Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Abdel-Messih v Mao [2016] NSWCATAP 223 Hearing dates: 25 July 2016 and 17 August 2016 Date of orders: 07 October 2016 Decision date: 07 October 2016 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member D Robertson, Senior Member Decision: The appeal is dismissed and, to the extent relevant, leave to appeal is refused. Catchwords: Quiet enjoyment- circumstances where landlord liable for third party actions. Orders restraining breach or requiring performance of residential tenancy agreement- discretion, no utility of orders. Strata scheme- liability of landlord for actions of building manager appointed by owners corporation. Legislation Cited: Civil and Administrative Tribunal Act 2013 Residential Tenancies Act, 2010 Strata Schemes Management Act, 1996 Cases Cited: AF Textile Printers Pty Ltd v Thalut Nominees Pty Ltd & Ors [2007] VSC 73, 17 VR 334 Collins v Urban [2014] NSWCATAP 17 Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15 Reiss & Anor v Helson & 2 Ors [2001] NSWSC 486 Category: Principal judgment Parties: Bishoy Abdel-Messih (Appellant) Jin Tao Mao (Respondent) Representation: Counsel: Not applicable Appellant (in person) D Tam (Agent for Respondent) File Number(s): AP 16/20721 Publication restriction: Unrestricted Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 28 April 2016 Before: D Charles, General Member File Number(s): RT 16/13066 reasons for decision Introduction 1. This is an appeal from a decision in residential tenancy proceedings RT 16/13066 (original proceedings). 2. In those proceedings the appellant was the tenant pursuant to a residential tenancy agreement with the respondent who was the landlord. The residential tenancy agreement was dated 9 December 2015 and was for a fixed period from 16 December 2015 until 14 June 2016. 3. The residential premises, the subject of the residential tenancy agreement, consisted of a unit being a Lot in a strata scheme located at 91 Liverpool Street Sydney, known as the "World Tower Building" (Strata Scheme). 4. The appellant sought various orders against the respondent including: 1. an order requiring a copy of a key or other opening device to be provided to the appellant; 2. an order directing the landlord or the landlord's agent to comply with a requirement of the residential tenancy agreement; and 3. an order in the nature of a specific performance order requiring performance of the residential tenancy agreement. 1. The dispute arose in circumstances where: 1. the appellant had sublet the residential premises to third parties and was seeking an access key for one of his sub-tenants; the appellant claimed the respondent had failed to comply with his obligations in respect of providing access, security devices and ensuring the appellant had quiet enjoyment. 2. the building manager appointed by the Owners Corporation of the Strata Scheme had deactivated access cards because of alleged non-compliance with strata by-laws; and 3. the appellant claimed he was verbally abused and had been harassed by the building manager. 1. The Tribunal determined the original proceedings and made orders on 28 April 2016 (Decision). The orders made by the Tribunal were as follows: 1. The respondent landlord is to provide the applicant tenant or any authorised sub-tenant of the applicant with access to the residential tenancy premises the subject of this application. 2. Such access is to include the provision of activated cards that are issued in accordance with the By-laws of SP 71067 and which enable access to the lifts and common areas of the strata building. 3. In any instance where the applicant or an authorised sub-tenant for the residential premises does not have an activated access card, the landlord and/or the landlord's agents are to take such reasonable measures as are necessary to ensure that the strata building management service acts co-operatively with the applicant or an authorised sub-tenant for the residential premises in order to facilitate access when requested to the lifts and common areas of the strata building. 4. The application is otherwise dismissed. 1. The appellant appealed the Decision and on 2 May 2016 filed a Notice of Appeal dated 2 May 2016. History of Appeal 1. In the Notice of Appeal at Section 5, the respondent sought the following orders: In addition to current order, 187(1)(b) An order that requires an action in performance of a residential tenancy agreement 187(1)(h) An order directing a landlord or a landlord's agent to comply with a requirement of the Act of the regulations 187(1)(d) An order as to compensation $6000 1. The respondent filed a Reply to Appeal dated 20 May 2016. In the Reply to Appeal the respondent supported the original orders made by the Tribunal and attached various documentary material 2. The proceedings were listed for call over on 24 May 2016. At that time directions were made for the appellant and respondent to lodge documents upon which they intended to rely for the purpose of the hearing being relevant evidence and submissions. The appeal was otherwise fixed for hearing on 25 July 2016. 3. When the matter came on for hearing on 25 July 2016 the respondent was not in attendance at the hearing. After enquiries it was apparent that various communications had taken place between the appellant and the respondent concerning the appeal and what was to occur. In the course of those discussions the Appeal Panel telephoned the agent for the respondent landlord, Mr Tam to enquire why he was not present at the hearing. 4. Mr Tam subsequently attended before the Appeal Panel and the Appeal Panel was advised that discussions had taken place between the parties whereby the appellant had agreed not to pursue his claim for additional compensation. The parties had agreed to enter a new residential tenancy agreement as part of a settlement of various disputes. That agreement was dated 24 June 2016 and became Exhibit B in the appeal proceedings in circumstances explained below. 5. During the course of discussions at the hearing on 25 July 2016 it also became apparent to the Appeal Panel that the respondent had understood from the settlement discussions with the appellant that the appeal had been settled in its entirety. On the other hand, the appellant contended that the settlement had been limited to that part of the appeal concerning compensation. It was also apparent to the Appeal Panel that it was necessary to determine the precise grounds of appeal and the orders sought. Further, because the respondent had been proceeding on the misunderstanding that all issues had been settled, it was necessary to adjourn the appeal for hearing on 17 August 2016 so that the respondent would have an opportunity to prepare and respond to those claims which the appellant still sought to pursue. 6. The Appeal Panel made further directions on 25 July 2016 for the provision of the sound recording in relation to the original hearing as well as providing for the parties to file and serve any further submissions in support of the appeal. 7. At item 4 of the directions made by the Appeal Panel on 25 July 2016, the Tribunal made the following notation: 4. The Appeal Panel notes the grounds of the appeal seeking compensation are withdrawn and the orders sought are: 1. The landlord (respondent) is to ensure the quiet enjoyment of the appellant by (i) raising the issue at the owners corporation meeting; or (ii) bringing a motion at the owners corporation meeting. to change personnel or managing agents hired by the owners corporation to manage the building. 2. The respondent is not to change any locks or security devices without: a) Order by the Tribunal; or b) Agreement of both parties. 3. An order that the respondent ensure the appellant and his sub tenants are provided with security devices to the residential premises, the subject of the orders. 1. Between 25 July 2016 and the adjourned hearing of the appeal on 17 August 2016 the parties filed further documents. In addition, at the hearing on 17 August 2016 the following documents became Exhibits by consent: 1. Exhibit A: typed copy of extracts of the sound recording (being an audio recording played at the original hearing before the Tribunal on 28 April 2016; 2. Exhibit B: residential tenancy agreement dated 26 June 2016; 3. Exhibit C: residential tenancy agreement dated 9 December 2015, being the agreement the subject of the original application; and 4. Exhibit D: bundle of documents containing, inter alia, photographs and copies of by-laws of the strata scheme. 1. The determination of the appeal was limited to the question of whether or not the Tribunal was in error in failing to make orders for which the appellant contended as recorded in the note being item 4 of the directions of the Appeal Panel made 25 July 2016 set out above. Submissions 1. The parties provided oral and written submissions. These submissions were referable to each of the three orders the appellant contended the Appeal Panel should make in his favour in resolving the appeal. Order 1 – landlord to ensure quiet enjoyment of appellant 1. The appellant submitted that the landlord was under an obligation to ensure the quiet enjoyment of the appellant in accordance of the terms of the residential tenancy agreement and the Residential Tenancies Act, 2010 (RT Act). 2. The appellant referred to clauses 14.1 and 14.2 of the residential tenancy agreement and s 50(1) and (2) of the RT Act. The respondent submitted that the appellant as a landlord and lot owner in the Strata Scheme was the employer of the building manager and had the power to change or terminate the building manager's employment. Alternatively, the appellant said that the builder manager was the landlord's agent to manage the building on behalf of all owners, that the lot owner had an equal interest in the common property and therefore the respondent as a lot owner had power to frame a motion to place before a general meeting of the owners corporation to bring about change. 3. The appellant said that the conduct of the building manager constituted a breach of the appellant's entitlement to quiet enjoyment under the residential tenancy agreement. Inter alia, the appellant identified these breaches as being constituted by: 1. The building manager entering the residential premises, ostensibly to conduct an inspection of a fire door, carrying out an unauthorised inspection of the residential premises and deactivating a security key because a sub tenant of the appellant had placed a bed in the area known as the "winter garden". The appellant said that the deactivation of the access card was said by the building manager to be permitted by reason of the unauthorised use of the "winter garden" (an enclosed balcony area) which the building manager said constituted a breach by the appellant of his obligations under the by-laws; and 2. The appellant being the subject of harassment and verbal abuse by the building manager who had followed the appellant throughout parts of the common property and had used foul language when communicating with the appellant. 1. The appellant relied on various emails and on a transcript of an audio recording which became Exhibit A in the proceedings. In relation to this exhibit there is a dispute concerning whether or not it was properly admitted into evidence because it was said to have been an unauthorised recording. 2. In relation to the issue of harassment, the appellant challenged the finding of the Tribunal that the building manager did not harass the appellant and acted within the building manager's authority. 3. In relation to the liability of the landlord in respect of the failure to ensure the quiet enjoyment of the appellant the respondent relied upon a number of authorities and said that he was "guaranteed exclusive right to the lawful undisturbed use of the property in peace, without disturbance by hostile claimants". In this regard he relied upon various authorities including Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15 at [23] and AF Textile Printers Pty Ltd v Thalut Nominees Pty Ltd & Ors [2007] VSC 73; 17 VR 334 at [38] – [51]. 4. In short, the appellant said there was a positive obligation upon the landlord to take action to prevent third parties from interfering with a tenant's right to quiet enjoyment. 5. In reply, the respondent referred the Tribunal to a copy of the by-laws and initially made submissions that the by-laws prohibited a bed being placed in the area of the "winter garden". The by-laws identified were by-laws 28 and 29 (part of Exhibit D). It became apparent during the course of submissions that by-law 29 to which the respondent referred related to window furnishings such as curtains and the respondent was unable to point to any express prohibition in the by-laws in connection with the placement of a bed in the area of the "winter garden", being an enclosed balcony area. 6. In any event, the respondent said that the actions of the building manager were not the respondent's responsibility and when access had been denied, the respondent had sent emails to the building manager requiring access to be granted. Consequently, the respondent submitted he had complied with his obligations. Order 2 – respondent not to change locks or security devices 1. The appellant submitted that order 3 requiring the respondent "to take such reasonable measures as are necessary to ensure the strata building management services acts cooperatively with the (appellant) or an authorised sub tenant for the residential premises in order to facilitate access when requested to lifts and common property areas of the strata building" was not a "sufficient or appropriate order". 2. In this regard the appellant says that the Tribunal's finding that an access key is "a matter of personal convenience" incorrectly interprets the obligations upon a landlord for the purpose of providing access having regard to the provisions of s 10 of the RT Act. 3. Further, the appellant submits that, by reason of the building manager of the Owners Corporation deactivating the devices for access to common property for alleged breaches of the by-laws by the appellant, the landlord is thereby rendered in breach of his obligations under the residential tenancy agreement by changing locks or security devices in contravention of the RT Act and residential tenancy agreement. Order 3 – Access keys for sub-tenants 1. In relation to order 3, that the respondent provide the appellant with security devices or access keys to the common property for the appellant's sub tenants, it was noted that the reason for this order was that the appellant had a tenant by the name of Mr Khan who was seeking an access key to the residential premises for the purpose of gaining access under the sub tenancy agreement. However, when the appeal was heard it was apparent that Mr Khan had left the premises and therefore no longer required an access device. In these circumstances, as no claim for compensation was otherwise sought, this issue no longer remained necessary to resolve on appeal. Consideration 1. This appeal relates to residential proceedings. The appeal was lodged in time, being fourteen days from the date of the decision to which the appeal relates. 2. The appellant has a right of appeal on a question of law and otherwise with leave of the Appeal Panel: see s 80(2)(b) of the Civil and Administrative Tribunal Act 2013 (NCAT Act). To the extent leave is required, it may only be granted if the appellant may have suffered a substantial miscarriage of justice: see cl 12 of Sch 4 of the NCAT Act. The principles applicable to determining this issue and whether leave should be granted are set out in the decision of Collins v Urban [2014] NSWCATAP 17. 3. As stated above, it is unnecessary to deal with the issue of whether an order should be made for the provision of an access key to Mr Khan, as he is no longer a sub tenant of the appellant. Consequently, it is only necessary to deal with the appellant's contentions that orders should have been made against the respondent in respect of: 1. Ensuring the quiet enjoyment of the appellant by taking particular action; and 2. Restraining the respondent from not changing locks or other security devices without an order of the Tribunal or agreement of the parties. 1. In our view, the appeal seeking orders in respect of each of these matters should be dismissed. 2. Our reasons can be stated shortly. No utility in making orders 1. As indicated by the parties at the commencement of the appeal, there is no challenge to that part of the Tribunal's decision dismissing the appellant's original application for compensation. 2. The only issues raised in the appeal are what, if any orders should be made being orders in the nature of: 1. An order that restrains any action in breach of the residential tenancy agreement; 2. An order that requires action in performance of a residential tenancy agreement; or 3. An order that a landlord or a landlord's agent to comply with a requirement of the RT Act or the Regulations. 1. These orders are discretionary as made clear by the provisions of s 187(1)(a), (b) and (h) of the RT Act. 2. In relation to orders made under subs 187(1)(a) or (b), the Tribunal is expressly authorised to make such an order "even though it provides a remedy in the nature of an injunction or an order for specific performances in circumstances in which such a remedy would not otherwise be available". However orders are discretionary and may only be made under s 187(1)(a) and (b) in relation to restraining a breach or requiring an action in performance of "a residential tenancy agreement". Similarly, orders made under subs 187(1)(h) are discretionary and may only be made in relation to requiring a landlord or landlord's agent to comply with the RT Act or the Regulations. 3. In the present case, the residential tenancy agreement which is the subject of the application is Exhibit C in this appeal. That agreement is dated 9 December 2015 for a fixed term commencing 16 December 2015 and ending on 14 June 2016. This was the agreement that was before the Tribunal at first instance and to which the Decision relates. 4. It is clear from the evidence tendered on the appeal that this agreement has now come to an end, a new residential tenancy agreement having been entered into between the parties on 24 June 2016, that agreement being for a fixed term commencing on 17 August 2016 and ending on 15 August 2017 (Exhibit B). The date of commencement of the new agreement was the date this appeal was finally heard. 5. The appellant contended that the new agreement was in fact an extension of the old agreement. The appellant relied on the handwritten notations at the bottom of page 1 of Exhibit B which says: Previous terms remain constant, change to $990 and car space 1. In our view this submission should not be accepted. The clear words in Exhibit B show an intention to create a fixed term tenancy "beginning on 17 August 2016 ending 15 August 2017". By its terms the new agreement did not vary or extend the original agreement (Exhibit C). At best the new agreement incorporated by reference terms of the original agreement in accordance with the handwritten notations. 2. In circumstances where the agreement, the subject of the original dispute, has now come to an end, in our opinion there is no utility in making orders in the nature of mandatory or restraining injunctions to regulate the future conduct of the parties under that agreement. Further, it is inappropriate to make orders regulating the new agreement of which there have been no proven breaches and which was not in existence at the time of or the subject of the original proceedings. Specific orders inappropriate in any event 1. In relation to the specific orders sought, the appellant contends that an order should be made in his favour for the purpose of ensuring his quiet enjoyment of the residential premise in that the landlord should be required to: 1. Raise issues at the owner's corporation meeting; 2. Bring a motion at the owner's corporation meeting; or 3. To change personnel or managing agents hired by the owner's corporation to manage the building. 1. The appellant says that the Tribunal is authorised to make such an order because the building manager is the agent of the respondent landlord and/or because the obligation to provide quiet enjoyment carries with it the obligation upon a landlord to take affirmative action against third parties within the building in which the residential premises are located. 2. We do not accept the building manager is the agent of the respondent or employed by the respondent. Rather, the building manager is the appointed agent of the owner's corporation and is subject to the direction and control of the owner's corporation or its delegate. The respondent is not a person delegated any management function of the strata scheme. 3. As made clear by s 8(2) of the Strata Schemes Management Act, 1996 (SSMA), the owner's corporation has the principal responsibility for the management of the scheme. Otherwise, those who may be involved in managing a strata scheme are any one or more of the following: 1. The executive committee of the owners corporation established in accordance with Part 3 of the SSMA; 2. A strata managing agent appointed in accordance with Part 4 of the SSMA; and 3. A caretaker appointed in accordance with Part 4A of the SSMA. See s 9 of the SSMA. 1. While a lot owner may vote at an annual general meeting, individual lot owners otherwise have no entitlement as a lot owner to manage a strata scheme or personally direct how the management of the strata scheme is to occur. 2. The view that the building manager is the agent of the owner's corporation and not an individual lot owner is also supported by s 13 of the SSMA. That section provides that an owner's corporation "may employ such persons as it thinks fit to assist it in the exercise of any of its functions". In this regard management includes "the management and control of the use of common property of the strata scheme": see s 61 of the SSMA. 3. Accordingly, we do not accept that the building manager is the agent of the landlord such that any actions by the building manager could constitute a breach of the landlord's obligation to provide quiet enjoyment to the appellant in a manner which contravened the residential tenancy agreement and/or s 50 of the RT Act. 4. The second limb of this submission is that the landlord was nonetheless obliged to take positive action against third parties, including the owner's corporation and/or its agent the building manager to prevent the appellant's quiet enjoyment being affected by the conduct of the building managing in deactivating security keys to the common property. 5. The tenant relied on the decision of Yeldham J in Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd. In that case His Honour said at page 23 E-F: I take the relevant law in relation to the covenant for quiet enjoyment to be correctly set out in Halsbury's Laws of England, 3rd ed., Vol 23, pp.605, 606, pars 1298, 1299 in these terms: "the covenant for quiet enjoyment operates according to its terms to secure the tenant, not merely in the possession, but in the enjoyment of the premises for all usual purposes; and where the ordinary lawful enjoyment of the demised premises is substantially interfered with by the acts or omissions of the landlord or those lawfully claiming under him, the covenant is broken, although neither the title to, nor the possession of the land may otherwise be affected... "if the act causes physical interference with the demised premises, there is a breach of covenant, notwithstanding that the act itself is done off the premises;..." 1. In our view this case has little relevance to the resolution of the present dispute. This is because Martins Camera concerned damage suffered by a tenant whose stock in a shop had been damage by a flow of water from the roof of the building owned by the landlord of which the demised premise formed part. Similarly AF Textiles has no relevance in the present case. 2. The decisions of the Supreme Court in Reiss & Anor v Helson & 2 Ors [2001] NSWSC 486 and cases referred to therein do relate to circumstances where there was a failure of the landlord to deal with interference to the right of quiet enjoyment caused by third parties and where it was asserted the landlord was required to take positive action to try and prevent such interference. These cases variously concerned the actions of either an owner's corporation or tenants or other lot owners in the strata scheme who conducted themselves in a manner that caused interference of the right to quiet enjoyment of the residential premises. In this regard, the Supreme Court in Reiss appeared to accept that a landlord may be under a duty to take positive action to ameliorate the conduct of others which impacts, at least in a physical sense, upon the use of the residential premises. However, in all cases what was required of the landlord was "to take reasonable steps" to ensure the entitlement to quiet enjoyment was not breached by third parties: see for example Reiss at [34]. 3. Whether or not such an obligation extends to taking action where a building manager deactivates access cards for gaining access to the common property through which is necessary to pass in order to enter the residential premises and/or whether a landlord is under an obligation to take positive action to try and prevent the owner's corporation or its agent inappropriately deactivating access keys is unnecessary to decide in the present case. This is because even if such an obligation exists, it seems clear from the evidence presented on appeal that the landlord in fact took steps to ensure any access device that was deactivated by the building manager was, upon request, subsequently reactivated so as to allow the appellant access to the premise. That is, the respondent in fact took reasonable steps to ensure the appellant's quiet enjoyment was not interfered with by third parties, including the building manager. 4. In this regard the email evidence (part of Exhibit D in the appeal) records communications from the respondent to the building manager seeking activation of access cards or information concerning reactivation of access cards which the appellant or his sub-tenants had been provided with. 5. Further, the Tribunal found that the access key had been deactivated because: in breach of the by-laws, the appellant assisted unauthorised persons with access to the building and it was on this basis that the building management service had sound reason to deactivate the applicant's security card. 1. In this regard by-law 27.4(b) provides that an owner or occupier of the lot must not: "give access keys to any other person". 1. Where this occurs, the owner's corporation is authorised by by-law 27.7 to "deactivate the access key if it determines that the owner or occupier to whom the access key was issued has breached any provisions of a by-law of the strata scheme, or has facilitated another person to so breach those by-laws". 1. In reaching this conclusion, the Tribunal had regard to evidence in a statement from a Mr Imran. The statement of Mr Imran is dated 14 April 2016 and is attached to the respondent's reply to appeal. While the appellant complains about inappropriate language and conduct of the building manager: see for example Exhibit A, the evidence of Mr Imran is evidence of a breach of the by-laws and the Tribunal is not shown to be in error in reaching the conclusions of fact in relation to a breach of the by-laws by the appellant in "letting unauthorised persons into the lift and common property of the private residential building". 2. Accordingly, it was open to the Tribunal to conclude that deactivation in the circumstances that occurred was authorised, at least in circumstances where there was unauthorised use of access cards. 3. In any event, the evidence does not suggest that the landlord failed to take steps to have any access card reactivated so as to allow the appellant to again have the use of such a device following deactivation. 4. In these circumstances, even if the respondent was under an obligation to take reasonable steps to ensure the quiet enjoyment of the appellant in respect of the residential premises was not infringed by the building manager deactivating access cards to common property, no relevant breach by the respondent has been established. Therefore order 1 sought by the appellant in this appeal should not be made. 5. In relation to order 2 – that the landlord not change any locks without an order of the Tribunal or with the consent of the tenant, in our view there is no evidence to support the view that the landlord has in fact engaged in such activity or that he will do so in the future. 6. Insofar as access cards to the common property and entrance of the building have been deactivated by the building manager, this is not, in the present case, conduct of the landlord which would constitute a breach by the respondent or his agent of the residential tenancy agreement nor does it constitute a contravention of s 71(3) of the RT Act. This is because any changes to access devices have been made by the building manager not the respondent. 7. In the absence of contravening conduct by the respondent (or his agent), an order restraining the respondent from engaging in such conduct should not be made. Accordingly, no error of the Tribunal has been established and no basis exists for the Appeal Panel to make an order in the terms sought. Orders 1. It follows from what we have said that the appeal should be dismissed. 2. The Appeal Panel makes the following order: 1. The appeal is dismissed and, to the extent relevant, leave to appeal 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: 07 October 2016