Knowles v Bollore SA; Bollore SA v Knowles

[2016] NSWCATCD 39

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Knowles v Bollore SA; Bollore SA v Knowles [2016] NSWCATCD 39
Hearing dates:	10 December 2015
Decision date:	11 May 2016
Jurisdiction:	Consumer and Commercial Division
Before:	T Simon, Senior Member
Decision:	Suzanne Knowles is to pay Bollore SA the amount of $16,703.30 immediately.
Legislation Cited:	Residential Tenancies Act 2010 (NSW) Residential Tenancies Regulation 2010
Cases Cited:	Fitzpatrick v Wu (RTT01/16425) Harris v Hill; Hill v Harris; [2015] NSWCATCD 84 Hyder Consulting (Aust) Pty Ltd v Wlh Wilmemsen Agency Pty Ltd and Anor [2001] NSWCA 313 (‘Hyder Consulting’)
Category:	Principal judgment
Parties:	Bollore SA (tenant/respondent) in RT 15/51940 Suzanne Knowles (landlord/applicant) in RT 15/51940   Suzanne Knowles (landlord/respondent) in RT 15/37621 Bollore SA (tenant/applicant) in RT 15/37621
Representation:	M Crocher solicitor for the tenant S Knowles in person
File Number(s):	RT 15/51940RT 15/37621
Publication restriction:	Unrestricted

Reasons for the Decision

Background to the Matter

1. An application was received from the tenant by the Tribunal on 9 June 2015. The tenant was seeking the return of her bond. Orders were initially made in favour of the tenant in absence of the landlord for an amount of $21,001.51. The landlord subsequently applied for a set-aside of the orders and was successful. The landlord has also made an application which was received on 11 September 2015 seeking payment of the bond to her. The landlord is seeking for the following damages:

1. $19,591.06 in total to replace the carpet;

2. $160.00 for pool maintenance;

3. $138.00 for outstanding garden maintenance;

4. $13,000.00 to replace curtains (the tenant withdrew that part of the claim at hearing);

5. $380.00 to clean glass.

2. The landlord presently holds the bond and she claimed the bond from the rental bond board on or about 3 June 2015 and the bond was paid in full to her.

3. The two applications deal with the same issues and have been dealt with together. For ease of reference the parties will be referred to as landlord and tenant.

4. The parties had the opportunity to exchange documents. The landlord provided her documents in a bundle which were received by the Tribunal on 6 October 2016. At hearing the landlord was also seeking to rely on further documents in reply and that was not objected to by the tenant at the hearing. The tenant provided a folder of documents on 21 October and two further statutory declarations. The Tribunal confirmed that each party had received the other party’s documents and had been given an opportunity to view them. All the documents received by the Tribunal from the parties have been considered in coming to this decision.

5. The landlord provided a copy of a residential tenancy agreement between the parties dated 25 September 2014. In accordance with the agreement rent was $22,813.00 per month and the term of the agreement was for 7 months from 1 October 2014 to 1 May 2015. A bond of $21,000.00 was lodged with the rental bond board and has since been paid out to the landlord on 3 June 2015. The parties agreed and the Tribunal was satisfied that possession was given to the landlord on 7 April 2015. The tenant was in the property for about 7 months.

6. The tenant lodged his application for the bond on 9 June 2016 which was within 6 months of the bond being paid out and within the time required by regulation 22 (8) of the Residential Tenancies Regulation 2010. Accordingly, the Tribunal was satisfied it had jurisdiction to decide the matter pursuant to s 175 of the Residential Tenancies Act 2010 (NSW) (RTA).

Ingoing and Outgoing Report

7. The landlord, at page 24 of her documents has provided a copy of an in-going and out-going report. The in-going report was completed by both the tenant and landlord. The tenant has agreed with the comments in the ingoing report. The outgoing report was completed by the landlord on 14 April 2015. A representative of the tenant, Christian Petersen was also present at the outgoing inspection and a statutory declaration has been provided by him.

Carpets

The Applicants Case

8. The ingoing report indicated that the carpets had been steam cleaned, however in certain places there were furniture indents. The outgoing report indicated carpet stains in various areas and referred to photos which have been provided. The photos show what is alleged to be cat urine, faeces vomit and cat hair in various places.

9. The landlord agreed that they had consented to the tenant keeping 2 cats. She stated that she had requested that special condition 46 be inserted into the lease to protect the premises in relation to any damage done by the cats which stated the following:

“ The tenant agrees to have the carpet professionally cleaned and/or to have the residential premises fumigated if the fumigation is required because animals have been kept on the residential premises during the tenancy, and the tenant agrees to repair any damage caused by animals kept on the premises ”.

10. The parties also had an agreement that allowed the landlord to attend the premises to water the plants and maintain the garden when the tenant was away overseas. The landlord first attended the property in December 2014 while the tenant was away. The cats had been sent away for boarding. The landlord claims that it was at that time that she noticed the cat urine and vomit. The landlord attended again the next day and the landlord claimed that she found cat urine on the doona covers and the bedroom.

11. The landlord subsequently wrote to the tenant on 31 December 2015 seeking for an inspection on 2 February 2015 to undertake some repairs. Ms Knowles relevantly stated in relation to the cats :

“ During the course of our attendance we have observed cat faeces or vomit in various areas of the house. As we did not attend with cleaning products we were not able to clean the same. We met with a Aileen on one visit who advised us that she had cleaned up the cat feaces. Aileen said that the smell was so bad when she entered that she was nearly sick.

We also observed very, very strong smells of cat urine and felt very sick from it too.

We open windows to try to circulate the air but the smell still remained overbearing.

As we continued to attend we noted the smell had not reduced. We had to search for the source but it appeared to be in every room.

We did find that there were two doona covers on the floor of the master bedroom dressing room that had been urinated on and the smell was not only strong but had “burned” a hole in the fabric of one of the doona covers. We took these to clean and there is now reduction in the smell in that area. We do not otherwise attend this area and only did so to find source of the smell.

The smell still remains very strong throughout the house and we feel that it has now penetrated the carpets and carpet lining.

We ask for your permission to have a carpet carer come and assess what can be done to remove the smell from the house as the carpets may need to be replaced ”.

12. The landlord wrote a further email on 6 January 2015 relevantly stating:

“ I have a carpet carer coming on Thursday at 1pm

I understand that you are not sue back in Sydney until 14/1/2015 so I will let him in. I propose to obtain 2 professional opinions on the future if (sic) the carpets ”.

13. The landlord arranged an inspection on 7 or 8 January from Pro, Wet & Dry. They have provided a report dated some three months later.

14. The tenant sent a subsequent email on 17 January 2015 relevantly stating:

“ Hope everything is fine. The house is beautiful.

I wanted to know if the carpet carer came?

Everything seem alright for me. I will contact Aileen on Monday. What about the stain upstairs beside the second bathroom due to water problem. I discussed with Bill about that, he told he will take care of that when I was in France but it is still there and it seems bigger than when I left. Did you manage to solve the water problem ….” .

15. The tenant also indicated in the he would be leaving the tenancy between 15 February and the beginning of March and asked that just one final inspection be done rather than two in a period of 10 days. He did ultimately leave early, however paid the rent up until the end of the fixed term period of the lease.

16. The landlord claimed that by March the smell was intolerable. The landlord had also asked the tenant not to clean the carpet because she had advice from carpet cleaners it would make the matter worse.

17. The landlord provided a letter from Devine Carpet Care dated 4 March 2015. The report indicated that the carpet had been left uncleaned for some time and that the majority of the stains and the odour could not be removed and that :

“ In fact, trying to clean the carpet now would probably make the problem worse.”

18. Pro-Wet & Dry relevantly stated:

“ Animal urine is a major problem unless attended too very early (i.e on the day), even then, in a lot of instances, the underlay does need to be replaced.

We are more than happy to attempt cleaning and underlay replacement, however, in our professional opinion, the carpet does need replacement ”.

19. The tenant subsequently replaced the carpet and was claiming the following amounts.

1. $737.00 to treat the concrete slab and timber floorboards to permanently remove the odour of cat urine and faeces.

2. $16,440.06 to replace all laid carpet in the house except lower ground spare bedroom.

3. A total of $2,414.00 to replace 4 separate all about 4 years old.

20. The landlord stated that the carpet was 10 years old and that the Tribunal should not depreciate for the carpets because of special condition 46 of the lease. In the alternative the landlord claimed that she had only tenanted the premises for 4 out of the 10 year period and had not received the full benefit of the depreciation and that the Tribunal should not calculate the entire period. She claims $2,880.84 should be taken off for depreciation.

The Respondents Case

21. The respondent put to the Tribunal that the landlord had not allowed the housecleaner or the landlord to attend to the cleaning of the carpets. They claimed that the carpets did not require replacement and that although Mr Petersen had signed the outgoing report, the damage and the evidence of the respondent did not justify complete replacement of the carpet.

22. The tenant called a witness Mr McMahon, who is an accountant and tax agent. He was cross examined at hearing. The expert explained that once a capital item was written off then it would have no further value in subsequent years. However, he conceded that whether the item had some sort of disposable value at the end of the period was a question of fact.

23. The respondent referred to the affidavit of Mr Petersen and the respondent’s housekeeper to demonstrate that the general condition of the property was in a satisfactory condition and the carpet could have been sanitised and cleaned. They also refer to the fact that some of the carpet was affected by water.

24. The respondent did not provide any independent evidence about the state of the carpet in the event it was found that the carpet was damaged, needed replacement aor cleaning.

Findings and Decisions on Carpet

25. The Residential Tenancies Act 2010 relevantly states at section 51(3)

(3) On giving vacant possession of the residential premises, the tenant must do the following:

(a) remove all the tenant's goods from the residential premises,

(b) leave the residential premises as nearly as possible in the same condition, fair wear and tear excepted, and, if there is a condition report, as set out in the condition report applicable to the premises when the agreement was entered into,

(c) leave the residential premises in a reasonable state of cleanliness, having regard to the condition of the premises at the commencement of the tenancy,

(d) remove or arrange for the removal from the residential premises of all rubbish, having regard to the condition of the premises at the commencement of the tenancy,

(e) return to the landlord all keys, and other opening devices or similar devices, provided by the landlord to the tenant.

26. In determining a bond claim, the Tribunal is required to determine if the tenant has left the residential premises in the same condition as when the agreement was entered into - subject to fair wear and tear.

27. The case of Fitzpatrick v Wu (RTT01/16425) provides helpful comment on the meaning of "fair wear and tear". Addressing a similar provision of the previous Act, the following relevant comment was made:

Section 26(1)(d) requires only that the tenants return the property in the state in which it was received minus fair wear and tear. It is the concept of "fair wear and tear" which causes the disputes in these matters and in particular whose standards determine whether wear and tear is fair" ... Given that the section is intended to have application to premises generally in NSW, Parliament could not have intended that the standard of "fair" wear and tear be the subjective standard of each individual landlord. Presumably Parliament had in mind something more objective in nature....the present Tribunal takes the view that the requisite standard is that commonly prevailing among the tenants of comparative premises and that the issue should not be approached from the standpoint of the fastidious and obsessive landlord.

28. Ordinarily in the case of carpet the Tribunal applies the depreciation schedule set out by the Australian Taxation Office based on Tax Ruling TR 2012/2. An example of this approach is articulated in the case of Harris v Hill; Hill v Harris; [2015] NSWCATCD 84

“ Having regard to the authorities and in particular the discussion on the question of fair wear and tear contained on p 120 of the 5th Edition of Anforth on Residential Tenancies, Law and Practice, New South Wales, I have considered the following factors in determining the issue of fair wear and tear concerning the carpet (and other relevant heads below):

a. The age, quality and condition at the beginning of the lease;

b. The average useful lifespan of the item;

c. Reasonable expected use; and

d. Number and type of tenants.

The reference by the tenant to the expected lifespan of the carpet being ten years is a reference to the depreciation scale as set out by the Australian Taxation Office based on Tax Ruling TR 2012/2 (as amended from time to time) which sets out the effective life of depreciating assets including fixtures and fittings in leased premises. Carpets, Linoleum and vinyl are afforded a life span of 10 years.

In her application the tenant states that she did offer to pay 40% of the cost of replacing the carpet as quoted by 0420 Carpet (p 17 Ex 1) but that this offer was not accepted. She now does not wish to contribute to the cost of replacing the carpet as she has since learned of the 10 year lifespan of carpet as referred to above.

In the circumstances, having regard to the above matters, in particular the age of the carpet I do not propose to allow any amount to be paid by the tenant towards the cost of the carpet. The carpet is 12 years old. Whilst it is accepted that it was in worse condition than when the tenant moved in, I do not think she should have to bear half of the cost of replacing 12 year old carpet in a rented premises ”.

29. However, this case the landlord makes submissions that because she specifically inserted special condition 46, the test is no longer a matter of simply of whether the tenant has breached s 51(3) of the RTA but rather whether there has been a breach of the residential agreement.

30. Section 219 of the RTA states:

219 Contracting out prohibited

(1) A term of any residential tenancy agreement, contract or other agreement is void to the extent that it purports to exclude, limit or modify the operation of this Act or the regulations or has the effect of excluding, limiting or modifying the operation of this Act or the regulations.

(2) A person must not enter into any contract or other agreement, with the intention, either directly or indirectly, of defeating, evading or preventing the operation of this Act or the regulations.

(3) A landlord’s agent must not enter into any contract or other agreement with the intention, either directly or indirectly, of obtaining exclusion from or indemnity for personal liability for any act on behalf of the landlord that renders the landlord’s agent liable for an offence under this Act.

Maximum penalty: 20 penalty units.

31. It is clear from the provision that the landlord cannot contract out of the RTA. Section 19(2)(a) of the RTA specifically prohibits the landlord from including terms in the agreement to the following effect:

(a) that the tenant must have the carpet professionally cleaned, or pay the cost of such cleaning, at the end of the tenancy,

32. Clause 46 only requires the tenant to repair any damage caused by animals kept on the premises. S 190 of the RTA allows for an application to be made for a breach of the tenancy agreement. However that does not contradict the obligation in s 51 that the tenant needs to return the property in the same condition subject to fair wear and tear. The special condition certainly can’t be interpreted as the landlord has put it that it now entitles her to damages which automatically warrant new for old. The special condition only requires repair to any damage.

33. It is clear that in assessing damages the guiding principal is that the tenant should be put in the same position had the breach not occurred. In Hyder Consulting (Aust) Pty Ltd v Wlh Wilmemsen Agency Pty Ltd and Anor [2001] NSWCA 313 (‘Hyder Consulting’) Sheller JA states at paragraph 54

“ In my opinion, if a defendant negligently damages or destroys the plaintiff’s property, and there is no evidence that the plaintiff had any reasonable choice other than to replace or repair what had been damaged or destroyed, the cost of replacement or repair, provided it is not extravagant, is recoverable. In each case it is a question of fact ”.

34. Giles JA states at paragraph 107:

“ The reasons of Moffitt P make clear that each case depends upon its own facts. The general principle of restitution in integrum, so that a plaintiff should be compensated for its loss, but not overcompensated, is undoubted. Its application will vary according to the circumstances ”.

35. Taking into consideration the case law and the evidence of the parties the Tribunal finds that the carpet has been so damaged by the landlord’s cats that the carpet requires replacement. The Tribunal has come to that finding by considering the noted indicating staining and an “odour in lounge area” on the outgoing report and the report of Devine Carpet Care who inspected the premises and found a cat urine odour and found that “the majority of the stains could not be removed and certainty not the odour.” The Tribunal has also considered the tenant’s assertion that the landlord prevented them from removing the stains. The Tribunal finds that it was always open to the landlord while having possession of the premises to clean the carpets and that the onus was on them to return the premises subject to fair, wear and tear which they did not. The Tribunal accepts the assertion of the landlord that they had been advised by Devine Carpet Care that cleaning the carpet would make the problem worse because the urine had been there for some time.

36. The Tribunal finds that the carpets had to be lifted and that consistent with the tax invoice from Devine Carpet Care the landlord incurred a cost of $737.00 to treat the underneath flooring as the cat urine has penetrated through the carpet.

37. The Tribunal also finds from the agreement of Max Lawson Carpets that the cost to replace the carpets in total is $16,440.06,

38. The Tribunal is not satisfied in the circumstances of this case that an appropriate award of damages is simply to apply the ATO tax schedule and make a finding that the carpet has a value of $0 because it is 10 years old.. Firstly, the Tribunal finds that the landlord has not leased the premises for the entire 10 years and accepts her evidence that she only leased it for 4 years and has only claimed a tax benefit for 4 years. Further, the Tribunal accepts that the carpet, although 10 years old, did have some residual value and would not have required complete replacing had it not been for the damage caused by the cat urine. However, the Tribunal is also not satisfied to allow complete replacement as carpet is a capital item with a limited life span. On the best evidence before it the Tribunal is satisfied to allow to the landlord 20% of the cost of replacing the carpet which totals an amount of $3,435.41.

35. The Tribunal also finds that the four rugs have been similarly damaged and for the same reasons as above the Tribunal allows 20% of the cost of replacing the rugs which amounts to $482.80.

Pool maintenance and Garden Maintenance

40. Special conditions 4 and 5 of the lease required the tenant to be responsible for the upkeep and maintenance of the gardens and lawns and the pool at monthly intervals. The tenant vacated the premises early, however did pay rent to the end of the fixed term. The landlord provided no evidence of receipts or invoices in relation to the cost of these items and could not explain why she did not have it. There was nothing in the outgoing report that the garden or the pool were left in a bad condition. Having considered the evidence on this point the Tribunal is not satisfied that the landlord has suffered any damage as a result of the breach. Accordingly this part of the claim is dismissed.

Windows

41. At hearing this part of the claim was conceded and so the Tribunal has allowed an amount of $380.00 for the cleaning of the windows.

42. The orders are made accordingly.

T Simon

Senior Member

Civil and Administrative Tribunal of New South Wales

11 May 2016

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: 06 July 2016