Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Pearson v Clark [2016] NSWCATAP 134 Hearing dates: 24 February 2016 Date of orders: 17 June 2016 Decision date: 17 June 2016 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member T Simon, Senior Member Decision: (1) Appeal allowed; (2) That the order made 22 October 2015 dismissing application RT 15/37923 is quashed; and (3) In application RT 15/37923 the following orders are made; 1 The tenants (respondents), Phillip Clark, Lisa Clark, Morgan Clark and Brady Clark are to pay the landlords (applicants), Scott Pearson and Loreen Kumar the sum of $2,280.00 immediately; Note: if the respondents do not comply with the order to pay money, a certified copy of the above money order may be obtained from the Tribunal for the purpose of enforcement action through the Local Court. 2 Order 1 takes effect on 7 July 2015. 3 The time to file application 15/37923 is extended until 9 June 2015 Catchwords: Dismissal of subsequent proceedings – Res judicata, issue estoppel, Anshun estoppel Exercise of powers of Tribunal at first instance Legislation Cited: Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Regulation 2013 Civil and Administrative Tribunal Rules, 2014 Residential Tenancies Act, 2010 Cases Cited: Aon Risk Services Australia Limited v Australian National University [2009] HCA 27 Blair v Curran (1939) 62CLR 464 Car Sales [2015] NSWCATAP 65 Collins v Urban [2014] NSWCATAP 17 Effrem Foods v Trawl Industries 115 ALR 337 Hammond v Ozzy's Cheapest Cars Pty Ltd t/as Ozzy Jackson v Goldsmith (1950) 81 CLR 446 McPherson v Mace [2015] NSWCATAP 203 Port of Melbourne Authority v Anshun (1981) 147 CLR 589 Texts Cited: Nil Category: Principal judgment Parties: Scott Pearson (Appellant) Loreen Koleena Wati Kumar (Appellant) Phillip Clark (Respondent) Lisa Clark (Respondent) Morgan Clark (Respondent) Brodie Clark (Respondent) Representation: Appellants: Mr S Pearson Respondents: Mr P Clark File Number(s): AP 15/61272 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not Applicable Date of Decision: 22 October 2015 Before: W Sponza, General Member File Number(s): RT 15/37923 reasons for decision 1. The appellants, Mr Pearson and Ms Kumar, were the landlords under a residential tenancy agreement in respect of a property located at Yarramundi. The respondents, Phillip, Lisa, Morgan and Brodie Clark were the tenants. 2. This appeal relates to orders and a decision made by the Tribunal on 22 October 2015 (October Decision). By those orders the Tribunal dismissed application RT 15/37923 (rent recovery proceedings) in which the appellants sought to recover an amount of $2,280.00 said to be unpaid rent owing by the respondents under the residential tenancy agreement. 3. In the October Decision the Tribunal set aside an earlier order in favour of the appellants in the rent recovery proceedings made on 7 July 2015 (July Decision) in which the appellants received a money order in their favour for unpaid rent in the sum of $2,280.00. The order setting aside the July Decision was made because the respondents did not appear at the original hearing and the Tribunal exercised a power to set aside the earlier decision under reg 9 of the Civil and Administrative Tribunal Regulation 2013 (NCAT Regulation). Having set aside the July decision the Tribunal then dismissed the application for rent arrears. The basis for the dismissal was that an earlier decision of the Tribunal made in two other proceedings on 25 May 2015 had determined the issue of rent arrears and therefore the subsequent application could not be made due to the principle of res judicata. History of proceedings between the parties 1. In order to understand the issues raised in this appeal, it is necessary to consider the history of the various proceedings between the parties. 2. The respondents had commenced proceedings RT 15/14115 (bond proceedings) against the appellants in which they sought an order under s 175 of the Residential Tenancies Act, 2010 (RT Act) that the rental bond which they had lodged under the residential tenancy agreement be paid to the respondents following termination of the residential tenancy agreement. The amount of the rental bond was $2,280.00. 3. The appellants subsequently filed application RT 15/26784 (compensation proceedings). This application is Exhibit A in the appeal. In that application the appellants sought an order that the respondents pay to the appellants an amount of money "to cover the cost of repairs and maintenance arising from the tenancy". 4. There was no dispute in either of the proceedings that the residential tenancy agreement had come to an end. 5. Applications RT 15/14115 and RT 15/26784 were heard by the Tribunal on 27 May 2015. On that day the Tribunal made the following orders: 1. In application RT 15/14115 the Tribunal directed that the rental bond be paid to the respondents together with interest; and 2. In respect of application RT 15/26784 the application was dismissed. 1. The Tribunal provided written reasons in respect of the orders made on 27 May 2015. In those reasons the Tribunal recounted the history of the proceedings and gave reasons for its findings in dismissing the appellants' claim and determining that the respondents were entitled to payment of the bond. Separate reasons were given in each application. The reasons given in application RT 15/26784 became Exhibit B in the appeal (the Compensation Decision). The reasons given in application RT 15/14115 (the Bond Decision) are attached to the respondents' reply to appeal dated 28 November 2015 filed in these proceedings. Collectively in these reasons they will be referred to as the May Decisions. They are slightly different decisions however the findings and reasons for decision can be summarised as follows. 2. The bond proceedings were commenced by application lodged on 23 April 2015. The compensation proceedings were commenced by application lodged on 5 April 2015. Both applications were listed before the Tribunal on 16 April 2015. At that time the directions were made in relation to the parties filing their evidence in each of the cases and both matters were fixed for hearing. 3. Following a letter from the Divisional Registrar to the appellants dated 29 April 2015 regarding noncompliance with the Tribunal's directions for the filing and service of evidence, the appellants wrote to the Tribunal by letter dated 14 May 2015 and advised as follows: With the exception of bank statements showing rental payments, all documents on which the applicants, Scott Pearson and Loreen Kumar, intend to rely were provided to the Respondents (Clark Family) and NCAT in accordance with NCAT requirements prior to the Tribunal held on 16 April 2015. Documents provided include the following: (1) Incoming and outgoing property inspection reports; (2) Special conditions of Residential Tenancy Agreement; (3) Tradesmens' Invoices and Statements; (4) Photos of items included in Applications' claim for reimbursement; (5) Receipts for amounts paid by Applicants; (6)Email correspondence between the applicants and the respondents; As we do not wish our personal banking transactions to be made available to the respondents, bank statements are currently being reviewed and all details not pertaining to the respondents' rental payments are being deleted. Bank statements, supporting the Rental Ledger already provided to the respondents and NCAT will be made available to the Tribunal hearing scheduled on 27 May 2015. 1. At the hearing, it would appear that the appellants sought to tender the various bank statements however the respondents objected to this course because they said they had not been served as directed and the respondents were disadvantaged. The Tribunal rejected the tender of the documents for the reasons set out in the May Decisions. 2. In the Compensation Decision the Tribunal then made the following decision under the heading "FINDINGS" (Compensation Decision page 3): The Tribunal has heard the oral evidence of both parties and given that the Tribunal has no other documentary evidence in respect of the applicants' claim the Tribunal finds that the applicant has failed to prove of their case on the balance of probabilities. 1. In respect of the bond proceedings, the Tribunal provided the following reasons in support of the order that the respondents be entitled to payment of the bond under the heading "finding" (Bond Decision page 3): The Tribunal finds that the applicant did lodge the bond. The respondent has failed to comply with the Tribunal directions as to filing of evidence and submissions. The Tribunal does not have any evidence before it to support the contention of the respondent that the applicant is not entitled to the refund of the bond moneys paid. 1. The appellants subsequently filed application RT 15/37293 dated 3 June 2015 (rent application). In that application the appellants sought orders against the respondents under s 187 of the RT Act in the following terms: Respondents to pay the applicants an amount of $2,280.00 being for rental arrears (unpaid rent) for the period sixth February 2015 to fifth March 2015 inclusive. 1. The application at item 13 referred to "supporting documents attached" being: 1. Email from respondent dated third March 2015 acknowledging four weeks rent is owed by them. 2. Rental Ledger. 3. Bank Statements (from applicants showing rent paid). 4. Signature pages of pre-existing tenancy agreement at XXX Yarramundi. 1. The rent application was initially listed for hearing before the Tribunal on 7 July 2015. On that day the respondents did not apparently appear and the Tribunal made orders extending the time for making the rent application and made an order in favour of the appellants against the respondents in the sum of $2,280.00 (July Orders). The Member who dealt with this application was not the same Member who made the orders on 27 May 2015. 2. The respondents applied to set aside the July Orders pursuant to Reg 9 of the NCAT Regulation. This application is RT 15/43166 (the set-aside application). On 14 July 2015 the Tribunal stayed the July Orders and made directions for the parties to file and serve submissions. 3. The application to set aside and the rehearing of the rent application (if the July Orders were set aside) was listed for hearing on 22 October 2015. The presiding Member at the October hearing who made the October Decision was the Member who made the May Decisions in connection with the bond proceedings and compensation proceedings. 4. As stated above, it is the October Decision which is the subject of this appeal. Grounds of appeal 1. The appellants' filed a Notice of Appeal dated 30 October 2015. This appeal is within fourteen days of the date of the October Decision and is therefore within the time as required by r 25(4)(b) of the Civil and Administrative Tribunal Rules, 2014 (NCAT Rules). 2. The Notice of Appeal seeks leave to appeal on the basis that the decision was not fair and equitable and was against the weight of the evidence. 3. The grounds of appeal set out in section 5B of the Notice of Appeal are as follows: 1: The former tenants have failed to meet their rental payment obligations under the NSW Residential Tenancies Act 2010 and the Residential Tenancy Agreement. 2: In making his Orders to award the bond to the former tenants at a previous Tribunal held on 27 May 2015, Member Sponza erred in his findings. 3: The Orders made by Member Sponza on 27 May 2015, on which he relies in making his Orders for Application File No. RT 15/37923 on 22 October 2015, have been made in respect of a different property address to that for which Application No. RT 15/37923 was lodged. 4: Member Sponza's findings at the Tribunal held on 22 October 2015 are contrary to the advice given by him at the Tribunal held 27 May 2015. 5: Member Sponza's statement regarding applications of which Member Smith would or would not have been aware in making his Orders of 7 July 2015 is prima facie incorrect. 1. In relation to leave to appeal on the basis that the decision was not fair and equitable the appellants contend as follows: 1. The former tenants have failed to meet their rental payment obligations, have received return of the bond and have been effectively "granted four weeks of rent free accommodation at a cost of $2,280.00 to the former landlords"; and 2. The justification in the May Decisions for making an order returning the bond to the respondents on the basis that the appellants had not provided evidence to support their claim was factually incorrect because "both the tenants' written submissions of rental arrears and the landlords' Rental Ledger were available to all parties at the hearing on 27 May 2015 and at the prior hearing on 16 April 2015 (adjourned to 27 May 2015)". 1. In relation to why the decision of the Tribunal was against the weight of evidence the appellant says in section 6B(ii) under the heading "what evidence should the Tribunal have given more weight to? Why", the following: No weight was given by Member Sponza to documentary evidence. None of the documents were referred to or considered by the Member. The parties were asked to (verbally) state their cases and were then dismissed by the Member. In presenting their cases, the former tenants agreed that rental arrears were owed but again argued that the arrears should be offset by the alleged emergency electrical repair costs. Member Sponza dismissed their claim for repair costs. Weight should have been given to all available documentary evidence. Reply to appeal 1. The respondents filed a Reply to Appeal dated 28 November 2015. In that reply they say: 1. "The former tenants had met our rental obligations as has been determined in a previous case file number RT 15/26784 and RT 15/14115 by Member W Sponza on 27 May 2015". The orders were that the Rental Bond Services pay Phillip, Lisa, Morgan and Brodie Clark the whole of the bond plus interest on rental bond number E805362-0. 2. The Tribunal did not err in its findings of 27 May 2015. Rather the appellant failed to comply with the Tribunal's orders by not supplying evidence by the date required. 3. The Tribunals findings are not contrary to the advice given to Mr Pearson; and 4. Mr Pearson should have appealed the decision of 27 May 2015. 1. In relation to this last submissions the respondents say: Had my application for an adjournment on 7 July 2015 been granted this would have been my defence that the issue of the unpaid rent had already been dealt with on 27 May 2015. 1. The Appeal Panel notes at this time that the respondents suggest in reply ground 5 that they in fact applied for but had been refused an adjournment of the hearing on 7 July 2015 when the July Orders in favour of the appellants were made for the payment of rent in the sum of $2,280.00. 2. In relation to why leave should not be granted, the respondents essentially repeated their reply to the appellants' grounds of appeal. In short, the respondents say that the appellant "was not entitled to file a fresh application for rent arrears which was subsequently determined in the absence of Mr Clark". Therefore, the respondents contended the matter was "res judicata". Appellants' response to respondents' reply to appeal 1. The appellants reiterated in the reply document that the rent claim had not been paid and that they were entitled to have the rental application "judged on its own merits". In this regard they say that on 7 July 2015 the Member considered the evidence provided and determined the claim should be upheld. 2. The appellants then dispute the respondents' claim that they have met their rental payment obligations and submitted that the Tribunal had not made a determination about this matter. Further, the appellants say (at page 2) that the finding by the Tribunal that it "does not have any evidence before it to support the contention of the (appellants) that the (respondents) are not entitled to a refund of the bond monies paid" is not a finding that all rent was paid. 3. Lastly, the appellants (at page 2) rely on the fact the respondents have "repeatedly stated, both in writing and verbally at multiple Tribunals, that unpaid rent to the value of $2,280.00 is owed by them, indicating that they have not met their rental payment obligations". 4. Consequently, they say that the orders made by the Member setting aside the July Decision are not fair or equitable. 5. The appellants then say that the respondents' email acknowledging that rent was owed and a rental ledger showing details of payments made had been provided prior to the 16 April 2015 hearing and were in the possession of all parties at that earlier hearing and at the Tribunal hearing on 27 May 2015. In this regard it would appear that the appellants seek to challenge the findings made by the Tribunal in the May Decisions to the effect that the appellant had not complied with the earlier orders made by the Tribunal. 6. Finally, in relation to the May Decisions the appellants say that, following conclusion of the hearing on 27 May 2015, the Tribunal advised the appellants that they should file a new application to recover any rental arrears and that the appellants "acted on this advice and the file number RT 15/37923 was assigned to our application". The appellants submit the finding made by Tribunal in the October Decision was therefore contrary to the statements made by the Tribunal at the hearing in May 2015. 7. It should be noted that the sound recording of the various hearings was not put in evidence before the Appeal Panel despite orders being made for evidence of the hearing below to be filed if it was relied upon. Submissions 1. At the hearing of the appeal on 24 February 2016 Mr Pearson represented the appellants and Mr Phillip Clark represented the respondents. 2. At the outset of the hearing when asked by the Appeal Panel, the respondents agreed that an amount of $2,280.00 in rent had not in fact been paid. 3. Each of the representatives made oral submissions. In short, these submissions reiterated the position set out by each of the parties in the written material which had been filed. 4. The appellants maintained their position that they are entitled to have the claim for rent arrears considered on its own merits and that they had been told by the Tribunal at the hearing in May that they could bring in a subsequent application for rent arrears. The respondents denied that the Tribunal made a comment about the ability of the appellants to bring a subsequent application. Neither party provided a copy of the sound recording of the hearings in May or October. Consideration 1. The appellants appeal against the October Decision where the Tribunal made orders to set aside the July Orders made in application RT 15/37923 and decided to dismiss that application for rent arrears of $2,280.00 because the claim was res judicata. 2. There is no dispute in this appeal that in fact the respondent owed the appellants rent arrears in the sum of $2280.00 and that this amount has not been paid. 3. The issue for determination in the appeal is whether the May Decisions in respect to the respondents' bond application and the appellants' compensation application determined the issue of rent arrears so as to give rise to a res judicata. There is a subsidiary issue which is whether or not the Tribunal was correct in the October Decision in concluding the Respondents were entitled to have the July Decision set aside pursuant to reg 9 of the NCAT Regulation. Regulation 9 provides as follows: 9 Additional power to set aside or vary decision determining proceedings (1) In addition to any power that is expressly conferred on the Tribunal by the Act or enabling legislation to set aside or vary its decisions, the Tribunal may order that a decision it has made that determines proceedings be set aside or varied in either of the following circumstances: (a) …. (b) if the decision was made in the absence of a party and the Tribunal is satisfied that the party's absence has resulted in the party's case not being adequately put to the Tribunal. 1. Pursuant to s80(2) of the Civil and Administrative Tribunal Act, 2013 (NCAT Act) the appellants need leave to appeal an interlocutory decision (see s80(2)(a)) and in respect of any other decision (including an ancillary decision) have a right of appeal on a question of law and otherwise require leave (see s80(2)(b)). 2. Because the appeal is in respect of a decision of the Consumer and Commercial Division, leave may only be granted where the appellants may have suffered a substantial miscarriage of justice because the decision was not fair and equitable, was against the weight of evidence or in circumstances where there is significant new evidence that was not reasonably available at the time the proceedings under appeal were dealt with: see cl12(1) of Schedule 4 of the NCAT Act. The principles applicable to the grant of leave were set out by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 at [70] and following. 3. In relation to the order to set aside the July Decision, this is an ancillary decision, and therefore there is an appeal on a question of law as of right and otherwise with leave: see Hammond v Ozzy's Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65 at [31] and following. Decision at first instance 1. The October Decision related to an application to set aside the July Decision in which the respondents were ordered to pay the appellants the sum of $2280 for rental arrears. The set-aside application was not originally placed in evidence before the Appeal Panel. However, both parties agreed that the Appeal Panel could obtain a copy of the set-aside application from the original file, which the Appeal Panel has done 2. The set-aside application is dated 14 July 2015 and was filed on that date. The reasons why the respondents said the July Decision should be set aside (section 8C) were as follows: 1. I asked for an adjournment by email and posted a letter. 2. I had a holiday book and paid for from 26/6/15 – 11/7/15. 3. The matter had been dealt with in previous cases file number RT 15/14115 and RT 15/26784 and Mr Pearson should have been made to go to appeal. 4. This application number RT 15 37923 was lodged after the period of 3 months. 5. I have proof that no money is owing for rent. Please (see) documents marked (1A, 1B, 1C and 1D) and (2A, 2B, 2C, 2D) and (3A, 3B, 3C) and (4A, 4B) and (5A). 1. In section 8D, "Alternative orders you want the Tribunal to make", the respondent said: Please have this order dismissed or at least be set aside and granted new hearing to enable me to put my case forward. Please note I still have nothing in writing regarding refusal of adjournment request and orders made on 7/7/15. These orders should be dismissed because they were allowed to continue outside the 3 months time limit allowance. 1. The respondent also sought a stay of the ordered to pay $2280 because the respondent Mr Phillip Clark says: I was away in Queensland and was not informed that my adjournment request had been refused. 1. Attached to the set-aside application with the various documents referred to above. The document headed "Marked 4B" is the document on which the respondents rely as supporting their contention in the set-aside application that they did not owe rent of $2280. That document records that rent of $2280 is in fact owed however the respondents claimed that the appellants "owed" the respondents a total of $2541.15 made up as follows: 1. "$2134 for the electrical work that was carried out after the storm hit the property"; and 2. "$407.15 being rent that was paid for the 5 days from Tuesday, 29 December 2014 – Saturday, 3 July 2015 while the property had no water, and waiting to be repaired. This is simply a payment for rent not for hardship it caused us during that time. Worked out at rent being $570 for 7 days rent per day would be $81.42 x 5 days = $407.15. 1. In setting aside the July Decision and dismissing the July application the Tribunal made the following finding (October Decision page 3): I find that the rental issues have been previously determined by the Tribunal and Mr Pearson was not entitled to file a fresh application for rental arrears which was subsequently determined in the absence of Mr Clark. I am of the view that the matter is res judicata. 1. In making this decision, the Tribunal did not make a finding that there had been a determination between the parties of the amount of rent arrears in the May Decisions nor did the Tribunal make a finding that no rent was in fact outstanding. Rather, under the heading "ISSUE FOR TRIBUNAL TO DETERMINE" the Tribunal posed the question for determination in the following terms: Have the former landlords, (the Appellants) been afforded procedural fairness? The rules or principles of natural justice, also known as procedural fairness, have developed to ensure that the decision making is fair and reasonable. Put simply, natural justice involves decision makers informing people of the case against them or their interest, giving them a right to be heard, not having a personal interest in the outcome and acting only on the basis of logically probative evidence. 1. The determination of this issue is set out by the Tribunal under the heading "FINDING" (October Decision pages 2-3). The Tribunal set out the circumstances in which it concluded the appellants were afforded procedural fairness in respect of the May Decisions. The Tribunal said the appellants were required to provide evidence for the purpose of the bond application and that they had failed to do so in accordance with the Tribunal's directions. The Tribunal then said (at October Decision page 3): To allow the landlord's documents regarding rent to be admitted at the hearing without giving Mr Clark an opportunity to properly prepare a case again such a claim would not have afforded Mr Clark procedural fairness. Mr Pearson was afforded procedural fairness to present his case, he however chose not to comply with the Tribunal directions to properly prepare and serve his case and having determined by the Tribunal, this ultimately, leading to Mr Pearson not being able to convince the Tribunal of the tenant owing rent arrears. 1. At page 2 of the October Decision the Tribunal records the following in relation to the set aside application: The grounds of the set aside are limited to the following circumstances: 1. All parties agree that the decision be set aside or varied 2. The person was not present when the decision was made and as a result the case was not adequately put to the Tribunal. 1. It is unclear from the above whether the appellants in fact consented to the orders being set aside or varied or whether this was a reference to a stated ground raised by the respondents (who applied to set aside the July Decision). The order to set aside made in the October Decision does not record it is by consent. The fact the appellants submitted that the July Decision to award them an amount of $2280 for unpaid rent should be maintained suggest there was no consent. The order setting aside the July Decision 1. Absent consent, it was necessary for the Tribunal to be satisfied the circumstance prescribed by Reg 9(1)(b) of the Civil and Administrative Tribunal Regulation, 2013 (NCAT Regulation) were established, approximately exercise the relevant discretion and provide reasons for doing so. 2. However, as is evident from reading the October Decision, there is no analysis of the Tribunal of whether or not rent was unpaid in the sum of $2280, a matter conceded by the respondents in the set-aside application. It is hardly surprising that there is no finding that rent was unpaid. This is because despite the statement in Section 8C of the set aside application, it is clear rent of $2280 was in fact unpaid. The fact rent was unpaid is a matter that supports the conclusion made by the Tribunal in the July Decision and would have counted against setting aside the July Decision. 3. Nor is there any analysis as to whether or not the respondents had established they are entitled to set-off a total of $2541.15 in respect of the respondents' claims detailed in the set-aside application. No separate application had been made by the respondents for damages for breach of the residential tenancy agreement in connection with a failure to repair. In any event, it is doubtful the respondents could claim for the electrical repairs carried out unless they had the approval of the appellants or the repairs were urgent or authorised by the residential tenancy agreement and the RT Act: see s63(4), s65 and Division 5 of the RT Act generally. No claim had been made for an order for the reduction of rent for the withdrawal of services nor damages for breach of the residential tenancy agreement in connection with the water issue. 4. Lastly, there is no analysis as to why a discretion was exercised in favour of the respondents to set aside the decision in circumstances where it is clear respondents: 1. had notice of the hearing; 2. had not been granted an adjournment (whether or not that result had been communicated to them); and 3. had not explained why one of the other three respondents could not have appeared at the hearing on 7 July 2015, in circumstances where the evidence indicated that only Mr Phillip Clark was away in Queensland. 1. These matters suggest that insofar as the Tribunal concluded the July Decision should be set aside, the reasons to do so were inadequate. As such the October Decision is liable to be set aside as there has been a failure to provide proper reasons: see eg in McPherson v Mace [2015] NSWCATAP 203 at [28] – [29]. Res Judicata 1. The only issue dealt with in the October Decision was whether or not the proceedings should be dismissed having regard to the principle of res judicata. If correct, this fact would support a decision to set aside the July Decision and dismiss the rent application. 2. In order to understand the correctness of the October Decision it is necessary to understand the circumstances in which the principle of res judicata apply. In Effrem Foods v Trawl Industries 115 ALR 337 the Full Court of the Federal Court of Australia Northrop and Lee JJ said at p380 line 10: In principle, res judicata is a defence to a claim in a legal proceeding. Traditionally it is a technical defence allowing no discretion in the court. The defence, if made out, is a complete bar to the claim. Unfortunately lack of a clear dichotomy between the defence of res judicata and similar defences based upon estoppel can give, and has given, rise to confusion in Australia, England and the USA. 1. There Honours, at p380 then referred to the High Court decision in Jackson v Goldsmith (1950) 81 CLR 446 in which the principles of res judicata and issue estoppel arose for consideration. In that case, Fullagar J set out the applicable rules of law. As noted by Northrop and Lee JJ in Effrem, "(a)lthough Fullagar J dissented in the judgement of the High Court, his exposition on this aspect of the matter can be treated as authority since his dissent was based upon the application of the principle to the facts of that case". 2. In Jackson, Fullagar J said at 466-8: The rule as to res judicata can be stated sufficiently for present purposes by saying that, where an action has been brought and judgement has been entered in that action, no other proceedings can thereafter be maintained on the same cause of action. This rule is not, to my mind, correctly classified under the heading of estoppel at all. It is a broad rule of public policy based upon the principles expressed in the maxim "all". The rule as to issue estoppel is generally stated in the words of Lord Ellenborough in Outram v Morewood (1803) 3 Beast 346 at 355; 102 ER 630 at 633. His Lordship said that the parties and privies are "precluded from contending to the contrary of that point, or matter of fact, which having been once distinctly put in issue by them … has been, on such issue joined, solemnly found against them". This is I think, a true case of estoppel, analogous to estoppel by deed and estoppel by representation. The same rule was concisely stated by Dixon J in Blair v Curran (1939) 69 CLR and 531 where his Honour said "A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies." It is unnecessary here to discuss these two principles further beyond noting two points. In the first place, if A sues B to judgement and in subsequent proceedings between them a plea of res judicata is raised, the primary question is whether the cause of action in the later proceedings is the same as that which was litigated in the former proceedings. This was the question which arose in the well-known case of Brunsden v Humphrey (1884) 14 QBD 141. It was held there that the causes of action were not the same. The injuria was the same but the damnum was different, and, since damage was "of the gist" of the particular action, the causes of action were not the same. The plea therefore failed. On the other hand, if A sues B to judgement and in subsequent proceedings between them a plea of issue estoppel is raised, the plea may succeed although the causes of action in the two cases are entirely different. The question will be whether an issue of fact or law which is raised in the later proceedings was an issue of fact or law which was also raised in the earlier proceedings and therefore determined. In the second place, it follows from the very nature of the difference between the plea of res judicata and the plea of issue estoppel that different materials are relevant in each case. Where the pleas of res judicata, only the actual record is relevant. Where the plea is of issue estoppel, any material may be looked at which will show that issues were raised and decided. Reasons given for the judgement pronounced are likely to be particularly important for this purpose: see Ord v Ord [1923] to KB 432 at 440 and Marginson v Blackburn Borough Council [1939] 2 KB 4 to 6 at 437. Both those cases were cases of issue estoppel and were clearly treated as such, though I think, with great respect, that both illustrate the unfortunate absence of a clear legal terminology, to which I have already referred. It should perhaps be added that, as Dixon J said in Blair v Curran [1939] 62 CLR at 532, the estoppel, so far as it applies to the facts, is confined to ultimate facts. It does not extend to mere evidentiary facts. 1. In relation to the reference by Fullagar J to the decision of Dixon J in Blair v Curran (1939) 62CLR 464 , it is useful to set out in full the principle stated by Dixon J. At 531-532 Dixon J explained that: A judicial determination directly involving an issue of fact or of law disposes once and for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgement, decree or order necessarily established as the legal foundation or justification of its conclusion. … Nothing but what is legally indispensable to the conclusion is thus finally closed or precluded. In matters of fact the issue- estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established." 1. In the present case, there were two proceedings. The causes of action raised in those proceedings were: 1. in the case of the bond proceedings, an order under s175 for an order for payment of the bond to the respondents (tenants) following the termination of the residential tenancy agreement; and 2. in the case of the compensation proceedings, a claim for damages in which the appellants sought an amount of money "to cover the cost of repairs and maintenance arising from the tenancy", that is damages for breach of the residential tenancy agreement in connection with repairs and maintenance. 1. The Tribunal made the following findings at page 3 of the October Decision: I find that the rental issues have been previously determined by the Tribunal and Mr Pearson was not entitled to file a fresh application for rental arrears which were subsequently determined in the absence of Mr Clark. I am of the view that the matter is res judicata" 1. In making this finding, the Tribunal does not identify what was the cause of action in the original proceedings. 2. As is made clear by Part 8 of the RT Act, a bond is "an amount of money paid or payable by the tenant or another person as security against failure by a tenant to comply with the terms of the residential tenancy agreement": see s157 of the RT Act. The money paid by the tenant must be deposited and held as required by Part 8 of Division 2 of the RT Act. A landlord has an entitlement to make a claim against the security in circumstances prescribed by the RT Act. However, a landlord is under no obligation to make such a claim. 3. Until paid to the landlord in consequence of a valid claim made in accordance with the RT Act or until an order is made by the Tribunal under section 175 of the RT Act, the bond remains the property of the tenant. Further, absent a landlord establishing a valid claim, a tenant is entitled to repayment of the security upon termination of the residential tenancy agreement. Lastly, the failure of the landlord to make a claim against the security does not, of itself, preclude the landlord from pursuing a tenant for damages or other claims arising under the residential tenancy agreement or any breach thereof. 4. Seen in this light, the cause of action in connection with the bond proceedings was the claim by the respondents, as tenants, for an order to be repaid their security bond following the termination of the residential tenancy agreement. It was not a cause of action being a claim for damages for unpaid rent arising from breach of the residential tenancy agreement by a landlord. It required proof the respondents (as tenants) had paid the bond as required by the residential tenancy agreement and that the residential tenancy agreement was at an end, thereby entitling the tenants to return their money lodged as security. 5. It follows that in so far as the Tribunal concluded that the rent recovery proceedings should be dismissed because of the principle of res judicata, the Tribunal was in error in reaching this conclusion. To use the words of Fullagar J "the causes of action were not the same", therefore the defence of res judicata raised by the respondents in the subsequent rent recovery proceedings must fail because the rent recovery proceedings did not seek adjudication on a cause of action that had already been decided. Issue Estoppel 1. However, that is not an end of the matter. It is also necessary to consider whether or not the earlier proceedings gave rise to an issue estoppel. 2. As is evident from the passage of the October Decision set out above, the Tribunal made a finding that "the rental issues have been previously determined by the Tribunal". 3. Whether or not this decision was correct depends upon an analysis of the May Decisions and the reasons given therein. As Dixon J said in Blair v Curran an estoppel: covers only those matters which the prior judgement, decree or order necessarily established as the legal foundation or justification in the conclusion.. Nothing but what is legally indispensable to the conclusion (emphasis added) is thus finally closed or precluded. In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients of the cause of action(emphasis added). 1. In deciding whether or not an issue estoppel arises, the Tribunal was entitled to have regard to material which shows what issues were raised and decided. In this regard the reasons given "are likely to be particularly important for this purpose": per Fullagar J in Jackson supra. 2. The findings in the May Decisions are set out above. Relevantly, in the Bond Decision the essential findings were that: 1. the respondents lodge the bond; 2. the appellants failed to comply with directions for the filing of evidence and submissions (a finding which supported the decision to reject evidence tendered at the hearing); and 3. there was otherwise no evidence before the Tribunal to support a contention by the appellants that the applicant was not entitled to a refund of the bond moneys paid. 1. Significantly, in the May Decisions the Tribunal did not make a finding that all rent payable by the respondents as tenants under the residential tenancy agreement had in fact been paid. The Tribunal simply rejected the tender of evidence on this subject matter because the appellants had been afforded procedural fairness and given an opportunity to present their evidence and had failed to do so in compliance with directions previously made. 2. While this may be a permissible approach because the respondents' claim was for return of the security and the principles of case management may apply: see eg Aon Risk Services Australia Limited v Australian National University [2009] HCA 27; 239 CLR 175, there is no basis to conclude from the content of the May Decisions that the Tribunal made a ruling in those decisions that all rent had in fact been paid. Rather, as the reasons record, the basis for dismissal was that the appellants had failed to put any evidence before the Tribunal to support an order that the respondents claim for return of the bond be dismissed. This and the fact that the respondents had originally paid the bond were the essential facts that led to a resolution of the bond proceedings in favour of the respondents. 3. The Tribunal, in the October Decision, does not otherwise identify in its reasons any finding of fact or law that was made in the May Decisions which would support a contrary conclusion. Certainly the Tribunal in the October Decision does not point to any material admitted into evidence nor any cross examination which may have occurred at the hearing in May that would suggest the issue of unpaid rent, which arose for determination in the rent recovery proceedings to which the July Decision relates, had been previously determined by the May Decisions. 4. Lastly, and significantly, there seems no basis for the Appeal Panel to infer that such a determination had been made. This is because the respondents themselves, both in the set aside application and in their statement to the Appeal Panel, conceded that the amount of $2280 rent was and still is unpaid and would not have contended otherwise when the bond proceedings were heard. 5. Accordingly, in our opinion the May Decisions did not give rise to any issue estoppel which would have bound the parties and prevented the Tribunal from making the July Orders. Anshun Estoppel 1. There is one final matter which needs to be considered, and that is whether or not the October Decision can be maintained on the basis that an estoppel arose in accordance with the principle set out by the High Court in Port of Melbourne Authority v Anshun (1981) 147 CLR 589. The basis of such a claim is that a party may be precluded in subsequent proceedings from raising a matter which should properly have been raised in the first proceedings. The test to be applied to establish such an estoppel was set out by the plurality (Gibbs CJ and Mason and Aiken JJ) in Anshun at 602-3 where they said: … there will be no estoppel unless it appears that the matter relied upon as a defence in the second action was so relevant to the subject matter of the first action that it would have been unreasonable not to rely. Generally speaking it would be unreasonable not to plead a defence if, having regard to the nature of the plaintiff's claim, and its subject matter it would be expected that the defendant would raise the defence and thereby enable the relevant issues to be determined in the one proceeding. In this respect, we need to recall that there are a variety of circumstances, some referred to in earlier cases, why a party may justifiably refrain from litigating an issue in one proceeding yet wish to litigate the issue in other proceedings… It has generally been accepted that a party will be estopped from bringing an action which, if it succeeds, will result in judgment which conflicts with an earlier judgment. 1. In the present case, the appellants claim in the rent recovery proceedings was for unpaid rent. While in one sense this claim may be seen as a "defence" to the bond proceedings, properly seen it is a separate cause of action for which the appellants were entitled to bring separate proceedings. Neither of the proceedings to which the May Decisions relate resolved this issue nor was it necessary to do so. The fact that the earlier proceedings did not resolve the issue of unpaid rent simply means that the appellants as landlords have lost the ability to claim against the security provided by way of a bond under the residential tenancy agreement. While that is a consequence of their failure to comply with the Tribunal's directions regarding filing and service of evidence, it does not mean that the failure to have the unpaid rent issue dealt with was "unreasonable" in the sense used in Anshun. 2. Further, it would be a curious result, having rejected the appellants' tender of the relevant evidence and otherwise not allowed the appellants to pursue the claim for unpaid rent, to conclude that the appellants unreasonably failed to litigate the issue of unpaid rent in earlier proceedings and were therefore estopped from subsequently bringing such a claim. 3. Finally, the bringing of such a claim could not in the present circumstances give rise to any conflict between the July Decision in respect of the rent recovery proceedings and the earlier May Decisions. 4. Accordingly, we are not satisfied the appellants' were otherwise estopped from pursuing the rent recovery proceedings. 5. It follows from the above that the Tribunal was in error in concluding the rent recovery proceedings could not be brought and the appeal should be allowed and the October Decision dismissing application RT 15/37923 should be quashed. 6. This was an error of law because the facts as found could not, at law, give rise to res judicata. Leave is not therefore required. In any event we should record that if leave was required we would have given leave as the October Decision is incorrect and the Appellants have suffered a substantial miscarriage of justice as the rent application was dismissed. Orders 1. As outlined above, there is doubt that the Tribunal properly dealt with the set-aside application. However, whether or not the July Orders should originally have been set aside, it is clear to us that all parties were provided with an opportunity to be heard in October and on appeal. Therefore the order setting aside the July Orders should not be disturbed. However, it is also clear the order for the payment of rent in the sum of $2280.00 was properly made. 2. Having determined the appeal should succeed, the question is what orders should be made. Section 80 (1) allows the Appeal Panel to make various orders including orders that the October Decision "be quashed or set aside or for a number decision to be substituted for it". Section 81(2) provides that the Appeal Panel may exercise all functions conferred upon the Tribunal at first instance when varying or making a decision in substitution for the decision under appeal. 3. Because the July Decision was set aside and we have determined that the October Decision should be quashed in part, the question is whether the proceedings should be remitted to the Division or the Appeal Panel should make an order in substitution for the decision under appeal. In our view the latter cause should be followed because the respondents agree that rent of $2280 was in fact unpaid. 4. While the respondents say they otherwise have their own claims for breach of the residential tenancy agreement, no application has been lodged in respect of these claims and they are matters which can separately be pursued. However in circumstances where there is clearly an amount of unpaid rent admitted by the respondent as unpaid, it is appropriate to finally resolve the rent recovery proceedings. 5. In doing so, the Appeal Panel notes that all of the orders made in July were set aside by the Tribunal in the October Decision. The orders which were set aside included an order extending time. No suggestion was made by the Tribunal in the October Decision or by the respondents in the appeal that time should not be extended. Certainly, there appears to be no prejudice to the respondents in the Appeal Panel now making such an order having regard to our conclusions above. 6. Accordingly, the Appeal Panel makes the following orders: 1. Appeal allowed; 2. That part of the decision made 22 October 2015 dismissing application RT 15/27923 is quashed; 3. In application RT 15/37923 the following orders are made; 1. The tenants (respondents), Phillip Clark, Lisa Clark, Morgan Clark and Brady Clark are to pay the landlords (applicants), Scott Pearson and Loreen Kumar the sum of $2280.00 immediately; 2. Note: if the respondents do not comply with the order to pay money, a certified copy of the above money order may be obtained from the Tribunal for the purpose of enforcement action through the Local Court. 3. Order 1 takes effect on 7 July 2015. 4. The time to file application 15/37923 is extended until 9 June 2015. ********** 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 11 July 2016 - Corrected error in paragraph 64 11 July 2016 - Corrected error in paragraph 64 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: 11 July 2016