Du Toit v Buhac

[2014] NSWDC 329

District Court

New South Wales

Medium Neutral Citation:	Du Toit v Buhac [2014] NSWDC 329
Hearing dates:	6 June 2014
Date of orders:	10 June 2014
Decision date:	10 June 2014
Jurisdiction:	Civil
Before:	P Taylor SC DCJ
Decision:	(1)Allow the appeal by Charmaine du Toit. (2)Dismiss the claim against Charmaine du Toit. (3)Dismiss the appeal by Jacques du Toit. (4)Dismiss Dalibor Buhac’s notice of motion. (5)Direct that any payment made by Jacques du Toit in discharging his liability to Mr Campbell under the Consumer, Trader and Tenancy Tribunal decision, in excess of a total of $5,500, be a credit to Jacques du Toit against his liability to Dalibor Buhac. (6)No order as to costs, with the intent that each party bear their own costs.
Catchwords:	APPEAL FROM LOCAL COURT – residential lease – monies owed by tenants to landlord – claim for overpaid rent by one tenant from another – terms of agreement – whether lack of jurisdiction - whether procedural unfairness – possible error of law not procedural unfairness – whether tenant’s wife was party to agreement – effect of admission in statement of claim – consequences of future defaults by tenant – costs of self-represented and unrepresented parties
Legislation Cited:	Local Court Act 2007, s 39 Uniform Civil Procedure Rules 2005, Pt 40
Cases Cited:	Burke v LFOT Pty Ltd (2002) 209 CLR 282 Cachia v Hanes (1994) 179 CLR 403 Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407 Preston v Commissioner for Fair Trading [2011] NSWCA 40
Category:	Principal judgment
Parties:	Jacques du Toit (first plaintiff) Charmaine du Toit (second plaintiff) Dalibor Buhac (defendant)
File Number(s):	2014/36003
Publication restriction:	None
Decision under appeal	Court or tribunal: Local Court Jurisdiction: Small Claims Division Date of Decision: 17 January 2014 Before: Assessor S Olischlager File Number(s): 2013/229616

Judgment

1. Jacques du Toit and Charmaine du Toit appeal from a decision of a Local Court assessor in favour of Dalibor Buhac.  Mr and Mrs du Toit were ordered to pay $7,721.22 ($7,371.77 plus interest).  They are self‑represented. Mr Buhac does not appear at all.

BACKGROUND

2. Mr du Toit and Mr Buhac as tenants entered a lease agreement with a landlord, Stewart Campbell, at a rent of $7,821.43 per month ($1,800 a week) for a period ending 15 November 2013.  Mr Buhac paid rent until 16 April 2013 although he vacated the premises on 30 March 2013.  Mr and Mrs du Toit left the premises on 4 May 2013.  Mr Campbell sought compensation in the Consumer, Trader and Tenancy Tribunal for "abandonment of the residential premises" totalling $7,200. The first page of the application to the Tribunal, which was in evidence, indicated that the $7,200 comprised amounts including $4,628.57 for the rent for the 18‑day period from 16 April to 4 May 2013 and $2,132 for "reletting costs as stipulated in the break lease provisions within the lease agreement".

3. For reasons that are not apparent, the Tribunal, by consent, ordered Mr Buhac and Mr du Toit to pay $11,000 to Mr Campbell.  $7,200 of this amount was paid by forfeiture of the four weeks' rental deposit, which comprised of equal contributions of $3,600 by Mr Buhac and Mr du Toit.  The residue of $3,800 was to be paid at $200 per month.  Mr du Toit has been paying his share of $100 per month. 

4. Until Mr Buhac vacated the property, Mr and Mrs du Toit and Mr Buhac occupied it.  For the first three months, Mr Buhac paid half the rent but thereafter paid one‑third. Mr Buhac commenced proceedings against Mr and Mrs du Toit asserting an agreement to share the rent in three equal shares between the occupants and an agreement that once one party vacated the premises that party was no longer responsible for the rent. Thus, Mr Buhac asserted that he had overpaid his share of the tenancy obligations.

5. Firstly, Mr Buhac submitted that he was not responsible for any part of the rent in the period 16 April to 4 May 2013 inclusive, a total of $4,885.71 for 19 days. 

6. Secondly, on the balance of the $11,000 sum, $6,114.29, Mr Buhac submitted that he should be responsible for only one‑third or $2,038.09. 

7. Thirdly, Mr Buhac says he is entitled to be repaid the sum of $3,911.16 being the additional amount of rent paid for the first three months when he was paying 50% of the rent rather than one‑third. 

8. As the amount of $3,911.16 exceeds the $2,038.09 he owes the landlord, Mr Buhac claims a credit of $1,873.07.  If he has to pay $5,500 to the landlord, being half of the $11,000 judgment, Mr Buhac says he will have overpaid in the sum of $7,373.07. This closely approximates the $7,371.77 awarded to Mr Buhac by the assessor.

9. In the hearing before the assessor, Mr Buhac did not appear. 

10. The issues appear to be:

1. whether there was an agreement between Mr and Mrs du Toit (or Mr du Toit alone) and Mr Buhac that Mr Buhac was only responsible for one-third of the rent;

2. whether there was an agreement that Mr Buhac would not be responsible for rent after he vacated the premises;

3. whether Mr Buhac was entitled to be reimbursed the greater share of the rent he paid for the first three months;

4. whether the $11,000 judgment should be divided in the manner indicated; and

5. whether Mrs du Toit was a party to the agreement.

11. The assessor found in favour of the absent Mr Buhac on all issues, save perhaps for whether Mrs du Toit was a party to the agreement, and gave judgment for $7,721.22 in favour of Mr Buhac against Mr and Mrs du Toit.

APPEAL

12. Mr Buhac was called outside the court and did not appear.  The court file contains his motion to dismiss the appeal including a signed statement indicating his awareness of the hearing date on 6 June 2014 and his inability to attend. It also indicated his desire that the matter proceed.  The file also contains a letter from the Registry informing Mr Buhac of his need to be present if he wished to prosecute his motion.  The documentary material is complicated by the circumstance that Mr and Mrs du Toit mistakenly stated in the appeal and other filed documents that it was "Filed for [Dalibor Buhac] [defendant]". 

13. The basis for the appeal from the assessor to this Court is found in s 39(2) of the Local Court Act 2007, which provides:

“(2) A party to proceedings before the Court sitting in its Small Claims Division who is dissatisfied with a judgment or order of the Court may appeal to the District Court, but only on the ground of lack of jurisdiction or denial of procedural fairness.”

14. The need for an appellant to identify a ground of lack of jurisdiction or denial of procedural fairness is apparent.  As to the absence of jurisdiction, Mr du Toit submitted that the assessor has overruled the Tribunal decision, which he asserted provided that each of Mr Buhac and Mr du Toit were liable for 50% of the $11,000.  This submission is incorrect.  The consent orders provided that Mr Buhac and Mr du Toit were liable for $11,000.  The assessor found that created a joint and several liability in each of Mr Buhac and Mr du Toit for the $11,000 and said nothing about their liabilities to each other.  In the absence of an agreement, the decision of the Tribunal may create rights of equitable contribution by each defendant for an equal contribution from the other (see e.g. Burke v LFOT Pty Ltd (2002) 209 CLR 282) but no finding to this effect was made by the Tribunal.

15. In my view, the assessor has awarded a sum that is within his jurisdiction to award.  Mr du Toit does not dispute this.  Accordingly, the assessor did not lack jurisdiction to make the order the subject of appeal. 

16. Mr and Mrs du Toit also submitted that they were denied procedural fairness because:

1. they were not served with the evidence of Mr Buhac;

2. the agreement found by the assessor was false and contrary to the lease;

3. the assessor represented Mr Buhac who was absent; and

4. Mrs du Toit was not associated with any contract. 

I consider each of these matters in turn.

(a) Service of evidence

17. Mr and Mrs du Toit accepted that they were aware of the claim of the agreement to share the rent in three equal shares.  Further, the basis of this finding is an email from Mr du Toit.  At no stage during the hearing before the assessor did Mr du Toit indicate he was in difficulty in meeting an argument based on his email and referred to the emails in his defence filed in the Local Court.  He repeatedly said in submissions to the assessor that those emails represented mere "banter" and did not constitute any agreement.  Further, Mr du Toit did not establish before me precisely what was and was not served before the hearing and the precise injustice that was caused to him, if there was an injustice, by any material not being served upon him. 

18. I am not satisfied there was any denial of procedural fairness in the hearing before the assessor because of the lack of service of a document.

(b) The false agreement

19. The assessor’s finding of the agreement and its terms was based upon an email of Mr du Toit stating, "I must cover two-thirds of everything" and Mr du Toit's conduct "in starting to make payments some months down the track of two-thirds of the rent".  It may be an error of law to determine the meaning of terms of the agreement by reference to post-contractual conduct (see Franklins Pty Ltd v Metcash Trading Ltd (2009) 76 NSWLR 603; [2009] NSWCA 407), although that conduct may be evidence of what was actually orally agreed. In any event, the assessor was not bound by the rules of evidence and his entitlement to inform himself as he thinks fit may mean he is entitled to use post-contractual conduct to ascertain the terms of the contract. Minds might differ on whether the email correspondence was sufficient to create a binding agreement to the effect found. However, neither of these matters is sufficient to amount to procedural unfairness. The assessor disclosed the potential significance of this material, gave Mr du Toit the opportunity to make submissions about it and a further opportunity to make submissions after the assessor's decision. A possible error of law is insufficient to establish procedural unfairness.

(c) Assessor represented Mr Buhac

20. There is no basis in the transcript of the assessor’s hearing to find that the assessor represented Mr Buhac.  There was not, nor could there be, any suggestion that to allow Mr Buhac's application to proceed in his absence was procedurally unfair to Mr and Mrs du Toit.  The assessor fairly disclosed to Mr du Toit his thinking on the matter. That he saw some force in Mr Buhac's position is far short of him representing Mr Buhac.

(d) Was Mrs du Toit a party to the agreement?

21. The assessor found:

"The Court does agree that there was no agreement with Mrs Du Toit herself and the email of 27 March is put in personal terms in that Mr Du Toit says, 'I must pay two-thirds toward the rent in costs associated with the lease'." 

However, the formal orders are against Mr and Mrs du Toit.  There is no explanation for this change of position of the assessor if that is what it is. It seems to me that it would be procedurally unfair to indicate to Mr and Mrs du Toit that Mrs du Toit is not a party to the contract, allow further submissions and then make orders against Mrs du Toit without further reasons.  Those orders can only be founded on Mrs du Toit being a party to the agreement.  In this respect Mrs du Toit has succeeded on this application.

(e) Additional matters

22. Two further matters arose in submissions. Although Mr Buhac is not present I allowed submissions on these further matters because the matters were a development of the matters already disclosed in the application with which Mr Buhac was served. 

23. First, the statement of claim in the Local Court asserted at paragraph 2 that "The plaintiff [Mr Buhac] agreed to pay half the rent for 3 months, after which the plaintiff expected to be refunded the amount of $3911.16”.  It is difficult to see how this alleges an agreement that the additional amount paid in the first three months was to be refunded. The agreement contemplates that Mr Buhac would pay one-half, not one-third, of the initial rent, and further Mr Buhac’s expectations do not of themselves constitute an agreement. The assessor did not give separate reasons dealing with the initial overpayment. He accepted that the email correspondence evidenced the obligation of the parties to pay one-third each, and did not read the language of the statement of claim as altering that position.

24. The sum in the statement of claim and the calculations provided consequent upon it plainly showed that Mr Buhac sought repayment of the initial overpayment. If it was an error by the assessor not to rely strictly on the terms of the statement of claim then it was not an error that created any procedural unfairness. The basis of the assessor's decision is founded upon the conduct of the parties after the agreement and, more especially, the email before the agreement. That evidence indicated that the parties would share rent in the proportion one-third each. In this respect the decision about the initial overpayment is a reflection of the decision the assessor came to as to the agreement between the parties about sharing the rent. That is not to be an error of a different kind sufficient to enliven the procedural unfairness element of s 39(2) of the Local Court Act 2007.

25. Finally, Mr du Toit argued that Mr Buhac has not paid his $5,500 but only $3,600.  The assessor does not deal with this issue at all but seems to assume that Mr Buhac has paid $5,500.  The issue arises because the landlord's judgment is not yet satisfied. 

26. Mr du Toit did not submit that he has paid in excess of the $100 per month. It follows that Mr du Toit has paid, at this stage at least, less than the $5,500 that would be a half share of the judgment.  Thus, neither Mr du Toit nor Mr Buhac has fully repaid their half share in the $11,000 Tribunal judgment to Mr Campbell. In other words, at this stage, Mr du Toit has not paid any moneys on behalf of the share of Mr Buhac.

27. What may happen in the future is necessarily uncertain.  Mr Buhac may pay some of the further monies owed by him and Mr du Toit under the judgment to the landlord, or he may not.  Mr du Toit might also cease to pay the landlord. In the event of underpayment to the landlord, an issue will arise as to who the landlord will enforce against.  In these circumstances, I do not think I can make any assumption about the source of the funds ultimately to be paid to the landlord other than to direct that any funds paid by Mr du Toit in discharge of the Tribunal judgment, in excess of the half share of $5,500, are to be a credit against Mr Buhac's judgment.

COSTS

28. Mr and Mrs du Toit seek costs although they were not represented.  I was informed that together they earn $207,000 per annum and they took time off work to come to the hearing. In fact, they took annual leave and so lost the opportunity for a further day's paid leave rather than actually losing any funds.  Whether these alleged losses of costs would have been mitigated had they engaged a legal practitioner to run their appeal was not explored. 

29. Under Pt 40 of the Uniform Civil Procedure Rules 2005 the successful party is ordinarily entitled to costs. However, "a litigant in person who is not a lawyer is not entitled to receive an order for costs to compensate him for time spent in preparing and conducting his case”: Preston v Commissioner for Fair Trading [2011] NSWCA 40 at [183] applying Cachia v Hanes (1994) 179 CLR 403.

30. Accordingly, a successful unrepresented person is generally only entitled to an award of costs that covers disbursements and those disbursements are not to include compensation for time spent preparing or conducting the litigation. 

31. Mr du Toit was largely unsuccessful in the proceedings. He might be expected to pay any disbursements of Mr Buhac whereas Mr Buhac might be expected to pay any disbursements of Mrs du Toit as she was successful. As I said, these disbursements would not generally include a charge for time spent.  In all the circumstances, I think the appropriate order is that there should be no order as to costs to the intent that each party bear their own costs.

ORDERS

32. The orders of the Court are:

1. Allow the appeal by Charmaine du Toit.

2. Dismiss the claim against Charmaine du Toit.

3. Dismiss the appeal by Jacques du Toit.

4. Dismiss Dalibor Buhac’s notice of motion.

5. Direct that any payment made by Jacques du Toit in discharging his liability to Mr Campbell under the Consumer, Trader and Tenancy Tribunal decision, in excess of a total of $5,500, be a credit to Jacques du Toit against his liability to Dalibor Buhac.

6. No order as to costs, with the intent that each party bear their own costs.

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Decision last updated: 21 May 2015