Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Angilley v Van Zeyl [2017] NSWCATAP 184 Hearing dates: 29 August 2017 Date of orders: 07 September 2017 Decision date: 07 September 2017 Jurisdiction: Appeal Panel Before: L Pearson, Principal Member J Lucy, Senior Member Decision: (1) Leave to amend the grounds of appeal granted. (2) The appeal is allowed. (3) Order 2 made on 19 May 2017 in the Tribunal at first instance is set aside. (4) Remit the matter to the Consumer and Commercial Division for rehearing and for the purposes of the remitted proceedings, the Appeal Panel directs: (a) Mr and Mrs van Zeyl are to give to the Tribunal and Mr Angilley and Real Estate Partners Pty Ltd, in person or by post, points of claim and any evidence to be relied upon at the hearing on or before 27 September 2017. (b) Mr Angilley and Real Estate Partners Pty Ltd are to give to the Tribunal and Mr and Mrs van Zeyl, in person or by post, points of defence and any evidence to be relied upon at the hearing on or before 11 October 2017. (c) Mr and Mrs van Zeyl are to give to the Tribunal and Mr Angilley and Real Estate Partners Pty Ltd, in person or by post, any submissions in reply on or before 18 October 2017. (d) The matter be listed for hearing on a date not before 18 October 2017. Catchwords: APPEAL: Claim by landlords against managing agent – Compensation for rent arrears and damage to property – Whether adequate reasons Legislation Cited: Civil and Administrative Tribunal Act 2013 Property Stock and Business Agents Act 2002 Residential Tenancies Act 2010 Cases Cited: Collins v Urban [2014] NSWCATAP 17 John Prendergast & Vanessa Prendergast v Western Murray Irrigation Limited [2014] NSWCATAP 69 Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 Wainohu v New South Wales (2011) 243 CLR 181 Category: Principal judgment Parties: Matthew Angilley and Real Estate Partners Pty Ltd (Appellants) Duncan and Nilva Van Zeyl (Respondents) Representation: M Angilley (Appellants) Respondents in person File Number(s): AP 17/25015 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 19 May 2017 Before: F Holles, General Member File Number(s): GEN 17/06995 REASONS FOR DECISION 1. This is an internal appeal pursuant to s 80 of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) against a decision made in the Consumer and Commercial Division of the Tribunal on 19 May 2017 to order Matthew Angilley and Real Estate Partners Pty Ltd to pay Nilva and Duncan van Zeyl the sum of $8,324.45 on or before 2 June 2017. That amount was made up of $4,618.46 for items damaged by former tenants of residential premises owned by Mr and Mrs van Zeyl, and $4,845.98 loss of rent from 29 October 2016 to 25 February 2017, less the refunded rental bond of $1,100.00. The Decision under Appeal 1. The claim by Mr and Mrs van Zeyl, lodged as a consumer claim application to the Tribunal on 10 February 2017, related to the management by Mr Angilley as managing agent of their rental property in Mittagong NSW during a residential tenancy which commenced in February 2016. Mr and Mrs van Zeyl (referred to in these reasons as "the landlords") claimed that Mr Angilley had made no inspections during the tenancy, that the property had been abandoned after extensive damage, and that Mr Angilley had failed in his duty of management of the premises, resulting in a cost to them of approximately $8,000.00. 2. The proceedings were first listed for Conciliation and Hearing (Group List) on 3 March 2017. Mr Angilley did not appear. Real Estate Partners Pty Ltd was joined as a respondent, the matter was adjourned, and directions were made for the parties to provide to each other and to the Tribunal the documents on which they intended to rely at the hearing. 3. The matter was heard on 19 May 2017 at Moss Vale. Mr Angilley did not appear, and telephoned to advise that his car had broken down. The Tribunal Member refused an adjournment, and proceeded to hear the matter. The Member provided his decision short written reasons, in which he found: 1. The rent was collected intermittently after the female tenant left the property in June 2016; 2. the male tenant left the property in October 2016; 3. There was no exit inspection by the agent, and consequently no compliance with s 29(4) of the Residential Tenancies Act 2010 (RT Act), which had consequences for recovery of damages under s 165 of the RT Act; 4. The bond was returned to the landlords; and 5. The landlords were consumers and the claim was one in which the Tribunal had jurisdiction. 1. The Member concluded that he was satisfied "that want of diligence by the agents in breach of the implied responsibilities of a managing agent had caused the loss" for which the landlords sought compensation. 2. On 10 January 2017 Mr Angilley, on behalf of the landlords and in their names, had lodged a separate application under the RT Act to the Tribunal against the former tenants, seeking an order for termination of the residential tenancy agreement for non-payment of rent and for payment of rent arrears (RT 17/01184). That matter was also listed for hearing on 19 May 2017. There was no appearance by the former tenants. The Member heard that application after the determination of GEN 17/06995, and dismissed it on the basis that the orders made in GEN 17/06995 made the application otiose. 3. The Appeal Panel notes that Mr Angilley's Notice of Appeal identified GEN 17/06995 and RT 17/01184 as the proceedings the subject of the appeal. However, he was not a party to proceedings RT 17/01184, and thus could not appeal from the determination of those proceedings. The landlords have not appealed. The submissions made on the appeal from GEN 17/06995 by the parties did not raise any issue with the determination of RT 17/01184. Accordingly, the Appeal Panel has not addressed RT 17/01184 in this decision. Availability of Appeal 1. The appeal may be brought as of right on a question of law or, with the leave of the Appeal Panel, on other grounds: s 80(2)(b) NCAT Act. As the appeal is brought from a decision of the Consumer and Commercial Division of the Tribunal, by virtue of cl 12(1) of Sch 4 to the NCAT Act leave to appeal may only be granted under s 80(2)(b) if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17 the meaning of "substantial miscarriage of justice" was summarised at [71] and [79] as follows: [71]. . . [I]t can be seen that the concept of a substantial miscarriage of justice refers to a failure in the way a matter was conducted or decided which deprived the appellant of a chance that was fairly open of achieving a better outcome than occurred. . . [79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result . . . it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Sch 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b). Grounds of Appeal 1. In his Notice of Appeal, confirmed at the appeal hearing, Mr Angilley stated that he is seeking to have the order that he pay the landlords the sum of $8,324.45 set aside. 2. The Notice of Appeal lodged on 1 June 2017 identified several factual matters which Mr Angilley disputed, including the finding that the male tenant left the property in October 2016. Mr Angilley explained his absence from the Tribunal hearing of 3 March 2017 and his failure to provide any documents as being that he had suffered a fire causing extensive damage to his property, and that cleaners had to clean the contents of the property which were not returned until late afternoon on 19 May 2017. The documents provided by Mr Angilley with his Notice of Appeal included an ingoing condition report from the previous tenant in 2015. In support of an application for leave to appeal Mr Angilley stated that the decision was not fair and equitable because he had been unable to present oral evidence at the hearing on 19 May 2017 due to car troubles and his request to the registry prior to the hearing to be able to give evidence over the phone or have the hearing adjourned was refused; that the decision was against the weight of evidence because he had been unable to give evidence and highlight the steps he had taken to regain possession of the property and claim rental arrears; and that there is significant new evidence, being the ingoing condition report from February 2015 which he had obtained from the old files that had been returned by the cleaner. 3. On 10 July 2017 Mr Angilley applied for leave to amend the appeal, providing amended grounds of appeal. Mr Angilley provided a list of asserted errors of law, being: 1. Making a finding of fact for which there was no evidence: 1. There was no managing agency agreement in evidence, and without an agency agreement the landlords could not be a consumer, only one party (the licensee) would have been responsible; 2. There was no evidence that the male tenant left the property in October 2016; 3. The landlords had made in RT 17/01184 an application against the tenants for rent arrears; 4. There was no agency agreement that would make Mr Angilley the agent responsible to conduct the outgoing condition report; 5. There was no evidence such as accounts, quotes or receipts to justify the claimed expenses; 6. Normal procedures were not followed, as notice of the orders in GEN 17/06995 was sent by post and not email; 1. Failing to accord procedural fairness: 1. No evidence to support the costs claimed; 2. Bias; 1. Inadequate reasons; 2. Failure to take into account matters required to be taken into account, being no reference to the Property Stock and Business Agents Act 2002 or Property Stock and Business Agents Regulation 2014; 3. Exercise of a discretionary power in a way that was legally unreasonable; 4. Failure to provide a reasonable opportunity to deal with adverse material: 1. not allowing him to attend the hearing by telephone; and 2. not considering that the carpets were at the end of their depreciated lifespan. 1. The landlords did not oppose leave being granted to amend the application, and as discussed below, responded to the matters raised in their reply to the appeal and in oral submissions. Reply to Appeal 1. In the Reply to Appeal filed on 15 June 2017 the landlords supported the orders made by the Tribunal, and responded to the statements in the Notice of Appeal filed on 1 June 2017. The landlords state that no claim was made that the male tenant left the property in October 2016, and acknowledged that 4 weekly payments were made in November 2016, however the statements provided by the appellants confirmed that the rent had been paid only up until 29 October 2016 in breach of the lease. The landlords confirmed that Mr Angilley was the managing agent until 21 January 2017. The landlords referred to messages left for Mr Angilley from November 2016, and an arrangement to attend the property on 17 January 2017 for an inspection. 2. In the further Reply to Appeal filed on 8 August 2017 the landlords responded to Mr Angilley's amended appeal. The landlords stated that they had not been supplied with a copy of the managing agency agreement; and that they had no way of knowing when the property was vacated, being alerted on 9 January 2017 by an electrician who had been sent to investigate fuse tripping. No outgoing condition report was made; Mr Angilley was managing agent until 21 January 2017. In response to the application for leave to appeal, the landlords stated that no evidence of the application in RT 17/01184 had been supplied to the landlords, the new agent or the Tribunal before 3 March or 19 May 2017. The landlords stated that only the most recent ingoing condition report should be considered as they had not had an opportunity to inspect the property between tenants. 3. The landlords provided with the second Reply to Appeal copies of some of the documents provided to the Tribunal at first instance, being the residential tenancy agreement for a 28 week period from 20 February 2016, the ingoing condition report dated 19 February 2016, extracts from email correspondence December 2016-February 2017, including an email of 21 December 2016 in which the landlords notified Mr Angilley that they were terminating the agency agreement from 21 January 2017; the bond claim made on 17 January 2017; photographs of the premises taken on 18 January 2017; and their itemised claim for costs. The documents provided on the appeal included receipts for some of those claimed costs; however, Mr Angilley stated that the receipts had not been included in the documents provided to him before the hearing at first instance. The landlords stated that the rent ledger had also been provided at first instance; at the appeal they stated that rent was paid to the end of October, with a couple of payments in early December. 4. The landlords sought to have the original decision upheld or increased to $9,963.95 to include additional costs resulting from the appeal. The Appeal hearing 1. Mr Angilley's application for a stay of the orders for payment of $8324.45 was refused at the call over on 20 June 2017. The parties were directed to provide a copy of the sound recording if oral reasons were given or what took place in the hearing was relied upon. On 10 July 2017 Mr Angilley advised that the recording was not available. 2. Mr Angilley's oral submissions on the appeal were that the managing agency agreement was between Real Estate Partners Pty Ltd and the landlords, and there should have been only one respondent. He cannot locate his copy of the managing agency agreement. The Member did not refer to the duties of managing agent that he was said to have breached. While he did not provide any documentary evidence to the Tribunal, had he been able to give oral evidence by phone he would have disputed the claim that the male tenant had left. The property did not look abandoned when he drove past in December 2016. He could not understand why both hearings were listed for the same day. He was not told by the Tribunal that he could have applied to have the decision set aside even though he was out of time. He disputes the calculation of the damages as he did not receive any invoices, only a summary spreadsheet, and a lot of the items were for things that were past the ATO depreciated life. He was on leave from 15 December 2016 to 16 January 2017. 3. The landlords submitted that they became aware the property was vacant on 9 January 2017 when an electrician alerted them. They arranged to meet Mr Angilley on 17 January 2017 however he did not attend, and they went on 18 January 2017 to take photographs. They did not say that the male tenant left in October, just that the rent was paid until the end of October with a couple of payments in early December. Their claim included refund of management fees, which the Member said could not be awarded as Mr Angilley had performed some services, and a claim for loss of increased rent for the house at the front of the property, which was also not awarded. Their complaint was that Mr Angilley did not return their calls from November onwards. Consideration 1. As noted above, in his amended grounds of appeal Mr Angilley raised several questions of law, and also sought leave to appeal. It is not necessary to address each of the asserted grounds of appeal, as for the reasons which follow we are satisfied that the Member made an error of law in not giving reasons for his conclusion that the agent's want of diligence caused the loss claimed by the landlords, and we have determined that the appeal should be allowed. 2. The starting point for consideration of whether reasons are adequate is the obligation in s 62(3) of the NCAT Act, which provides that a statement of reasons should set out: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made. 1. The Appeal Panel in Collins v Urban [2014] NSWCATAP 17 discussed the circumstances in which reasons are required, and noted: 49 One reason why reasons are generally required, notwithstanding a provision such as s 62, is that if reasons for decision are neither sought nor prepared and an appeal or application for leave to appeal is lodged, the findings of fact and legal reasoning of the decision maker at first instance would not be available to the appellate body by way of written reasons. In many instances not having findings of fact and legal reasoning explicitly available may render effectively worthless any appeal right because the appellate body does not have a statement of the findings of fact, the relevant law and explanation of how the law was applied to the facts as found, by the decision maker at first instance. 1. The required content and detail of reasons will vary according to the nature of the jurisdiction which the body in question is exercising and the particular matter the subject of the decision: Wainohu v New South Wales (2011) 243 CLR 181. The fundamental requirement is that the essential ground or grounds upon which the decision rests should be articulated: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247. 2. The Member gave short written reasons which were incorporated in the notice of order sent to the parties at the conclusion of the hearing. While acknowledging that reasons provided in that form may not be as comprehensive as those that might be expected in a reserved decision, the Appeal Panel concludes that the Member did not give adequate reasons for his conclusion that there was a want of diligence by the agent which had caused the loss claimed by the landlords. The Member did not explain the basis on which he found that the male tenant left the property in October 2016, so as to support his finding of liability for loss of rent from 29 October 2016 to 25 February 2017. It would appear, on the face of it, that there is no evidence to support the finding about the vacation of the male tenant. The reasons do not set out a reasoning process which explains the particular responsibilities of the agent which the Member found had been breached, how he had breached them, or his reasoning to the conclusion that the breach caused the loss claimed by the landlords both as to rent arrears and damage to the property. 3. In so concluding we acknowledge the difficulty posed when a party to the proceedings does not provide any documentary evidence in support of its position, or contact the Tribunal to explain any reason for that failure, and does not appear at the hearing. There was some limited evidence before the Member in the form of extracts from emails to support the landlords' claim that the agent had not responded to their requests for information from November 2016, which was the period of the claimed default. The Member was not provided with a copy of the managing agency agreement, or other evidence to establish whether it was Real Estate Partners Pty Ltd or Mr Angilley personally, as the licensee retained as managing agent. The landlords said they had not been provided with a copy. It is not clear from the material provided on the appeal what evidence the Member was provided in support of the claimed rent arrears, noting that the landlords' submissions on the appeal were that some payments were made in November, or early December. 4. While noting these concerns, the Appeal Panel concludes that the Member's reasons do not set out his reasoning process. This means that the essential grounds on which the decision rested have not been articulated. There is no copy of the sound recording available so it is not possible to determine whether the Member provided more detailed oral reasons. The failure of the Member to provide adequate reasons for the decision is an error of law: John Prendergast & Vanessa Prendergast v Western Murray Irrigation Limited [2014] NSWCATAP 69, and the appeal should be allowed. Orders 1. Having determined that the appeal should be allowed, the Appeal Panel must consider what orders should be made under s 81 of the NCAT Act. The appropriate course is to remit the matter to be re-heard by the Tribunal, with directions for exchange of evidence, including any evidence obtained since the time of the original hearing. The landlords have not appealed the Member's findings, as recounted on the appeal, relating to those parts of their claim for management fees and the rent for the house. The remitted hearing is to consider and determine the landlords' claims for payment of the rent arrears and the costs of repairs to the flat. 2. The orders of the Appeal Panel are: 1. Leave to amend the grounds of appeal granted. 2. The appeal is allowed. 3. Order 2 made on 19 May 2017 in the Tribunal at first instance is set aside. 4. Remit the matter to the Consumer and Commercial Division for rehearing and for the purposes of the remitted proceedings, the Appeal Panel directs: 1. Mr and Mrs van Zeyl are to give to the Tribunal and Mr Angilley and Real Estate Partners Pty Ltd, in person or by post, points of claim and any evidence to be relied upon at the hearing on or before 27 September 2017. 2. Mr Angilley and Real Estate Partners Pty Ltd are to give to the Tribunal and Mr and Mrs van Zeyl, in person or by post, points of defence and any evidence to be relied upon at the hearing on or before 11 October 2017. 3. Mr and Mrs van Zeyl are to give to the Tribunal and Mr Angilley and Real Estate Partners Pty Ltd, in person or by post, any submissions in reply on or before 18 October 2017. 4. The matter be listed for hearing on a date not before 18 October 2017. ********** 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 September 2017