Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Gu & Wang v Granger & Granger [2020] NSWCATAP 4 Hearing dates: 28 November 2019 Date of orders: 10 January 2020 Decision date: 10 January 2020 Jurisdiction: Appeal Panel Before: S Westgarth, Deputy President P H Molony, Senior Member Decision: (1) Appeal upheld. (2) The Respondents are to pay to the Appellants the sum of $1,906 within 14 days. (3) Otherwise the order made in RT19/28672 on 11th September 2019 is affirmed Catchwords: LANDLORD AND TENANT-residential tenancy agreement- agreement to reduce rent- appeal on a question of law Legislation Cited: Civil and Administrative Tribunal Act 2013 Interpretation Act 1987 Residential Tenancies Act 2010 Cases Cited: Collins v Urban[2014]NSWCATAP17 John Prendergast and Vanessa Prendergast v Western Murray Irrigation Ltd [2014]NSWCATAP69 Texts Cited: None cited Category: Principal judgment Parties: Yan Ping Gu (Applicant) James Wang (Applicant) John Brian Granger (Respondent) Kate Granger (Respondent) Representation: Applicants (Self Represented) Respondents (Self Represented) File Number(s): AP 19/43512 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer & Commercial Division Citation: N/A Date of Decision: 11 September 2019 Before: J Levingston, General Member File Number(s): RT 19/28672 REASONS FOR DECISION Introduction 1. This is an appeal from a decision (the Decision) made in the Consumer & Commercial Division of the Tribunal and published on 11 September 2019. 2. The appeal was lodged on 25 September 2019, within the time required by the Civil & Administrative Tribunal Rules (the Rules). 3. The Appellants were landlords under a residential tenancy agreement regulated by the Residential Tenancies Act, 2010 (NSW) (the RT Act) and the Respondents to this appeal were the tenants. 4. The Decision records that the Tribunal made an order directing Rental Bond Services to pay the landlords the sum of $204 and any balance of the bond was to be paid to the tenants. The Decision concerned a claim for outstanding rent and claims for compensation on the basis that the premises had not been returned to the landlords in good repair at the end of the tenancy. 5. The landlords' appeal two aspects of the Decision. The first concerns the claim for arrears of rent and the second concerns a claim for compensation by reason of damage to walls. The Decision 1. The following is a summary of the Decision insofar as it deals with the two aspects under appeal (referred to above): 1. In paragraph 20 of the Decision one of the tenants (Mr Granger) is recorded as having agreed that rent of $5,585.71 was payable on 20 May 2019 for the period from 19 May 2019 to 5 June 2019. However, he submitted that this amount should be set-off by a written agreement with the landlords "finalised in an email of 17 May 2019" recording an agreement that the tenants would allow the landlords' selling agents to conduct inspections for prospective buyers of the premises by payment of $250 for each inspection of the premises to be held twice a week. There were five inspections making an allowance of $1,250. The difference between the amount of arrears as at the date of the hearing (namely $1,578.57) and the offset of $1,250 was recorded in the Decision as equalling one days rent. The Decision records that that amount is accounted for by the landlord claiming an additional day for rent for the day after vacant possession was given on 4 June (ie. for 5 June). The Decision records that the outgoing condition report was conducted on 4 June being the day on which the keys were returned and that there was no basis for claiming rent on the following day. The landlords' claim failed. 2. In paragraph 20(d) of the Decision, the claim for compensation to repair walls is dealt with. The Decision records that at the start of the tenancy the incoming condition report showed that the walls were marked and chipped. The Tribunal accepted the tenants' evidence that blind fixtures fell out of the walls and that the tenants repaired them by "bogging/filling" the holes and repainting the walls using paint left by the landlords. The landlords contended that the tenants were liable for using incorrect paint colour, but the incoming condition report evidenced that the walls were generally in disrepair with marks etc. The tenants' work in making repairs would not make them liable as the landlords could have arranged the repairs themselves. The claim failed. 3. Two of the landlord's claims were successful resulting in the order for $204 to be paid out of the bond to the landlords. The Notice of Appeal 1. The following is a summary of the grounds of appeal set out in the Notice of Appeal: 1. The landlords claim that there was an error in the calculation of rent in respect of the period of 21 days from the date on which the tenants gave notice of termination. Notice of termination was given by email on 16 May 2019 and specified that the property would be vacated on 5 June 2019. The tenants vacated on 4 June but the landlords contend that rent for 5 June should have been allowed. The landlords also contend that the correct calculation of 21 days commences from 17 May 2019 to 6 June 2019. The landlords seek rent for 5 and 6 June. 2. The second ground of appeal concerns whether the tenants were entitled to a rent reduction. The landlords submitted that there was no agreement between the parties for a rental reduction and that the Decision was in error in finding that there was such an agreement. 3. The next ground concerned the Tribunal's finding that the tenants were not liable for damages by reason of different coloured marks appearing on the walls caused by the tenants' unprofessional patching and chips on the stone benchtop. This ground was said to constitute a decision which was not fair and equitable and against the weight of evidence. 4. The landlords sought an order from the Appeal Panel requiring the tenants to pay them outstanding rent of $1,907.14 for the period 20 May 2019 to 6 June 2019 plus a further amount by way of compensation. The Reply 1. The tenants have filed a Reply in which they contended that the Decision should stand. Directions 1. The Tribunal made directions on 10 October 2019 for the preparation and conduct of the appeal. Those directions included a direction that the Appellants were to lodge with the Tribunal and provide to the tenants (as Respondents) the sound recording of the hearing at first instance and a typed copy of the relevant parts. There was a further direction that the Respondents were to lodge with the Tribunal and to provide to the landlords (as Appellants) the sound recording if that was not already provided and the Respondents were relying on what happened at the hearing, and a typed copy of the relevant parts. 2. Subsequently, the parties filed and served submissions. However, the sound recording was provided to the Tribunal by the landlords but a copy was not provided to the tenants. Neither party provided a transcript of the hearing or part of the hearing. 3. The directions required the parties to file submissions. The landlords' submissions include some invoices but with no supporting submissions. They also included some photographs. These photographs were not identical with the ones considered by the Tribunal at first instance. This was acknowledged by Mr Wang on behalf of himself and the other landlord. He said that the photographs provided to us were of a better quality than the ones considered by the Member. The explanation for providing better quality photographs to us than the quality of the photographs provided to the Tribunal at first instance was that the landlords thought, subsequent to the filing of the appeal, that the Tribunal would benefit from better quality photographs. We indicated at the hearing that we did not intend to consider these fresh photographs. The reason for not doing so is that, in our view, they constitute fresh evidence for which there was no satisfactory explanation as to why they had not been provided at first instance. 4. The Civil & Administrative Tribunal Act, 2013 (NSW) (the NCAT Act) deals with the regulation of appeals and we will refer to the relevant provisions subsequently in this decision. However, at this stage we record that cl 12 of Schedule 4 of the NCAT Act permits the filing of fresh evidence in support of an appeal if such fresh evidence was not reasonably available at the first instance hearing. In our view, the photographic evidence was reasonably available had the landlords decided during the course of the first instance proceedings to produce better quality photographs. Their explanation for not doing so is unsatisfactory. At the appeal hearing we explained the need for parties to finalise their evidence and not be permitted to generally file fresh evidence on an appeal. As we explained if we were to permit the filing of fresh evidence on an appeal in circumstances where that evidence could reasonably have been made available at the first instance hearing we would not assist the timely finalisation of disputes between parties before the Tribunal. 5. The tenants filed and served a folder of material in opposition to the appeal. Some of that material included a copy of a decision in the Administrative Appeals Tribunal involving the landlords. We do not regard that material as being of any relevance to the issues before us. As we indicated at the hearing of the appeal we have not had any regard to the Administrative Appeals Tribunal decision. The Appeal Hearing 1. Mr Wang represented himself and the other landlord at the hearing of the appeal. The tenants were both present and represented themselves. Mr Wang made oral submissions in support of his argument that the member erred in deciding that there was an agreement between the parties providing for a rental reduction. He also submitted that an extra days rent of $328.50 was refused in error by the Tribunal. Finally, he made submissions with respect to the findings made by the Tribunal in paragraph 20(d) of the Decision in respect of which the Tribunal rejected the claim for compensation. 2. Mr Granger made submissions concerning the rent reduction and argued that the tenants had made an offer to cooperate with respect to the landlords' desire to make the premises available for inspection by prospective purchasers on the basis that the rent would be reduced by $250 for each inspection. There were two inspections per week and five inspections overall meaning that the tenants argued for a rent reduction of $1,250. The tenants submitted that the landlords had breached the obligation contained in the RT Act to give 14 days' written notice of any intention to sell the premises and to require the premises to be available for inspection by prospective purchasers. In consideration of the tenants cooperating with the landlords and permitting the inspections to occur without such 14 days' notice, the tenants offered, according to the submission of Mr Granger, to permit the inspections to occur provided rent was reduced at the rate of $250 per inspection. 3. The tenants also objected to the ground concerning the claim for compensation and said that the Decision was not in error in rejecting that claim. Decision 1. Appeals from decisions in the Consumer & Commercial Division are regulated by s 80 of the NCAT Act and cl 12 of Schedule 4 of that Act. Essentially that means that there is an appeal as of right on any question of law, and with leave if the grounds set out in cl 12 can be established and the Appeal Panel exercises its discretion to grant leave. 2. In this case we will firstly deal with the claim that the Tribunal was in error in determining that there was an agreement for a rent reduction. The parties did not dispute the relevance of a number of emails attached to the Notice of Appeal and it is of assistance to the understanding of this aspect of the appeal if we were to set out the substance of those emails. We do so as follows: 1. Email dated 14 May 2019 at 8:22 am from the landlords to the tenants. This records that the landlords' agent had, on 6 May 2019, discussed with the tenants that the property was to be sold and that the tenants had indicated that they would still be living in the property until it was sold. The landlords offered a rent reduction of $100 for each inspection. 2. Email dated 16 May 2019 at 1 pm from the landlords' agent to the tenants confirming a telephone conversation with the tenants that the landlords offer a rent reduction of $300 per week for the duration of the marketing campaign. The email stated that the campaign will continue until the auction on 24 June 2019. 3. Email dated 16 May 2019 at 3:10 pm from one of the landlords to the tenants confirming a discussion the tenants had had with the other landlord that the settlement set out in the above email from the agent was agreed. 4. Email dated 16 May 2019 at 7:22 pm from the tenants to the landlords and their agent attaching a Notice of Termination. The Notice of Termination gave 21 days' notice of the tenants' intention to terminate the tenancy and stated that vacant possession will be given on 5 June 2019. 5. Email dated 16 May 2019 at 9:36 pm from the landlords to the tenants. That email set out at some length the history of the negotiations between the parties. The landlords asserted that the agreement had been breached by reason of the sending of the Notice of Termination. It is clear that the landlords were concerned about the adverse effect that the tenants' departure would have on the presentation of the property. The email recorded that the parties had had a conversation and the tenants wished to have a rent reduction of $500 per week. 6. Email dated 17 May 2019 at 7:24 am from one of the landlords stating that the landlords had decided to "have rental reduction $500 per week for you in order to keep the arrangement and prevent any loss from rescheduling the plan of selling the property". 7. Email dated 17 May 2019 at 9:54 am from one of the landlords to the tenants stating that he sought confirmation of the arrangement set out in the earlier email of that morning. The email confirmed a rental reduction of $500 per week as requested by the tenants and that the landlords would keep going with the current schedule of selling as opposed to rescheduling the plan of selling and cancelling the current marketing. 1. It is clear from the emails summarised above that there was no email of 17 May finalising an agreement (as stated in the Decision). Rather, the emails record an assertion by the landlords that the issue of the Notice of Termination was alleged to have constituted a breach of an agreement allegedly between the parties and that the landlords were now offering a rental reduction of $500 per week on the basis that the tenant stayed in possession until the auction. The tenants did not stay beyond the date stated in the Notice of Termination. In our view the Tribunal was in error in finding that the parties had reached an agreement on 17 May. 2. On the basis of the emails, we are not satisfied that either party has established that an agreement was reached between them. The landlords contend that there was no agreement and that they should have the full rent. The tenants contend that there was an agreement that they would be entitled to a rent reduction of $500 per week until they left the premises with no obligation to stay for the duration of the marketing campaign. In our view, there was no meeting of the minds between the landlords and the tenants in relation to the issue of whether the tenants would stay for the duration of the marketing campaign. It is clear that the landlords proposal included a term that the tenants would stay until the auction, but we are not satisfied that the tenants agreed to stay. 3. In our view, the finding by the Tribunal that the emails of 17 May constituted finalisation of an agreement was, having regard to all of the emails, an error of law. An appeal lies as of right on any question of law and in the circumstances contended for by the landlords, we are satisfied that the landlords have raised a question of law. In the Appeal Panel decision in John Prendergast and Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, the Appeal Panel identified various categories of grounds of appeal raising questions of law. They included a failure to provide adequate reasons and whether there was no evidence to support a finding of fact: see para 13. 4. In our view, the evidence did not disclose that the parties had reached an agreement, and as a consequence of our view that there was insufficient evidence to justify the finding that the parties had reached an agreement, the result is that the landlords are entitled to the full rent (because there was no concluded agreement for a rent reduction during the period of the marketing campaign), and also that the tenants were entitled to vacate on conclusion of the period notified in the Notice of Termination or at the conclusion of the period of 21 days required by s97 of the Residential Tenancies Act, 2010 (NSW) (the RT Act) (whichever is the later). 5. This brings us to the second ground of appeal, namely the assertion by the landlords that the Member made an error in the calculation of the period in respect of which rent was due. The relevant facts are not controversial. The Notice of Termination was sent by email on 16 May 2019 and the tenants ultimately left on 4 June 2019. For the purposes of the calculation of time, the day of service does not count (see s 36 of the Interpretation Act, 1987 (NSW)). Day one is therefore 17 May 2019 and the 21st day from then is 6 June. In the Decision, the Tribunal allowed rent to 4 June only. In our view, the landlords were entitled to rent for 5 and 6 June ($328 per day). 6. In the result the landlords are entitled to payment of the reduction in rent ($1,250) plus the two days of rent ($656). These two figures total $1,906. 7. The third ground of appeal concerned the landlords' claim that the Tribunal erred in holding that the tenants were not liable for damages by reason of their attempts to patch up the walls and in respect of chips on the stone benchtop. In our view, the landlords have not been able to demonstrate either an error of law or that one of the grounds set out in cl 12 of schedule 4 of the NCAT Act is applicable. In particular, the landlords have not demonstrated to us that the Decision was not just and equitable, against the weight of evidence, or that fresh evidence not reasonably available at the first instance hearing, should now be considered. In addition, no question of principle, no issue of public administration and no clear injustice has been established (see Collins v Urban (2014)NSWCATAP17 which would warrant our giving leave to the landlords in respect of this ground. 8. This ground is rejected. Conclusion 1. In view of the reasons given above, the appropriate orders are the following: 1. Appeal upheld. 2. The Respondents are to pay to the Appellants the sum of $1,906 within 14 days. 3. Otherwise the order made in RT19/28672 on 11th September 2019 is affirmed ********** 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. 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