. On that date, when the respondent was moving her belongings out of the premises, there was a fire that damaged the kitchen. The fire occurred while the respondent was absent from the premises and NSW Fire & Rescue (Fire and Rescue) attended and forced entry to the premises to deal with the fire. The Tribunal noted that the report by Fire & Rescue found that "the cause of the fire was not in question. It was caused by the tenant placing a storage box onto the stovetop and the stovetop element being turned on": [56] 4. The appellant lodged an application in the Tribunal on 25 October 2022 (the Application) seeking a compensation order "for damages due to deliberately lit fire in the kitchen" totalling $26,860. The Tribunal's decision 1. The Tribunal dismissed the application and directed the appellant to pay the respondent the entire rental bond of $2,120 plus interest: [2] and [3]. The Tribunal was "not satisfied … that the grounds required to make the orders sought [by the appellant] have been established": [2] 2. Relevantly, the Tribunal found: 1. The appellant's claim was brought under s 51(3) (b) of the RT Act, which requires the tenant, upon giving vacant possession of premises, to "leave the premises as nearly as possible in the same condition, fair wear and tear excepted" as they were at the start of the tenancy: at [11], [35], [63] and [65] (references to s 51(3)(c) elsewhere at [69] and [70] of the reasons would seem to be typographical errors)]. The corresponding obligation to the statutory obligation under s 51(3)(b) was contained in cl 17.2 of the tenancy agreement: [47(1)] 2. The appellant's evidence failed to establish "with any certainty" the condition of the premises at the start of the tenancy in February 2020: [49] and [64] 3. The evidence showed that the area of the kitchen, including and immediately surrounding the stovetop, was badly burned by fire at the end of the tenancy agreement: [59] 4. The damaged areas included the walls and splashback surrounding the stove top, the cupboards and range hood immediately above the stovetop, the kitchen benchtop, the ceiling in the kitchen and the blind in the window immediately adjacent to the stovetop: [59] There was also "burnt material in front of the other than [sic – perhaps meant to be a reference to the oven] and the dishwasher immediately below the stovetop": [59] There was fire damage to two kitchen cabinets and appliances although the extent of the damage was not evident: [60] 5. The painted surfaces in other parts of the premises, such as the interior ceilings, walls and woodwork, had also been damaged by smoke [61]. There was no evidence to support the claim for blinds in other parts of the premises having been damaged by fire, smoke or water: [61] 1. The appellant claimed compensation in the amount of $26,860: [4]. The Tribunal recorded the appellant's consent to limit the claim to the Tribunal's jurisdictional limit of $15,000 plus the bond of $2,210: [10]. Notwithstanding the findings on liability, the Tribunal made secondary findings in relation to damages. 2. In relation to the appellant's claim for loss of rent, if she had succeeded on liability, the Tribunal found: 1. There was no evidence to prove that there was a prospective tenant waiting to take a fresh tenancy at $550 per week claimed for the 8-week period after the end of the tenancy agreement (up $20 from the $530 per week under the existing tenancy agreement); [78] and 2. There was no evidence of any marketing of the premises "in that period that was thwarted by the fire": [78] 3. No amount was allowed for loss of rent. 1. As to the claim for costs associated with the damage caused to the kitchen if the appellant had succeeded in her application, the Tribunal found: 1. There was no evidence to establish "the value of the kitchen at the time of the fire": [79] 2. Based on the evidence from the appellant that the kitchen was last renovated some 8 to 12 years ago, so that the damaged items were "now quite old" [79], the Tribunal disallowed the quotation obtained by the appellant from Superior Kitchens & Joinery (SKJ) dated 8 November 2021 for the cost of supplying and installing all new replacement parts, blinds and painting work: [80] 3. Instead, in assessing quantum, the Tribunal had regard to the Australian Taxation Office guide for rental property owners for the treatment of rental property expenses (the ATO Guide). The Tribunal noted that the ATO Guide sets out the effective life (expressed in years) of kitchen assets, such as cooktops, ovens, range hoods and stoves acquired on or after 1 July 2014, being between 10 and 12 years. The expected useful life of window blinds in the ATO Guide is 10 years. Kitchen items such as bench tops, cupboards, sinks, tap wear and tiles were treated as "capital works reductions" and allowed for the spreading of those deductions over a period of 25 or 40 years. The Tribunal found that it was reasonable to use those rates from the ATO Guide to discount the cost of replacement components to account for the age and second-hand nature of the property damaged by the fire: [81] 4. At [83], the Tribunal applied discounts to the following items that it allowed from the SKJ quote, giving a total of $11,935 for replacing the kitchen, as follows: 1. 60% of $12,550 for supplying and installing new polyurethane kitchen cabinets with engineered stone benchtop and splashback (as per original design): $7,530 2. 60% of $1,480 for plumbing and electrical trade work: $888 3. 10% of $1,820 for replacement appliances: $182 1. The Tribunal allowed 100% for the $2,250 quoted by SKJ for the cost of removing and disposing of the damaged kitchen cabinets, splashback and appliances: [83] 2. In addition, the Tribunal allowed the cost of the one blind in the kitchen that was damaged, applying a 70% discount on the price of $250 for a new blind based on a quote by Bondi Blinds dated 22 October 2021, allowing the sum of $75: [84] 3. The cost of repainting the whole premises based on a quote from James Gatis Decorators dated 21 October 2021, was $6,600. That full amount was disallowed. Instead, that sum was discounted by 25%, allowing $1,650 on the basis that "the kitchen would have formed about 25% of the painted surfaces in the premises": [85] 1. If the appellant had succeeded in establishing an entitlement under the RT Act, the total amount of damages quantified by the Tribunal was $13,660 (which was within the Tribunal's jurisdictional limit). An order for the respondent to pay compensation of that amount would have caused the respondent to forfeit the entire rental bond of $2,120. Grounds of Appeal 1. The appellant's Notice of Appeal was lodged on 21 December 2021, together with a submission described as Annexure "A". An Amended Notice of Appeal was filed on 27 January 2022. 2. The Amended Notice of Appeal raised the following five grounds of appeal: 1. The Tribunal erred in law by failing to deal with the appellant's claim under s 51(1)(d) of the RT Act. 2. The Tribunal erred in law in the exercise of its discretion by failing to grant leave to the appellant to adduce evidence of two condition reports relating to the premises at the commencement and at the end of the lease. 3. The Tribunal erred in the exercise of its discretion by failing to grant leave to the appellant to rely on the condition reports, to cause the decision to not be fair and equitable. This issue only requires our consideration if the discretionary error in ground (2) is not made out as a question of law. 4. The Tribunal erred in law by failing to make findings with respect to the condition of the property against the weight of evidence, where there was evidence from the appellant on the condition of the property at the commencement and end of the lease and where no evidence was led to the contrary by the respondent. 5. The Tribunal erred it is determination and calculation of compensation to which the appellant would have been entitled, had the claim not been dismissed, by: 1. determining the amount of compensation at an amount less than the full replacement cost of the damaged items, namely the kitchen, blinds, the repainting of the premises and the entry door; and 2. applying the ATO Guide and the tax depreciation guidelines to determine the effective life and value of the damaged property. Reply to Appeal 1. The respondent lodged a Reply to Appeal on 8 February 2021, which responded to the grounds raised in the Amended Notice of Appeal. 2. The Reply to Appeal referred to Attachment "2" in reply to the appellant's contentions. The respondent challenged the appellant's allegations that she intentionally or negligently caused the fire and generally expressed her support for the Tribunal's decision by a series of denials in response to each of the appellant's five grounds of appeal. Statutory basis of the appeal and applicable legal principles 1. As set out above, the Amended Notice of Appeal raised three purported "errors of law" and other alleged errors by which the appellant contended that the Tribunal's decision was against the weight of the evidence and otherwise erroneous because of the way it approached the assessment of damages. 2. Section 80(2) of the NCAT Act provides that an internal appeal may be made as of right to the Appeal Panel on a "question of law" and otherwise with the leave (that is, with the permission) of the Appeal Panel. For present purposes, we propose to treat the reference to "errors of law" in the Amended Notice of Appeal as raising "questions of law" for the purpose of s 80(2), although the two concepts are not necessarily always interchangeable: Orr v Cobar Management Pty Ltd [2020] NSWCCA 22 per Bathurst CJ and Bell P at [52]. 3. An internal appeal is not a re-hearing of the original proceedings or a mere opportunity for a party dissatisfied with the outcome in the original proceedings to re-argue its case: Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]. To succeed in an appeal, the appellant must identify a question of law that has caused an error in the Tribunal's reasons or otherwise an error of the type for which it is appropriate to grant leave to appeal. 4. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, the Appeal Panel set out a non-exclusive list of questions of law at [13], including: 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. 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it. 1. A question of law will also arise if it is contended that there was a material failure by the Tribunal to respond to a "substantial, clearly articulated argument relying upon established facts" that may be characterised either as a failure to afford natural justice or as a constructive failure to exercise jurisdiction: Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088; [2003] HCA 26 at [24]–[25] (Gummow and Callinan JJ; Hayne J agreeing at [95]); DVE18 v Minister for Home Affairs (2020) 276 FCR 401; [2020] FCAFC 83 at [34]; followed by the Appeal Panel in Goncalves v Bora Developments Pty Ltd [2021] NSWCATAP 231 (Goncalves) at [9(2)]. 2. A failure to deal with evidence may also in the appropriate circumstances raise a question of law. This may be characterised as a failure to have regard to a relevant consideration or a failure to have regard to critical evidence. By s 38(6)(a) of the NCAT Act, the Tribunal "is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings." This obligation includes an obligation to have regard to material which has been disclosed to the Tribunal and which is relevant to the facts in issue, at least where that material is of some significance: Goncalves at [28]; Croghan v Rees [2021] NSWCATAP 328 (Croghan) at [40]. 3. Where the appellant is self-represented, it is appropriate for the Appeal Panel to review the stated grounds of appeal, the material provided by the parties and the Tribunal's decision which is being challenged to ascertain whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal: Cominos v Di Rico [2016] NSWCATAP 5 (Cominos) at [13]. Where a party or both parties are legally represented, there is an expectation that they will identify any questions of law (STAR Training Academy Pty Ltd v Commissioner of Police (No 2) NSWCATAP 98) but otherwise the Appeal Panel should assist by identifying any questions of law having regard to the Notice of Appeal and the parties' submissions: ZEJ v ZEL [2018] NSWCATAP 252 at [8]-[11]. 4. For the reasons we now discuss, we are satisfied that this appeal raises several questions of law such that leave to appeal from the decision of the Tribunal is not required. Questions of law 1. Having regard to the above principles, we have re-formulated the grounds of appeal to discern the following four questions of law that arise: 1. Question 1: Whether there was a failure to afford natural justice or a constructive failure by the Tribunal to exercise jurisdiction by reason of its refusal or failure to consider the appellant's claim under s 51(1) (d) of the RT Act for a breach of cl 15.4 of the tenancy agreement. 2. Question 2: Whether there was a failure to afford the appellant procedural fairness or an unreasonable or plainly unjust exercise of the Tribunal's discretion to reject the appellant's application to adduce evidence of the condition reports relating to the beginning and end of the tenancy: see House v The King (1936) 55 CLR 499; [1936] HCA 40 (House v The King) at 504-505; also see 507. Given this question of law, we need not consider the alternative basis raised by the appellant's third ground of appeal. 3. Question 3: Whether there was a failure by the Tribunal to take into account all relevant considerations in relation to the condition of the premises at the beginning and end of the tenancy, including the appellant's evidence going to that issue and the condition reports. 4. Question 4: Although ground of appeal 5 is not expressed as an "error of law", properly characterised, we are of the view that this raises a question law, namely whether there was a failure by the Tribunal to afford the appellant procedural fairness by approaching the assessment of damages by reference to the ATO Guide, without notice to the parties and without first receiving submissions from the parties as to the appropriateness of that approach when calculating the appellant's loss. This issue would include the related challenge that the Tribunal erred in determining the amount of compensation at an amount less than the full replacement cost of the damaged items in the kitchen and elsewhere in the premises, because the Tribunal's approach in using the ATO Guide caused it to apply discounted amounts to the appellant's claim. 1. In our opinion, for the reasons we now discuss, the Tribunal's decision was affected by reason of its failure to properly deal with issues associated with each of the four questions of law that we have formulated above. Consideration 1. Claim under Section 51(1)(d) RT Act 1. The Tribunal did not deal with the basis of the appellant's application lodged on 25 October 2021 for an order for "compensation for damages due to deliberately lit fire in kitchen" and described in the application as "an intentional act of negligence". That was not an oversight. 2. The Tribunal relevantly observed: 1. "I expressly asked Mr Juskey [who appeared at the hearing before the Tribunal on behalf of the appellant] whether the landlord also made a claim on the basis that the tenant had intentionally or negligently caused or permitted damage to the premises. He replied that the claim was not put on the [sic] basis, repeating that the claim is made on the basis that the premises were not returned in the condition that they were in at the start of the tenancy agreement. I have therefore determined the claim solely on that ground": at [10] 2. One of the "main issues to be determined" was whether the tenant left "the premises – and, in particular the kitchen - as nearly as possible in the same condition, fair wear and tear accepted, as at the commencement of the tenancy": [11] 3. "The evidentiary case produced by the landlord was more conducive to supporting a potential claim that the tenant had breached clause 15.4 of the tenancy agreement and s 51(1)(d) of the RT Act, by intentionally or negligently causing or permitting fire damage to the premises on 15 October 2021. As I have stated above, the landlord chose not to run that claim. Accordingly, the tenant was not required to present a defence in response to it. In those circumstances it is not appropriate for the Tribunal to make any determination on whether such a claim would have succeeded, and I decline to do so": [71] 1. The Tribunal did not further consider any matters relevant to a claim that could be brought under s 51(1)(d) of the RT Act and then dismissed the claim under s 51(3)(b) due to a lack of evidence: [70] 1. Section 51(1)(d) of the RT Act provides: 51 Use of premises by tenant (1) A tenant must not do any of the following— … (d) intentionally or negligently cause or permit any damage to the residential premises 1. The Tribunal identified the corresponding obligation to s 51(1)(d) in cl 15.4 of the tenancy agreement: [47(6)] 2. In our view, there was a failure on the part of the Tribunal to address the correct question and a constructive failure to determine a dispute properly within its jurisdiction and which, on the evidence before it, the Tribunal could determine. 1. The appellant's application squarely raised the facts and allegations referrable to a claim for breach of cl 15.4 of the tenancy agreement and therefore a claim for compensation for the damage caused to the kitchen under s 51(1)(d) of the RT Act. This was accepted by Tribunal at [71] but then it was not dealt with. 2. As found the Tribunal found, the need for condition reports arose if the appellant sought to bring a claim under s 51(3)(b): see [35] and [37] (citing Carbery v Warringah Rugby Club Ltd [2021] NSWCATAP 153 at [36]-[39]); and [40] (referring to Vasales v Li [2021] NSWCATAP 295 AT [30]-[31]); [49] and [59]). 3. Yet, consistent with the nature of the case being brought by the appellant under s 51(1)(d) and in breach of cl 15.4 of the tenancy agreement, Mr Juskey informed the Tribunal that he did not see the need to tender the condition reports. Having reviewed the transcript of the hearing before the Tribunal, the appellant was in effect required to make an election between bringing a claim under s 51(1)(d) or s 51(3)(b) of the RT Act but without those provisions being expressly raised or explained by the Tribunal. 4. In response to a question from the Tribunal as to whether the appellant was relying upon any particular provision of the tenancy agreement, Mr Juskey replied: I will have to read all the details, but we rely on an assumption that the unit should be returned in the condition that it was received. At the signing of the lease, undamaged, unbroken, in a good condition: T 24:25 1. The Tribunal raised the issue of "allowing for wear and tear" to which Mr Juskey agreed: T 24:34. 2. Although Mr Juskey made a reference to the condition reports "before and after", he did not rely upon them in his evidence because as he explained: I don't think there's any question. The kitchen looked the same two years ago as it now after the fire, so I didn't consider that as a question. I do have photos of the unit from well before the tenant moved in, and showing the pristine condition of the kitchen …: T 32:20 1. The following exchanged occurred between the Tribunal and Mr Juskey: Q: So, did you want to argue in the alternative that - not so much that it was a changing condition since the start of the tenancy agreement, but to assert that the tenant permitted or allowed the premises to be damaged either through intentional act or intentional and negligent cause. Did you want to argue that? A: I don't think it's relevant to establish it was damaged intentionally or accidentally upon this. It was damaged during the tenancy, and at the time of handover back to us, the kitchen was burnt. That's the only thing that we need to claim for the repair costs: T 32:34 1. In his oral submissions in reply, Mr Juskey said much the same again: I don't think that we are in a position to go any further as far as finding who's at fault or who started it [ie the fire] .... It's really not important here. There was a fire during the tenancy and the tenant is responsible. Accident or not, it doesn't really matter that much now. There was a fire: T 38:30 1. In our view, the above extracts from the transcript of the hearing before the Tribunal show that the appellant conducted a case consistent with the claim sought in her Application, namely that the fire damaged the kitchen giving rise to a claim for compensation. Although the appellant did not expressly refer to a breach of cl 17.2 of the tenancy agreement or s 51((3)(b) the RT Act, neither did she refer to either cl 15.4 or s 51(1)(d). There was no reference, discussion or submissions recorded in the transcript about any of those clauses of the tenancy agreement or the corresponding statutory provisions under the RT Act. 2. Further, in our view, it would not have been apparent to Mr Juskey that the Tribunal was proceeding or would deal with the appellant's claim on the basis that the claim for compensation for destruction of the kitchen by the fire by negligence was not pressed and that the claim only concerned the issue of whether the premises were left "as nearly as possible in the same condition, fair wear and tear excepted" as they were at the commencement of the tendency. This is apparent from the evidence given by the parties and their later submissions and exchanges with the Tribunal, including for example: 1. evidence from the respondent about the condition of the stove knobs (T 34:37), including a photograph of the oven (Exhibit L2); 2. evidence from the respondent denying that the fire was deliberate; 3. allowing Mr Juskey to make submissions in reply to the respondent's contention that the fire was accidentally caused, including a submission that the appellant did not have to establish whether the damage was intentional or accidental (e.g., T 35:23; T 38:30). 1. If the Tribunal was correct in confining the appellant's claim to a claim under s 51(3)(b) for a breach of cl 17.2 of the tenancy agreement as stated at [10] of its reasons, and which is presumably a reference to the exchange with Mr Juskey about "fair wear and tear" in the transcript that we have set out above commencing at T24: 21, the Tribunal permitted the hearing to be conducted with evidence and submissions that were entirely irrelevant to the issues that it regarded as being solely relevant to its determination of the Application. 2. We are satisfied that there was sufficient evidence and a sufficiently articulated case that required the Tribunal to determine either as the primary claim or at least in the alternative, a potential claim for compensation under s 51 (1)(d) of the RT Act. 3. In our view, for the reasons set out above, there was a failure on the part of the Tribunal to afford the appellant natural justice and a constructive failure to exercise jurisdiction by not considering the appellant's claim under s 51(1) (d) of the RT Act for a potential breach of cl 15.4 of the tenancy agreement: see 38(6)(a) of the NCAT Act, Goncalves at [9(2)] and [28] and Croghan at [40] referred to above. 2: Discretionary Error – Condition Reports 1. The next question of law that we have identified concerns whether there was a failure by the Tribunal to afford the appellant procedural fairness or an unreasonable or plainly unjust exercise of the Tribunal's discretion to reject the appellant's application to adduce evidence of the condition reports relating to the beginning and end of the tenancy. We referred above to the High Court's decision in House v The King, where the joint judgment of Dixon, Evatt and McTiernan JJ stated (at 504-505): [i]t is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed ... It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. 1. Having decided that the matters for determination arose under s 51(3)(b) of the TRA, it was incumbent upon the Tribunal to ensure as a matter of natural justice, that evidence that was available and relevant to that issue was properly before the Tribunal to ensure it could exercise its jurisdiction. The Tribunal was aware that the disposition of the Application, at least as it had characterised the issues, required consideration of the condition reports in accordance with the authorities referred to by the Tribunal and to which have referred above. 2. In our view, the Tribunal's refusal to allow the condition reports into evidence was an unreasonable and plainly unjust exercise of the Tribunal's discretion, sufficient to raise a question of law of the kind referred to in House v The King. The reasons set out by the Tribunal to explain its decision to disallow the condition reports, when the Tribunal appears to have decided that the appellant's case was entirely dependent upon those reports being in evidence to establish the "fair wear and tear" exception, does not properly reflect the context in which the appellant sought to tender those reports. 3. As we have set out above, the issue of "fair wear and tear" was first raised by the Tribunal. So too was the issue of "the condition of the premises … at the start of tenancy": see T 32: 9. Only then did the appellant offer to tender the condition reports saying: I may send you photographs and condition report[s] if you want, or we may ask the tenant if the kitchen was burnt before she moved in, as simple as that: T 32: 29. 1. Describing the decision of the appellant to not place the condition reports into evidence before the hearing as a "strategic decision" (at [67]), was to overstate matters, particularly when the appellant's representative made it clear – although not in express words - that the case he was presenting, as the Tribunal recognised at [71], was more conducive to a claim for breach of cl 15.4 of the tenancy agreement and relevant to s 51(1)(d) of the RTA Act. 2. The appellant was given no opportunity to make any submissions in response to the "several reasons" later given by the Tribunal in its reasons at [67] and in the exercise of its discretion to reject the tender of the condition reports. The Tribunal did not seek any submissions from the respondent to assess whether the tender of the condition reports was opposed or if there was any demonstrated prejudice that may be said to arise if they were allowed into evidence. There was no express decision made at the time of the hearing to disallow the tender of the condition reports. In the absence of hearing submissions from the parties in relation to the tender of the condition reports, there was both a denial of procedural fairness and to some extent, there was therefore no evidence to substantiate many of the findings made in [67] and [68] in support of the decision to disallow the tender. 3. Having decided that the issues for consideration concerned an alleged breach of cl 17.2 of the tenancy agreement and issues under s 51(3)(b) of the RTA Act, we are of the view that in disallowing the condition reports, the exercise of the Tribunal's discretion miscarried. The reasons given by the Tribunal to disallow the condition reports at [67] were plainly unjust when the parties, and in particular the appellant, were not afforded the opportunity of being heard in relation to those grounds later relied upon by the Tribunal to disallow the condition reports and to make important findings to disallow that evidence that were not supported by evidence or submissions advanced by either party. 3: Other evidence of the condition of the premises 1. Having regard to our reasons above in relation to question 2, the discretionary error and denial of procedural fairness caused the Tribunal to fail to take all relevant considerations into account relation to the condition of the premises at the start and end of the tenancy, at least in relation to the kitchen. 2. The condition reports, together with other evidence given by the appellant would have been in our view sufficient for the Tribunal to make findings about the condition of the premises at the start and the end of the tenancy. The Tribunal referred to this other evidence at [49], [59], [60], [61] and [79] of its reasons. The transcript (at T 23: 1; 44) makes a reference to photographs showing the kitchen before the fire and at [84] and [85] of its reasons, the Tribunal refers to photographs of the fire damage to the kitchen. The Tribunal made no evaluation of that evidence in terms of making any findings about the condition of the premises at the start and end of the tenancy and it could have quite easily made a finding that the fire damaged kitchen was not subject to "fair wear and tear" (having decided that was the relevant test). 3. Under s 38(6)(a) of the NCAT Act, the Tribunal "is to ensure that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings." This obligation includes an obligation to have regard to material which has been disclosed to the Tribunal (we interpose here, or that is reasonable available and admissible) and which is relevant to the facts in issue, at least where that material is of some significance: Goncalves at [28]; Croghan v Rees [2021] NSWCATAP 328 at [40]. 4. We are of the opinion that there was a failure by the Tribunal to take into account all relevant considerations in determining the condition of the premises at all relevant times, in circumstances where the Tribunal had decided that the appellant's claim was more properly to be considered under s 51(3)(b) rather than s 51(1)(d) of the RT Act. 4: Quantum 1. Having regard to the Tribunal's decision to apply the ATO Guide to calculate damages but without, it appears from our review of the transcript, first hearing from the parties as to its relevance or otherwise, we are satisfied that the Tribunal failed to afford the parties procedural fairness in applying the ATO Guide. Allied with this challenge made by the appellant to the Tribunal's findings on quantum, the appellant has also challenged the Tribunal's approach in discounting her claim for compensation (in part by applying the depreciation guidelines in the ATO Guide). 2. The transcript records that the Tribunal asked Mr Juskey if the appellant carried "depreciation for the kitchen cabinets and the kitchen equipment in her tax or financial affairs", to which the answer was "no": T 23:17. There was no claim or submission made by the appellant and no exchange between the parties and the Tribunal concerning the use of the ATO Guide to calculate damages. In the circumstances, we are satisfied that the appellant was denied procedural fairness by the Tribunal assessing her damages by reference to the ATO Guide, about which the appellant did not rely in her claim for damages or use for the purpose of depreciating kitchen assets in her taxation and financial accounts. Further, it would appear from our review of the transcript that the appellant was not even aware that the Tribunal might rely upon the ATO Guide to assess her claim for damages. Disposition of the Appeal 1. In our opinion, the Tribunal's decision was affected by the considerations we have discussed in relation to each of the four questions of law that we have identified as arising in this appeal. 2. We have not heard from the parties in relation to matters relevant to determining issues arising under s 51(1)(d) of the RT Act or quantum. In the circumstances, we have decided that the appropriate course is to remit the proceedings to a differently constituted Tribunal for re-determination on all matters including quantum. Orders 1. Appeal allowed. 2. The proceedings are remitted to a differently constituted Tribunal for re-determination. 3. The Tribunal is to make directions which give the parties the opportunity to serve such evidence as they may wish to rely upon in the re-determination of these proceedings. ********** 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: 08 July 2022