Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Phillips v KC Enterprises (NSW) Pty Ltd t/as Love Realty [2018] NSWCATAP 181 Hearing dates: 14 May 2018 Date of orders: 26 July 2018 Decision date: 26 July 2018 Jurisdiction: Appeal Panel Before: L Pearson, Principal Member D Fairlie, Senior Member Decision: 1. Leave to appeal refused. 2. Appeal dismissed. 3. Either party may file written submissions within 14 days seeking an order in relation to the costs of the appeal. 4. If either party files submissions in accordance with order 3, the other party may file submissions in response within a further 14 days. 5. Any submissions filed in accordance with orders 3 and 4 should address whether the question of costs may be determined on the papers and without a hearing pursuant to s50(2) of the Civil and Administrative Tribunal Act. 6.If no submissions are filed in accordance with orders 3 and 4, there will be no order in relation to the costs of the appeal. Catchwords: APPEAL – Consumer claim – Breach of Managing agency agreement – Whether error in finding of no actual loss – whether error in finding failure to act with due care and skill not established Legislation Cited: Australian Consumer Law (NSW) Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Fair Trading Act 1987 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 Category: Principal judgment Parties: Carolyn Phillips (Appellant) KC Enterprises (NSW) Pty Ltd trading as Love Realty Representation: Appellant in person M Bull, agent for respondent File Number(s): AP 18/10235 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: n/a Date of Decision: 16 February 2018 Before: K Clark, General Member File Number(s): GEN 17/50614 REASONS FOR DECISION 1. On 27 February 2018 Ms Carolyn Phillips lodged an internal appeal against a decision made on 16 February 2018 in the Consumer and Commercial Division of the Tribunal dismissing her claim against KC Enterprises (NSW) Pty Ltd t/as Love Realty, relating to its management of her property at Elemore Vale NSW. Availability of Appeal 1. An internal appeal can be brought as of right on a question of law or, with the leave of the Appeal Panel, on other grounds: s 80(2) Civil and Administrative Tribunal Act 2013 (the NCAT Act). As this 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 an 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 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 satisfies 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): Collins v Urban at [80]-[84]. The decision under appeal 1. Ms Phillips applied to the Tribunal on 28 November 2017 seeking orders relating to breaches of a managing agency agreement between her and the respondent for residential premises at Elemore Vale NSW, in relation to the cost of unauthorised repairs and cleaning to her townhouse, and payment of the rental bond, and also for compensation for stress. The application referred to a claim for payment of $3000, and a claim for compensation of $10,000, however did not specify details of or the basis on which the amounts were claimed. 2. The hearing was held at Newcastle on 16 February 2018, with Ms Phillips appearing in person and the respondent represented by Mr Matthew Bull, an employee. The Member dismissed the application, having found that while the respondent was in breach of the managing agency agreement dated 10 February 2017 the applicant had not established that she suffered any loss arising from the breach, and further that she was not satisfied that the respondent had failed to provide its services with due care and skill. 3. The Member provided written reasons with the Notice of Order. 4. In those written reasons the Member stated that she was satisfied that there was jurisdiction to hear and determine the application as a "consumer claim" under s 79E of the Fair Trading Act 1987, being satisfied that the claim related to the provision of services by a supplier in the course of a business and was both within the monetary limit of the Tribunal's jurisdiction and within the time period specified for bringing the action. 5. The Member found that there was a managing agency agreement entered into between the parties on 10 February 2017; that the respondent found a tenant who entered into a lease on 7 March 2017, paying a bond of $1280; that the tenants vacated on 29 September or 3 October 2017; that a new lease with different tenants was entered into on 20 October 2017; that the appellant terminated the agency agreement on 24 November 2017; and that the appellant had lodged separate proceedings against the tenants for damage payable by them. 6. The Member identified the basis of the claim in the following terms: 15. The applicant contends that the respondent breached the Agency Agreement and failed to carry out its services with due care and skill in the following respects: (a) that it carried out repairs and cleaning to the property after the tenants vacated which exceeded $200 (the minimum expenditure amount specified in the Agency Agreement) without her consent; and (b) that the respondent paid a portion of the Bond to the tenant. 16. At the hearing the applicant initially also claimed that the respondent failed to deposit funds due to her in her bank account. She was given time to provide evidence on that point at the hearing and was unable to find any examples of where payments had not been deposited so she withdrew that claim. 17. There was a claim by the applicant in the documents that the respondent failed to claim a break fee from the tenant but the applicant stated she did not wish to pursue that claim. 18. There was a claim by the applicant for compensation for stress but no evidence was led to that claim and, in any event, the Tribunal would not have been able to award compensation for stress due to the provisions of the Civil Liability Act NSW 2002. 1. The Member identified the documentary evidence relied upon by the appellant, and summarised her sworn oral evidence; and identified the documentary evidence relied upon by the respondent and summarised the sworn oral evidence of Mr Bull. 2. The Member first considered whether there was a breach of contract. The Member found that there was a breach of the provision in the agency agreement prohibiting the respondent from spending more than $200 on repairs and maintenance, whether payments were to be made from the bond or by the owner directly. The Member accepted the respondent's evidence that it has a policy of not seeking authority for repairs above the specified limit in the case of repairs conducted from the bond monies, and found "there is no contractual basis for doing that under the Managing Agency Agreement". However the Member was satisfied that the work paid for from the bond monies was performed, and there was no evidence it was not performed poorly; that the bond money was the tenants' money and not money to which the appellant was necessarily entitled; and that value had been received by the appellant for the money that was expended from the bond. For those reasons the Member found that the appellant had suffered no loss from the respondent's failure to obtain her consent before using the bond money. 3. The Member then considered whether the services were performed with due care and skill, as required by s 60 of the Australian Consumer Law (NSW) (ACL(NSW)) (being the Australian Consumer Law applied in New South Wales pursuant to s 28 of the Fair Trading Act 1987). The Member found that the respondent has a process to be followed when a tenant vacates a property, and that the process adopted was "a thorough and professional process". The Member found that while the process failed to take account of the individual restrictions in the Management Agency Agreement she was satisfied this could be justified on the basis that it is important to move quickly to conduct repairs so the property can be re-let, and no bond money was paid to the tenant. The Member was not satisfied that the respondent had failed to act with due care and skill. The Appeal 1. In her Notice of Appeal the appellant identified the orders challenged as the dismissal of the application; and stated that she sought compensation totalling $3,258.67, for unauthorised expenses taken out of the bond being $764.74 to a cleaner, $90.00 to fix a tile, $4.50 to cut keys, and $164.70 water usage, totalling $1,023.94; refund of the respondent's fees approximately $1,784.73; and parking, petrol, photocopying and solicitor fees $450.00. 2. The Grounds of Appeal run to three pages, including a summary of events. In summary, the appellant is contending: 1. She suffered loss by the respondent taking the costs out of the rental bond, as she was then unable to use that money to fix the alleged malicious damage done to her property, which totals $4,040.00; 2. The cleaning was not done adequately; 3. She is entitled to a refund of the management fees and the costs of having to lodge a complaint with the Tribunal and appeal, due to the respondent not performing their duty of care; 4. Due to the stress the respondent has put her under she has had to resign from her job and remains unable to work; 5. She paid the respondent to collect the bond plus two weeks rent in advance which they did not do; the tenant should not have moved in and been given the keys; and as a result of those errors and others including spending the bond money on repairs and cleaning she did not authorise, she has been placed in financial hardship. 1. The appellant stated that she is seeking leave to appeal on the ground that the decision was against the weight of evidence, because the respondent breached the provisions of the managing agency agreement and failed in their role as agent. 2. In written submissions filed on 18 April 2018 the appellant stated that she is seeking compensation totalling $4,512.20: 1. $164.70 water usage 2. $854.70 cleaning and tile repair charge 3. $2,042.80 fees and charges paid to the respondent 4. $1450 for costs for attending the Tribunal (being $50 parking fees, $300 petrol costs, $400 photocopying and postage, and $700 solicitor fees still accruing). 1. In summary the appellant submits that: 1. The respondent breached the managing agency agreement by incurring costs of $1,023.94 without her consent; 2. As a result of the agent's error she was placed in financial hardship, as while she completed some repairs to the property before the new tenants moved in on 20 October 2017 the majority of repairs have not been done as the agent had used the majority of the bond for cleaning; 3. The respondent failed to act with due care and skill and she is entitled to a refund of the fees paid of approximately $2,042.80; 4. The water usage charge of $164.70 was not paid to Hunter Water. 1. The errors of law are stated in the written submissions to be: 1. The respondent breached the managing agency agreement and she suffered a loss because her choice was to use the bond money to fix the damage, and she was going to clean the property herself; 2. The tiles were not fixed; and 3. The respondent failed to act with due care and skill. 1. At the appeal hearing the appellant clarified her claim as being for $1,023.74, being the amounts taken from the bond; a refund of fees and charges paid the respondent; and her additional costs. The written submissions included a further amount of compensation of $292,200, being $28,000 for lost wages November 2017-May 2018, $1,000 hospital costs, $4,000 medical bills for her children and herself, $31,200 for anxiety, $28,000 lost wages June 2018-December 2018, and $200,000 non pecuniary damages. At the appeal hearing the appellant confirmed that she is not seeking in the appeal compensation for stress. Reply to Appeal 1. The respondent did not provide a Reply to Appeal. Its submissions in response to the appellant's written submissions were that no error in the application of the law has been demonstrated and the appellant simply does not agree with the Member's decision. The decision was not against the weight of evidence because the Member was provided with all relevant documents from both parties, both parties had ample time to prepare their case, and documents on which both parties were to rely were provided in preparation for the hearing. The Appeal Hearing 1. The parties provided copies of the documents provided at the first instance hearing. The appellant provided a copy of the sound recording of that hearing, however stated that she had been unable to provide a typed copy of the relevant parts as directed at the call over on 15 March 2018, for financial reasons. 2. Both parties made submissions in support of their position on the appeal. The appellant confirmed that she has separate proceedings against the former tenants to recover compensation for their damage; and that new tenants had moved in on 20 October 2017 and she is not claiming loss of rent. 3. It emerged during the appeal hearing that there was a dispute between the parties as to whether the appellant's claim for refund of the management fees and charges was raised before the Member. The appellant stated that she had been given leave to amend her claim to raise that issue, whereas the respondent's representative stated that it had not been part of the claim and was not considered at the hearing. 4. Pursuant to the power conferred by s 38(2) of the NCAT Act, and having discussed the issue with the parties, the Appeal Panel obtained the Division file in order to confirm whether leave had been granted to amend the claim to include a claim for refund of fees. We have listened to the sound recording. 5. The Division file confirms that at the first listing of the application on 11 December 2017, a direction was made that the applicant was given leave to amend the claim by sending a copy of the amended claim to the Tribunal and the respondent by 22 January 2018 including "a list of each item claimed, specifying the monetary amount of each claim". She was directed to provide documents in support of her application to the Tribunal and the respondent by 22 January 2018. 6. On 17 January 2018 the Tribunal received a large collection of documents from the applicant, including a handwritten document of 2 pages headed "Type Up" which appears to be an amended claim. That document lists "Bond dispersal", with a list of "unauthorised deductions" totalling $1833.73; "Other damages by tenants" totalling $15,000; Break fee $1280; and "Lost sale costs (legal)" $700. The second page includes "Love Realty's fees and charges ??$1784.73", and refers to stress and financial loss. 7. The sound recording of the first instance hearing reveals that the main focus during the hearing was on the "unauthorised deductions" totalling $1023.73. The appellant raised an additional claim that the agent had not properly accounted for the rent, however that was not pursued further at the hearing having regard to the rent ledgers in evidence; the appellant had provided no evidence as to that issue before the hearing. The claim for a refund of the agency management fees was dealt with fairly shortly towards the end of the hearing, with the Member identifying the need for the appellant to establish that the agent's services had not been provided with due care and skill. In the discussion of that claim, the appellant agreed with the Member that her argument was based on her claims that she did not receive the rent money, and the unauthorised deductions from the bond. 8. Based on the material on the Division file and the way in which the hearing was conducted, we are satisfied that the appellant did claim as part of her application that she was seeking a refund of the agent's fees and charges, however there were no documents itemising that claim, and the matters giving rise to that claim were limited as noted above to the claim relating to unauthorised deductions from the bond, and the claim relating to accounting for rent which was not pressed at the hearing. Consideration Whether the appeal involves a question of law 1. The appellant is not legally represented, and the Appeal Panel must determine whether a question of law has in fact been raised, subject to any procedural fairness considerations that might arise to the respondent: Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12]. 2. We can discern no error in how the Member approached the application, first establishing that there was jurisdiction to deal with the claim, and secondly in identifying the alternative bases for the claim, namely for breach of contract or under the consumer guarantees in the ACL(NSW). 3. As to the consideration of whether there was a breach of contract, we note that there was no appeal by the respondent in relation to the finding that it was in breach of the managing agency agreement. We proceed on the basis that the respondent was in breach of contract in undertaking the expenditure of $1023.74 from the rental bond, contrary to the provision in cl 4.1(d) and H in the Management Agency Agreement requiring the appellant's consent before doing so. Even if the respondent was in breach of contract, the appellant is not entitled to financial compensation unless she can establish that the breach caused actual loss. The issue on the appeal was whether the Member erred in her conclusion that the appellant had not established that she had suffered loss as a consequence of that breach. 4. The Member had before her evidence as to payment of $764.74 for "labour to complete bond cleaning, rubbish removal and lawn mowing" and tip fees; payment of $90 for "remove and replace broken tile on laundry splashback"; and payment of $4.50 to MACS Timber & Hardware for "key cut"; the ingoing and outgoing condition reports including photographs; and payment from the bond money for the amounts of $101.70 and $63.00 for water usage. The central complaint of the appellant was that she wanted to do the cleaning herself, and would have used the bond money to pay for repairs. The tax invoice for $764.74 included rubbish removal and lawn mowing in addition to cleaning, and tip fees. The outgoing condition report confirmed that that work was required, as was the repair to the tile. The Member satisfied herself that the evidence supported the need for the payments. The appellant has not established that any of the amounts included in the $1023.74, including the unpaid water usage bills, was not otherwise payable or not recoverable from the former tenant from the rental bond at the end of the tenancy. 5. The appellant has not demonstrated any error on the Member's part. There was evidence to support her findings, which were clearly open to the Member on the evidence before her. 6. In relation to the claim for a refund of the management fees and charges, the amended claim did not provide details of "??$1784.73" as it appears in the document provided on 17 January 2018. In the appeal documents the amount claimed was variously put at $1,784.73 and $2,042.80. While the appellant had been given leave to amend her claim, she was required to provide details of the amount claimed. More importantly, on our understanding of how the matter proceeded at first instance, we are satisfied that the Member dealt with that aspect of the claim consistently with how it was framed at the hearing. Having rejected the claim relating to the unauthorised deductions from the bond, and the claim relating to accounting for rent not being pursued, the Member's conclusion that the appellant had not established that the respondent had failed to act with due care and skill was open to her on the evidence. The Member addressed the evidence as to how the respondent managed the process of the end of the tenancy as part of her reasoning to the conclusion that she was not satisfied that the respondent had failed to act with due care and skill. The appellant has not demonstrated any error of law in how the Member dealt with that aspect of her claim. 7. The appellant not established any error on a question of law. Whether leave to appeal should be granted 1. As noted above, for leave to appeal to be granted the Appeal Panel would have to be satisfied that the appellant may have suffered a substantial miscarriage of justice, in this case, on the basis that the decision was against the weight of evidence. For that to be established, we would need to be satisfied that the evidence in its totality was so strongly against the conclusion reached by the Member, that it could be said that her conclusion was not one that a reasonable tribunal member could reach: Collins v Urban at [77](2). The findings of the Member were open to her on the evidence before her, and the appellant has not established that there was a failure in how the matter was conducted or decided which deprived her of a chance that was fairly open of achieving a better outcome than occurred such that there may have been a substantial miscarriage of justice. Leave to appeal should not be granted. Conclusion 1. For the reasons above, leave to appeal should not be granted and the appeal should be dismissed. 2. In her Notice of Appeal the appellant also sought payment of "parking, petrol, photocopy and solicitor fees" at $450.00. That amount changed in the written submissions of 18 April 2018 to "$1450 for costs for attending the Tribunal". The appellant stated that these amounts were estimates. The application below did not include, and nor did the Member consider, any such claim, and we have not considered that as part of this appeal. 3. The starting point for proceedings in the Tribunal, including on appeal, is that unless the Tribunal is satisfied there are special circumstances warranting an award of costs, each party is to pay their own costs: s 60(1), (2) NCAT Act. The matters to which the Tribunal may have regard in determining whether there are special circumstances are specified in s 60(3) NCAT Act. The appellant has been unsuccessful in the appeal. We see no basis on which any of the disbursements claimed by the appellant, even assuming that she could substantiate the amounts, would warrant an order for costs under s 60 of the NCAT Act. Should either party seek an order for costs of the appeal they are to make submissions addressing the matters in s 60(3) of the NCAT Act, including whether any application for costs should be determined in the absence of the parties on the papers. 4. The orders of the Appeal Panel are: 1. Leave to appeal refused. 2. Appeal dismissed. 3. Either party may file written submissions within 14 days seeking an order in relation to the costs of the appeal. 4. If either party files submissions in accordance with order 3, the other party may file submissions in response within a further 14 days. 5. Any submissions filed in accordance with orders 3 and 4 should address whether the question of costs may be determined on the papers and without a hearing pursuant to s50(2) of the Civil and Administrative Tribunal Act. 6. If no submissions are filed in accordance with orders 3 and 4, there will be no order in relation to the costs of the appeal. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar ********** 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: 26 July 2018