Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Boys v Miskell [2016] NSWCATAP 208 Hearing dates: 15 June 2016 Date of orders: 15 June 2016 Decision date: 15 June 2016 Jurisdiction: Appeal Panel Before: Mullane ADCJ, Principal Member P Molony, Senior Member Decision: (1) The appeal and the application for leave to appeal are refused and dismissed; (2) The respondents' application for costs is refused. Catchwords: Residential Tenancy – Application for payment of arrears of rental refused – evidence inadequate- appeal dismissed Legislation Cited: Residential Tenancies Act 1987; Residential Tenancies Act 2010; Consumer, Trader and Tenancy Tribunal Act 2001 Residential Tenancies Regulation 2010; Civil & Administrative Tribunal Act 2013; Civil & Administrative Tribunal Rules 2014 Cases Cited: Jackson v NSW Land & Housing Corporation [2014] NSW CATAP 22; Ratnam v Cumarasamy (1965) 1 WLR 8; Gallo v Dawson [1990] HCA 30 Category: Principal judgment Parties: Peter Boys (Applicant) Gemma Miskell and Dean Miskell (Respondents) Representation: Counsel: Nil Solicitors: Nil File Number(s): AP 16/15933 Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Consumer & Commercial Division Citation: Nil Date of Decision: 3 March 2016. Before: K Ross – Tribunal Member File Number(s): RT 15/65646 REASONS FOR DECISION Introduction 1. This was an appeal from a decision of a member of the Consumer & Commercial Division of this Tribunal on 3 March 2016 dismissing an application by the applicant landlord for payment by the respondent tenants of alleged unpaid rental in respect of a residential tenancy. 2. The reasons for the dismissal of the application were: 1. the claim for $6,224.28 for arrears of rent that had accrued prior to the commencement of the current lease and was out of time, and an extension of time should not be granted; and 2. In respect of the claim for other arrears since commencement of the current lease, the Tribunal was not satisfied that the rent ledgers of the landlord were accurate and the landlord had failed to prove the current arrears. 3. Regarding both matters, "Having considered the material paced before it, the Tribunal is not satisfied (at the civil standard of proof) that the grounds required to make the orders sought have been established." Relevant Legislative Provisions 1. Section16(1) of the Residential Tenancies Act 1987 ("the 1987 Act") which applied when the landlord discovered the arrears in 2009, provided: (1) "If a landlord or a tenant under a Residential Tenancy Agreement claims that breach of a term of the agreement has occurred, the landlord or the tenant may, not later than 30 days after becoming aware of the breach, apply to the Tribunal for an order in respect to the breach" 1. The 1987 Act was in 2010 repealed and replaced by the Residential Tenancies Act 2010 ("the 2010 Act"). Subsection 190 of the 2010 Act gives a landlord or tenant the right to apply to the tribunal for relief within the period prescribed by the regulations if the other party has breached the lease. Regulation 22(9) provides that the prescribed period is 3 months after the applicant becomes aware of the breach. 2. The Consumer, Trader and Tenancy Tribunal Act 2001 ("the CTTT Act") from 2001 gave that Tribunal jurisdiction as the Tribunal under the 1987 Act and that continued under the 2010 Act. Section 81 of the CTTT Act gave that tribunal power to extend times, including the time for commencing proceedings for breach of a Residential Tenancy Agreement. 3. The Civil and Administrative Tribunal Act 2013 ("the Act") commenced on 1January 2014. It abolished the CTTT and created this Tribunal and its Divisions. It gave the Consumer and Commercial Division of this tribunal the residential tenancy work previously part of the jurisdiction of the CTTT. Section 187(1)(d) of the 2010 Act gives that Division of the Tribunal power in residential tenancy proceedings before it to make an order for compensation. In section 41 of the Act there is power for the Tribunal to extend the time prescribed by Reg 22(9). 4. Sections 36, 37 and 41 of the 2010 Act provide: 36 Rent Receipts: (1) If rent under a residential tenancy agreement is paid in person (other than by cheque), the person who receives the payment must, when the payment is made, give the person making the payment a rent receipt. (2) If rent under a residential tenancy agreement is paid by cheque, the person who receives the payment must make the receipt available for collection by the tenant or post it to the residential premises. (3) A "rent receipt" is a receipt that contains the following matters: (i) the name of the person who receives the rent or on whose behalf the rent is received, (ii) the name of the person paying the rent or on whose behalf the rent is paid, (iii) the address of the residential premises for which the rent is paid, (iv) the period for which the rent is paid and the date up to which the rent is paid, (v) the date on which the rent is paid, (vi) the amount of rent paid. (4) This section does not apply to the New South Wales Land and Housing Corporation or the Aboriginal Housing Office Maximum penalty: 20 penalty units 37 Rent Records (1) A landlord or landlord's agent must keep a record of rent received under a residential tenancy agreement (a "rent record"). (2) A rent record may be kept in any form, and must contain any particulars, prescribed by the regulations for the purposes of this section. (3) A landlord or landlord's agent must, within 7 days of a written request by the tenant, provide a written statement setting out the particulars of the rent record for a specified period. (4) This section does not require a landlord or landlord's agent to provide a written statement for a period to a person if the landlord or agent has previously provided a written statement for the same period to the person. (5) Subsections (3) and (4) are terms of every residential tenancy agreement. 41 Rent increases (1) The rent payable under a residential tenancy agreement may be increased only if: (i) the tenant is given a written notice by the landlord or the landlord's agent specifying the increased rent and the day from which it is payable, and (ii) the notice is given at least 60 days before the increased rent is payable. (2) This section extends to an increase in the rent payable under a residential tenancy agreement on renewal of the agreement as if the increase were an increase during the term of the agreement. Note: Notice of a rent increase on renewal is required under subsection (1) before the lease is renewed (3) A rent increase is not payable by a tenant unless the rent is increased in accordance with this section or the rent is increased by the Tribunal. (4) The residential tenancy agreement is varied to specify the increased rent from the date the rent is increased in accordance with this section. (5) Notice of a rent increase must be given by a landlord or landlord's agent in accordance with this section even if details of the rent increase are set out in the residential tenancy agreement. (6) Notice of a rent increase may be cancelled or varied (so as to reduce the increase) by a subsequent written notice given to the tenant by or on behalf of the landlord. Any such later notice takes effect from the date on which the earlier notice was to take effect. (7) Notice of a rent increase is not required to be given by a landlord or landlord's agent if the increase arises because of the end of, or a reduction in, a rent reduction. (8) Subsections (1)-(7) are terms of every residential tenancy agreement. (9) A landlord or landlord's agent must not contravene this section Maximum penalty: 20 penalty units 1. In all respects relevant to these proceedings Sections 36, 37 and 41 of the 2010 Act make provisions the same as Sections 40, 41 and 45 of the 1987 Act. The subsection corresponding to Subsection 41(3) of the 2010 Act in the 1987 Act is subsection 45(5) and it provides : "(5) A rent increase (including a rent increase permitted under subsection (4) or provided for in any other tenancy agreement) is not payable by a tenant under a residential tenancy agreement unless the rent is increased in accordance with this section or by an order of the Tribunal." 1. Subsection 45(4) of the 1987 Act prohibits increasing the rent during the term of a fixed term residential tenancy agreement unless the agreement sets out the amount of the increase, or a method of calculating it, is set out in the agreement. 2. This appeal from the Consumer & Commercial Division of this Tribunal is to the Appeal Panel of the Civil and Administrative Tribunal and comes within the definition of "Internal Appeals" in the Civil and Administrative Tribunal Act 2013 ("the Act"). 3. Paragraph 25(4)(b) of the Civil & Administrative Tribunal Rules 2014 (NSW) provides that in "residential proceedings" an appeal of a decision of a single member of the Tribunal must be lodged within 14 days from the date on which the appellant was notified of the decision or given reasons for the decision, whichever is the later. The appeal was filed within time. 4. Section 80(2) of the Act provides: "(1) any internal appeal may be made: (1) In the case of an interlocutory decision of the Tribunal at first instance, with leave of the Appeal Panel; and (2) In the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance – as a right on any question of law, or with the leave of the Appeal Panel on any other grounds". 1. There are other restrictions on the granting of leave. Schedule 4 of the Act applies to the Consumer and Commercial Division. Sub-Clause 12(1) of Schedule 4 relevantly provides: "(1) An Appeal Panel may grant leave under Section 80(2)(b) of this Act for an internal appeal against a Division's decision, only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (1) The decision of the Tribunal under appeal was not fair and equitable; or (2) The decision of the Tribunal under appeal was against the weight of evidence; or (3) Significant new evidence has arisen, being new evidence that was not reasonably available at the time the proceedings under appeal were being dealt with" Claim 1 Raised in the Application 1. In May 2009 the landlord became aware of rent underpaid as a consequence of a mistake by the landlord's agent. The tenant's evidence is that they too were not aware of the underpayment until it was raised by the landlord. 2. The only description in the application of this claim is: Section 187(1)(d) – an order as to compensation $6,224.28 The owner is also seeking compensation to the amount of $6,224.28 being for the error of direct debiting the tenants' bank account on a fortnightly basis for with only the weekly amount being taken. The tenants acknowledge this error and commenced paying this off at a $50 per fortnightly amount and agreed that the balance of funds would have to be paid in full if or when they vacated the property. 1. There was no section 187 of the Residential Tenancies Act 1987 in May 2009 when the landlord's agent became aware of the error and the arrears. But there was a power in subsection 16(2)(b) for the relevant tribunal to order payment of an amount of money or, under para 16(2)(d), order payment of compensation. However, in May 2009 subsection 85(3) of the 1987 Act prohibited the Tribunal from ordering the payment of an amount that exceeded $5,000.00. 2. It is common ground that the landlord became aware of claim 1 arrears in May 2009. Accordingly, the time for bringing claim 1 under the 1987 Act in respect of those expired in June 2009. Under section 41 of the Act, which commenced on 1 January 2014, the member had power to extend the new time limit under the 2010 Act of 3 months. 3. The landlord's agent testified that in 2008 the landlord increased the rent from $395 to $420 per week, but when the change in the landlord's computer the rent was erroneously set at $420 per fortnight. Consequently, the rent deducted from the tenants' bank account by direct debit was only $420 per fortnight instead of $840. The error was not discovered till 29 May 2009 and the arrears were then $12,390. (This figure from the landlord's agent is inconsistent with the other evidence of how the arrears came about, because that figure is $170 more than a whole number of payments of $420.) 4. The landlord's agent testified that in 2011 the landlord's accountant calculated the arrears and, after allowing for the payments of rent and amounts for arrears of rent, found the arrears had been reduced to $9,874.29. 5. The landlord's agent alleged that the rent was increased by the landlord from $840 per fortnight to $920 per fortnight from 25 June 2011 by notice to the tenants dated 19 April 2011. The notice was not put before us as part of the Landlord's case. It appears there was no original or copy in evidence before the member and there was no direct evidence that the notice complied with the requirements of subsection 41(1) of the 2010 Act as to its contents. The member did not rely upon that in reaching his decision. The member found, and it is not disputed by the appellant in the appeal, that there was no evidence of notice of rental increase being given to the tenants. The tenants denied receiving such a notice. There was no evidence that it was given to them. This was consistent with the finding of the member that the rental receipts showed payments did not increase until August 2011. 6. The Member therefore found the landlord had not discharged the onus of proving the required notice was given to the tenants. As a result, the purported increase in the rental by $40.00 per week in June 2011 was not proved to be payable by the tenants. But the landlord's agent's subsequent calculations of the arrears are based on an assumption that the increase was payable. 7. Similarly it appears that the Landlord did not provide evidence to validate the purported rental increase of $25 per week in 2008 by establishing that the requirements regarding notice of the increase in subsections 45(1) & (2) of the 1987 Act were satisfied. It appears that the landlord did not prove those matters and that increase was therefore not proved to be payable by the tenants. However, the member did not rely upon this when dismissing the application for an extension of time to make the application. 8. The tenants' evidence was that they were not aware of there being arrears till after the landlord discovered the arrears in May 2009. They testified that they then commenced to pay the arrears by payments of $50 per week additional to the rent. They did not increase the amount for rent till August 2011. Their evidence was that they then paid rent of $420 per week (total $940 per fortnight) and in early 2010 they agreed to increase the payments for arrears to $60 per week with the rent so their payments became $960 per fortnight, of which $840 was rental and $120 was arrears. The receipts between June 2010 and August 2011 showed the tenants paid payments of $900 per fortnight comprising $840 of rent and $60 of arrears. The agent's documents headed "Tenant Statement" show an increase in the fortnightly rental payments from $840 per fortnight to $900 per fortnight from the payment on 12 February 2010. There is an additional (untitled) column in those statements for the period 9 October 2009 to 19 August 2011 that may recognise amounts paid off the arrears by cumulative subtotals of arrears paid for various periods. The total of those subtotals of arrears payments is $7,000.00. But thereafter the payments for arrears were mostly not included in the statements. 9. At page number 11 of the appeal documents (the 4th page of the bundle of Tenant Statements that were before the Member) there is an entry of $900 for rent paid on 15 April 2011 (presumably comprising $840 for fortnightly rent and $60 or arrears). Page number 27 submitted by the appellant as part of additional evidence that was not available at the hearing before the member purports to be a copy of the same page, but it omits an entry that is included in the copies of the Tenant statements before the Member, showing on 15 April 2011 a payment of rent of $900 and by change in the cumulative arrears total, a payment of $60 for arrears. That is consistent too with the tenants paying $960 intending $840 for fortnightly rent and $120 for reduction of the arrears. 10. The landlord apparently relied upon copies of the Tenant Statements without any statement explaining them to prove the arrears and payments. But there are about 18 entries in the rent paid column comprising the fortnightly rental amount with a minus sign in front of it. So far as we are aware there was no evidence before the member explaining that. It appears the member in his reasons was referring to such entries when he referred to some payments on the Tenant Statements being "reversed". But so far as the Panel is aware, there was no explanation for the negative entries, or, if they were reversals, in what circumstances the payment was received and why it was reversed. 11. It also appears that there was no record of arrears payments after 19 August 2011 in the Tenant Statements or any other document before the Member. From 2 September 2011 the payments increased to $920 per fortnight. The member found that the whole of each payment (including any part for arrears) was treated as paid for rent and the receipts and Tenant Statements showed the rent paid in advance. 12. The Member found that whilst it was not disputed that there were arrears at 2009, the 2011 rental increase was disputed and consequently so were the issues of whether any arrears had been paid in full, and, if not, the extent of any underpayment. She held "the resolution of that dispute is made much more difficult because of the delay". 13. The Member concluded : As well as the error that created the original arrears, actions such as removing the arrears from the ledger have unnecessarily complicated the matter. The rent increase which was said to take place from 25 June 201 is not reflected on the ledger from that date. Payments of $50 were sometimes credited to rent and sometimes to arrears and sometimes reversed. The Tribunal has no confidence that the ledger is accurate. 1. The Notice of appeal does not raise any question of law. 2. There are 6 Grounds of Appeal in the Notice of Appeal. Grounds 1,2 and 4, are matters where the Appellant seeks to rely on additional evidence that was not before the Member. This additional material was filed with the Notice of Appeal (or in that document where the ground is described) 12 days after the appellant received the reasons for the decision sought to be appealed. The appellant offers no evidence that any of such evidence was not reasonably available in about 3 months between the filing of the application on 8 December 2015 and the hearing by the member on 3 March 2016, or even before the application. 3. Ground 4 does not dispute the finding that "Actions such as removing the arrears from the ledger have unnecessarily complicated the matter." It offers an explanation as to how it happened. It says that receipts were issued to the tenant for payment for arrears. It does not say it produced to the Tribunal its record of arrears paid or records of the receipts issued for such payments. The "additional material" is mostly material that was before the Member. The remainder (new evidence) does not with the other evidence suggest the appellant has an arguable case in the appeal. The Panel is not satisfied any of Grounds 1,2 & 4 has merit. 4. The appellant says regarding ground 3 that it was taken by surprise at having to prove the rental increases because they didn't know they would be in dispute. But the onus was on the landlord to prove his claim for arrears and this required proof that where the landlord increased the rent: * the notice was written and specified the increased rent and the date from which it was payable; and * the notice was given to the tenants at least 60 days before the increased rent was payable. 1. It was unwise for the landlord to assume the tenant would concede such matters or that the tenant would give advance notice if they were disputed. 2. "The rent increase which was said to take place from 25 June 2011 is not reflected on the ledger from that date". It appears that ground 5 is a challenge to this finding. It is clear from the reasons that the Member by this statement was referring to the fact that the ledger does not show payments of the new rental commencing until September 2011. The evidence supported that finding. The appellant says in relation to that Ground that a ledger sheet was emailed to the tenants on 3 August 2011 and it also notified the tenants of a rental increase to commence from 25 June 2011. But such notice could not validly increase the rent because it was not given to the tenants 60 days before commencement of the increase in the rental. Ground 5 has no merit. 3. Ground 6 appears to be a challenge to the finding "Payments of $50 were sometimes credited to rent and sometimes to arrears and sometimes reversed". It is clear that when the tenant statements separately showed the cumulative receipts of arrears, payments of arrears were identified by that. But when they weren't, sometimes they were included in the rental amount (but not quantified) and sometimes they were not acknowledged at all and not included in the rental figure. It appears that this ground of appeal has no merit. Refusal of Extension of Time to File Application for Claim 1 1. The appellant seeks to overturn the decision of the member refusing to extend the time for filing the application so far as it relates to claim 1. 2. The principles applicable for dealing with such an application were discussed by the Appeal Panel comprising the President of the Tribunal and the Deputy President of the Consumer and Commercial Division in Jackson v NSW Land & Housing Corporation [2014] NSWCATAP (19 May 2014) at [18] to [22]. It was held there that generally the court or tribunal is required to consider if asked to grant an extension of time set by a statute or statutory instrument: 1. The Length of the delay; 2. The reason for the delay; 3. Whether the appellant has a fairly arguable case; and 4. The extent of any prejudice suffered by the respondent to the appeal. 1. The Judicial Committee of the Privy Council held in Ratnam v Cumarasamy (1965) 1 WLR 8 (at p 12): The Rules of Court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken, there must be some material upon which the court can exercise its discretion. 1. The Australian courts have adopted and applied the decision of McHugh J siting as a single Justice of the High Court in Gallo v Dawson [1990] HCA 30 at [2] that the grant of an extension of time is not automatic. The object of the Rule is to ensure that those rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the court (or tribunal) to do justice between the parties. 2. He held that the discretion to extend time can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work on injustice upon the applicant. 3. The length of the delay in filing the application for an order for payment of the arrears is extremely long. It was about 79 Months when the prescribed time was 1 month. The reason for the delay is that the landlord elected to reach an agreement with the tenant for payment of the arrears rather than issue an application in the then Tribunal seeking an order for payment of the arrears. He apparently elected not to seek legal advice. 4. The landlord did not have "a fairly arguable case" if the time were extended to allow his application. 5. Because of the delay there would have been prejudice to the Tenants if the time for filing the application was extended. It would allow the landlord to bring the claim more than 6 years after the breach when even the 2010 legislation specified only 3 months. In that time memories have long faded and records of the tenant that might have been located and assisted the tenants are likely to have been lost, destroyed or discarded. 6. In the circumstances the Landlord did not establish that there would be any injustice to him if the time were not extended and the decision to refuse the application was correct. Leave to Appeal on Claim 1 1. Pursuant to subclause 12(1) of Schedule 4 of the Act, the Tribunal found that the appellant has not established regarding claim 1 that: 1. The decision of the Tribunal under appeal was not fair and equitable; or 2. The decision of the Tribunal under appeal was against the weight of evidence; or 3. Significant new evidence has arisen, being new evidence that was not reasonably available at the time the proceedings under appeal were being dealt with. 1. Accordingly the Appeal Panel is not satisfied that for any of those reasons the appellant may have suffered a substantial miscarriage of justice. 2. For that reason leave to appeal on this claim was refused. Claim 2 Raised in the Application 1. The only description in the application of this ground is: Section 187(1)(c) – an order for payment of an amount of money $398.22; George Brand Real Estate Copacabana are seeking the balance of outstanding rent on vacate of $398.22 being 8/10/15 to 14/10/15. 1. Claim 2 is for rent for the specified period of 6 days (8 October 2015 to 14 October 2015). The application was filed on 8 December 2015, so it was within the time of 3 months allowed by section 190 of the 2010 Act and Reg 22 (9) of the 2010 Regulation. 2. The inadequacy of the records and other evidence resulted in a situation where the evidence did not enable the member to determine precisely what the situation was at 8 October 2015 as to rentals. It was not possible to determine particularly what total rent the tenants were legally liable to pay, what they had paid in total (as rent and arrears) as at 8 October 2015 . The evidence did not allow the member to determine whether the tenants had paid more than they were liable to pay or less than they were liable to pay. 3. It was therefore not possible for the member to determine whether there was any liability for the tenants to pay any rental for the 6 days in question. The landlord therefore did not have "a fairly arguable case". The evidence did not establish claim 2 had any merit. Leave to Appeal on Claim 2 1. Pursuant to subclause 12(1) of Schedule 4 of the Act, the Appeal Panel found that the appellant had not established regarding claim 1 that: 1. The decision of the Tribunal under appeal was not fair and equitable; or 2. The decision of the Tribunal under appeal was against the weight of evidence; or 3. Significant new evidence has arisen, being new evidence that was not reasonably available at the time the proceedings under appeal were being dealt with. 1. Accordingly the Appeal Panel is not satisfied that for any of those reasons the appellant may have suffered a substantial miscarriage of justice. 2. For that reason leave to appeal on claim 2 was refused. Conclusions 1. Accordingly the application for leave to appeal and the appeal were dismissed. Costs 1. The Tenants sought an order for the landlord to pay their costs of the appeal. They did not have legal representation for the appeal. They sought expenses of $800 for travel by private car from the Central Coast to Sydney and return to attend the hearing, $300 for hotel accommodation and $200 for the cost of legal advice. The car expense was not reasonably incurred as the tenants could have travelled by public transport (train) at a fraction of $300. The Accommodation expense was not reasonably required as the hearing was set down for a half day hearing from 10.15am. It started at 10.15 am and was completed at 11.13 am. The train service between Sydney and the Central Coast would have amply met their needs in a window of about 8.00am to about 1.00pm. The tenants were not able to produce a bill for the legal advice and in all the circumstances the Tribunal declined the costs application. Orders 1. The orders made on 15 June 2016 therefore were: 1. The application for leave to appeal and the appeal are dismissed; and 2. The Respondents' application for costs is refused. ********** 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: 13 September 2016