Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Webb and Anr v Bondi Beach Astra [2015] NSWCATAP 18 Hearing dates: 10 December 2014 Date of orders: 09 January 2015 Decision date: 09 January 2015 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member D Patten, Principal Member Decision: application for leave to appeal is dismissed; the appeal is otherwise dismissed; no order as to costs. Catchwords: Anticipatory breach, Entitlement to damages Legislation Cited: Civil and Administrative Tribunal Act, 2013 Retirement Villages Act, 1989 Cases Cited: Nil Texts Cited: Nil Category: Principal judgment Parties: John Martin Webb (first appellant) Nina Webb (second appellant) Bondi Beach Astra Retirement Village Pty Ltd (respondent) Representation: First appellant in person Solicitors: JB McCooe, McCooe Raves and Poole File Number(s): AP 14/46494 formerly AP 14/0316 Publication restriction: Unrestricted Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Citation: Not applicable Date of Decision: 1 August 2014 Before: K Rosser, Senior Member File Number(s): RV 14/11213 decision 1. In application RV 14/11213 (2014 application) the appellants sought compensation for breach of an Occupancy Agreement (agreement) between them and the respondent, the operator of a retirement village. 2. The appellants are the owners of a unit forming part of the retirement village complex which is located at Bondi. Under the terms of the agreement, the appellants were able to lease the unit. However any prospective tenant was required to be approved by the manager of the respondent and was also required to enter an occupancy agreement with the operator. 3. The basis of the claim was an alleged anticipatory breach by the respondent. Even though the appellants had not at that time submitted any prospective tenant for approval, the appellants asserted the respondent would not have approved any prospective tenants of the appellants. The appellants asserted they lost the sum of $16,400 being rent calculated from 15 May 2013 to 28 February 2014 at a rate of $400 per week. 4. The application was dismissed on 1 August 2014 and the Tribunal provided written reasons (decision). 5. The appellants appeal the decision. History and the Tribunal's decision. 1. These parties have had a long history of disputes. 2. In 2011 the appellants commenced proceedings against the respondent and in 2012 obtained orders from the Consumer Trader and Tenancy Tribunal (CTTT) to the effect that the agreement was a service contract for the purpose of clause 3 (2) of schedule 4 of the Retirement Villages Act, 1989 (Act) and that section 174 of the Act did not apply to the agreement (2012 decision). Essentially the Tribunal concluded that the appellants retained the right to lease the property subject to clause 2 (e) of the agreement. 3. Clause 2 (e) provides: "The Occupant and the Proprietor hereby covenant and agree… not to lease, sublease or part with or share the possession of the Unit PROVIDED THAT this shall not prevent leasing the unit to persons over the age of 55 years of age who have been approved as Occupant by the Manager and who have entered into an Occupancy Agreement with the Service Company and have paid the Service Company's reasonable costs in respect thereof." 1. The respondent appealed the CTTT's 2012 decision to the District Court of New South Wales (first appeal), the appeal being dismissed on 2 November 2012. 2. Following dismissal of the first appeal, the proceedings were remitted to the CTTT. On 15 April 2013 the CTTT made an award in favour of the appellants in the sum of $29,735 (2013 decision) for a claim for loss of rent. The Tribunal accepted the appellants' evidence that there were persons "who were willing and able to occupy (the appellants') lot" in the relevant period claim and there had been a breach of the agreement by the respondent. This award related to a period prior to 15 April 2013. 3. The respondent appealed the 2013 decision (second appeal) which appeal was dismissed on 21 November 2013. 4. The present appeal relates to a further claim for compensation made in the 2014 application by the appellants for a period from 15 May 2013 until 28 February 2014 that was dismissed. 5. In dismissing the 2014 application, the Tribunal made the following findings (at [22] and following): 1. by letter dated 30 August 2013 the appellants asked for an undertaking that the respondent would approve any new tenant submitted for approval provided that certain specified documents were submitted; 2. that the appellants did not receive a response to that letter from Mr McCooe dated 13 September 2013; 3. in the absence of receiving a response, the appellants chose to continue not to put forward a tenant for approval. 4. There was no refusal by the respondent to accept any new tenant because none had been submitted for approval; 5. there was no unequivocal statement from the respondent that any prospective tenant would be refused; 6. the Tribunal was not satisfied that all or any prospective tenants whose applications might be submitted would be suitable; 7. the Tribunal was not satisfied that Astra had breached clause 2 (e) of the agreement during the relevant period nor that Astra had made any unequivocal statement prior to or during the relevant period which could be considered an anticipatory breach. Grounds of appeal and submissions. 1. In the Notice of Appeal the appellant stated the grounds as being the decision was against the weight of evidence and was not fair and equitable. However, in submissions dated 31 July 2014 the grounds stated are as follows: 1. the decision was against the weight of the evidence; 2. (the Tribunal) erred in law by failing to identify the conduct of the respondent as amounting to an anticipatory breach of (clause) 2 of the Occupancy Agreement; and 3. (the Tribunal) erred in law in applying a test of conclusive evidence rather than applying the test of the balance of probabilities. 1. The appellants submitted that the history of events that occurred in 2012, the fact of the second appeal by the respondent and the fact that the appellants had sought an in principle approval of a tenant by letter dated 30 August 2013 constitute facts which should have led the Tribunal to conclude that there had been an anticipatory breach. 2. The appellants relied on various documents tendered at the original Tribunal hearing recording communications in 2012 in 2013. These are found in the respondent's folder of documents provided in the 2014 application. The letter dated 30 August 2013 from the appellants' lawyer is at pages 102-103. 3. In the letter dated 30 August 2013 the appellants' lawyer says (page 102): "Our clients have not requested the agent to find another tenant for the property, pending the outcome of the Appeal and their Notice of Motion, because all tenants, bar one, previously submitted have been rejected by your client without explanation. Our clients do not consider it fair or reasonable to engage an agent to find a tenant, only to have such prospective rejected out of hand. This would not be fair, either to the agent or the prospective tenant." 1. The letter then seeks confirmation from the respondent that it will "provide an undertaking to approve any new tenant submitted for approval provided that at the time of submitting the application for approval, the (appellants) agent also submits following". Thereafter the letter lists a number of documents to be provided including "a reference". 2. In oral submissions, the appellants also relied on the letter dated 13 September 2013 as evidence of an anticipatory breach. The letter is from the respondent's lawyer to the appellants' lawyer and is found at pages 104-105. In essence, they submitted that the failure of the respondent to make a statement of the type contained in the letter of 13 September 2013 at an earlier time was indicative of the fact that the respondent would not approve any tenants and that the respondent was under an obligation to advise that it would consider application receive. 3. The appellants acknowledged that the orders, the subject of the second appeal, had not been stayed and therefore the rights and obligations of the parties were as determined in the 2012 decision and 2013 decision. The appellants also conceded to the Appeal Panel that no suitable tenant had in fact been submitted to the respondent and that the finding of fact on this point at paragraph [22] of the 2014 decision on this issue was correct. 4. The respondent submitted that leave to appeal was required by the appellants and that leave should be refused. 5. The respondent submitted that the findings of the Tribunal that it had not breached the agreement were correct and that, in effect, the appellants were seeking compensation for losses in consequence of not taking any action to submit a suitable tenant pending a determination of the second appeal. 6. The respondent submitted that the appellant were not asserting any actual breach, but only an anticipatory breach. In these circumstances there is no entitlement to the damages claimed and, in any event, the Tribunal made a determination against the appellants that there was not "any unequivocal statement prior to or during the relevant period which can be considered to be an anticipatory breach" by the respondent. That is, the Tribunal determined there was in fact no anticipatory breach. Decision. 1. There is a right of appeal without leave on a question of law: see s 82 (2) of the Civil and Administrative Tribunal Act, 2013 (NCAT Act). Otherwise leave is required. 2. In relation to the grounds which do not identify an error of law, the Appeal Panel may only grant leave if satisfied that the appellants may have suffered a substantial miscarriage of justice because of certain circumstances (NCAT Act, Sch 4, cl 12(1)). These circumstances are that: 1. the decision of the Tribunal under appeal was not fair and equitable, or 2. the decision of the Tribunal under appeal was against the weight of evidence, or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. The Appeal Panel is not satisfied that the appellants have demonstrated any error of law or that there has been a substantial miscarriage of justice such that leave to appeal should be granted and the orders of the Tribunal should be set aside. 2. The appellants' case is that there was an anticipatory breach in that the respondent had indicated that it would not consider any tenants which the appellants might submit for approval. The appellants identified various factual matters which they asserted supported this conclusion. 3. It is common ground that the appellants did not submit any tenants for approval during the relevant period. It is also common ground that there was not in fact a refusal of a particular tenant or tenants during the relevant period. 4. It is clear from the evidence that the appellants chose not to identify and put forward prospective tenants: see letter dated 30 August 2013. In circumstances where the orders of the Tribunal in the 2012 decision and 2013 decision remained in effect, there was nothing to stop the appellants from doing so and the decision not to take such steps does not constitute a basis for concluding there was an anticipatory breach by the respondent. 5. In support of the claim of anticipatory breach the appellants relied on earlier conduct of the respondent refusing approval which was found to be in breach of the agreement. 6. While the respondent may have breached the agreement at an earlier time, for which compensation has already been awarded, this fact is not sufficient to demonstrate that the respondent would continue to breach the agreement into the future. Further, the exercise of a right of appeal, even if that appeal is likely to fail, in connection with the earlier Tribunal decisions does not manifest an intention not to be bound by the terms of the agreement. 7. The appellants, through their lawyers letter dated 30 August 2013, sought an undertaking that "any tenant" would be approved provided that the listed documentation was submitted. However, this undertaking sought to circumvent the approval process contemplated by clause 2(e) of the agreement and the requirement in that clause that the respondent's reasonable costs in respect of any approval be paid. The failure of the respondent to give such an unconditional undertaking in circumstances where the agreement contemplated an approval process does not amount to conduct constituting an anticipatory breach of the agreement. 8. In relation to the letter from the respondent's lawyers dated 13 September 2013, it is relevant to note what the respondent said at page 105: "We are of the view that pending determination of our clients Appeal, our client is obliged to examine any application for approval (and the content of documentation submitted in support of such an application) on its merits. This was the effect of the CTTT order which has not been stayed." 1. Rather than being conduct constituting an anticipatory breach, this statement correctly records the respondent's obligation. 2. Accordingly, the decision of the Tribunal has not been shown to be against the weight of evidence nor did the Tribunal make an error of law in concluding that the facts as found did not constitute an anticipatory breach. 3. Further, even if an anticipatory breach of an agreement had been established, the appellants' right was to consider whether or not the breach amounted to a repudiation of the agreement and terminate the agreement. Otherwise, the appellants could elect to perform the agreement and sue for any damage suffered by reason of an actual breach that might then occur in the future. Until there is a breach causing actual damage there is no entitlement to an award of damages, other than perhaps nominal damages. 4. In the present case there has been no refusal of a particular tenant, no loss actually suffered and therefore no error in dismissing the application for compensation. 5. The last matter to deal with is the ground of appeal asserting that the Tribunal applied the wrong legal test for assessing evidence. 6. At paragraph 22 of the Tribunal's decision, the Tribunal said: "… The (appellants) chose to continue not to put forward a tenant for approval. While the position is understandable based on the past experiences with (the respondent), the problem that arises is that (the respondent) did not refuse a suitable tenant during the relevant period because none were submitted for approval. However, I cannot make a conclusive finding in this regard. Firstly, a prospective tenant had been approved after the CTTT's first decision and that tenant had decided not to proceed, so I am not satisfied that (the respondents) July 2011 letter can be relied on as evidence that (the respondent would have refuse any tenant the (appellants) proposed. Secondly, after the second CTTT decision neither (the respondent) (nor its representative Mr McCooe) made any unequivocal statement that a prospective tenant would be refused. Thirdly, without any applications having been submitted, it is difficult to find that any or all possible applications would have been from suitable tenants." 1. When read as a whole, the decision of the Tribunal was not that it had to be "conclusively" satisfied, but rather having evaluated the evidence the Tribunal found that the conduct of the respondent did not amount to an anticipated breach. Therefore, there was no error of law in applying an incorrect standard of proof. 2. In any event, having reviewed the evidence in the appeal, the Appeal Panel is not satisfied that the conduct of the respondent constituted an anticipatory breach of the agreement. 3. Consequently, the appeal should be dismissed. Orders. 1. At the conclusion of the appeal, the respondent indicated that in event it was successful it would not seek costs. 2. Accordingly, the Appeal Panel makes the following orders: 1. application for leave to appeal is dismissed; 2. the appeal is otherwise dismissed; 3. no order as to costs. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar ********** 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: 24 February 2015