Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Murauer v Andresson [2016] NSWCATAP 15 Hearing dates: 9 December 2015 Date of orders: 20 January 2016 Decision date: 20 January 2016 Jurisdiction: Appeal Panel Before: Dr J Renwick SC, Senior Member R Titterton, Senior Member Decision: 1. The appeal is allowed, in so far as it relates to the Tribunal's finding and decision that the appellant is to pay the amount of $3,475.00 to the respondents, and is set aside. 2. Otherwise the appeal is dismissed. 3. The respondents are to reimburse the sum of $3,475.00 to the appellant. Catchwords: Residential Tenancies Act 2010 - Landlord's general obligations for residential premises - Landlord's general obligation – correct legal test Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administration Tribunal Rules Residential Tenancies Act 2010 (NSW) Cases Cited: Bhandari v Laming [2015] NSWCATAP 224 Collins v Urban [2014] NSWCATAP 17 Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 McCabe Toshack [2014] NSWCATCD 239 Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 Partridge v Maidi Pty Ltd [2013] NSW CTTT 390 Category: Principal judgment Parties: Mark Murauer (Appellant) Katie Andresson, Heidi Goddard, Grant Meath-Summerville (Respondents) Representation: Mr Dobrych, solicitor, for the appellant Ms Andresson and Ms Goddard (in person) File Number(s): AP15/56962 Publication restriction: None Decision under appeal Court or tribunal: Civil and Administrative Tribunal of NSW Jurisdiction: Consumer and Commercial Division Date of Decision: 15 September 2015 Before: G Meadows, Senior Member File Number(s): RT 15/46008 REASONS FOR DECISION Introduction 1. This is an appeal and an application for leave to appeal in relation to residential tenancy premises in Hornsby between the landlord, Mr Murauer, and the tenants, Ms Andresson, Ms Goddard and Mr Meath-Summerville. For the reasons which follow, the appeal is allowed, in part. 2. The respondent tenants are to repay to the appellant landlord the sum of $3,475.00, noting the undertaking of the landlord at the hearing that this sum was to be paid to the tenants on 1 December 2015. Background 1. The tenants sought an order under s 187(1)(c) of the Residential Tenancies Act 2010 for damages in relation to damaged possessions caused by mould in the residential premises. As discussed below, there is no dispute as to the quantum found by the Tribunal below, namely that the damaged possessions amount to $3,475.00. 2. Section 52 of the Residential Tenancies Act states: 52 Landlord's general obligations for residential premises (1) A landlord must provide the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant. (2) A landlord must not interfere with the supply of gas, electricity, water, telecommunications services or other services to the residential premises unless the interference is necessary to avoid danger to any person or to enable maintenance or repairs to be carried out. (3) A landlord must comply with the landlord's statutory obligations relating to the health or safety of the residential premises. Note: Such obligations include obligations relating to swimming pools under the Swimming Pools Act 1992 . (4) This section is a term of every residential tenancy agreement. 1. Section 63 of the Residential Tenancies Act states: 63 Landlord's general obligation (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. The facts 1. Most of the facts in this matter are not in dispute. They include the following: 1. The premises were rented between 21 December 2014 and 14 July 2015. 2. At an inspection by the landlord on 7 April 2015, there was no sign of dampness or mould in the premises. 3. In early June 2015, the tenants discovered bad mould infestation. They cleaned it but they did not report it to the landlord. On 28 June 2015, the tenants discovered "extremely severe" mould affecting a number of chest of drawers and wardrobes. They then notified the landlord of the mould. The Tribunal found that "the mould infestation was extremely severe in those areas affected and the damage to the tenants' possessions is also very clear". There is no challenge by the landlord to that finding. 1. The challenge comes to the following reasoning in the decision below: I am not satisfied the tenants allowed damp conditions to prevail in the premises. Any possible water ingress (for example during the extreme weather conditions in April this year) were contained and cleaned up by the tenants. If the mould had first appeared in the open, such as on walls or ceilings, I would regard it as the tenants' responsibility, at least initially, to attempt to keep it under control by regular cleaning. However, the tenants were not aware of the mould. It is true that neither was the landlord aware, but in my view, the landlord had the statutory duty to provide the premises in a reasonable of cleanliness and fit for habitation by the tenants (s 52) and in a reasonable state of repair (s 63). I find the mould was caused by poor ventilation, and probably exacerbated by some water ingress through window frames. I find the landlord has breached those sections of the Act and that has resulted in this severe mould infestation. 1. The undisputed evidence is that on 30 June 2015, the tenants gave notice and physically departed the premises, although they did not formally vacate until 14 July 2015. There simply was, at most, a few days between the time the tenants first notified the landlord of the mould, and the time they vacated the premises, but equally relevantly, it would appear the damage was already done to the goods at the time the landlord was notified. 2. The determinative question on this appeal is whether the Tribunal applied the incorrect legal test in relation to ss 52 and 63, such that the decision should be set aside, or alternatively, erred in its application of the law concerning those provisions. 3. In relation to s 52, the Appeal Panel can deal with the matter quite briefly. In short, s 52 is concerned with the initial condition of the premises, not the conditions which may develop during the term of the lease. The position is different in relation to s 63 because that section also concerns the maintenance of the premises. 4. As the Appeal Panel stated in Bhandari v Laming [2015] NSWCATAP 224 at [38]: The obligation to provide residential premises fit for habitation is mandatory and, according to language used in the provision, unqualified. Relevantly, the obligation is not expressed to be contingent on reasonable steps or to be dependent on the landlord being at fault or having control over the event or circumstance affecting the state of the premises. This is in contrast with the obligation on the landlord to provide and maintain the residential premises in a reasonable state of repair (s 63 RTA) and the obligation that arises in respect of the tenant's entitlement to quiet enjoyment of the residential premises (s 50 RTA). The landlord's obligations under sections 50, 63 and 52 (in relation to the state of cleanliness of the residential premises) are mandatory and ongoing but qualified by the concept of reasonableness. 1. The fundamental point made by the landlord is that a breach of s 63 occurs, and only occurs, if according to the test propounded by Gummow J in Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313 at 370-1 and quoted below, the landlord receives notice of the defect in the premises so that he or she can investigate it, and the landlord fails to carry out the necessary works in a reasonable time frame. The landlord's fundamental proposition is that the landlord had evidently acted to carry out the necessary works within a reasonable time, or alternatively, the damage was already done, there was a latent defect, and there was simply no capacity to deal with the damage. 2. As the Consumer and Commercial Division of the Tribunal stated in Hanney v McCabe Toshack [2014] NSWCATCD 239 at [49]-[50]: 49. 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. 50. 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. 1. We note that the respondent refers to Hanney in its Reply to Appeal. The respondents rely on par [23] of the decision in Partridge v Maidi Pty Ltd [2013] NSW CTTT 390 which is cited in Hanney at [58] that a "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". A careful reading of that decision shows that those remarks are a discussion about s 52. 2. The respondents submit that "the landlord had a strict statutory duty towards the respondents as per sections 52 and 63 of the Act". 3. The tenants' submission is correct in relation to s 52 of the Residential Tenancies Act. It is not correct in relation to s 63. Relevant Law 1. In relation to repairs, s 65(3) of the Residential Tenancies Act provides the answer. That sub-section provides: (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. 1. As already noted, the Tribunal below relevantly found that: The landlord had a statutory duty to provide the premises in a reasonable state of cleanliness and for habitation by the tenants (s 52) and in a reasonable state of repair (s 63). I find that the mould was caused by poor ventilation and probably exacerbated by some water ingress through the window frames. I find the landlord has breached those sections of the Act and that has resulted in this sever mould infestation. 1. The Tribunal correctly stated the relevant effect of s 52. However, the Tribunal did not address the matters set out in s 65(3) of the Act, and in this respect, the Tribunal erred in law. That being so, the appeal in relation to the finding that the landlord was to pay the amount of $3,475.00 to the tenants for damage to goods effected by mould must be allowed, and the order set aside. Determination of claim 1. Section 81 of the Civil and Administrative Tribunal Act 2013 provides: 81 Determination of internal appeals (1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following: (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when varying, or making a decision in substitution for, the decision under appeal. 1. The Appeal Panel asked the parties at the hearing whether, in the event that the appeal was allowed, the Appeal Panel should determine the matter for itself, or remit as much of the application as was necessary back to the Tribunal for further determination. The parties agreed that their preferred course was for the Appeal Panel to determine the application. 2. The tenants agreed that they gave notice to the landlord of the presence of mould in the premises on 28 June 2015, gave notice to vacate and physically departed the premises on 30 June 2015, although they did not formally vacate until 14 July 2015. The Appeal Panel considers that it cannot be said that, within that timeframe, the landlord failed to act with reasonable diligence to have the repair carried out (s 65(3)(b)). 3. However, there remains the question whether the landlord ought reasonably to have known of the need for repair (s 65(3)(a)). Here, the tenants rely on the following matters which are set out in their submissions: 1. There was a gap between the brick wall and the edging. 2. There was mould on the outside of the windows. 3. There was mould on the outside walls and balconies of the premises. 4. Matters (2) and (3) are supported by photographic evidence. 5. The landlord's response to notification of the existence of mould (namely to dehumidify the air by running an air-conditioner) did not satisfy the landlord's statutory duty. 1. The respondents placed before the Appeal Panel the photographic evidence which they say was before the Tribunal below. Relevantly, in relation to (1) above, these are photographs A to D; in relation to (2) photograph E; and in relation to (3), photographs X1 and X2. 2. We are not persuaded that, without more, these photographs support the proposition that the landlord ought reasonably to have known of the presence of mould at the premises and the need to effect repairs. We have reached that conclusion for a number of reasons. 3. First, the photographs are not dated. Accordingly, it is not possible to know when it was, based on these photographs, the landlord ought to have been aware of either the gap, or the mould. 4. Secondly, there is no evidence of an expert nature which establishes that the gap apparently identified in photographs A to D was conducive to or in fact allowed the mould to develop within the premises. For instance, it is not clear what the depth of the so-called gap was, and whether was a factor in allowing the mould to develop. 5. Thirdly, again, there is no expert or other evidence to provide a causative link between what is alleged to be mound on the external balcony and the presence of mould within the premises. 6. On the balance of probabilities, Appeal Panel is not satisfied, and does not find, that the landlord ought reasonably to have known of the existence of mould or any need for repair of the premises. 7. 26. Accordingly, the Tribunal's finding and decision the landlord is to pay the amount of $3,475.00 to the tenants is set aside. The tenants are to reimburse this amount to the landlord. Extension of time 1. The decision appealed from was published on 15 September 2015. The appellant states in his Notice of Appeal that he received notice of the decision on 19 September 2015. 2. Regulation 25 of the Civil and Administration Tribunal Rules relevantly provides that, unless the Tribunal grants an extension under s 41 of the Civil and Administrative Tribunal Act 2013, an internal appeal must be made within 14 days from the day on which the appellant was notified of the decision or given reasons for the decision (whichever is the later). 3. Accordingly, the Notice of Appeal was filed some nine days late. 4. The relevant principles in considering whether or not to extend time were stated by the Appeal Panel in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. In that decision, the Appeal Panel considered an application for an extension of time where the hearing was held and orders made on 30 January 2014, and the notice of appeal was filed on 4 March 2014. This was a matter involving a residential tenancy, like the present appeal, where appeals must be filed within 14 days from the day on which the appellant was notified of the decision to be appealed or given reasons for the decision. The notice of appeal in Jackson was filed approximately 19 days late. 5. The Appeal Panel refused the application to extend time, and dismissed the appeal. In doing so, the Appeal Panel noted the following relevant principles: 1. Under s 41, the Appeal Panel has power to grant an extension of time in which to appeal in the present matter. The discretion to grant an extension of time is unfettered under that section but it must be exercised judicially. It must also be exercised having regard to the statutory command in s 36 of the Act that the guiding principle for the Act "is to facilitate the just, quick and cheap resolution of the real issue in the proceedings": see [18]. 2. The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant: see [22(1)]. 3. The discretion is to be exercised in light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision, and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success: see [22(2)]. 4. Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: 1. the length of the delay; 2. the reason for the delay; 3. the appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and 4. the extent of any prejudice suffered by the respondent (to the appeal): see [22(3)]. 1. The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel of the Tribunal conducted a review of the relevant cases and set out the principles at [84]. In summary, for leave to appeal to be granted, an appellant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact. Ordinarily, it is appropriate to grant leave to appeal only in matters that involve issues of principle, questions of public importance or matters of administration or policy which might have general application, an injustice which is reasonably clear, a factual error that was unreasonably arrived at and clearly mistaken; or that the Tribunal went about its fact finding process in such an unorthodox manner that it produced an unfair result. 2. For the reasons above, the Appeal Panel considers that the Tribunal below did make an error of principle, in that it did not correctly apply or consider s 65 of the Residential Tenancies Act. The Appeal Panel also considers that its discretion to extend the time for filing should be exercised in favour of the appellant, otherwise in the circumstances he will suffer an injustice. The Appeal Panel also notes that the delay in filing the Notice of Appeal is relatively short. 3. In the circumstances, but particularly considering there was an error in the Tribunal's reasoning, the Appeal Panel considers that the time for filing the Notice of Appeal should be extended to 13 October 2015. Orders 1. The Tribunal orders that: 1. The appeal is allowed, in so far as it relates to the Tribunal's finding and decision that the landlord is to pay the amount of $3,475.00 to the tenants, is set aside. 2. Otherwise the appeal is dismissed. 3. The tenants are to reimburse the sum of $3,475.00 to the landlord. ********** 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: 20 January 2016