Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Matthew Hanney and Belinda Smiley v ; Lachlan McCabe and Amanda Toshack [2014] NSWCATCD 239 Hearing dates: 1 August 2014 and 24 September 2014 Decision date: 09 December 2014 Jurisdiction: Consumer and Commercial Division Before: G A Kinsey, General Member Decision: Application RT 14/28415 The landlords Lachlan McCabe and Amanda Toshack are to pay the sum of $2,195.00 to the tenants Matthew Hanney and Belinda Smiley on or before 19 December 2014 Application RT14/37816 The landlords Lachlan McCabe and Amanda Toshack are to pay the sum of $777.99 to the tenants Matthew Hanney and Belinda Smiley on or before 19 December 2014 Note: The net result is that the landlords are to pay the tenants the sum of $2,972.99 in respect of both applications Legislation Cited: Residential Tenancies Act 2010 Residential Tenancies Regulation 2010 Civil and Administrative Tribunal Act 2010 Cases Cited: Northern Sandblasting Pty Ltd v Harris (1997) 188CLR 313 Jones v Bartlett (2000) HCA56; (2000) 205 CLR 166 Partridge v Maidi Pty Ltd (Tenancy) [2013] NSW CTTT 390 Shrestha v Crandell Pty Ltd [2010] NSW CTTT 240 De Chazol v Scala [2010] NSW CTTT 135 Category: Principal judgment Parties: Matthew Hanney and Belinda Smiley (tenants) Lachlan McCabe and Amanda Toshack (landlords) File Number(s): RT 14/28415 and RT 14/37816 Publication restriction: Unrestricted reasons for decision Application RT 14/28415 1. On 29 May 2014 the applicants filed an application against the respondents in which they sought the following orders under the Residential Tenancies Act 2010 ("the RTA"): 1. An order under section 45 reducing the rent payable where the premises are uninhabitable; 2. An order under section 65(1)(a) that the landlord carry out repairs; 3. An order under section 65(1)(b) that the landlord reimburse the tenant for repairs; 4. An order under section 109 that they were entitled to give immediate notice to vacate on the grounds that the premises were uninhabitable and to terminate the tenancy; 5. An order under section 187(1)(o) for compensation. I will refer to this application RT 14/28415 as "the First Application". 1. The applicants claimed on the First Application that they were entitled to compensation of $10,000.00. Application RT 14/37816 1. In an application filed in the Tribunal on 24 July 2014 the applicants claimed an amount of $1,660.67 from the rental bond. I will refer to this application RT 14/37816 as "the Second Application". Jurisdiction 1. The dispute involved a residential tenancy agreement entered into by the parties on 19 November 2013. 2. The premises are "residential premises" within the meaning of section 3 of the RTA. The Tribunal has jurisdiction to hear and determine the application. Background 1. The parties entered into the standard form residential tenancy agreement on 19 November 2013 for premises at XXX Virginius Street, Padstow ("the Agreement'). 2. The tenancy was for a period of 6 months commencing on 19 November 2013 and ending on 20 May 2014. The rent was $535.00 per week. 3. An ingoing inspection was carried out on 18 November 2013. The tenants made various handwritten comments about the condition of the premises on the report, signed it on 25 November 2013 and returned the report to the agent. 4. The applicants vacated the premises on or about 18 May 2014 but did not return the keys to the agent until 22 June 2014. 5. On the First Application, the Tribunal made procedural directions on 11 June 2014 for the filing and service of documents. Both parties complied with the directions by filing and serving folders of documents. 6. In respect of the Second Application, although no procedural directions were made, the parties agreed that the two applications should be heard together as the evidence given by the parties was common to both matters. 7. The Tribunal heard the First Application and Second Application together with evidence in one being evidence in the other. 8. Prior to the commencement of the hearings on 1 August 2014 and 24 September 2014 the Tribunal encouraged the parties to conciliate and reach an agreement pursuant to the statutory obligations imposed by section 37 of the Civil and Administrative Tribunal Act 2013. Although the parties did not resolve their dispute in its entirety, the applicants conceded the amounts of $182.10 for outstanding water usage and $500.58 for electricity usage. The Applicants' Evidence 1. The applicants filed and served a bundle of documents which included the following: 1. Statement of Matthew Hanney providing background and commentary on each head of claim; 2. Statement quantifying compensation sought; 3. Ingoing Inspection Report; 4. Medical Certificate from Dr Paul Lai dated 22 May 2014; 5. Photographs; 6. Emails and text messages between applicants and real estate agent; 7. General correspondence; 8. Report from Pest Free dated 2 June 2014; 9. Impact Statement. 1. This evidence was supplemented by oral evidence Matthew Hanney at the hearing. 2. Mr Hanney told the Tribunal that there were many problems with the property which were evident from the beginning of the tenancy. 3. There was mould in the vanity which prevented the bathroom from being fully utilised. He claimed to have spoken to the agent on at least 60 occasions and sent emails. In an email on 10 December 2013, Belinda Smiley told the agent: "We are not utilising the bathroom for its normal functions – currently we do not wash or brush our teeth in the bathroom, we keep what we would in a bathroom cabinet in two containers out in the hall and I really need this health concern addressed." 1. The applicants alleged that the vanity was unusable for 17 weeks and sought a rent reduction of $100.00 per week. The total amount claimed was $1,700.00 for the period 20 December 2013 to 4 March 2014. 2. The next claim made by the tenants was in respect of the dishwasher. Mr. Hanney stated the tenants first reported that the dishwasher was not working on 10 December 2013 and was not repaired until 23 January 2014. He claimed that the dishwasher was not working on three separate occasions during the tenancy. 3. The applicants claimed $20.00 per week for a period of 5 months. 4. The tenants' third claim concerned the blinds in the premises which "were broken, unusable, did not provide privacy, fell on us and created large hazards". 5. The problems with the blinds are detailed in the applicants' written submissions and may be summarised as not operating properly, not secured correctly and generally in need of maintenance. 6. In an email to the agent on 10 December 2013, Belinda Smiley wrote: "I'm sure you can understand, we do however require all items to be in working order as per laws. We do not require the blinds to be in working order, 3 verticals need to be fixed with adjusting rods to adjust or block out light. Happy for the two bedroom ones to just be fixed as these are desperately required." 1. The applicants claimed compensation of $25.00 a week per blind for 28 weeks for 3 blinds. The amount claimed is $2,100.00. 2. The applicants allege that the rented premises were infested with bird lice. According to Mr Hanney's evidence, he reported the problem on 18 May 2014 although he had previously mentioned to the agent that there were issues with fleas. The tenants arranged for the house to be gassed to remove the lice. 3. The applicants' written submissions outline the effect the bird lice had on their general health and the impact on their use and enjoyment of the premises. 4. The applicants claim $1,200.00 for the cost of the initial treatment and follow up. 5. In addition, the applicants claimed an additional $2,140.00 "plus the week Belinda and the children were advised not to reside in the premises till the gas was fixed add $535.00". 6. The applicants claimed moving costs of $2,000.00 and 14 days rent free to organise the move from the rented premises. They submitted that the premises were uninhabitable from 18 May 2014. 7. The applicants' final claim was stated as follows: "The gas leak we had to endure for 21 weeks which caused documented and recorded heart and breathing problems in adults and on a newborn infant. We believe $100.00 per week at 21 weeks totalling $2,100.00" 1. At the hearing on 25 September 2014, the applicants conceded the water bill of $182.10 and the electricity bill of $500.58 and agreed to pay those amounts. 2. The applicants disputed the landlords' claim for rubbish removal and 5 days outstanding rent. The applicants alleged that they had booked a council clean-up to remove the rubbish. Respondents' Evidence 1. The respondents filed and served a bundle of documents as follows: 1. Reply to Tenant's Application dated 27 May 2014 with specific reference to each head of the tenant's claim; 2. Quotations and invoices for repairs to various items; 3. Copies of email correspondence; 4. Diary notes; 5. Photographs of affected areas of premises; 6. Pest reports; 7. Response to tenant's claim for compensation including rent free period and reimbursement of pest treatment costs; 8. Ingoing inspection report and photographs. 1. Oral submissions were made by the agent on behalf of the applicants at the hearing. 2. The respondent argued that in respect of the bathroom vanity, the landlord had taken reasonable steps to arrange for repairs. It was acknowledged that the issue was first reported on 10 December 2013 and quotes were obtained within a few days to repair and replace the vanity and exhaust fan in the bathroom. The work was not completed until about 12 March 2014. 3. As regards the dishwasher, the respondents submitted it was an older model and parts were difficult to obtain. From the oral evidence of Michelle Marfutenko, it is undisputed that the dishwasher broke down on 3 occasions during the tenancy. 4. The respondents stated that steps were taken during the tenancy to obtain quotes to replace the blinds. The respondent obtained quotes from Absolute Blind Services on 20 December 2013 and 14 January 2014. 5. The landlords wanted to obtain 2 further quotes but access to the property was denied by the tenants. 6. In the respondents' written submission, the landlords dispute the tenants' claims about the condition of the blinds and state that "the blinds were in working order and securely fixed to the wall." 7. The respondents disputed the applicants' evidence regarding the presence of bird lice and the date on which they vacated the premises. 8. The respondents submitted that the bird lice problem was first reported on 18 May 2014. Michelle Marfutenko sent an email to Belinda Smiley on 3 June 2014 in which she wrote: "I have been trying to contact you over the past several days but have had no luck. The owners are wanting to get this 'hole' fixed so please call me back ASAP." 1. A series of emails and diary notes attached to the respondents' written submission show the steps taken by the landlords to address the problem. 2. The respondents denied any other claims by the applicants for compensation and disputed that the premises were uninhabitable. Relevant Legislation 1. Section 63 of the RTA sets out the landlords' general obligation to maintain and repair residential premises. 2. Section 63 provides: "(1) A landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. (2) A landlord's obligation to provide and maintain the residential premises in a reasonable state of repair applies even though the tenant had notice of the state of disrepair before entering into occupation of the residential premises. (3) A landlord is not in breach of the obligation to provide and maintain the residential premises in a reasonable state of repair if the state of disrepair is caused by the tenant's breach of this Part. (4) This section is a term of every residential tenancy agreement." 1. Section 64 of the RTA provides that a landlord must, not later than 14 days after being given notice from the tenant, reimburse the tenant for the reasonable costs of urgent repairs. Section 62 defines what repairs are classified as "urgent repairs". 2. The remedies available to a tenant where a landlord fails to carry out repairs are set out in section 65 of the RTA. Relevantly, section 65 provides as follows: "(1) Orders for which tenant may apply. The Tribunal may, on application by a tenant, make any of the following orders: (a) an order that the landlord carry out specified repairs, (b) an order that the landlord reimburse the tenant an amount for urgent repairs carried out by the tenant. (2) Orders for repairs. The Tribunal may make an order that the landlord carry out specified repairs only if it determines that the landlord has breached the obligation under this Act to maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises. (3) The Tribunal must not determine that a landlord has breached the obligation unless it is satisfied that: (a) the landlord had notice of the need for the repair or ought reasonably to have known of the need for the repair, and (b) the landlord failed to act with reasonable diligence to have the repair carried out. (4) Reimbursement for urgent repairs. The Tribunal may order that the landlord reimburse the tenant an amount for urgent repairs carried out by the tenant if it is satisfied that the landlord has failed to reimburse the tenant for the costs in accordance with this Division." 1. If the Tribunal is to make a determination that the landlord has breached his obligation to maintain the residential premises in a reasonable state of repair, regard must be had to the age, rent payable and prospective life of the premises and the Tribunal must be satisfied that the landlord had notice of the need for the repair or ought reasonably to have known of the need for repair and failed to act with reasonable diligence to have the repair carried out. 2. In Northern Sandblasting Pty Ltd v Harris [1997] 188 CLR 313, Gummow J stated at 370-371: "In general, there is no breach of an express covenant by a landlord to keep the demised premises in repair unless two criteria have been met. First the landlord must have information as to the existence of the defect such as would put a reasonable landlord on inquiry as to whether works of repair are needed and, secondly, thereafter the landlord must have failed to carry out the necessary works with reasonable expedition." 1. This obligation must be carried out in a reasonable time and is not excused by conduct or delay caused by tradesmen or suppliers, see Shrestha v Crandell Pty Ltd [2010] NSW CTTT 240; De Chazol v Scala [2010] NSW CTTT 135. 2. The applicants argued that the premises were uninhabitable and submitted that they were entitled to give a termination notice to end the residential tenancy pursuant to section 109 of the RTA. 3. Section 109 of the RTA provides: (1) This section applies if residential premises under a residential tenancy agreement are, otherwise than as a result of a breach of an agreement, destroyed or become wholly or partly uninhabitable or cease to be lawfully usable as a residence or are appropriated or acquired by any authority by compulsory process. (2) The landlord or the tenant may give the other party a termination notice. (3) The termination notice may end the residential tenancy agreement on the date that the notice is given. (4) The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement. (5) The Tribunal may, on application by a landlord or tenant, make a termination order if it is satisfied that a termination notice was given in accordance with this section and that this (6) section applies to the residential premises. 1. Section 109 applies if residential premises under a residential tenancy agreement "become wholly or partly uninhabitable or cease to be lawfully usable as a residence" otherwise than as a result of a breach of the agreement. 2. A termination notice under section 109 may be given by either party and that the termination notice may end the residential tenancy agreement on the date that the notice is given. 3. The landlord must provide premises "in a reasonable state of cleanliness and fit for habitation by the tenant" (section 52(1) of the RTA). 4. The landlord must also comply with statutory obligations relating to health and safety (section 52(3) of the RTA). 5. The obligations under section 52 are implied terms in every residential tenancy agreement (section 52(4) of the RTA). 6. In Partridge v Maidi Pty Ltd (Tenancy) [2013] NSW CTTT 390, the Tribunal considered the obligations under section 52 of the RTA and stated: 20. "The premises must be fit for habitation at the commencement of the tenancy : Proudfoot v Hart (1890) 25 QBD 42 ; which held this meant: "... a state as to repair that the premises might be used and dwelt in not only with safety, but with reasonable comfort, by the class of persons by whom and for the sort of purpose for which, they were to be occupied." 21. This 'imports some reference to what we call humanity or humaneness': Summers v Salford Corporation [1943] AC 283 at 292; and the state of the premises does not represent a threat to the life, limb or health of the tenant: Morgan v Liverpool Corporation [1927] 2 KB 131 at 145. 22. In Gray v Queensland Housing Commission [2004] QSC 276 and Hampel v South Australian Housing Trust [2007] SADC 64 courts concluded that premises are not fit for habitation if 'the state of repair is such that injury is to be expected, or will naturally occur, from the ordinary use of the premises they cannot be regarded as fit for human habitation'. 23. The landlord's obligation is one of strict liability and it does not matter that it was not aware of the ant infestation, the ingress of water and the resultant mould. 1. The obligations imposed by sections 52, 63 and 64 are terms of every residential tenancy agreement. 2. Section 190 of the RTA provides: "(1) A landlord or a tenant may apply to the Tribunal for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the regulations after the landlord or tenant becomes aware of the breach or within such other period as may be prescribed by the regulations. (2) An application may be made: (a) during or after the end of a residential tenancy agreement, and (b) whether or not a termination notice has been given or a termination order made. (3) A landlord's agent may make an application on behalf of a landlord." 1. The prescribed period in which an application must be made to the Tribunal is 3 months after the applicant becomes aware of the breach. 2. Regulation 22(9) of the Residential Tenancies Regulation 2010 provides: "(9) For the purposes of section 190 (1) of the Act, the prescribed period for making an application for an order in relation to a breach of a residential tenancy agreement or proposed agreement is within 3 months after the applicant becomes aware of the breach. 1. The orders which the Tribunal may make in any proceedings under the RTA are set out in section 187 and include orders for the payment of an amount of money or compensation. 2. In assessing damages, the Tribunal must take into account the duty of the tenants to mitigate their loss. The tenants must take reasonable steps to mitigate any loss they may suffer. Consideration 1. The applicants seek the payment of substantial compensation under the First Application for the landlord's alleged failure to provide and maintain the residential premises in a reasonable state of repair contrary to clauses 18.1 and 18.3 of the Agreement. 2. The applicants claim compensation in respect of the bathroom, vanity, the dishwasher and the blinds. 3. The threshold question is whether these applications for compensation were made within time. 4. The Tribunal finds on the evidence that the applicants emailed the respondents' agent on 10 December 2013 and requested repairs to the dishwasher, blinds and vanity. 5. I find that 10 December 2013 was the date on which the applicants first became aware of the breach of the Agreement. 6. The First Application was received in the Tribunal on 29 May 2014 which was more than 3 months after the applicants became aware of the breach of the agreement. Accordingly, those parts of the application relating to compensation for failure to repair the dishwasher, blinds and vanity in breach of the residential tenancy agreement were out of time. 7. The next claim for compensation concerns the bird lice. I find on the evidence that the presence of bird lice was first reported on 18 May 2014 in a text message to Michelle Marfutenko. 8. Whilst the evidence suggests that the infestation may have been present for some time, the Tribunal does not find that the landlord has breached the obligations imposed by sections 52 and 63 of the RTA. 9. There is no evidence before the Tribunal which suggests that at the commencement of the tenancy, there was a pest problem which required treatment. The tenancy agreement was due to end on 20 May 2014. The bird lice issue was reported on 18 May 2014, 2 days before the end of the agreement. 10. The applicants claim that in April, they were bitten and broke out in rashes. They complained of itchiness. However, there is no evidence that prior to 18 May 2014; the problem was raised with the agent. 11. Relying on the principles in Northern Sandblasting Pty Ltd v Harris (1997) HCA 39, the Tribunal finds that there was no breach of the covenant in the residential tenancy agreement to keep the premises in a reasonable state of repair. The Tribunal is satisfied that the agent was advised of the problem on 18 May 2014 and took steps to address the issue with reasonable expedition. 12. The tenants vacated the premises on 18 May 2014. The keys were returned to the agent on 22 June 2014. The Tribunal finds that the tenants did not reside in the premises form 18 May to 22 June 2014. 13. The applicants claim compensation of $2,100.00 for a gas leak which was alleged to have been present for 21 weeks. The evidence presented by the applicants in support of their claim does not establish a breach of the residential tenancy agreement by the respondents. 14. The Tribunal prefers the respondents' evidence that the gas smell was first reported on 12 April 2014. The tax invoices from Mark Smith Plumbing and Matic Services show that the agent engaged tradesmen to attend the premises and report on the problem. Given the Easter holidays and ANZAC long weekend, the Tribunal finds that the landlord acted with reasonable expedition to have repairs done. 15. Although the respondents state they vacated the premises on 11 May 2014, the Tribunal rejects that evidence. 16. The Tribunal prefers the evidence of the respondents on this point and finds that the applicants vacated the premises on 18 May 2014. The text message from Belinda Smiley confirms that the applicants vacated the premises on that date. 17. The applicants have sought an order that they receive compensation equivalent to 14 days rent free because the premises were uninhabitable. The Tribunal calculates the amount claimed to be $1,070.00 and finds that amount of compensation to be fair and reasonable. 18. The Tribunal finds that the tenancy ended on 22 June 2014 when the keys were returned. The Tribunal finds on the evidence that in the period 18 May 2014 to 22 June 2014, the premises were partly uninhabitable. The Tribunal accepts the applicants' evidence that the bird lice infestation had made the premises uninhabitable and they could not continue to reside in the dwelling. 19. The applicants claim an amount of $1,200.00 for pest treatments. The only evidence before the Tribunal of the amount paid for the pest treatment is a tax invoice dated 2 June 2014 for $380.00 from Pest Free. The Tribunal allows the applicants the sum of $380.00 by way of reimbursement. 20. The applicants claim moving costs of $2,000.00. The Tribunal is not satisfied on the evidence that the applicants have made out their claim. The tenancy agreement was almost at an end. This claim is refused. 21. Although the claim for compensation for breach of the residential tenancy agreement in respect of the vanity, dishwasher and blinds was made out of time, the Tribunal may consider an application before the end of the tenancy that the rent is excessive, having regard to the reduction or withdrawal of any goods, services or facilities (section 44(3) of the RTA). 22. The Tribunal finds that during the tenancy, the tenants did not have complete access to the vanity, dishwasher and blinds. Accordingly, the Tribunal is satisfied that in those periods the rent was excessive and the applicants should receive compensation for reduction in services or facilities. 23. The Tribunal finds that the agreement ended on 22 June 2014. Therefore, the application for the order was made before the end of the tenancy and within time. 24. The Tribunal finds that in respect of the following services and facilities, the appropriate compensation will be: 1. Dishwasher – rent reduction of $120.00 for the period from 24 December 2013 to 23 January 2014; 2. Vanity – rent reduced by $225.00 for the period from 1 January 2014 to 4 March 2014; 3. Blinds – rent reduced by $400.00 for the period from 1 January 2014 to 18 May 2014. 1. As the applicants no longer reside in the premises, the Tribunal orders the respondent to pay the applicants the sum of $745.00 to the applicants as compensation. Summary – First Application 1. The respondents are ordered to pay the applicants the sum of $2,195.00 calculated as follows: 1. Rent abatement $1,070.00 2. Reimbursement of Pest Free invoice $380.00 3. Compensation for reduction in services and Facilities $745.00 The Second Application 1. The Second Application concerned an application by the tenants for a refund of $1,660.67. 2. The Rental Bond amount was $2,140.00. 3. On 14 July 2014, Rental Bond Services disbursed the rental bond as follows: 1. Belinda Smiley and Matthew Hanney $479.45 2. Chambers Fleming Professionals Real Estate $1,660.67 1. At the hearing on 24 September 2014 the tenants conceded the following amounts: 1. (a) Water usage $183.10 2. (b) Electricity account $500.58 1. What is in dispute were claims for rubbish removal and outstanding rent for 5 days. 2. The agent has made a claim for $350.00 for rubbish removal. The invoice from Sydney Cleaning and Property Maintenance dated 3 July2 014 is for an amount of $200.00. The invoice refers to items besides rubbish removal. 3. The evidence shows that a Council Household Clean Up had been organised for 3 July 2014. Photos of the residential premises establish that the premises required internal cleaning and removal of stickers. The Tribunal is satisfied that the landlord is entitled to $200.00 for cleaning and rubbish removal. 4. The landlord's claim for 5 days rent is dismissed. The landlords have not established on the balance of probabilities of their entitlement to claim any rent. The landlord did not tender a rent ledger or present evidence which would be sufficient to prove that rent was owing. Further, there is strong evidence that the premises were at least partly, if not wholly, uninhabitable after 18 May 2014 and the tenants are entitled to compensation. 5. The total amount due by the tenants to the landlords is as follows: 1. Water usage $182.10 2. Electricity $550.58 3. Cleaning & Rubbish Removal Costs $200.00 TOTAL: $882.68 1. After deducting $882.68 from the amount of $1,660.67 received by the landlords from the rental bond, the tenants are entitled to payment of $777.99. Graham Kinsey General Member Civil and Administrative Tribunal of New South Wales 9 December 2014 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: 12 February 2015