Civil and Administrative Tribunal New South Wales Medium Neutral Citation: NSW Land and Housing Corporation v Smith [2015] NSWCATAP 27 Hearing dates: On the papers Decision date: 02 March 2015 Jurisdiction: Appeal Panel Before: D Patten, Principal member C Paull, Senior member Decision: Appeal Allowed – decision of the Tribunal varied. Catchwords: Distinction between sections 44 and 187 of Residential Tenancies Act – Absence of right to use reasons to alter clear basis of finding. Legislation Cited: Civil and Administrative Tribunal Act 2013; Residential Tenancies Act 2010. Cases Cited: Coppins v Helmers (1968) 88 WN 455 Category: Principal judgment Parties: NSW Land and Housing Corporation (Appellant) Rebecca Smith (Respondent) Representation: On the papers File Number(s): AP14/46456 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 18 June 2014 Before: A Anforth Reasons for Decision 1. This is an appeal by the landlord against the following orders made in the Tribunal below (Mr A Anforth) on 18 June 2014: 1. The landlord is to install a heater of its choice by 30 June 2014, with any empty cavity to be repaired. 2. The tenant has been without partial heating from 30 April 2012 to 9 April 2014, and without any heating since that date. 3. The tenant is entitled to a rent reduction for partial withdrawal of services in the period 30 April 2012 – 9 April 2014 at the rate of $30 per week during April, May, June, July and August each year, and half that rate in the other months, coming to an amount of $2,280.00. The tenant prefers the money to be paid direct to her rather than a rent credit to be paid by 9 July 2014. 4. The rent is reduced by 10% of the rent from time to time, on-going from 18 June 2014 due to the reduction in services. 1. The grounds of appeal were stated as: 1. An error in law occurred in determining that the tenant is entitled to a rent reduction over a period in excess of two years. 2. An error in law occurred in determining that the tenant is entitled to a 10% reduction of the rent on an ongoing basis from 18 June 2014. 1. The Notice of Appeal filed on 11 July 2014 also sought leave to appeal on the merits of the case it being asserted that the decision is not fair and equitable. For reasons which appear hereafter it is unnecessary for us to consider whether such leave should be granted. 2. So far as the papers before us reveal the Tribunal on 18 June 2014 neither made formal findings nor expressed reasons for the orders it made except to the extent that they can be gleaned from the transcript of the hearing. However in response to an application under s 62 of the Civil and Administrative Tribunal Act 2013 (the Act) Mr Anforth furnished reasons for his decision on 12 August 2014 (the Notice of Appeal having been filed in the meantime on 10 July 2014). We will need to return to these reasons but we pause to note that in them Mr Anforth recognised an error in and purported to correct order 4 by limiting its operation to a period of 12 months. This may have been permissible under the "slip rule" (s 63 of the Act) but again in light of the conclusion we have reached it is unnecessary to decide the question. 3. The dispute concerns premises at Queanbeyan of which the Appellant is lessor and the respondent is tenant. The relationship is subject to the provisions of the Residential Tenancies Act 2010 (the Tenancies Act) and under that statute is categorised as "a social housing tenancy agreement" although nothing turns on that circumstance in this case. 4. We take the primary facts from Mr Anforth's reasons of 12 August: 1. Between 30 April 2014 (sic 2012) and the hearing date, the tenant suffered persistent and recurrent problems with the heating system in the residential premises. 2. The original heater was a ducted, wall-furnace model similar to a Vulcan WF30, which heats up to 60m2. The respondent no longer installs this type of heater in its tenanted premises; the heater now used is a model akin to the Rennai 559FT. The new model of heater is more energy efficient but heats a more limited area, up to 56m2, and does not use ducting. 3. Since 30 April 2012, the respondent has authorised contractors to inspect the original heater and repair it as needed in response to three failures. These repairs did not succeed in remedying the situation as the parts installed either did not fit, or another part of the heater failed. 4. Between 30 April 2012 and 9 April 2014 there was only partial and intermittent heating in the house. 5. Between 9 April 2014 and 5 June 2014 there was no heating at all; the tenant purchased her own portable electric heater on the latter date. 1. Sections 44 and 187 of the Act prescribe the powers of the Tribunal in circumstances potentially relevant to this case. 44 Tenant's remedies for excessive rent (1) Excessive rent ordersThe Tribunal may, on the application of a tenant, make any of the following orders: (a) an order that a rent increase under an existing or proposed residential tenancy agreement is excessive and that, from a specified day, the rent for residential premises must not exceed a specified amount, (b) an order that rent payable under an existing or proposed residential tenancy agreement is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises and that, from a specified day, the rent for residential premises must not exceed a specified amount. (2) Time limit for excessive rent increase applicationsAn application for an order that a rent increase is excessive must be made within the period prescribed by the regulations after notice of the increase is given. (3) Applications on withdrawal of goods or servicesA tenant may, before the end of a tenancy, make an application that the rent is excessive, having regard to the reduction or withdrawal of any goods, services or facilities provided with the residential premises, even if those goods, services or facilities were provided under a separate or a previous contract, agreement or arrangement. (4) Determination of excessive rent For the purposes of making an order under this section, the Tribunal may declare that amounts payable under a contract, agreement or arrangement under which goods, services or facilities are provided to the tenant are rent. (5) The Tribunal may have regard to the following in determining whether a rent increase or rent is excessive: (a) the general market level of rents for comparable premises in the locality or a similar locality, (b) the landlord's outgoings under the residential tenancy agreement or proposed agreement, (c) any fittings, appliances or other goods, services or facilities provided with the residential premises, (d) the state of repair of the residential premises, (e) the accommodation and amenities provided in the residential premises, (f) any work done to the residential premises by or on behalf of the tenant, (g) when the last increase occurred, (h) any other matter it considers relevant (other than the income of the tenant or the tenant's ability to afford the rent increase or rent). (6) Effect of excessive rent order An order by the Tribunal specifying a maximum amount of rent: (a) has effect for the period (of not more than 12 months) specified by the Tribunal, and (b) binds only the landlord and tenant under the residential tenancy agreement or proposed residential tenancy agreement under which the rent is payable. Note. A tenant under a social housing tenancy agreement may also apply for an order that rent is excessive if a rent rebate is cancelled (see section 141 (1)). 187 Orders that may be made by Tribunal (1) The Tribunal may, on application by a landlord or tenant or other person under this Act, or in any proceedings under this Act, make one or more of the following orders: (a) an order that restrains any action in breach of a residential tenancy agreement, (b) an order that requires an action in performance of a residential tenancy agreement, (c) an order for the payment of an amount of money, (d) an order as to compensation, (e) an order that a party to a residential tenancy agreement perform such work or take such other steps as the order specifies to remedy a breach of the agreement, (f) an order that requires payment of part or all of the rent payable under a residential tenancy agreement to the Tribunal until the whole or part of the agreement has been performed or any application for compensation has been determined, (g) an order that requires rent paid to the Tribunal to be paid towards the cost of remedying a breach of the residential tenancy agreement or towards the amount of any compensation, (h) an order directing a landlord, landlord's agent or tenant to comply with a requirement of this Act or the regulations, (i) a termination order or an order for the possession of premises, (j) an order directing a landlord or landlord's agent to give a former tenant or person authorised by a former tenant access to residential premises for the purpose of recovering goods of the former tenant or fixtures that the former tenant is entitled to remove. (2) Without limiting the Tribunal's power to make an order as to compensation, the Tribunal may order compensation to be paid for the following: (a) loss of rent, (b) any other breach of a residential tenancy agreement, (c) loss or damage suffered by a person as a result of inaccurate, ambiguous or out-of-date information being listed about the person on a residential tenancy database. (3) An order under subsection (1) (a) or (b) may be made even though it provides a remedy in the nature of an injunction or order for specific performance in circumstances in which such a remedy would not otherwise be available. (4) The Tribunal must not make an order for: (a) the payment of an amount that exceeds the amount (if any) prescribed by the regulations for the purposes of this section, or (b) the performance of work or the taking of steps the cost of which is likely to or will exceed the amount (if any) prescribed by the regulations for the purposes of this section. Note. This Act also confers other order-making powers on the Tribunal, including other specific powers to make termination orders, to declare that premises have been abandoned, to make orders about holding fees and to make various orders about rental bonds. 1. Although there is potential for sections 44 and 187 to overlap in our opinion they provide distinct remedies. Section 187 seems to contemplate a situation where there has been a breach of a contractual obligation by either landlord or tenant and, inter alia, limits the amount of monetary compensation which may be ordered. On the other hand s44 does not necessarily predicate a breach of a contractual obligation by either party, although this may have occurred. Instead it looks at the situation which has arisen in fact and, in appropriate circumstances, provides the tenant with relief by allowing for the rent to be adjusted to reflect those circumstances. But s44 has limitations of its own. Where services etc. have been reduced or withdrawn the application for relief must be made before the end of the tenancy and the power of the Tribunal to order that the rent not exceed a specified amount is limited to a period of 12 months. 2. In light of the foregoing it is obviously important that the Tribunal specify in a given case the basis of the power it is purporting to exercise. In this case the Tribunal did not do so however it is difficult to escape the conclusion from the opening words of Order 3 and the words of Order 2 that the Tribunal was purporting to exercise a power under s44. 3. Moreover, a perusal of the transcript of the proceedings below which is before us supports such a conclusion as there are a number of references by the learned member to rent reductions for loss of heating facilities. The transcript suggests that the parties did not address the position as to whether there had been a breach of the landlord's contractual obligations and there was certainly no finding by the Member in that regard. Significantly, at page 21, line 38 of the transcript the Member is recorded as saying "…9 April 2014 and without any heating since that date. The tenant is entitled to a rent reduction for partial withdrawal of services in the period 30 April 2012 to 9 April 2014 at the rate of $30 per week during April, May, June, July, and August each year and half that rate in the other months". He then accepted the calculation of that amount at $2280 1. On the material before us we are satisfied that when he made orders on 18 June 2014 the Member was purporting to act under s44 and it was on that basis that the appeal was constituted. 2. In his reasons of 12 August 2014, Mr Anforth after making reference to s44 proceeded to find breaches by the appellant of its contractual obligations viz the obligation to allow quiet enjoyment and the failure of the landlord to maintain the premises in a reasonable state of repair. He then expressly relied upon s187 to award compensation of $2280 adding: 92 The award of $2,280 for the period prior to the hearing is an award by way of compensation under section 187. It does not purport to be an award of a rent reduction under section 44 albeit that the quantum of the compensation is calculated by reference to the week rents for various periods. 1. Mr Anforth's reasons as it seems to us fundamentally changed the basis on which the matter was argued and decided on 18 June 2014. So far as the transcript reveals neither party addressed the issue of breaches of contractual obligations by the landlord nor was there any reference to compensation under s187. Relevantly the hearing was plainly confined to the tenant receiving relief for reduction or withdrawal of services or facilities under s44(1)(b). In our opinion Mr Anforth was not entitled to make such a change. This was not a mere clerical slip but a purported change of the whole basis of the way the case had been argued and, if we may respectfully say so, decided. We refer for instance to cases such as Coppins v Helmers (1968) 88 WN 455 per Isaacs J. 2. On the basis that order 3 was made pursuant to s44 of the Tenancies Act its operation was limited by s44(6)(a) to a period of 12 months. Moreover the reduction for partial withdrawal of services would not have applied in warmer months when heating was unnecessary. Mr Anforth allowed $30 per week for colder months and we would accept that as reasonable and regard it as reasonable that a period of 36 weeks be taken into account within the period of 12 months prior to June 2014. Although this relief is retrospective and does not sit entirely comfortably with the power to stipulate that the rent from a specified day must not exceed a specified amount it seems to us that s44 must necessarily contemplate retrospective relief. On that basis it is convenient to quantify the relief by a lump sum rather than the formula which, on its face, the statute requires. We quantify the amount of relief the tenant should receive at $1080. 3. In relation to the period after June 2014 Mr Anforth said in his reasons: 81 The tenant objected to the respondent installing its preferred heater as she believed it would cause both parties undue expense and inconvenience: the capacity and design of the proposed heater is smaller than the original heater' this means that the tenant will have to purchase and operate supplementary heater, and the respondent will have to renovate or repair the wall cavity where the original heater was located. 82 These are valid concerns. However, requiring the respondent to install the same or equivalent model of heater as the original heater is impractical. 83 The respondent is the primary provider of social housing in NSW, and provides standard facilities and services in its residential premises. This policy facilitates administrative efficiency and ease of maintenance. The proposed heater has replaced the original heater in this inventory; making individual variations in the absence of exceptional circumstances would cause undue administrative and practical inconvenience to the respondent, and is likely to cause problems in terms of future maintenance. In addition to inconveniencing both parties, this would increase the likelihood of future litigation analogous to the current matter. 84 Therefore, the Tribunal enabled the respondent to install a heater of its choice, but also required that the wall cavity be repaired at the Respondent's expense, and ordered that the tenant be compensated for the partial withdrawal of heating services to the date of the hearing and thereafter. The presence of the new heating would constitute a withdrawal of heating services for the rest of the tenancy, however long that may be. 1. In our opinion there was no evidence, other than the respondents expressed belief, that a new heater would constitute "a withdrawal of heating services". This could not be inferred in our view simply from the fact that the proposed new unit was designed to heat a slightly smaller area and was not ducted. The finding that the installation of a new heater would constitute a withdrawal of heating services for the rest of the tenancy was, with respect, an error of law in the absence of any evidence to support it. 2. It follows that the orders made below cannot stand. Under s81 of the Act however we are entitled to make orders without a rehearing which conform with these reasons and the findings of fact made by Mr Anforth. 3. ORDERS: 1. Appeal allowed. 2. Orders 3 and 4 made in the Tribunal below quashed. 3. In Lieu thereof: 1. Order that the tenant is entitled to a rent reduction in total of $1080 in respect of the months of May, June, July, and August 2013 and the months of April and May 2014. 2. Order that the tenant is entitled to a rent reduction to the extent that for the period from 18 June 2014 until the landlord complies with Order 1, or the expiration of 3 months whichever is the earlier, the rent must not exceed 90% of the rent otherwise payable. 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. 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 Amendments 02 March 2015 - typographical error on coversheet 03 March 2015 - typographical error 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: 03 March 2015