Kutalyova v Weinman

[2023] NSWCATCD 38

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Kutalyova v Weinman [2023] NSWCATCD 38
Hearing dates:	17 March 2023
Date of orders:	03 May 2023
Decision date:	03 May 2023
Jurisdiction:	Consumer and Commercial Division
Before:	H Woods, Senior Member
Decision:	The respondents are to pay the applicant the sum of $6,284.63 with 28 days.
Catchwords:	LEASES AND TENANCIES — Residential Tenancies Act 2010 (NSW) — Rent — Excessive rent
Legislation Cited:	Residential Tenancies Act 2010 (NSW)
Cases Cited:	Roberts v NSW Aboriginal Housing Office [2017] NSWCATP 9
Category:	Principal judgment
Parties:	Marina Kutalyova (Applicant) Lisa Weinman and Daniel Weinman (Respondents)
Representation:	Marina Kutalyova (Self represented) Lisa Weinman and Daniel Weinman (D. Cameron, Agent)
File Number(s):	RT 22/51746
Publication restriction:	Nil

REASONS FOR DECISION

INTRODUCTION

1. The dispute concerns a residential tenancy agreement between the applicant as the tenant and the respondents as the landlords dated 16 June 2022 (the Agreement) in respect of unit 3, 17 Onslow Street Rose Bay, NSW 2029 Rose Bay (the Premises).

2. The Premises are on the first floor of a unit block and contained 3 bedrooms, a combined lounge / living area, kitchen, bathroom, ensuite to bedroom 1 and laundry. Bedroom 1, living room, bedroom 2 and the laundry opened onto balconies.

3. The Agreement started on 27 June 2022 and was to end on 26 December 2022.

4. The tenant however gave notice that she was vacating the premises and then vacated the premises on 21 November 2022 because of the impact of substantial construction work going on at the unit block including the Premises.

5. The tenant appeared for herself. Mr Cameron, of RTDC Pty Ltd t/as Ray White Bondi Junction, the Landlords’ agent (the Agent) appeared with leave, for the landlords.

ISSUES

6. The application filed 21 November 2022 sought various orders including for the rent payable to be reduced, the payment of $4,750.00, and compensation of $15,000.00, together with a termination order and an order in respect of a rental bond that had been paid by the applicant

7. Pursuant to leave granted by the Tribunal on 15 December 2022, the tenant amended her claim to claim the amounts identified under the heading “orders sought” in a statement filed on 29 December 2022 (Amended Application).

8. The Amended Application claimed:

1. $950.00 pursuant to s187 (1) (c) of the Residential Tenancies Act 2010 (NSW) (the Act) for the overpayment of rent paid in advance which the landlord claimed as a break lease fee;

2. an order pursuant to s 44 (1) (b) of the Act that the rent payable was excessive;

3. an order pursuant to s 45 of the Act to the effect of reducing the rent payable by fifty per cent for the five weeks the tenant remained in the premises whilst construction work was being performed, being from 24 October to 21 November 202, being $2,375.00;

4. an order for compensation of $15,000.00 for economic and non-economic loss, comprising:

1. 12 months additional rent of $100.00 per week, being $5200.00;

2. removalist costs of $2299,62, but revised at the hearing to be $2759.63; $149.00 for the cost of the application, printing and parking;

3. $219.00 for the cost of taking time off work to attend the Tribunal; $400.00 for the cost of an outgoing clean of the premises and an ingoing clean of an alternative unit at $200.00 each; and

4. $3407.36 for non-economic loss.

9. At the hearing, the tenant was granted leave to alternatively claim that pursuant to ss 43 and 45 of the Act, the rent abated because the premises became wholly or partly ununitable otherwise than as a breach of the Agreement and ought to be reduced.

10. In summary, the tenant contended that she was misled by the landlord not disclosing the extent of the works to be performed, and that if the extent of works had been disclosed to her, she would not have entered the Agreement and tenanted the Premises, and would have tenanted an alternative property, that the extent of the works meant that the Premises became uninhabitable and that she had no option but to terminate the tenancy and rent an alternative unit.

11. There is no real dispute as to the extent of the works being performed at the unit block including the premises, the impact of those works on the tenant and that the tenant had not been informed of the extent of the works to be performed before she entered the Agreement.

12. The following issues required consideration.

13. First, whether the landlords breached s 26 of the Act by inducing the tenant to enter the agreement by knowingly concealing a material fact of a kind prescribed by the Residential Tenancies Regulation 2019 (NSW) (Regulations), being rectification work or major repairs to be carried out to common property during the term of the agreement.

14. Second, whether in breach of clause 19 of the agreement or s 52 of the Act, the landlords failed to provide the premises in a reasonable state of cleanliness and fit for habitation.

15. Third, whether in breach of clause 15 of the Agreement or s 50 of the Act, the tenant’s right to quiet enjoyment was interfered with.

16. Fourth, subject to the determination of the above issues, whether any compensation should be ordered, and if so for what, and how much.

17. Fifth, having regard to s 44 of the Act, whether the rent payable was excessive having regard to a reduction or withdrawal by the landlords of any goods, services, or facilities.

18. Sixth, having regard to s 43 of the Act, whether the rent abates because the Premises became wholly or partly ununitable otherwise than as a breach of the Agreement and if so, having regard to s 45 (2) of the Act, whether the Tribunal ought to make an order determining the appropriate rent, and if so, how much.

19. Seventh, whether the tenant validly terminated the agreement, such that the landlord was not entitled to retain a break fee of $950.00.

20. Eighth, subject to whether a finding is made that the landlords breached the agreement and any relief to be ordered, whether the tenant should also be awarded an amount for non-economic loss, and if so, how much.

JURISDICTION

21. I am satisfied that the Act provides for the Tribunal to make the orders sought by the tenant.

22. The application was filed on the day the tenant vacated the premises and it was not submitted that the tenant was out of time in respect of her application

23. I am therefore satisfied that a residential tenancy agreement existed between the parties, that the application was brought within the prescribed period and that the Tribunal has jurisdiction to hear and determine the dispute.

CONSIDERATION

24. The tenant relied on a documents filed with the Tribunal on 29 December 2022 that included a two page unsigned statement that summarised the tenant’s claims, a ten page unsigned statement headed “Background”, a 29 page bundle of photographs of the Premises and the unit block showing construction work being performed, a bundle of documents marked “EV.1” to “EV.8”, a bundle containing tax invoices from JB Removal's Pty Ltd and paid receipts for expenses, and a Centrelink form identifying the tenant as the carer for a Mr. Arthur Burns who resided at the Premises with the tenant.

25. The landlords relied on a bundle of documents filed with the tribunal on 14 March 2023 that included hearing notes, a copy of the agreement and photographs. At the hearing, the Agent also provided a copy of the Exclusive Management Agency Agreement between the agent and the landlords.

26. Neither party called any oral evidence, and the tenant was not required for cross examination on the contents of the “Statement”, or the document headed “background”.

27. In June 2022 the Premises were advertised as being available for rent for $1000 per week.

28. The tenant inspected the Premises on 15 June 2022 with the Agent, during which, the Agent informed the tenant to the effect that:

• the landlords were expecting some balcony repairs to take place;

• that he wasn't sure that it was going ahead but if it did, it would preclude the tenant from going on the balcony for about four to eight weeks, as they were repairing balustrades; and

• that the owners would reduce the rent from the advertised price of $1000 per week for the duration of the repairs.

29. I relevantly note that an email from the agent to the Tenant dated 2 November 2022 states “The owner also wanted to pass on their side of things as well. The previous tenants were paying $1150 per week. The property was advertised for $1000 per week due to the upcoming balcony works being out (sic)”

30. Pursuant to emails between the Agent and the tenant dated 15 and 16 June 2022:

1. the tenant proposed that she pay rent of $950 per week, that she pays 6 or even 12 months up front and that if balcony repairs go ahead there will be no need to adjust the rent;

2. the landlords agreed to provide a six month tenancy starting 27 June 2022 with rent of $950 per week or $4127.98 per month to be paid in advance.

31. The Agreement was entered, a rental bond of four weeks rent ($3800.00) was paid in addition to the payment of rent in advance, and the tenant moved into the premises on 1 July 2022.

32. On 26 September 2022, the Agent emailed the tenant forwarding an email from a Mr Alan Hird in respect of works to be performed at the unit block which stated that scaffolding will start on Monday October 10, that all balconies must be cleared by that time, that all garages will be inaccessible to cars during the next four to five months and that the driveway will be reserved for walking access only.

33. The tenant responded stating to the effect that she had been informed that there was a lot more work happening than just changing the balustrade, including concrete removal, tiles up lifted and major repair work because of suspected concrete cancer, and that garages will be inaccessible by cars for 4 to 5 months.

34. The tenant further stated that that she was not aware of all this when she proposed a $50 per week discount and understood that the work was only to involve balustrade changes and that nothing was said about the major scope of work being done and that she may need to break the tenancy early and seek a refund.

35. Further emails were exchanged between the tenant and the Agent on 4 and 5 October in respect of the works being performed and the prospect of finding alternative premises for the tenant.

36. On 6 October the tenant received a “Notice of Work” stating to the effect that that various works will be carried out to the building commencing on 13 October for a duration of 18 weeks (weather permitting) that included but were not limited to “demolition, concrete spalling repairs, steel repairs, tiling, painting, doors replacement and waterproofing works”, and that “there will be significant noise during demolition and concrete spoiling works on the balconies” and “the scaffolding will block the driveway, preventing the use of the internal garage spaces by cars”.

37. The tenant emailed the Agent on 11 October 2022 attaching a copy of the notice and stating:

“when I rented the property, it was on the understanding that there would be balcony works, i.e. changing the balustrades. There was no mention of remedial works, which is major construction work… It was not fair of the owner to rent us an apartment knowing that there was this major scope of work to be undertaken, and not provide us with this information. I can assure you that I would not have taken the apartment on that understanding… As such, I'm requesting a rental reduction to $500 p/week from the start of the work, until completion…”

38. The tenant did not receive I reply to that email.

39. The work commenced on about 13 October 2022.

40. Having regard to the photographs of the unit block and the Premises provided by the tenant and the uncontested evidence of the tenant, I find that:

1. balustrading and netting covered the whole of the unit block including the balconies of the premises;

2. the driveway to the unit block was blocked and the garages, including the garage to the premises were inaccessible;

3. windows and balcony doorways were not being able to be opened because of jack hammering and demolition noise and dust;

4. because louvered windows above balcony glass doors could not be completely closed, a significant amount of dust entered the Premises; and

5. that because windows and glass doors were not able to be opened the premises did not have adequate ventilation whilst the works were performed.

41. During a discussion between the Agent and the tenant after the works commenced, the tenant informed the agent as to the extent of and impact of the works on her, and the Agent said that he would come to the Premises and prepare a report.

42. On 1 November 2022, the tenant emailed the agent stating:

“just wondering if you have that report ready? I just received notice today that the doors are also being changed. This is just ridiculous. They knew all this was happening, major demolition and reconstruction and did not inform me prior to taking the lease out. Please let the owners know, they have five days to respond to my rental reduction. In the absence of any response, I'm lodging with the tribunal”.

43. On 2 November 2022, the agent emailed the tenant stating:

“Good news, I have heard from the owner, we are willing to reduce the rent by $50 per week for the entire period that they are living there without vehicle access to the garage …

the owner also wanted to pass on their side of things as well. The previous tenants were paying $1150 pw. the property was advertised for $1000 PW due to the upcoming balcony works being out (sic)…”

44. Apart from an email stating that the landlords were not aware that garages would not be accessible, the agent did not reply to the tenant setting out what the extent of the landlords’ knowledge of the works was.

45. The tenant replied by email stating:

“Hi Cameron, that is completely unacceptable. Do you know when you might have the report ready? I’m going tribunal”,

to which the Agent replied by email stating

“the report was to the owner and it was based on the inspection that I carried out last week...”

46. On 8 November the tenant emailed the Agent stating that the offer of $50 reduction in rent was unacceptable and seeking assistance for the tenant to relocate to new premises.

47. Thereafter the Agent and the tenant exchanged emails in respect of attempts to find alternative premises for the tenant.

48. In an email dated 9 November 2022 the agent stated:

“Unfortunately since moving in, the rental market has increased dramatically and the prices for three bedroom properties has also increased. For example, I have a 2 bed, one bath 0 parking in Simpson St Bondi coming onto the market at $1000 pw”.

49. On 11 November 2022 the tenant emailed the agent stating that she had found another property to rent and

“… We will be vacating this unit on 18th November 2022… I am requesting a full refund of my monies that were paid in advance rent… please, let me know when I can expect the refund.”

50. The tenant thereafter vacated the Premises on 21 November 2022 and the landlord refunded the rent paid in advance for the balance of the tenancy save for $950.00, which the landlord retained as a fee for the tenancy breaking the tenancy early. The rental bond was also paid to the tenant.

51. Having regard to s 26 (1) of the Act and s 8 (1) (i) of the Residential Tenancy Regulations, the landlord must not induce the tenant to enter into an agreement by knowingly concealing “scheduled rectification work or major repairs to be carried out to common property during the fixed term of the agreement”.

52. Having regard to the photos of the work, the description of the work in the notice issued to the tenant and the tenant’s uncontested evidence as to the extent and impact of the works, I am satisfied that the works were scheduled rectification work and major repairs to be carried out to common property during the term of the agreement.

53. I am further satisfied that:

1. the tenant was only informed to the effect that there would be rectification work to the balustrades of the balcony; and

2. having regard to the lack of evidence being provided by the landlords as to their actual knowledge (as opposed to the Agent’s knowledge) and the email from the Agent stating that to the effect that the previous tenants were paying $1150.00 per week and that the property was advertised for $1000.00 per week due to the upcoming balcony works being [carried] out”, the landlords were aware ( although it appears from emails that that the agent may not have been) that the works to be performed to common property were substantially more than what the tenant was informed of and the landlords knowingly concealed that material fact.

54. I further accept the tenant’s evidence would not have entered the agreement if she was aware of the works and find that the tenant was induced to enter into the agreement by the non-disclosure of the extent of the works to the common property.

55. I therefore find that the landlords were in breach of s 26 of the Act.

56. I am also satisfied (having regard to the evidence as to rents increasing thereafter), that if the tenant had of been informed of the works to be performed, she would have tenanted alternative premises for at least in the order of $100.00 per week less than she was able to rent alternative premises for from 21 November.

57. That the tenant would have been able to tenant alternative premises from in the order of $100.00 per week less than she did in November when she vacated, is supported by the agents 8 November email in which he stated “Unfortunately since moving in, the rental market has increased dramatically and the prices for three bedroom properties has also increased. For example, I have a 2 bed, one bath 0 parking in Simpson St Bondi coming onto the market at $1000 pw”.

58. In respect of the claimed breach of s 52 of the Act, premises are habitable if they can be used and dwelt in not only safely but also with reasonable comfort, being the state of the premises which a landlord is required to provide at the commencement of a residential tenancy agreement, and it is the nature and extent of the defect that must be considered in evaluating whether the premises are not fit for habitation. Roberts v NSW Aboriginal Housing Office [2017] NSWCATP 9 (16 January 2017) at [117].

59. Having regard to photos of the work and the Premises, the description of the work in the notice issued to the tenant and the tenants uncontested evidence as to the extent and impact of the works, in particular that windows and balcony doors could not be opened, that balconies were covered by scaffolding and mesh, and the noise (in particular from jack hammering) and the impact of dust and noise from the works entering the premises, I am satisfied that from about 13 November 2022, the Premises did not have adequate ventilation and were not fit for habitation and that from about 13 November 2022, in breach of s 52 of the Act the landlords failed to provide the premises in a state that was fit for habitation.

60. Because of my findings above I also find that it was open to the tenant to terminate the agreement pursuant to s 98A or s 98 of the Act, which the tenant did by her email sent on 11 November 2022.

61. Having regard to my findings that the landlords breached s 26 and 52 of the Act, I will now turn to the orders sought by the tenant.

62. Because I have found that the tenant terminated the agreement for a reason permitted under the Act, the landlords were not entitled to the break fee pursuant to clause 51 of the Agreement or the Act, and the tenant is therefore entitled to be paid the amount of $950 of prepaid rent which the landlord withheld as a break fee.

63. Considering the photographs of the unit block and the Premises and the tenants description of the works and the impact of the works, which evidence was uncontested, in my view the rent payable should be reduced by 50 per cent, being $475 per week for the period from when construction commenced to when the tenant vacated the premises, being 5 weeks, from about 17 October to 21 November 2022, being $2375.00.

54. In circumstances where I am satisfied that if informed of the extent of the works, the tenant would have rented alternative premises, I am also satisfied that the tenant would not have incurred the removalist expenses moving from the premises or the cost of having the Premises cleaned and that the tenant is entitled to be compensated for removalist expenses of $2759.63, (being the total of the paid invoices issued by JB removal's Pty Ltd and dated 18 November and 19 November 2023) and cleaning costs of $200.00.

55. Although the tenant’s evidence did not include an invoice or receipt for the payment of the $200.00 for cleaning costs, I accept the tenants evidence that she incurred that expense. I am not however satisfied that the tenant is entitled to be compensated for the cost to have the alternative premises that the tenant moved into, cleaned.

56. In circumstances where I am satisfied also that the tenant would have rented alternative premises for in the order of at least $100 per week less than she was able to obtain in November 2022 when she vacated the premises, I find that the tenant is also entitled to compensation of $100 per week for the period from 21 November 2022, (the date the tenant vacated the premises) to 26 December 2022 (the end date of the agreement), being $500.00.

57. The claims for $149 for the application fee printing costs and parking and $219 for time off work to appear at the Tribunal are claims for costs of and incidental to the proceedings, and mindful that that each party is to pay their own costs of the proceedings, in my view the tenant is not entitled to be compensated for those amounts.

58. The amounts of $950.00, $2375.00, $2759.63, and $200.00, total $6284.63.

59. In respect of the tenants claims pursuant to s 44 of the Act, although I am satisfied that the landlord breached s 52 of the Act by failing from about 13 October to provide the premises in a habitable state, given that the works were not works directly arranged by the landlords, but by the owners corporation, although satisfied that there was a reduction or withdrawal of services or facilities, I am not satisfied that it was by the landlord and therefore would not make an order in respect of the rent pursuant to s 44 (1) of the Act. For the same reason, I am not satisfied that the landlord or the landlord’s agent interfered with the tenant’s right to quite enjoyment.

60. In respect of the tenants claim for a reduction in rent pursuant to ss 43 and 45 of the Act, if I had not found that the landlords were in breach of s 52 of the Act, I would have found, for the reasons already stated in respect of my consideration of the s 52 claim, that the premises became wholly or partly inhabitable, and that the rent abated and that from 13 October, the rent ought not exceed $475.00 per week. Having regard however to my findings in respect of the claim pursuant to s 52, I won’t make any order pursuant to ss 43 and 45 of the Act.

61. The tenant also claims non-economic loss of $3,407.38. That amount being the difference between the other amounts claimed by the tenant and the Tribunals jurisdictional limit of $15,000.00.

62. The claim for non-economic loss is generally for stress, anxiety, frustration, disappointment and inconvenience arising from the tenant having to cancel surgery and suffering ongoing pain until that surgery can be arranged, general stress, anxiety, disappointment and inconvenience suffered by the tenant personally and having to deal with the impact of the works in particular the demolition works on her son and Mr. Burns, and the stress and inconvenience of having to pack up and move again before the end of the fixed term tenancy.

63. I accept that the type of loss claimed by the tenant is recoverable as a separate head of loss and is not precluded or limited by the Civil Liability Act 2002 (NSW).

64. Considering:

1. that the agreement was for a fixed term of six months ending just over one month after the tenant vacated and there was no guarantee that the tenancy would continue after that date or if it did for the same rent, and the tenant may have had to move out at that point anyway;

2. that the period of the works being performed before the tenant vacated was only five weeks;

3. that I have effectively reduced the rent payable for the period when the works were being performed by 50 per cent;

4. that there was no medical evidence in respect of the pain the tenant says she continues to suffer because of her surgery being delayed; and

5. that the rent payable of $950.00 incorporated at least some level a discount for the entire tenancy arising from inconvenience that may have arisen from works the tenant understood were to be performed to the balustrading of the balcony’s (although it is difficult to quantify how much of the $50.00 can be allocated to that as opposed to the fact that the rent was paid upfront),

I do not propose to make an additional award for non-economic.

75. For the reasons set out above, I will order that the landlords pay the tenant the amount of $6284.63.

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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 July 2023