Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Tsang v Agar [2016] NSWCATCD 17 Hearing dates: 18 February 2016 Decision date: 30 March 2016 Jurisdiction: Consumer and Commercial Division Before: Margaret Mary McCue, General Member Decision: 1. The applicant is entitled to an order for payment of the whole of the bond ($ 3,100.00). The Rental Bond Board is directed to pay to the tenant the whole of the bond. 2. The respondents are to pay to the applicant the sum of $ 1,550.00 on or before 7 April 2016, in addition to monies payable at order 1. Catchwords: Applicants' entitlement to a refund of all monies paid to the respondent; vacant possession of premises at the commencement of the lease Legislation Cited: Civil and Administrative Tribunal Act, 2013, Part 5, Schedule 4, Residential Tenancies Act 2010 ("the Act") Category: Principal judgment Parties: Shirley Tsang (applicant) Neera Agar; Ashish Agar; Nita Agar (respondents) Representation: Applicants: In person Respondent: Ms Oglesby (agent) File Number(s): RT 15/68080 Publication restriction: Nil REASONS FOR DECISION Application 1. The parties entered into a residential tenancy agreement commencing on 2 December 2015 for a term of 26 weeks for premises located at Riverview. 2. The tenant gave notice to terminate the lease on 6 December 2015. The applicant says that the premises were not ready for occupation at the commencement date of the lease. The applicant submits that she is entitled to terminate the lease without penalty. 3. The respondents oppose the application. The respondents seek recovery of a break lease fee pursuant to the terms of the residential tenancy agreement where the tenant has terminated the lease during a fixed term. 4. The applicant tenant brings proceedings pursuant to Sections 103; 109; 175; 187 and 190 of the Act. APPEARANCES 1. The applicant appeared in person though assisted by an interpreter, as required. 2. The agent, Ms Linda Oglesby, appeared for the respondents. JURISDICTION 1. On the establishment date, 1 January 2014, the Civil and Administrative Legislation (Repeal and Amendment) Act 2013 amended certain statutes which previously conferred jurisdiction on now "abolished" tribunals. NCAT has jurisdiction to hear and determine relevant matters in place of the "abolished" tribunals. 2. From 1 January 2014, the Residential Tenancies Act was amended. The definition of "Tribunal" was changed in that Act from the CTTT to NCAT - see cl 4.34 item (2) in Schedule 4 to the Civil and Administrative Legislation (Repeal and Amendment) Act. 3. I am satisfied that NCAT has jurisdiction to hear the application made pursuant to the provisions of the Residential Tenancies Act 2010 ("the Act"). BACKGROUND AND EVIDENCE 1. The applicant requested an interpreter to assist her with giving her evidence in the proceedings. 2. Ms Tsang said that she was a little nervous about matters that bring her before the Tribunal in relation to this application. 3. Ms Tsang relied upon a folder of documents concerning a residential tenancy agreement entered into between her and the respondents for the premises,24 Romani Avenue Riverview. ("the Riverview premises") 4. Given the time allocation, I had suggested that perhaps Ms Tsang could give her evidence directly, and where necessary, confer with the interpreter for assistance. Ms Tsang also had a support person with her on the day of the hearing. I formed a view that Ms Tsang's competence in the English language was sufficient to allow matters to proceed in this way. 5. During the course of the hearing, the nervousness seemed to diminish and Ms Tsang gave her evidence in a competent and cohesive manner. 6. Ms Tsang had sold a property in Roseville. There was no immediate urgency for her to leave those premises. I will come back to this later in the decision. 7. Ms Tsang was proposing to travel overseas from 9 December, 2015. It was Ms Tsang's intention to make arrangements to secure rental accommodation prior to that date. 8. Ms Tsang responded to an advertisement for the Riverview premises. Ms Tsang contacted a Ms Kim Walters, a property assistant at Belle Property, the managing agent. 9. The respondent's agent, Ms Oglesby, gave evidence during the course of the hearing that this was the first time the family had leased the Riverview premises. It was a family home, and perhaps this may account for some of the matters that were the subject of the applicant's complaint; the respondents' unfamiliarity with obligations relating to the leasing of premises. 10. At the initial inspection of the premises around 21 November 2015, Ms Tsang said that the respondents' furniture and other belongings, as well as debris and rubbish, had not been cleared from the Riverview premises. 11. Afterwards, Ms Walters called the applicant to see whether she had any interest in leasing the Riverview premises. The applicant submitted an application that was subsequently approved in around 24 November 2015. 12. In around 25 November 2015, the applicant paid a deposit to Ms Walters to secure the Riverview premises. Ms Tsang's observed at the time of a second viewing on 25 November 2015, that little progress had been made in preparing the property for the commencement of the tenancy on 1 December 2015, notwithstanding assurances from Ms Walters that the Riverview property was being made ready for occupation on that date. 13. Ms Tsang said that she also had some concerns about fencing repairs that had not been attended to at the time of the inspection. Ms Tsang stressed to Ms Walters that she had a dog and how important it was to secure the fencing prior to her family's occupation of the premises. 14. The purpose of Ms Tsang's inspection on 25 November was to look at the floor plan for the positioning of the furnishings once the lease commenced. It was around that time, Ms Tsang also had some discussions with Ms Walters about having the Riverview property fumigated. Ms Tsang would arrange this if the respondents were resistance to the proposal. 15. It transpired that the pest control and fumigation had not been carried out for over two years and the landlords were resistant to funding this cost. Ms Tsang was keen to have the premises made ready for the commencement of the lease and attended to the pest control at her own expense. 16. As I understood the evidence, the original lease was signed at the agent's office in around 28 November 2015. Subsequently, the front page of the agreement was substituted to amend the start date from 1 December to 2 December 2015. The premises were not in a state of readiness at the original start date on 1 December. Kim Walters telephoned the applicant to postpone the commencement date until 2 December 2015. 17. As at 30 November 2015, the applicant says that, during the conversation with Ms Walters, she said words to the following effect: The landlord is not ready, there are heaps of things to do and we need to postpone the commencement date from 1 to 2 December. 1. Kim Walters said to the applicant: when you collect the keys on 2 December 2015, we are going to ask you to exchange the first page of the previous lease with a substituted page referencing a 2 December start date. 1. The lease was not re-executed. The tribunal accepts that the residential tenancy agreement tendered as part of the applicant's evidence sets out the terms and conditions of the lease. 2. The applicant went to the agent's office at around 12 noon on 2 December, 2015. Kim Walters was not at the office and she contacted Alexis Adam instead. The applicant confirmed that she received a set of keys on 2 December, as well as a condition report. 3. When Ms Tsang arrived at the premises on 2 December she observed that: nothing had changed since 25 November. The landlord had some furniture in the house; there was rubbish in the carport areas and the pathway. 1. Ms Tsang called Kim's office immediately and left a message for her to the following effect: nothing has changed since 25 November 2015 and that the premises were not ready for occupation as at the start date of the lease 1. The applicant's evidence was that she did not move in and she did not know what to do. Kim called and said that she expected the landlord should have finished the job by 11.30 am that morning. One of the landlords had arrived (unscheduled) at the premises on 2 December to finish the job. The applicant submits that she not move in because the landlord had not vacated the premises. 2. There was some attention to repairs during the period from 2 December to 4 December. However, the applicant observed that some of the landlords' furniture was still at the premises; the shed was full of the landlords' possessions; the fence was not repaired; the flyscreens were not repaired. The sunroom had a leak in the roof. The applicant called Kim to put her on notice about matters the subject of the complaint. 3. The applicant had also arranged for a pest control attendance at the premises on 4 December. The premises were infested with cockroaches in overwhelming numbers: throughout the house and on the kitchen benches. The applicant's evidence was that they were "everywhere." 4. The applicant's submission was that the premises were not fit for purpose from the very start of the lease; she was unable to move into the premises at the commencement date of the lease. The applicant continued to report these matters to the agent. The agent was unable to assist with any progress of the matter until 7 December 2015. This was unsatisfactory from the applicant's point of view. 5. The applicant then gave formal notice of termination of the lease on 6 December 2015, relying upon the matters that she had raised with the agent prior to entering into the lease, and confirming that the premises at the commencement of the lease were not fit for her occupation. 6. The tribunal noted the agent's subsequent evidence was that the Riverview property was the respondent's family home for many years and it was their first foray into a leasing arrangement for the premises. Perhaps the respondents needed guidance regarding their obligations under the terms of the agreement. 7. As at 4 December 2015 the applicant's evidence was that: the state of the premises made the applicant feel horrible 1. There was heavy infestation of the building with cockroaches, wasps and other insects. As well, the lawn and pathways were covered with insects, and the other matters of complaint raised with the agent had not been remediated. 2. Ms Linda Oglesby appeared at hearing for the respondents. Ms Oglesby is the property manager, though, during the course of her evidence said that she had not inspected the premises until after the notice of termination was given to the office in around 6 December 2015. 3. Ms Oglesby ("the agent") said that she relied upon regular reports from her staff members, Alexis Adam and Ms Walters, to update her on the progress of preparation of the premises in anticipation of the lease commencement date. 4. The tribunal suggested that perhaps the best evidence would be sourced from agents who had inspected the property and had first hand knowledge of the state of the premises at the due date of the commencement of thelease. The agent submitted that if further evidence was needed, then the matter should be adjourned to allow her to address those matters. However, this was unnecessary given Mrs Olgesby's disclosure that a statement in her tender bundle, though unsigned and undated, was prepared by Alexis Adam 5. In her statement, Ms Adam sets out the respondents' position: The owners of 24 Romani Avenue Riverview have made every effort to repair and make good items that Ms Tsang wanted repaired before even moving into the property and only vacated the property themselves the day prior to the lease start date. The property was not vacant and unliveable for any period of time prior to the commencement of the lease. 1. The respondent's evidence did not include a residential tenancy ingoing condition report. The agent relied upon a document that was tendered in the applicant's case without objection from the applicant. The condition report was annotated with the tenant's comments and prepared by the agent on 1 December 2015. The agent noted that there were no signs of mould and dampness; no signs of pest and vermin; no rubbish had been left on the premises. 2. However, the applicant certainly had a different view about these matters and encircled the YES provision: all of the above were present at the premises. Other provisions of the report were annotated with contrasting views as to the state of repair of the premises. The photos attendant to the report did not include photos depicting matters the subject of the applicant's complaint. 3. In contrast, the applicant's TAB entitled "property not available on time" showed some old fence palings that needed repairs to secure the property for the dog, as well as photographic evidence of a significant amount of furniture that had been left in the garden shed; debris in the exterior areas of the premises; rubbish in the yard and in the under house areas. 4. The agent submitted that the garden shed did not form part of the leased premises. This submission was not supported by reference to any provision in the lease: there was no exclusion of any area of the leased premises. 5. It may have been difficult for the landlord to prepare the property for the commencement of the tenancy on 2 December 2015, given the agent's evidence that the property was not vacant prior to the commencement date; the respondents only vacated the property themselves the day prior to the lease starting on the (re-scheduled date). 6. The agent's position is that the owners of the Riverview premises made every effort to repair and make good the items that the agent had agreed to attend to prior to the commencement of the lease. Clearly, notwithstanding their every good intention, the evidence supports a contrary view about the state of preparedness of the property at the commencement of the lease. 7. The respondents' position was that there was no breach of the lease agreement and that the applicant had not allowed a reasonable time for the landlord to complete any requested repairs. 8. This is in contrast to Ms Tsang's evidence that Ms Walters had assured her that the repairs would be attended to prior to the commencement date of the lease. This did not occur. 9. Ms Adam said in the written statement that formed part of the respondent's tender: Ms Tsang dropped the keys off to the office on 7 December and we only charged rent up until this date. 1. The statement suggests to the tribunal that Ms Adam accepted the applicant's position that the lease was terminated on the basis of the respondents' breach. However, the agent presses for the "break lease" fee on the basis that the respondents were not in breach of the lease. 2. There was some evidence that repairs had been effected but these had taken place on the eve of service of the notice of termination. There was a second invoice relating to the installation of a lock on the gate, adjusting a hinge in the sunroom, replacing light fittings and bulbs as well as attending to fence repairs. Those repairs appear to have been effected in around 8 December 2015. The agent's position was that her clients had not breached the lease founded upon a failure to repair. 3. The agent suggested that Ms Tsang had changed her mind about moving into the premises. The agent submitted that the settlement date for Ms Tsang's current property sale was extended and that she had notice of this in around 6 December 2015. The agent further submitted that this was the reason for the termination. 4. This matter was put to Ms Tsang. She said that the notice extending the settlement date for the sale of her Roseville premises was received well after giving the notice of termination in around 5/6 December. The landlords' obligations under the terms of the lease and the Act 1. Pursuant to clause 13 of the lease, the landlords agree: 2. To make sure that the residential premises are vacant so that the tenant can move in on the agreed date, and 3. To take all reasonable steps to ensure that, at the time of signing the agreement, there is no legal reasons why the premises cannot be used as a residence for the term of this agreement. Occupation of residential premises as residence 1. In addition to clause 13 of the agreement, section 49 of the Act provides as follows: Occupation of residential premises as residence 1. A landlord must take all reasonable steps to ensure that, at the time of entering into the residential tenancy agreement, there is no legal impediment to the occupation of the residential premises as a residence for the period of the tenancy. 2. A landlord must ensure that the tenant has vacant possession of any part of the residential premises to which the tenant has a right of exclusive possession on the day on which the tenant is entitled to occupy those premises under the residential tenancy agreement. (3) This section is a term of every residential tenancy agreement. 1. In contrast to the provisions of clause 13 of the agreement (the use of the conjunctive "and") section 49 (2) is a discrete or stand alone obligation, included as a term of every residential tenancy agreement. 2. Relevantly, the Landlord must ensure that the tenant has vacant possession of any part of the premises on the day on which the tenant is entitled to occupy those premises. What is vacant possession? 1. Some guidance is provided in Waterhouse v Waugh (2003) NSWCA 139 (2 June 2003). Young C J cited the following authority of Cook v Taylor (1942) Ch 349, 352 A term in a contract for the sale of land, which requires the vendor to deliver "possession", will ordinarily be construed as requiring delivery of vacant possession. Cook v Taylor (1942) Ch 349, 352. There is no reason for adopting a different construction in agreements between landlord and tenant. The tenant was bound to deliver vacant possession. 1. His Honour also relied upon the following passage in Cumberland Consolidated Holdings Ltd v Ireland (1946) KB 264 at 270-271 Subject to the rule de minimis a vendor who leaves property of his own on the premises on completion cannot ... be said to give vacant possession, since by doing so he is claiming a right to use the premises for his own purposes, namely, as a place of deposit for his own goods inconsistent with the right which the purchaser has on completion to undisturbed enjoyment ... the right to actual unimpeded physical enjoyment is comprised in the right to vacant possession. We cannot see why the existence of a physical impediment to such enjoyment ... should stand in a different position to an impediment caused by the presence of a trespasser ... When we speak of a physical impediment we do not mean that any physical impediment will do. It must be an impediment which substantially prevents or interferes with the enjoyment of the right of possession of a substantial part of the property 1. The presence of rubbish, left at the premises, together with various items of the landlords' possessions stored at the Riverview property, including those articles stored in the shed, impeded the applicant's right to vacant possession of the premises, whilst the landlords were claiming a right to use the premises for their own purpose. 2. The applicant seeks a termination order pursuant to section 103 of the Act. The section provides: 1. The Tribunal may, on application by a tenant, make a termination order if it is satisfied that: 1. the landlord has breached the residential tenancy agreement, and 2. the breach is, in the circumstances of the case, sufficient to justify termination of the agreement. 1. In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following: 1. the nature of the breach, 2. any previous breaches, 3. any steps taken by the landlord to remedy the breach, 4. any steps taken by the tenant about the breach, 5. the previous history of the tenancy. 1. On the evidence, the tribunal has considered matters set out at section 103 (2) as they are relevant to the findings on the evidence: the nature of the breach; the steps taken by the landlords to yield up vacant possession of the premises at the commencement of the agreement; the landlords endeavours to effect repairs to the property after the commencement date; the steps taken by the tenant about the breach. 2. The tribunal finds that the landlords of the residential premises the subject of the residential tenancy agreement, failed to deliver vacant possession of the Riverview property to the applicant at the commencement date of thelease. The landlords are in breach of their obligations under the terms of the residential tenancy agreement whilst the landlords claimed a right of use of the premises, inconsistent with that right to which the tenant was entitled under the terms of the lease. 3. The breach was such to entitle the applicant to terminate the lease for a fixed term without penalty and payment of break lease costs. Findings and Orders 1. The applicant was entitled to terminate the lease for a fixed term given the respondents' breach of the agreement to provide vacant possession of the residential premises at the commencement date of the lease. 2. The respondent is not entitled to any payment of break lease costs, given the nature of the breach. 3. The tribunal makes a declaration that the residential tenancy agreement was terminated as and from 2 December 2016, the commencement date of the lease. 4. The applicant is entitled to an order for payment of the whole of the bond ($ 3,100.00) pursuant to section 175 of the Act. 5. The respondents are to pay to the applicant the sum of $ 1,550.00 on or before 7 April 2016, in addition to monies received for payment of the bond. Margaret Mary McCue General Member Civil and Administrative Tribunal of NSW 30 March 2016 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 28 April 2016 - 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: 28 April 2016