Keene v Tattersalls Capital Pty Ltd

[2020] NSWCATCD 13

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Keene v Tattersalls Capital Pty Ltd [2020] NSWCATCD 13

Hearing dates:

14 January 2020

Date of orders:

22 January 2020

Decision date:

22 January 2020

Jurisdiction:

Consumer and Commercial Division

Before:

M Eftimiou, General Member

Decision:

The application is dismissed

Catchwords:

CONSUMER — Breach of Exclusive Property Management Agreement

Legislation Cited:

Property Stocks and Business Agents Act 2002 (NSW)

Fair Trading Act (NSW) 1987 (NSW)

Residential Tenancies Act 2010 (NSW)

Cases Cited:

Nil

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Philip Charles Keene (First Applicant)
Leanne Victoria Keene (Second Applicant)
Tattersals Capital Pty Ltd (Respondent)

Representation:

First and Second Applicant (Self-represented)
Mr Freeman (Respondent)

File Number(s):

COM 19/35354

Publication restriction:

NIL

REASONS FOR DECISION

1. The applicants entered into an Exclusive Management Agency Agreement with the respondent on or about 1 September 2017 to manage their rental property in Bigola Plateau.

2. On 3 October 2017, the respondent as agent for the applicant entered into a residential tenancy agreement for the premises at Bigola Plateau. The agreement was a 12 month agreement. The weekly rent was $1200.00. The tenants paid a rental bond of $4800.00. The tenants gave vacant possession of the property on or about 3 October 2018.

3. The applicants are dissatisfied with the way that the respondent has managed the property. The applicants allege that they suffered a loss as a result of the respondent’s breach of contract and breach of the Property Stocks and Business Agents Act 2002 (PSBA). The applicants submit that they have incurred charges and fees “erroneously through actions and inactions of the real estate agents acting unlawfully, improperly, unfairly and incompetently in the management of our former rental property.” The applicants through an amended claim filed on 20 November 2019 are seeking an order that the respondent pay to them $9385.49.

4. In particular the applicants seek the following:

1. Refund of Letting Fee charged for negligent service by the respondent $660.00

2. Water Consumption cost not recovered by the respondent $77.52

3. TV Aerial repair cost in excess of $250.00 overcharged by the respondent $157.00

4. Contractor cost in excess of $250.00 charged by the respondent $1438.00

5. Rectification of unlicensed plumbing by respondent’s contractor $112.00

6. Certification of substandard work of respondent’s contractor $200.00

7. Management Fees charged by respondent for services unfit for purpose $1961.15

8. Additional losses owing to respondent services being unfit for purpose $4779.62

Jurisdiction

5. The Tribunal is satisfied that the applicants’ are consumers and the respondent is a supplier in the course of carrying on a business of real estate services including the service of managing real estate on behalf of consumers, pursuant to s79D of the Fair Trading Act (NSW) 1987 (FTA)

6. The matter falls within the definition of “consumer claim” under s 79E of the FTA.

7. Section 79S of the FTA limits the Tribunal’s jurisdiction to claims of less than $40,000.00. The applicant’s claim is for less than $40,000.00 and has been brought within time limitations set out in section 79L of the FTA

8. The Tribunal is satisfied that it has jurisdiction under s79J of the FTA to hear and determine the matter.

9. The Tribunal’s jurisdiction is limited in relation to the Property Stocks and Business Agent’s Act (PSBA) to s36 of the Act. Section 36 (3), (4) and (6) of the PSBA provides:

(3)    If money has been paid to or is or has been retained by a licensee (out of money received by or paid to the licensee) in respect of any transaction by or with the licensee as a licensee and has been so paid to retained as remuneration or as reimbursement for connection with the transaction, the person paying the money or the person who would be entitled to the money had the money not been retained, may require the licensee to furnish the person with an itemised account of the transaction in accordance with the regulations.

(4) A person who is served with a statement of claim under this section or is provided with an itemised account of a transaction as provided by this section may apply to the Tribunal for the determination of a consumer claim within the meaning of the Fair Trading Act 1987 in relation to:

(a)   the entitlement of the licensee to the whole or any part of the amount specified in the statement of claim or the itemised account, or

(b)    whether the whole or any part of the amount is reasonable.

…

(6)   The Tribunal has jurisdiction to hear and determine any such consumer claim despite:

(a)    the terms or conditions of any agreement or contract entered into between the licensee and the applicant, and

(b)   the amount being more or less than the maximum amount (if any) of remuneration to which a licensee is entitled under this Act.

Procedural

10. The applicants appeared in person before the Tribunal and were represented by Mr Keene who gave sworn evidence. The applicants sought to rely on a folder of documents submitted in accordance with Tribunal directions. The folder was marked Exhibit A.

11. The respondent was represented by Mr Freeman who gave sworn evidence. The respondent sought to rely on a folder of documents marked Exhibit B.

Evidence

12. The applicants at the time of the agreement between the parties were the registered proprietors of the property in Bilgola Plateau. The respondent is a real estate agent licensed under the PSBA.

13. The applicants and the respondent entered into a REINSW form of Exclusive Management Agency Agreement (“Management Agreement”) for the property management of the property at Bigola Plateau. The agreement was signed by the parties on 1 September 2017.

14. The respondent as agent for the applicants entered into a 12 month residential tenancy agreement. The respondent managed the property by amongst other things, collecting rent on behalf of the applicants: carrying out an ingoing and an outgoing inspection report; attended to repairs and carried out three property inspections during the course of the tenancy.

15. The tenant vacated the property at the end of the fixed term on or about 3 October 2018. On or about November 2018, the respondent gave notice to the applicants under the contract to terminate the Management Agreement.

16. The applicants soon after, commenced proceedings in the NSW Local Court to recover money from the tenant for damages to the property. The NSW Local Court determined that the tenant owed to the landlord $3932.00 for end of tenancy charges. The NSW Local Court ordered the Rental Bond Service to pay to the landlord $3932.00 from the tenant’s rental bond money and the balance of the bond being $900.00 was to be paid to the tenant.

17. The Management Agreement sets out the terms of the respondent’s management of the property.

Applicant’s claim

Applicant’s allegations of respondent exceeding authority

18. The applicant alleges that in performing its obligations under the Management Agreement the respondent exceeded its authority when

1. It approved the repair of the TV aerial in excess of $250.

2. It approved the work of SkyMark Pty Ltd in excess of $250.00.

19. In addition the applicant claims:

1. Refund of letting fee of $600.00 by the respondent due to negligence.

2. Refund of water usage costs of $77.52 not paid by the tenant.

3. Cectification of unlicensed plumbing by respondent’s contractor $112.00.

4. Certification of substandard work by respondent’s contractor $200.00.

5. Management Fees charged by respondent for services unfit for purpose $1961.15.

6. Additional losses owing to respondent’s services being unfit for purpose $4779.62.

Findings

20. The applicants claim that the respondent has failed to perform the services it was obliged to perform under the Management Agreement. Although not pleaded in this way the Tribunal has also considered whether the respondent has failed to perform the services it was obliged to perform under the Agreement as the applicants managing agent with due care and skill, being a statutory guarantee under s 60 of the Australian Consumer Law.

21. The applicants claim as a result of the breach of the Management Agreement the applicants have suffered damages and loss.

22. The onus of proof is on the applicants to adduce evidence in support of the claim. The applicants must establish to the civil standard of proof that the respondent has breached its obligations and duties under the Management Agreement.

23. The applicants rely on the Management Agreement to support their contention that the respondent exceeded its authority in managing the property.

24. The Management Agreement authorises the respondent to “effect repairs and maintenance to the Property to Maximum pre approved maintenance expenditure not greater than $250.00( Clause E 1. (12)).

Television Aerial Repair

25. The Tribunal is satisfied on the evidence before it that the applicants authorised the respondent to arrange for repair to the television aerial.

26. The evidence before the Tribunal establishes the following:

27. On 14 December 2017 the tenant wrote to the respondent advising that they were having difficulty with TV reception since moving in and asking the landlord to investigate and repair.

28. The respondent wrote to the applicants on 21 December 2017 advising them of the tenant not being able to obtain TV reception.

29. On 31 December 2017 the applicants replied to the respondent as follows:

“We were able to get all channels on our old TV (10 years old) and with an Aldi tv from both the external and internal aerial. If you want to send someone out to have a look and the problem is with their TV I guess they will be responsible for the service fee”

30. The Tribunal is satisfied that the email from the applicants dated 31 December 2017 is a written authority for the respondent to carry out any necessary repairs to the TV aerial.

31. The Tribunal is satisfied that the work undertaken by the tradesperson that was invoiced on 12 February 2018 was work that was needed to be carried out by the landlord to fulfil its obligations under s63 of the Residential Tenancies Act 2010. The landlord has an obligation to maintain the residential premises in a reasonable state of repair.

32. The evidence from the tradesperson before the Tribunal indicates; “antenna was damage some part, coaxil was old, cable short to repair. Wall plate was not standard one”.

33. The Tribunal is satisfied that the issue was not caused by the tenant but was the responsibility of the landlord to repair. The Tribunal is satisfied that the email of the landlord dated 31 December 2017 was authority either expressed or implied for the respondent to carry out the repair. The Tribunal is not satisfied that the respondent has exceeded its authority under the agreement.

SkyMark Pty Ltd (SkyMark) Invoice

34. The applicants submit that the respondent has exceeded its authority by agreeing to works done by SkyMark to the property once the tenant had vacated the property. An invoice was issued by SkyMark in the sum of $2488.00 for works completed at the property.

35. The applicants submit that no written approval was sought by the respondent nor was there any written approval for the works.

36. The Tribunal is not satisfied on the evidence before it that the respondent has authorised SkyMark to carry out any work on the property without the consent of the applicants.

37. The respondent has given evidence that after the tenant’s vacated the property the applicants were eager to put the property on the market for sale. The applicants requested from the respondent a recommendation for a tradesperson to carry out repairs. The respondent recommended SkyMark. On 5 October 2018 a representative of SkyMark attended the property. The applicants dealt directly with SkyMark showing the handyman around the property and pointing out what work they required to be completed.

38. Email correspondence contained at Exhibit B page 41 from SkyMark confirms the respondent’s evidence that all instructions regarding work to be completed was received from the applicants and not from the respondent. It is also clear from the evidence that the applicants worked together with SkyMark to carry out the repairs, providing material and carrying out some works.

39. The applicants have failed to satisfy the Tribunal that the respondent authorised works to be carried out without the consent of the applicants. The Tribunal is satisfied that at all times the applicants instructed and worked together with the SkyMark to carry out the repairs. The Tribunal finds that the applicants consented to the works being carried out and there is no breach of the agreement by the respondent.

40. The Tribunal will now deal with the other issues raised by the applicants in the amended application

Letting Fees

41. The applicants hold the view that the respondent should not be entitled to a letting fee of $660.00 because the respondent advised the applicants that the tenant that was recommended was “excellent” and it is the applicants’ opinion that they were not excellent. The applicants allege that the respondent was “unprofessional” in checking the tenant’s application and that in checking the tenant’s previous rental ledger they did not advise the applicants that the tenants had significantly damaged the previous property and had their rental bond reduced.

42. The respondent has given evidence that it telephoned the property managers for the tenant’s two previous tenancies. The respondent was advised that the tenant was an excellent tenant and they would have no hesitation in renting to the tenant again.

43. The applicants’ contention rests on a Tenant ledger for a previous property rented by the tenant in Bilgola which shows a number of invoices for repairs paid from the tenant’s rental bond at the end of the tenancy.

44. The Tribunal is satisfied that the respondent is entitled to the letting fee. The Tribunal is satisfied that the respondent only charged the landlord half the letting fee. The material provided by the respondent satisfies the Tribunal that they provided the service with due care and skill carrying out extensive checks, including contacting the tenant’s two previous property managers to obtain references, checking the Tenant data base, carrying out an ingoing inspection report, preparation of the lease agreement, collection and deposit of rental bond and advising the landlord of same.

45. The Tribunal has considered the tenant’s previous rental ledger and is not satisfied from the ledger that the tenant has either intentionally or negligently caused any damage to the previous rental property that would give rise to any concerns to the respondent in recommending the tenant to the applicants. Evidence has been given by the respondent, which the Tribunal accepts, that accidents can occur in rental properties and the tenant paying for a repair is not evidence that the tenant has breached a term of the residential tenancy agreement or that they are not a suitable candidate for consideration as a tenant.

46. The applicants have failed to satisfy the Tribunal that the respondent has breached the terms of the agreement or s60 of the ACL. The applicants have failed to establish the claim for a refund of letting fee and this part of the claim is dismissed.

Water Invoice

47. The applicants seek the payment of $77.52 for water usage not recovered from the tenant.

48. The evidence before the Tribunal establishes the following:

49. The Managing Agency Agreement provides at Item E 1(17) that the agent will do all things and make such application as may be necessary for the recovery of possession from the tenants and the recovery of monies due. Clause N of the Agreement provides that the tenant is required to pay the Water Consumption Charges for the property. A water usage account for the period 22 November 2017 -22 February 2018 remains unpaid.

50. The respondent has given evidence that Item K in the Managing Agency Agreement provides that the owner authorises and directs the agent to pay from rental the items marked to be paid. The applicants did not indicate that they wanted the respondent to pay the water charges for the property on the management agreement.

51. The respondent gave evidence that the applicants failed to have the water invoices redirected from the rental property either to the applicants’ home address or to the respondent’s address. The applicants also failed to indicate on the Management Agreement that they wanted the respondent to be responsible for the payment of water usage.

52. On being advised of an unpaid water usage account from the commencement of the tenancy, the respondent advised the applicants that in accordance with section 39 of the Residential Tenancies Act the tenant is not required to pay the water usage charges if the landlord fails to request payment from the tenant within 3 months of the issue of the bill for those charges by the water supply authority.

53. The Tribunal finds that the respondent has not breached the terms of the Managing Agency Agreement or s60 of the ACL. The applicants have not indicated on the Agreement that they require the respondent to pay the water usage accounts. The respondent is not able to recover monies from the tenant in contravention of section 39 of the Residential Tenancies Act. The respondent cannot be held liable for the applicants own failure to redirect its mail or to request the respondent to have the water usage accounts redirected.

54. This part of the application must fail.

SkyMark Pty Ltd (SkyMark) Invoice

55. At the end of the tenancy, the applicants asked the respondent for a recommendation for works that needed to be done on the property prior to sale. The respondent recommended SkyMark who issued an invoice of $2238.00 for the works. The applicants in proceedings HB19/00979 agreed to pay to Sky Mark Pty Ltd the sum of $2238.00. The applicants contend that this amount should be recovered from the respondent because the work that was carried out by SkyMark Pty Ltd was not rendered with due care and skill; they did not hold the required license necessary to carry out plumbing works and the applicants have suffered a loss in having the work carried out by SkyMark investigated.

56. The Tribunal has previously found that the applicants consented to the works being carried out by SkyMarks.

57. The applicants contend that SkyMark is “unqualified/unlicensed, does substandard work and enormously overpriced/uncompetitive”. The applicants have recovered $1050.00 from the tenant’s bond and are seeking to recover the balance of $1438.00 from the respondent, of the invoice paid to SkyMark.

58. The applicants seek to rely upon the Management Agreement Clauses 4.3, 4.4(1) and (2), 4.5 and 4.6. In addition the applicants seek to rely on the following documents to support their claim:

1. An email from Inspect My Home confirming an appointment for an inspection of the work undertaken by SkyMark.

2. Photographs taken by Inspect My Home.

3. Findings of Inspect My Home.

4. Invoice from Super Plumbers Pty Ltd.

5. Download from Sydney Water website regarding general plumbing work.

59. The respondent submits that the applicant dealt directly with SkyMark. SkyMark are used regularly by the respondent and the respondent believes their work to be of good quality and their prices competitive.

60. The Tribunal may rely on evidence from expert witnesses to reach a conclusion about a technical matter or area of specialised knowledge that is relevant to an issue to be determined in proceedings. It is important that experts’ opinions are soundly based, complete and reliable.

61. The applicants submit that the work undertaken by SkyMark has not been rendered with due care and skill and that they were unlicensed to carry out the work. The evidence provided by the applicants does not satisfy the Tribunal that the works carried out by SkyMark were not rendered with due care and skill. The report from Inspect My Home states that “Craig” who carried out the inspection has over 25 years experience building his own reputable building company and is licensed. There is no evidence of “Craig’s qualifications or experience on the documents. However, the Tribunal accepts that “Craig” may have building qualifications and experience. There are four photographs attached with the following:

“Patched plaster board walls in ground floor bedrooms, hallway, stairwell and top floor bedroom were not adequately sanded prior to paint being applied. Recommend resanding, application of undercoat to manufactuers specifications and two coats of colour matched paint to manufactures specification.

Rear ground floor bedroom walls and walk in robe appear to have only had one coat of finish paint as existing paint colour is clearly visible in areas. Recommend 2^nd coat be applied to manufacturers specification.”

62. The statement by Inspect My Home does not set out the fact and assumptions of fact on which the opinion in the report are based or the reasons for each opinion expressed. For example the report states that the walls were not adequately sanded prior to paint being applied. The Tribunal is not able to determine what “the walls were not adequately sanded” means. Is Craig suggesting that the work is defective, because it does not meet Australian Building Code or any standards or tolerances available for painting work? In regards to the photographs of the tiles, the report does not tell the Tribunal whether the tiles, “sitting proud” is within tolerances and whether this is or is not a defect. No measurements have been provided to satisfy the Tribunal that the tiles are not within tolerances. The Tribunal accepts that the Inspect My Home report holds an opinion that the work could have been rendered to a better standard, however, there is little probative evidence on which the Tribunal is able to be satisfied that the work was not rendered with due care and skill.

63. The applicants commenced proceedings in the Tribunal against SkyMark in the matter HB19/00979. Orders were made by consent of the parties on 8 February 2019 that the applicants were to pay to SkyMark the sum of $2238.00. The applicants were unable to provide a reasonable explanation to the Tribunal as to why they agreed in the Home Building Proceedings to pay SkyMark’s invoice if they held an opinion that the work was not rendered with due care and skill.

64. There is no evidence that the work that the SkyMark carried out which appears to be internal painting works, that a license is required to carry out the works.

65. SkyMark did carry out some plumbing works. The Tribunal understands from the evidence that they refitted correct taps for washing machine. SkyMark submit that a home owner is entitled to change taps, shower heads and washers but not carry out major plumbing works. The applicants seek to rely upon downloaded generic documents from Sydney Water regarding what works a home owner is allowed to do without a license. The applicants have not satisfied the Tribunal that the works that SkyMark carried out required a licensed plumber. Even if the Tribunal is wrong regarding this issue the applicants have had the work carried out by SkyMark inspected by Super Plumbers who confirm:

“Attended property to investigate work done by and unlicensed plumber. On inspection of washing machine taps found them to have been installed correctly. Checked for leaks, all okay. Left site”.

66. The applicants have failed to satisfy the Tribunal that they have suffered a loss due to any work done by SkyMark that may have required them to hold a license.

67. The applicants were unable to provide to the Tribunal a copy of the Judgement from the Local Court setting out the basis of the Orders made by the Court in determining that $3932.00 of the tenant’s rental bond money was to be paid to the applicants.

68. The Tribunal is unable to determine how much of the cost of $2238.00 paid by the applicants to SkyMark relates to damages caused by the tenant to the property and or how much relates to work undertaken by the applicants to enable them to prepare their home for Sale.

69. The Tribunal is not satisfied that the respondent has breached the Managing Agency Agreement by engaging SkyMark to carry out works. The Tribunal is satisfied that SkyMark were engaged by consent of the applicants. The works undertaken by SkyMark were done with due care and skill and the applicants have not suffered any loss. The NSW Local Court ordered that an amount of $3932.00 be paid to the applicants from the tenant’s rental bond to cover any damage to the property.

70. The Tribunal acknowledges that the applicants paid Inspect My Home and Super Plumbers to inspect the works carried out by SkyMark. However, this was a decision that the applicants made and it does not flow from any damage that was caused by the respondent nor any action of the respondent in breach of the Management Agreement.

Return of Management Fees

71. The applicants seek the return of their management fees paid to the respondent. The applicants have failed to satisfy the Tribunal that the respondent has breached the Management Agreement. The applicants have failed to satisfy the Tribunal that the service has not been rendered with due care and skill.

72. The Tribunal is satisfied that the respondent has done a proper tenant check; entered into a tenancy agreement; lodged money with the rental bond board; collected rent ($62,571,45): completed an ingoing and outgoing inspection report: conducted routine inspections as well as ensuring that the applicants met their obligations under section 63 of the Residential Tenancies Act. Any loss to the applicants as a result of the tenancy was recovered in the NSW Local Court from the tenant’s rental bond.

73. The applicants have failed to establish that they are entitled to a refund of management fees. The Tribunal is satisfied that the respondent is entitled to the management fees received by it.

Claim for Financial Loss

74. The applicants’ are claiming that they are entitled to financial loss. In particular the applicants have stated the following:

1. Due to deceit negligence the respondent arranged for unsuitable tenants who damaged their property.

2. The respondent failed to pay water usage accounts or recover the funds from the tenant.

3. The respondent deliberately disregarded instructions from the applicants to pay contractor invoices from the trust account.

4. The respondent carried out only three of four required periodic inspections. The respondent failed to provide photographs after every inspection.

5. General incompetence of the respondent in managing the property.

6. The applicants’ property was sold at a reduced price with the unrepaired damage contributing to the reduction in sale price.

75. The Tribunal has already considered whether the respondent breached the Management Agreement and has found that it did not.

76. The Tribunal is not satisfied that the applicants have suffered any loss as a result of any breach of the tenancy agreement. The applicants had a cause of action against the tenant to seek orders to recover costs for any loss. The applicants exercised their right under the Residential Tenancies Act to recover money for any damage caused by the tenant during the tenancy. The NSW Local Court made orders that $3932.00 of the rental bond money be paid to the applicants and the balance of $900.00 was to be returned to the tenant.

77. The respondent carried out three of four periodic property inspections during a 12 month period. The Tribunal is not satisfied that the respondent’s failure to carry out one less property inspection in a twelve month period has caused the applicants any loss.

78. The Tribunal is not satisfied that the respondent has caused the applicants to lose any money on the sale of their property. The evidence provided by the applicants is that the Sales Agent Appraisal of the property was much higher than the actual price received at the sale of the property. This is not evidence that the respondent has failed to render services with due care and skill or has breached the managing agency agreement. There is also little to support the applicants claim that there was little time before the tenant’s vacating the property and the sales agency agreement was entered into for repairs to be carried out. Even if this is correct, this is not as a result of a breach by the respondent of the Managing Agency Agreement or of s60ACL.

79. The applicants have failed to establish on the balance of probabilities that the respondent has breached the managing agency agreement. The applicants have failed to establish that the respondent has breached s60 of the Australian Consumer Law. The application is dismissed.

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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

Decision last updated: 17 March 2022