Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Aavelaid, A v J.A. Hayek Holdings Pty Ltd t/as Laing & Simmons [2014] NSWCATCD 240 Hearing dates: 25 February 2014, 2 June 2014 and 16 September 2014 (on papers) Decision date: 11 December 2014 Jurisdiction: Consumer and Commercial Division Before: T Simon, Senior Member Decision: The respondent is to pay the applicant the amount of $900.00 immediately Legislation Cited: Civil and Administrative Tribunal Act (NSW) 2013 Consumer Claims Act (NSW) 1998 Fair Trading Act (NSW) 1987 Category: Principal judgment Parties: Dr Urmas Aavelaid (applicant) J.A. Hayek Holdings Pty Ltd t/as Laing & Simmons (respondent) Representation: Applicant in person Ms Touma and Ms Nichol for the respondent File Number(s): GEN 13/54539 Publication restriction: Unrestricted reasons for decision Appearances 1. Both parties appeared in relation to this matter at hearing on 25 February 2014 and for a further hearing on 2 June 2014. The matter was adjourned by consent to accommodate for further submissions to be made on the papers. It was listed for hearing on the papers on 16 September 2014 following submissions. 2. Mr Aavelaid appeared in person on both occasions. The respondent was represented by two agents, Ms Touma and Ms Nichol. The Application 1. By application received 16 October 2013, the applicant was initially seeking an amount of $11,685.64 from the respondent. The applicant was claiming that the agent had failed to advertise and manage the property in accordance with the managing agency agreement. He was claiming the respondent had breach the contract between the parties and had failed to act with due care and skill. 2. The applicant was subsequently allowed leave to amend the application to an total amount of $18,543.07 for the following; 1. Economic loss for the period from 13 August 2013 to 4 October 2013 at 128.57 per day totaling $6,557.07. 2. $1,040.00 for a reduced rent of $40.00 for a 26 week period totaling 3. $946.00 for the refund of a fee paid to the agent. 4. $10,000 in exemplary damages 5. Interest as set out by the statute. 6. Costs of the matter Procedural Background 1. This matter took an inordinate amount of time. This was mainly due to the numerous submissions of the applicant. This matter was initially listed for four hours. Due to the many submissions and material provided by the applicant, it was listed for a further three hours. Mr Avelaid wanted a further opportunity to make extensive legal submissions and had numerous cases that he wished to rely on. He only had copies for the Tribunal. The Tribunal provided copies to the respondent and by consent further opportunities were provided for the parties to make submissions in writing and for the submissions to be considered on the papers. Not all submissions and documents provided to the Tribunal will be referred to individually in these reasons; however they have all been considered. 2. Two agents appeared on behalf of the respondent and made submissions and provided evidence at varying times. Every opportunity was given to the applicant to cross-examine them. Jurisdiction 1. The applicant provided an Exclusive Management Agency agreement between the parties. It was signed by the agent on 1 July 2011 and the applicant on 29 September 2011 as he was away in Estonia at the time. The agreement was for the management of the applicant's investment unit and was to commence on 1 July 2011 until terminated by either party in accordance with the agreement. 2. The Tribunal was satisfied that the applicant was a consumer and the respondent a supplier, in accordance with section 3 of the Consumer Claims Act 1998 (the Act). Further, the Tribunal was satisfied that the matter involved a consumer claim in accordance with section 3A(1)(a) of the Act. The Tribunal was satisfied that in accordance with section 7 of the Act, the services were provided in NSW and that the application was made with three years of the alleged cause of action and accordingly it had jurisdiction to decide the matter. The Applicant's Case 1. Mr Aavelaid provided a statutory declaration dated 17 October 2013. He is a dental surgeon, and also lists his extensive experience in running, owning and dealing with real estate and his own legal cases. He submitted that the Tribunal should consider him an expert in those fields. In support he attached the first two pages of a unreported decision of the Supreme Court, Urmas Aavelaid v Residential Tennacies Tribunal of New South Wales & Anor 1995, which noted the following: "…the appellant in these proceedings having a remarkable track record of obtaining orders from various courts as a litigant in person and, he is more likely than not, able to refer a decision involving himself rather than another litigant. This is a tribute of him and his obvious intelligence in dealing with legal proceedings." 1. The remainder of the decision is not provided. The applicant also provided email correspondence demonstrating his involvement in consultation on policy relating to residential tenancies law. 2. The applicant submitted that the respondent did not conduct the management of the property in a proper way. He refers to another managing agency agreement that the parties entered into and claims that although this application does not relate to that agreement, he had issues with the management of that property as well, including with recordings on the ledger. 3. The applicant provided a letter from the respondent agency, which he has marked exhibit 2 in his documents, dated 17 July 2013. The letter advised him that the tenant who was leasing the premises at the time had given notice of their intention to vacate the property on 13 August 2013 and that unless advised otherwise the respondent would be advertising the property for lease on various websites. He provided various statements from the Real Estate Institute, which he suggested indicated that the rental market at the time was tight. He relied on his own experience as an expert in the property market to make submissions that this property should have been leased for the new tenant to take possession immediately on the old tenant leaving. 4. The applicant submitted that the property had failed to lease because it was essentially not advertised for three weeks because it was listed under house rather than unit on the website. He suggested that people looking for properties in the city would not look under house because there are no houses in the Sydney CBD where the unit is located and as such they would not have found it if they were searching on the internet. The applicant also relied on statements from other agents explaining that prospective lessors were more likely to look under units when searching for properties. 5. The applicant referred to an email he sent the respondent, dated 5 August 2013 (marked his exhibit 4), in which he advised he could not locate his unit on the internet. He referred to a further email dated 6 August 2013 in which he advised the agent: "The idiot who put the ad in, placed it under "All" or under "House" as "Property Type" and forgot to place it under "unit"…." The applicant asked that agent to change it immediately and asked her to send confirmation once it was done. In the train of further emails, the applicant also asked the respondent to change the rent to $875.00 and the landlord changed it to $8,750.00. The applicant picked it up almost immediately and it was changed within about 1 ½ to 3 hours to the correct amount of $875.00. The applicant submitted that this led him to missing out on prospective tenants. The applicant also provided comparable properties at the time. He submitted that they were in the same area and in same ways inferior to his own and were listed for a higher price on 20 September 2013. 1. The applicant provided a lease showing that on 25 September 2013 a residential tenancy agreement was eventually entered into for an amount of $860.00 week for the property. 2. The applicant also submitted that the respondent was incompetent and that he did not receive statements and often when he received them they were wrong and that they sent emails to his incorrect address. The Applicant's witnesses 1. Two witnesses appeared at the hearing for the applicant. The first was Mrs Kaire Aavelaid who was the applicant's wife and who had provided two statutory declarations. In essence Mrs Aavelaid submitted that from about July 2013 she had been concerned about the way the property had been managed. She submitted that on the morning and evening of 3 August 2013 she was asked by her husband to check on the web if the property had been advertised for lease and was unable to find it. She checked again on 5 August 2013 and still could not find it. On 6 August 2013 she spoke with the agent and was advised by her that the property was advertised. It wasn't until she widened the search to "all" as opposed to "units" that she found the premises leased under "house." In a further statutory declaration Ms Aavelaid also claimed that she did subsequent searches in September 2013 and made notes of those searches. Those notes were provided with the statutory declarations and also reveal no results for the property. 2. The second witness was Dr Petersons who also provided a statutory declaration. He submitted that he is very familiar with computers and that he could not find any listings for the property when he searched on 20 September 2013. Dr Petersons claims he is very familiar with computers and that he is a computer programmer without any specific qualifications and has been using computers over the last ten years. He does not have any formal qualifications and provided no further any evidence showing the extent of the expertise. He did make some comments in relation to the web data and indicated that they do not signify listings of the property. He submitted that in his experience records from computers may be manipulated. He claimed that the records show the advertisement and not the website. The Respondent's case 1. The agent Anna, who was primarily dealing with the matter, has left the agency since the application was made. Two other agents appeared to make submissions relying on the email correspondence between the parties and there own knowledge of what had happened with the matter. 2. They submitted that the agency had managed the property with due skill and care. The tenant gave notice to vacate on 17 July 2013 and they advised the landlord immediately. 3. The respondents provided screen shots of the advertisements. The respondents provided REINSW institute vacancy rates. 4. They submitted that the property was advertised from 17 July 2013 and provided export details of the advertisement. They agreed that the property entry was changed from a house to apartment on 6 August 2013. They agreed that for a short period of an hour and 38 minutes on 9 September 2013 there was an error where the rent was changed from $900.00 to $8,750.00. The respondent agreed to compensate the applicant for the period that the property was advertised as a house as opposed to a unit. That was the period from 17 July 2013 to 16 August 2013 and they were willing to compensate 50% of two weeks rent totaling $900.00. The respondent did not agree to compensate for the difference in the rent as they submitted that $860.00 was simply the real market rent of the time. They also submitted that the time taken to correct the typing error was not significant. They submitted that people in this area would search under "all" – even if they were searching for a unit, because generally there are only apartments in the Sydney area. 5. They submitted that open for inspections were allowed on 24 July 2013 and the property was opened two to three times a week and they provided emails of people who attended and their feedback. 6. Email correspondence shows that an application was taken on 31 July 2013 from a Sean who decided to go ahead with another property on Bathurst Street. 7. The respondent claimed that the asking price of $900.00 per week, which the applicant had wanted and instructed to advertise, had been too much. The respondent provided details of a similar property that had been available for lease on 5 August 2013, and was in the same complex on the 12th floor. The unit had been had been leased for $875.00. They submitted that the property on the 12th floor had a newer kitchen. They provided other examples of comparable units at the time that were advertised for $875.00 a week. They submitted that some of the same tenants that applied for those properties had applied for the applicants property and he had declined to lease it. 8. Importantly, the respondent also referred to an email dated 15 August 2013 (marked exhibit F in the respondents documents). It refers to a prospective tenant, Peter. The tenant made a number of requests and the requests had been forwarded to the applicant for his comment. The comments were also included in the email. At that point, the prospective tenant had agreed for the fridge to remain in the property and that he would attend to the flyscreens himself and that the tenancy would commence on 24 August 2013. However the tenant was seeking that the rent be reduced from $900.00 to $875.00 and wanted a 12-month lease. The applicant did not agree to a 12 month lease or a rent reduction on the basis that "As a move in is not immediate but with a further 10 days vacancy period (unlike what you thought), I am now unlikely to reduce the rent from $900.00." 1. In a further email dated 20 August 2013, from the prospective tenant Peter he states: "1. Sorry cannot meet your requirements. Your owners terms are extremely unreasonable." 2. I have gone back and forth with you for 4 days, and your owner has strange requests. No one in their right mind would have a tenant store a fridge, an old one at that, and except a new one in its place. I have been an excellent tenant, and as you have witnessed I have kept the property clean and have installed a new kitchen, your owner would benefit from a tenant like myself." 1. On the same day the applicant wrote an email to the agent stating: "I am contemplating agreeing to $875.00 for a 1 year lease. Offer that to him…. So call him 9.a.m. tomorrow, Wednesday (see supra) before he starts looking around seriously." 1. However it appears that the prospective tenant Peter was proceeding with another tenancy. In an email from the agent to Peter dated 26 August 2013 the agent states; Have you been accepted for the unit yet. Please contact me urgently. Peter replies by email "I will be moving to 2108." In a further email on 27 August 2014, the agents states to Peter "….My owner missed out. Yes I would like to compare the unit did you lease it at $870.00 p/w." Peter replied by email "Yes $870.00 for one year and a maximum increase of $20.00 the following year." 1. In another email dated 10 September 2013, the agent advised the applicant of another prospective tenant Daniel. The email stated the following; The application that I received from Daniel, he has phoned me 20 minutes ago and requested the following:- * Lease to commence on 18 September 2013. * 12 month lease is required * rental amount is $860.00 per week. For a 12 month period. (he believes that $870 .00 that is offered is off the table due to the rent reduction that his wife saw this morning regarding your property). * Fridge to be removed (he has his own) * He has giving me his banking details to deduct payment as as you agree. (if you agree) Your property was open for inspection today at 12.10pm, with poor interest – no applications taken." 1. On 11 September the applicant relevantly replied by email as follows; 2.Call me after the 4.45 pm showing today – WITHOUT FAIL – right after the showing of the unit. Ylou(sic) can tell this Daniel if he calls that you are talking to me about 5 p.m. today 3. Let me make something very clear, From time to time we need to communicate by phone. At other times by e-mail will suffice. However, any major decisions made by phone MUST be reduced to writing … It is I who decides when a call is appropriate or not, it is not you to decide. It is for you to ensure you keep to promises made (unlike up to now) 4, Briefly about this offer. Generally, I do not like it but I am not rejecting as yet. Maybe I can decide after we talk this late afternoon b. The problems are: 1). The low rental rate, especially for the second 6 months; 2). The delayed move in date (i.e 8 days from today); and 3) VERY IMPORTANLTLY, why should I throw out a fridge that is in good condition. In fact, I doubt that I can dispose of the fridge by taking it downstairs and even if I could, it would be an extra cost. Also, as the fit is a special size, I can just see that a subsequent prospective tenant will demand a fridge or I lose them as their fridge would not fit or they do not possess one. Call me about 5 p.m or within a short time of that time." 1. On 13 September 2014 at 7.40am the applicant sent a further email indicating that he will accept $860.00 a week rent for a 12 month period. However in relation to the fridge he gave 3 options. Either the tenant accepts the fridge in the unit, moves the fridge himself and disposes of it himself and leaves his fridge in the unit when he vacates or is responsible for storage of the applicants fridge for the term of the tenancy and is return it to the unit on vacating the premises. 2. In an email dated 16 September 2013 from the agent to the applicant it states; I have not yet spoken to Daniel, I will need your confirmation in writing if you will agree to the terms which. I have listed below. * Removal of fridge at your cost * $860 per week * 12 month lease 1. It appears this email was incorrectly sent to the wrong address at the time. It was submitted by the respondent that the applicant later spoke with Daniel himself and in a further email dated 25 September 2013, the agent explained to the applicant that "at the end of the day, Daniel decided not to take the unit cause of the way you spoke to him." 1. The respondent rejected the claim that they did not reply to emails in a timely manner. Instead, they claimed that the applicant was demanding and unreasonable and called repeatedly including on weekends and after hours. The respondent also referred to a series of emails from their reception to the agent that they submit demonstrate the numerous numbers of calls made by the respondent with often rude messages left. 2. The respondents also submitted that the landlord raised the rent every 6 months and it was often excessive and whenever the applicant came to re-lease the property he would have to lease it for less. In this regard they relied on a ledger for this and previous properties. They submitted that this was demonstrative of a pattern, in which it takes about 50 days to re-rent the applicants properties. 3. The respondent also provided what purported to be statutory declaration from their receptionists. The applicant objected to these being considered on the basis that they were not in proper form and that the witnesses were not available for cross-examination. The Tribunal was satisfied that they could still be considered, but was mindful of the weight given to them. In essence they indicated that the applicant was at times difficult to deal with. Findings and Decision 1. The applicant is making his claim based on two causes of action. The first is a consumer claim as defined by section 3A of the Consumer Claims Act (NSW) 1998 for breach of the contract. The applicant had referred to clause 17 of the managing agency agreement between the parties which states "The principal undertakes to indemnify and keep indemnified the Agent against all actions, suits, proceedings., claims, demands, costs and expenses whatsoever which may be taken or made against the Agent in the course of or arising out of the proper performance or exercise of any powers, duties or authorities of the Agent." This clause appears to have been misconceived by the applicant. It is an indemnity to be provided by him as principal against the agent. In any case the Tribunal has considered breach of the contract by the agent. 1. The other cause of action arises from the Australian Consumer Law. Section 13 (3)(a) of the Consumer Claims Act (NSW) 1998 relevantly states: (3) Without limiting subsection (1), when the Tribunal is considering whether or not to make an order or orders under section 8, it is appropriate for the Tribunal to take into account, so far as material to the particular circumstances of the case: (a) any code of practice prescribed under the Fair Trading Act 1987 , and Section 28 of Fair Trading Act (NSW) 1987 also relevantly states (1) The Australian Consumer Law text, as in force from time to time: (a) applies as a law of this jurisdiction, and (b) as so applying may be referred to as the Australian Consumer Law (NSW), and (c) as so applying is a part of this Act. The Australian Consumer Law text is relevantly defined in section 27 as The Australian Consumer Law text consists of: 1. Schedule 2 to the Competition and Consumer Act 2010 of the Commonwealth, and 2. (the regulations under section 139G of that Act. 1. In this case it appears that the applicant is submitting that the respondent has not provided the services with "due care and skill" as required by section 60 of Schedule 2. 2. The Tribunal has considered all the evidence provided by the parties. Having considered that evidence the Tribunal finds that except for the short period of 2 weeks from 17 July 2013 to 16 August 2013, the respondent has managed the property with due skill and care and in accordance with the agency agreement. 3. The letter of 17 July 2013 demonstrates that the respondent advised the applicant as soon as they were given notice that the tenant was vacating. They commenced advertising the property almost immediately. It is noted that they advertised it under "house" as opposed to "unit". From 24 July 2013 the emails between the parties demonstrate that the respondent was conducting open houses and private inspections and updated the applicant on the inspections and feedback they had received. They negotiated on behalf of the landlord and in accordance with the instructions of the applicant. 4. The applicant has claimed much of the evidence given is hearsay. He stated that Anna who was the agent was not available to give evidence or cross-examine. Section 38 of the Civil and Administrative Tribunal Act (NSW) 2013 relevantly states about the procedures of the Tribunal generally: (1) The Tribunal may determine its own procedure in relation to any matter for which this Act or the procedural rules do not otherwise make provision. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice. (3) Despite subsection (2): (a) the Tribunal must observe the rules of evidence in: (i) proceedings in exercise of its enforcement jurisdiction, and (ii) proceedings for the imposition by the Tribunal of a civil penalty in exercise of its general jurisdiction, …. (4) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. (5) The Tribunal is to take such measures as are reasonably practicable: (a) to ensure that the parties to the proceedings before it understand the nature of the proceedings, and (b) if requested to do so-to explain to the parties any aspect of the procedure of the Tribunal, or any decision or ruling made by the Tribunal, that relates to the proceedings, and (c) to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings. (6) The Tribunal: (a) 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, and (b) may require evidence or argument to be presented orally or in writing, and (c) in the case of a hearing-may require the presentation of the respective cases of the parties before it to be limited to the periods of time that it determines are reasonably necessary for the fair and adequate presentation of the cases. 1. While the Tribunal accepts that Anna was not available to give evidence or cross-examine, much of the negotiation between the applicant and her was done through email. Those emails have been provided to the Tribunal and record the events and correspondence between the parties. 2. The Tribunal finds that the respondent did mistakenly advertise the property at $8,750.00 instead of $875.00. However this was for less than two hours. The applicant provided very little evidence to demonstrate that the error, for such a short period of time, would have made a difference to the property being leased out earlier. He simply made the submissions in his capacity as an expert. The Tribunal finds, that given that the error was fixed within about 2 hours, it did not impact on the eventual time that it took lease the property. 3. The Tribunal also finds that the respondent failed on one occasion to send the applicant an email to the correct address, however the Tribunal does not find that this had any great significance to the leasing of the property or was a breach of the due care and skill expected from the respondent. 4. The respondent did admit that they had failed to take due care and skill when they failed to advertise the property on the internet under 'unit' and instead did it under 'house'. However, the Tribunal does not find that this is the only reason as to why the property failed to lease. The Tribunal finds from the emails in particular, that there was actually interest in leasing the property at that time. However, the applicant's terms in relation to the advertised rent, the fixed term period and the fridge were unreasonable and meant that prospective tenants did not proceed to lease the property. From the evidence, it appears that the rent amount of $900.00 was too high. Even when the clearance rate is relatively low, if the rent is too high, a property is going to be more difficult to rent. The feedback provided in various emails demonstrates that prospective tenants did not proceed to lease the premises for various reasons including that either the rent was too high, some wanted the landlord to remove the fridge at his own cost or wanted a longer fixed term period. 5. Accordingly the Tribunal finds that the a return of half the rent for a period of two weeks and for a total amount of $900.00 is fair and just to compensate for the error in advertising the property under 'house' as opposed to 'unit'. 6. The Tribunal does not find that any failure by the respondent resulted in the property being rented at $40.00 less than it should have been. Even when the listing error was fixed, it remained difficult to lease the property at the applicant's asking price and the applicant accepted the amount of $860.00 per week. The Tribunal finds that the evidence relating to vacancy rates for the period does not take into consideration the particular circumstances of this individual unit. The Tribunal is not satisfied as to the applicant's submissions that the acceptance of the $860.00 rental amount was out of duress or a need to mitigate. The amount was accepted after genuine negotiations between the parties and the Tribunals finds that the lease amount obtained was the market rent for this particular unit. 7. The Tribunal does not find that the fee of $946.00 should be refunded to the applicant. The applicant submitted that the respondent had failed to properly assemble statements and undertake its responsibilities with due diligence. However, after careful consideration of the documents and submissions, the Tribunal finds that the work was done with due care and skill, even if at times there were minor errors. Those errors were quickly rectified once the respondent was notified. 8. In relation to the claim for exemplary damages. The Tribunal does not find that the respondent has done anything to warrant a finding for the awarding of exemplary damages. The Tribunal finds that any error made was not done intentionally, knowingly or with malice. While the error of advertising the property under "house" as opposed to a "unit" may have been a breach of due skill and care, the Tribunal does not consider such a breach worthy of the making of an order for exemplary damages. 9. In relation to the applicants request for interest pursuant to the statute. The Tribunal finds no such provision in the statute. 10. Given the applicants limited success in the matter and the provision of section 60 of the Civil and Administrative Tribunal Act (NSW) 2013, the Tribunal was not satisfied to allow costs in the matter. 11. The orders are made accordingly. T Simon General Member Civil and Administrative Tribunal of New South Wales 11 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