Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Zhang v Barry [2023] NSWCATAP 225 Hearing dates: 2 August 2023 Date of orders: 14 August 2023 Decision date: 14 August 2023 Jurisdiction: Appeal Panel Before: P Durack, Senior Member D Ziegler, Senior Member Decision: 1. Time to lodge the appeal is extended to 5 June 2023. 2. The appeal is allowed. 3. Orders 1 and 2 made on 4 May 2023 in RT 23/04888 are set aside. 4. The matter is remitted to the Consumer and Commercial Division of the Tribunal for redetermination, with leave for the parties to adduce such evidence as the Tribunal thinks fit. Catchwords: APPEAL – Whether appellant notified of the hearing – whether a denial of procedural fairness – whether rehearing should be ordered – whether to extend time for lodgement of the appeal. Legislation Cited: Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Electronic Transactions Act 2000 Residential Tenancies Act 2010 Cases Cited: Italiano v Carbone [2005] NSWCA 177 Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 Stead v State Government Insurance Commission (1986) 161 CLR 141 Sullivan v Department of Transport [1978] FCA 48; (1978) 20 ALR 323 at 343) Category: Principal judgment Parties: XiaoLi Zhang (Appellant) Malcolm Barry (First Respondent) Natasha Byers (Second Respondent) Representation: J Zhao (Agent) (Appellant) First Respondent (Self-represented) Second Respondent (Self-represented) File Number(s): 2023/00179292 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and commercial division Citation: nil Date of Decision: 04 May 2023 Before: K George, General Member File Number(s): RT 23/04888 REASONS FOR DECISION 1. This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal involving a claim made under the Residential Tenancies Act 2010 (the RT Act). 2. The application to the Tribunal was brought by the tenants, who are the respondents in this appeal, against the landlord, who is the appellant in this appeal. 3. In the Tribunal proceedings the tenants claimed the landlord had breached the residential tenancy agreement in several respects. They sought a rent reduction of $200 per week, plus compensation of $15000. The Tribunal found partially in favour of the tenants and ordered that the landlord pay compensation of $4200 comprising: 1. $2000 in respect of faulty electricity and air conditioning; 2. $500 in respect of a faulty smoke alarm; 3. $1000 in respect of a faulty gate and the lack of a back fence separating the premises from a granny flat behind the premises; and 4. $700 in respect of items belonging to the landlord which were stored on the premises during the tenancy. 1. The balance of the tenants' claim was dismissed. 2. The landlord now appeals that decision. The basis for the appeal is that the landlord says she did not receive notice of the hearing and was denied a reasonable opportunity to be heard and defend the tenants' claim. 3. For the reasons set out below, we have decided to set aside the decision of the Tribunal and remit the matter to the Tribunal for redetermination. Background 1. The following background facts have been determined by us from the parties' respective documents and oral submissions and also from the Tribunal file for the proceedings below (RT23/04888) (the tenants' proceedings), and from the Tribunal file for related proceedings brought by the landlord (RT23/06500) (the landlord's proceedings). 2. In April 2022 the parties entered into a written residential tenancy agreement (the tenancy agreement) in respect of premises in South-West Sydney in New South Wales (the premises). The tenancy agreement commenced on 9 May 2022 and was for a fixed term of 12 months. 3. The rent payable under the tenancy agreement was $1100 per week. 4. The tenancy agreement came to an end prior to the expiry of the fixed term when the tenants gave up possession of the premises on or about 24 February 2023. 5. On 1 February 2023 the tenants lodged an online application form with the Tribunal registry initiating the tenants' proceedings (the tenants' application form). 6. On or about 2 February 2023 the Tribunal's registry issued a "notice of conciliation and hearing (group list) - in person" to both parties notifying them that a hearing in relation to the tenants' proceedings would be held on 24 February 2023 in the Tribunal's Sydney registry. The notice to the landlord was addressed to the landlord's then managing agent (ACSG Real Estate) at its street address. This is the address for service which had been provided by the tenants on the tenants' application form and is the same as the "address for service of notices" specified for the landlord in the tenancy agreement. 7. On 10 February 2023 the landlord's former managing agent commenced the landlord's proceedings against the tenant. The landlord sought various orders including an order for termination of the tenancy agreement. Those proceedings are not the subject of this appeal but are relevant to the timeline of events leading to this appeal. 8. On 24 February 2023 a conciliation and group list hearing in the tenants' proceedings was held. The landlord's former agent Ms Jenny Zhu attended the hearing on behalf of the landlord. 9. At that hearing the Tribunal made directions for the parties to exchange evidence in preparation for the hearing. The tenant's evidence was due on 10 March 2023 tenant and the landlord's evidence was due on 24 March 2023. 10. On 27 February 2023 the Tribunal issued notices of hearing to the parties notifying them that the final hearing of the tenants' proceedings would occur on 4 May 2023. For reasons which are not clear from the documents before us, the notice of hearing addressed to the landlord was sent by email rather than by post. It was sent to the email address for the landlord's then managing agent which was specified by the tenants on the application form. However, this is different to the email address for the landlord's agent specified in the tenancy agreement. In this regard the tenancy agreement contains two different email addresses for the landlord. The first is an email address specified on page 1 of the tenancy agreement under the heading "landlord's telephone number or other contact details". The second is an email address specified on page 4 of the agreement under the heading "Giving notices and other documents electronically". Next to the words "Does the landlord give express consent to the electronic service of notices and documents?" there is a box marked "Yes" beneath which a further email address has been provided in a box marked "Specify email address to be used for the purpose of serving notices and documents". 11. Some time between 8 March 2023 and 18 April 2023 the landlord appointed a new agent – Elders Ramsgate Real Estate - to manage the premises. 12. The tenants lodged documents in the tenants' proceedings on 17 March 2023. We do not know whether the tenants provided a copy of those documents to the landlord (whether via her current or former agent) as was required by the procedural directions made by the Tribunal on 24 February. 13. No documents in the tenants' proceedings were lodged by or on behalf of the landlord. 14. On 29 March 2023 the Tribunal issued a notice to the parties informing them that a request by the tenants for an urgent hearing of the tenants' proceedings had been refused. The landlord's copy of that notice was emailed to the same email address for the landlord's former managing agent as had been used for the notice of hearing. 15. On 18 April 2023 a conciliation and group list hearing for the landlord's proceedings occurred in the Tribunal's Sydney registry. The landlord was represented at that hearing by the new managing agent, Ms Joanne Zhao of Elders Ramsgate Real Estate. 16. Following that hearing the Tribunal issued a notice of order setting out the procedural directions made by the Tribunal at the hearing. The landlord's copy was addressed to the email address for the landlord's former managing agent. 17. Between 21 April and 3 May 2023 Ms Zhao and the tenants exchanged emails about the landlord's proceedings. 18. On 21 April 2023 one of the tenants, Mr Barry, sent an email to Ms Zhao attaching a copy of correspondence from the Tribunal regarding the landlord's proceedings. Ms Zhao responded by email on 23 April 2023 stating "Thank you for sending this through. Our agency hasn't received any email from NCAT Tribunal. I'll contact the NCAT next week and ask them to make sure to update our agency details from their system". 19. Ms Zhao says she did indeed contact the Tribunal to request that the landlord's contact details be updated. She provided nothing to substantiate this. However, the Tribunal file reveals that on 3 May 2023 the Tribunal issued a notice of hearing to the parties in relation to the landlords' proceedings. The notice of hearing to the landlord was addressed to Ms Zhao's email address. As best as we can tell from the materials before us, that is the first time the Tribunal issued a document to the new managing agent. 20. None of the emails exchanged by the parties between 21 April 2023 and 3 May 2023 made any reference to the tenants' proceedings. 21. The final hearing of the tenants' proceedings was held on 4 May 2023. Neither the landlord nor the landlord's agent attended the hearing. The hearing was held ex parte. The Tribunal said in its written reasons: The landlord did not appear at the hearing. A copy of the Notice of Hearing emailed to the agent's preferred address appears on the Tribunal's file. It has not been returned to the Tribunal. I am satisfied that the landlord has been served with the Notice of Hearing. There is no explanation for the landlord's failure to attend the hearing. Having regard to the amount claimed and the likelihood the tenants would be prejudiced if the hearing does not proceed, and in the interests of the just, quick and cheap resolution of the dispute, the Tribunal determined to proceed with the hearing in the absence of the landlord. 1. The Tribunal issued copies of the notice of order in the tenants' proceedings to both parties on the day of the hearing. The landlord's copy of the notice of order was addressed to Ms Zhao's email address. However, Ms Zhao says she did not receive that email. 2. On 2 June 2023 the hearing of the landlord's proceedings took place and the Tribunal made an order in relation to release of the rental bond. 3. On 3 June 2023 the tenants sent a copy of the Tribunal's notice of order in the tenants' proceedings to Ms Zhao's email address. 4. This appeal was lodged two days later on 5 June 2023. Scope and nature of internal appeals 1. To succeed in an appeal, the appellant must demonstrate either an error on a question of law, which, except in an appeal from an interlocutory decision, may be argued as of right; or that permission (that is, "leave") to appeal should be granted to bring the appeal: Civil and Administrative Tribunal Act 2013 (NCAT Act), s 80(2). 2. The only ground of appeal raised by the landlord is that the landlord was denied procedural fairness because she was not made aware of the tenants' proceedings and therefore did not have a reasonable opportunity to present her case. 3. Whether there was a denial of procedural fairness is a question of law: Italiano v Carbone [2005] NSWCA 177. Accordingly leave to appeal is not required. 4. There is an issue as to whether the notice of appeal was lodged on time and whether the landlord requires an extension of time for lodging the appeal. We will deal with this issue later in this decision. Denial of procedural fairness 1. The landlord says she was denied procedural fairness because she did not receive notice of the hearing. 2. She says that had she been on notice of the hearing she would have presented evidence and arguments refuting the tenants' claims for compensation. 3. The Tribunal has a duty to conduct its hearings in a procedurally fair manner and to take such measures that are reasonably practical to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings (s38(2) and (5)(c) of the NCAT Act). 4. It is uncontroversial that procedural fairness requires that both parties have a reasonable opportunity to present their case (Minister for Immigration and Multicultural Affairs v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 at [40]; Sullivan v Department of Transport [1978] FCA 48; (1978) 20 ALR 323 at 343). 5. The registry serves notices of hearing in the Tribunal's Consumer and Commercial Division. 6. Rule 13(2) of the Civil and Administrative Tribunal Rules 2014 (the Rules) relevantly provides: (2) Means for service or giving of notices and documents A notice or document may be served on or given to a person or body— (a) by means of personal service, or (b) by posting a copy of the notice or document, addressed to the person or body— (i) to the person's or body's address for service, or (ii) if the person or body does not have an address for service, to the person's or body's business or residential address (or the business or residential address last known to the person or body serving the notice or document), or (c) by leaving a copy of the notice or document, addressed to the person or body— (i) at the person's or body's address for service, or (ii) if the person does not have an address for service, at the person's or body's business or residential address (or the business or residential address last known to the person or body serving the notice or document), or (d) in the case of a Government Department—by leaving a copy of the notice or document at, or by posting the notice or document to, any office of that Department addressed to the head of the Government Department, or (e) in the case of a person or body whose address for service includes a DX address in New South Wales—by leaving a copy of the notice or document, addressed to the person or body, in the DX box at that address or in another DX box for transmission to that DX box, or (f) in the case of a person or body that has consented to service by means of a fax sent to a fax number specified by the person or body—by faxing a copy of the notice or document, addressed to the person or body, to that fax number, or (g) in the case of a person or body that has consented to electronic service by means of an email address or mobile phone number specified by the person or body—by transmitting the notice or document in an electronic format, addressed to the person or body, to that address or number, or (h) in the case of service on a corporation—by serving a copy of the notice or document on the corporation in any manner in which service of such a notice or document may, by law, be served on the corporation, or (i) in such other manner as the Tribunal or a registrar may direct in a particular case. 1. In the Consumer and Commercial Division of the Tribunal, the Tribunal may proceed with a hearing to determine a matter in the absence of a party where: 1. it is satisfied that a notice of hearing has been duly served on the absent party: Rule 35(2)(b) of the Rules; or 2. being satisfied that service of a notice of hearing on the absent party has been duly attempted, or having given directions under rule 15 for substituted service, the Tribunal considers that justice requires that the matter be dealt with in the absence of the party: Rule 35(2)(b). 1. In this instance the notice of hearing was sent by email to an email address for the landlord's former managing agent. The email address used was not one of the email addresses specified in the tenancy agreement. More importantly, there is no evidence that at the time of issue of the notice of hearing the landlord had consented to service by email in the tenants' proceedings as required by Rule 13(2)(g), or that the Tribunal had directed that the landlord be served by email to that email address pursuant to Rule 13(2)(i). In such circumstances, we conclude that the landlord was not served with a notice of hearing in accordance with Rule 13. 2. Moreover, the materials before us support Ms Zhao's assertion that her agency, which was representing the landlord at the time of the hearing, did not know about the hearing and indeed had no knowledge at all of the tenants' proceedings. In this regard: 1. It is not in dispute that there was a change of managing agent shortly before the hearing of the tenants' proceedings. 2. In an email to the tenant on 23 April 2023 Ms Zhao informed the tenants that she had received nothing from NCAT. This is corroborated by the Tribunal file for the tenants' proceedings which contains no correspondence from the Tribunal to Ms Zhao's email address until after the hearing on 4 May 2023, and by the Tribunal files for the landlord's proceedings which contains no correspondence to Ms Zhao's email address until 3 May 2023. This suggests that Ms Zhao did in fact contact the Tribunal after her 23 April email exchange with the tenants, and that this is why subsequent correspondence from the Tribunal was sent to her email address and not that of the former agent. 3. In the emails between the parties at around this time the parties discussed the landlord's proceedings. However, neither party mentioned the tenants' proceedings. Indeed, even as late as 3 May 2023, the parties exchanged emails about the documents due in the landlord's proceedings but made no mention of the landlord's documents due in the tenants' proceedings, which by that time were well overdue. Moreover, no mention was made of the fact that the hearing of the tenants' proceedings was the following day. 4. The fact that Ms Zhao attended both hearings in the landlord's proceedings and took steps to comply with the procedural directions in those proceedings gives credibility to her claim that she did not attend the hearing of the tenants' proceedings because she did not know about it. 1. All of these factors satisfy us that the landlord, who was represented by Ms Zhao's agency at the relevant time, was not aware of the hearing. 2. We would add that it is curious that the tenants, who were on notice that the landlord's new agent was having issues receiving documents from the Tribunal, and who had received no documents from the landlord in the tenants' proceedings, did not themselves notify Ms Zhao of the tenants' proceedings or of the hearing date. Nor did they take any steps regarding the landlord's non-compliance with the Tribunal's procedural directions in the tenants' proceedings. Had they done any of these things, or informed the Tribunal on the day of the hearing of these matters, this appeal may well have been avoided. 3. We conclude that the failure to serve the landlord's agent with a notice of the hearing in accordance with cl 13 of the Rules, in circumstances where the new agent was not in fact aware of the hearing or of the proceedings at all, means that the landlord was not given a reasonable opportunity to be heard in the proceedings. 4. However, not every departure from the requirements of procedural fairness will entitle the aggrieved party to a new hearing. For example, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would be futile to order a new trial: Stead v State Government Insurance Commission (1986) 161 CLR 141 (Stead) at [10]. 5. Where, however, the denial of natural justice affects the entitlement of a party to make submissions on an issue of fact, it is more difficult for an appeal body to conclude that compliance with the requirements of natural justice could have made no difference: Stead at [11] 6. In this case we are satisfied that had the landlord's agent attended the hearing, she would have presented evidence seeking to refute factual matters asserted by the tenants. In this regard she says she would have presented evidence that: 1. the landlord attended to repair issues promptly; 2. the tenants' used the premises for conducting a jet ski business contrary to the terms of the tenancy agreement, and that this overloaded the electrical circuit resulting in the electrical issues complained of by the tenants; 3. there was an existing glass fence between the main house and the granny flat; and 4. the items left behind by the landlord were wardrobes and other fixtures which were part of the premises and could not be moved. 1. It is not necessary for the Appeal Panel to assess the merits of the landlord's contentions in relation to these matters. What is relevant is that the landlord's case in relation to these matters was not put to the Tribunal and we cannot conclude on the materials before us that the landlord's inability to present this evidence made no difference to the outcome of the case. 2. Accordingly, we are satisfied that there has been a denial of procedural fairness which justifies the matter being reheard. Extension of time for commencing the appeal 1. Subrule 25(4) of the Rules is as follows: (4) Unless the Tribunal grants an extension under section 41 of the Act, an external or internal appeal must be lodged— (a) in the case where the enabling legislation specifies the period within which the appeal is to be made—within the period specified, or (b) in the case of an internal appeal against a decision made in residential proceedings—within 14 days from the day on which the appellant was notified of the decision or given reasons for the decision (whichever is the later), or (c) in any other case—within 28 days from the day on which the appellant was notified of the decision to be appealed or given reasons for the decision (whichever is the later). 1. These are residential proceedings and therefore the appeal was required to be lodged within 14 days from the day on which the landlord was notified of the decision. The notice of appeal states that the landlord was first notified of the decision when a copy was emailed to Ms Zhao by the tenants on 3 June 2023. If that is correct, then the notice of appeal, lodged on 5 June 2023 was within time. However, as noted above, the Tribunal file reflects that a copy of the notice of order (which included reasons for decision) was emailed to Ms Zhao on the day of the hearing. Ms Zhao confirmed at the hearing of the appeal that the email address used for notification of the decision was the email address which she provided to the Tribunal registry for service of documents. If she was notified of the decision on the day that email was issued, then the landlord will require an extension of time to appeal. 2. Unfortunately, the material provided by Ms Zhao as to these matters is unsatisfactory. She has provided no evidence (for example in the form of a sworn statement) either that the Tribunal email of 4 May attaching the notice of order did not reach her email address, or as to when that she first became aware of the decision. 3. In the absence of any evidence in relation to this important point it is not necessary to delve into the service provisions of the Rules or their interaction with the Electronic Transactions Act 2000. In the circumstances, we are not able to be satisfied as to when the landlord was notified of the decision. As such, the landlord requires an extension of time to appeal. Indeed, this appears to have been accepted by the landlord as her notice of appeal states that the landlord seeks an extension of time for lodging the appeal. 4. The principles governing an extension of time to appeal under s 41 of the NCAT Act are well established: see Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 (Jackson) from [18]-[22]. In summary 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, that is usually whether the appellant has a fairly arguable case; and 4. The extent of any prejudice to the respondent (to the appeal). 1. As to the length of the delay, as we have explained above, there is no satisfactory evidence as to when or how the landlord (or her agent) was notified of the decision. However, assuming the landlord was notified of the decision on the day it was issued by the Tribunal, the appeal was lodged at most 18 days out of time. This is not insignificant in circumstances where the period for lodging the appeal was only 14 days. However, the tenants have not identified any prejudice which they are likely to suffer as a result of the two and a half week delay. 2. With regard to the reason for the delay, as explained, we are not satisfied that the landlord has provided an adequate explanation. In such circumstances, as was stated in Jackson: It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59]. 1. For the reasons explained above, we are satisfied that the appeal has substantial merit and is more than fairly arguable. 2. Accordingly, we have decided to extend time for lodging the appeal. Conclusion and orders 1. For these reasons we make the following orders: 1. Time to lodge the appeal is extended to 5 June 2023. 2. The appeal is allowed. 3. Orders 1 and 2 made on 4 May 2023 in RT 23/04888 are set aside. 4. The matter is remitted to the Consumer and Commercial Division of the Tribunal for redetermination, with leave for the parties to adduce such evidence as the Tribunal thinks fit. 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: 14 August 2023