Mazengarb v Sethi

[2021] NSWCATCD 51

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Mazengarb v Sethi [2021] NSWCATCD 51

Hearing dates:

8 June 2021

Date of orders:

28 June 2021

Decision date:

28 June 2021

Jurisdiction:

Consumer and Commercial Division

Before:

P French, General Member

The decision issued on 28 June 2021 is amended pursuant to section 63 of the Civil and Administrative Tribunal Act 2013 and should read as follows: (amendments are shown in bold type)

Decision:

(1) The rent payable for the premises was excessive by $100.00 per week from 15 August 2020 to 7 December 2020 and must not exceed $450.00 per week during this period.

(2) The rent payable for the premises was excessive by $75.00 per week from 8 December 2020 to 19 February 2021 and must not exceed $475.00 per week during this period.

(3) The rent payable for the premises was excessive by $50.00 per week from 20 February 2021 to 26 March 2021 and must not exceed $500.00 per week during this period.

(4) The landlord, Sameer and Vineeta Sethi, are to pay the tenants, Melinda Mazengarb and Peter McLeod, the sum of $2,685.70 immediately.

(5) The application is otherwise dismissed.

Catchwords:

LEASES AND TENANCIES: Residential Tenancies Act 2010 (NSW) – tenants’ claim that rent was excessive due – tenants’ claims for compensation for alleged breach by the landlords of the obligation to pass possession of the premises reasonably clean and in a state fit for habitation – compensation claims out of time

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Residential Tenancies Act 2010 (NSW)

Residential Tenancies Regulation 2019 (NSW)

Cases Cited:

Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Melinda Mazengarb (First Applicant)
Peter McLeod (Second Applicant)
Sameer Sethi (First Respondent)
Vineeta Sethi (Second Respondent)

Representation:

File Number(s):

RT 21/07107

Publication restriction:

Nil

REASONS FOR DECISIOn

Introduction

1. This is an application by former tenants of rented premises for orders pursuant to section 44(1)(b) of the Residential Tenancies Act 2010 (RT Act) that would reduce the rent payable for the premises during three overlapping periods in the course of the tenancy due to the landlords’ alleged withdrawal keys, failure to secure the back yard, and failure to provide an off-street parking area with the premises. The tenants seek to recover from the landlords a total of $4,580.00 in excessive rent they contend they have paid in respect of these periods. The tenants also apply for orders for compensation for damage and loss they contend they incurred in the course of the tenancy due to the landlords’ breach of the residential tenancy agreement in allegedly failing to pass possession of the premises to them at that time reasonably clean and in a state fit for habitation. The total damage and loss the tenants contend they suffered as a result of these breaches and for which they seek to be compensated is $2,136.00. This application was made to the Tribunal on 16 February 2021 (the application).

2. For the reasons set out following the Tribunal is satisfied that the rent was excessive during three overlapping period from the start of the tenancy on 15 August 2020 up to its end on 26 March 2021 due to the withdrawal of keys, a back fence and car park rom the residential premises. Excessive rent orders have been made with respect to the relevant periods and, because all rent was paid by the tenants up to the end of the tenancy, a money order has been made which requires the landlords to repay the tenants the rent they had paid which is in excess of these orders, which is $2,685.70. The tenants’ compensation claims have each been dismissed on the basis that they were made outside the time period permitted by the RT Act and Residential Tenancies Regulation 2019 (RT Regulation), and there are insufficient grounds to justify the exercise of the discretion to extend the time in which the application may be made with respect these claims under section 41 of the Civil and Administrative Tribunal Act 2013 (NCAT Act).

Procedural History

3. The application was first listed for hearing by telephone in a Group List for Conciliation and Hearing on 9 March 2021 in accordance with NCAT’s COVID-19 revised hearing procedure. Ms Mazengarb and Mr McLeod both attended that listing of the application in person. Ms Johnston, Property Manager attended on behalf of the landlord. In accordance with the Tribunal’s usual practice where both parties are present in person the Tribunal, differently constituted, attempted to assist the parties to resolve the dispute cooperatively by conciliation. Those efforts were not successful. As a consequence the proceeding was adjourned to a Special Fixture Hearing.

Evidence

4. Prior to the first listing of the application the Divisional Registrar had issued directions to the tenants for the filing of the documentary evidence that they intended to rely upon at the hearing. The tenants complied with that direction and indicated at the hearing that they did not intend to file further evidence (a notation was made to this effect in the orders the Tribunal made on that occasion). At the first listing further directions were issued for the filing and exchange of the respondent’s response to the tenants’ claims. The respondents complied with those orders when they filed and served documentary evidence on 23 March 2021. Subsequent to these filings the respondent filed additional evidence on 9 April 2021 which prompted the tenants to file further evidence in reply on 4 June 2021, in effect one working day prior to the hearing. The tenants’ final filing was the subject to objection by the landlords’ agent, which resulted in the tenants objecting to the filing of the landlord’s second bundle. The tenants’ first bundle was marked Exhibit A1 and the landlord’s first bundle Exhibit R1.

5. Having heard the objections to the further evidence filed I determined to allow both parties to rely upon the later evidence filed only to the extent that it relates to the issue of whether a car was capable of being parked in the back yard of the premises. That was the sole subject of the landlords’ second bundle, which was marked Exhibit R2. That material had been filed and served more than a month prior to the hearing. No leave had been granted for the filing of this additional material, but it could not be said that it took the tenants by surprise at the hearing in circumstances where they had it a month in advance. I am also satisfied that the particular evidence that is included in the landlords’ second bundle was not available to them before the compliance date for the filing of their evidence.

6. The tenants’ second filing traversed the car park issue and other subjects. I have therefore admitted into evidence only pages 157 and 165 to 167 of these documents and marked them Exhibit A2. The tenants are entitled to rely upon this material in reply to the landlords’ second bundle, even if it was filed very close to the hearing. This material excerpted from what surrounds is not voluminous and is capable of being fairly dealt with by the landlords’ agent at the hearing. There is no satisfactory explanation for the late filing and service of the remainder of the tenants’ bundle. It transverses a number of issues and its contents take the landlords’ agent by surprise. The landlords have not had a fair opportunity to consider and deal with that material prior to the hearing.

7. Both tenants attended the Special Fixture hearing by telephone. The landlords were represented at the hearing by Mr Ramsey Batchon, the landlords’ Managing Agent. Each gave oral evidence under an obligation imposed by section 71 of the NCAT Act to tell the truth. The parties had the opportunity to present their respective cases, to ask each other questions, and to make final submissions to the Tribunal.

Background facts

8. The dispute arises from a residential tenancy agreement that was made on 11 August 2020. It was a fixed term agreement of 12 months duration which was expressed to commence on 15 August 2020 and end on 14 August 2021. The rent payable under the agreement was $2,389.88 per calendar month. The number of approved occupants was four – the tenants lived at the property with their two children. At the start of the tenancy the tenants provided the landlords with a rental bond of $2,200.00. That bond has been repaid to the tenants in full and does not feature in the dispute that is before the Tribunal for determination.

9. The residential premises is an older-style free-standing house on a block with front and back lawns in Greenwich. The residence has three bedrooms, one bathroom, another toilet, and separate kitchen, laundry, sunroom, and living and dining areas. It does not appear to be in issue that the fabric of the premises is in poor condition. It appears that it is the landlords’ intention in the foreseeable future to develop the site.

10. The residential tenancy agreement was terminated and the tenants returned possession of the premises to the landlords on 26 March 2021 pursuant to a termination notice the tenants served on the landlords which is dated 11 February 2021. The termination notice provides as grounds for termination breach of the agreement by the landlord and contravention by the landlord of the information disclosure provisions under section 26 of the RT Act. The landlords (at least ultimately, if not initially) did not resist the termination notice and did not pursue the tenants for any break fee associated with the early termination of the fixed term agreement.

11. It was submitted by the landlords’ agent, Mr Batchon, in argument that the landlords’ decision not to pursue the tenants for a break fee ‘settled’ the dispute between the tenants and the landlords in relation to all issues in dispute, or in the alternative, that this fact ought to be taken into account by the Tribunal in determining if the tenants were entitled to the remedies they claim in this application.

12. The tenants denied ever ‘settling’ their claims with the landlord on the basis that no break fee would be pursued, and there is no objective or surrounding evidence that would lend credence to the contention that they did. That may have been the subjective intention of the landlords but if so I am satisfied that it was unilateral conduct that did not create any equitable agreement that would prevent the tenants from pursuing the claims made in this application.

13. As to whether the Tribunal ought to take the landlord’s decision not to pursue a break fee into account in determining if the tenants are entitled to the remedies sought in their application, that submission pre-supposes the landlords would have been entitled to a break fee in the circumstances. That is not an issue that falls for determination in the context of these proceedings because there is no related claim by the landlords for a break fee under consideration. However, I observe that the termination notice the tenants served on the landlords would appear to satisfy the requirements for a section 98 termination notice based on breach of the residential tenancy agreement, and no application was made to the Tribunal by the landlords under sections 98(4) or 111 of the RT Act to dispute that notice. That being the case the residential tenancy agreement terminated in accordance with that termination notice: section 81(2) of the RT Act.

14. A break fee is a landlord’s remedy for the abandonment of premises by a tenant (that is, where possession is returned for an impermissible reason): section 107 of the RT Act. Premises are not abandoned where the residential tenancy agreement is terminated for a permissible reason as it appears to have been in this case. It is therefore not appropriate for the Tribunal to take the landlords’ decision not to pursue a break fee into consideration in determining the tenants’ entitlement to the remedies they pursue in this proceeding.

Excessive rent claims

15. The tenants contend that the rent was excessive during three overlapping periods on the following bases:

1. The failure of the landlords to provide keys to locks to the kitchen, laundry and bathroom windows, and front and back security screen doors. The tenants claim rent was excessive by $50.00 per week due to the landlord’s failure to provide these facilities.

2. The failure of the landlords to provide a secure back fence to the rear of the property from the commencement of the tenancy on 15 August 2020 up to the date a fence was installed which was 19 February 2021. The tenants claim rent was excessive by $50.00 per week due to the landlord’s failure to provide this facility;

3. The failure of the landlords to provide a secure car park at the rear of the property from the commencement of the tenancy on 15 August 2020 to the date they returned possession on 26 March 2021. The tenants claim rent was excessive by $80.00 per week due to the landlord’s failure to provide this facility.

16. As a consequence of these overlapping periods the Tribunal is, in effect, asked to make excessive rent orders in the following terms:

1. The rent was excessive by $180 dollars per week and should not have exceeded $370.00 per week for the period 15 August 2020 to 7 December 2020 due to the landlords’ withdrawal of the car park, back fence and keys;

2. The rent was excessive by $130.00 per week and should not have exceeded $420.00 per week for the period 8 December 2020 to 19 February 2021 due to the landlords’ continued withdrawal of the back fence and car park;

3. The rent was excessive by $80.00 per week and should not have exceeded $470.00 per week for the period 20 February 2021 to 26 March 2021 due to the landlords’ continued withdrawal of the car park.

17. There was an issue at the hearing as to whether the rent payable under the agreement, which was $550.00 per week at the material time, was a market rent. The significance of this is that the Tribunal would need to factor in any under market amount not paid in its determination of whether rent was excessive if it found there was a withdrawal or reduction by the landlords of goods, services or facilities provided with the residential premises.

18. Neither party has filed any evidence of rental listings for comparable properties in the locality or a similar locality to the rented premises. Consideration of this issue is therefore limited to the oral evidence and submissions of the parties.

19. It may be accepted that $550.00 per week is, prima facie, a cheap rent for a three bedroom property in Greenwich. However, to determine if it was cheap in fact it is necessary to consider the overall condition of the premises. In this respect is not in issue that the premises is in generally poor condition with extensive wood rot throughout. The advertising of the property to which the tenants responded states that it had been recently freshly painted and had new carpets, but the landlords’ agent now accepts that this advertising was false. The interior and exterior paintwork and carpets are in old dilapidated condition. The photographic evidence of the tenants illustrating the overall dilapidation of the premises is compelling. The tenants entered into the residential tenancy agreement following a period where the premises was advertised for rent on the open rental market for an extended period. It is not entirely clear on the evidence what the original listed rental price was but it may be inferred on a normative basis that if the property was not originally listed at $550.00 per week, that was the best rental price the landlords were able to achieve. On these bases I am satisfied that t was a market rent at the material times for this dispute.

Alleged withdrawal of car park

20. The tenants contend that the property was advertised as having off street parking via rear lane access and that as a consequence such a facility was incorporated into the residential premises that was subject to the residential tenancy agreement. In support of that contention they have submitted into evidence a copy of the on line advertising of the premises to which they responded. It relevantly states, apparently with reference to the back yard of the premises: “[f]enced – off street parking via rear lane access”.

21. The tenants contend that, in reality, there was no off street parking provided under the agreement because the designated parking area was inaccessible due to the presence of a ground down tree stump and mound of earth in the designated parking area of the back yard. They have submitted into evidence a series of photographs which depict the mound and tree stump.

22. The photographs that have been submitted by both parties depict a somewhat makeshift access route to the back yard from the rear lane. A rough cement ramp has been installed in the gutter and a short, steep-ish, rough concrete ramp connects the street to the perimeter of the back yard across the nature strip. It is not known who has installed these ramps or if they comply with any relevant local government regulations. The area of the back yard where the disputed car park is located is partly constituted by a subsiding, dilapidated paved pathway and partly by a grassed area. Immediately at the top of the cement ramp there is a grassed mound that appears approximately 30cm in height. The tenants submit, and this does not appear to be in dispute, that this mound was constituted by building rubble, tree roots and earth.

23. The condition of the designated car park area is not really in dispute between the parties. The dispute is in relation to whether a car could be parked in this area or not, despite the mound of earth and stump. In this respect the landlords contend that the area was reasonably accessible and a car could have been parked there, and was under the previous tenancy. The landlords contend that before the residential tenancy agreement was signed the tenants were invited to test if the car parking area was accessible to their motor vehicle. The tenants vehemently deny this and claim that they relied upon the representations of the landlords’ agent at their viewings that the car parking area was accessible.

24. On or about 19 February 2021 the landlords installed a rear fence to the property (see following). In order to install the fence the mound of soil and stump had to be levelled in order to allow the fence gate to open. The landlords rely on photographs of a Property Manager’s motor vehicle parked in the back yard after that time to prove that the area was accessible. The landlords also rely upon photographs of heavy vehicle tyre tracks from the edge of the road up to the back of the premises taken after that date which they contend also establish that the back yard area was accessible to motor vehicles.

25. The tenants contend that the heavy vehicle tyre marks are those of their removalist’s truck which was able to be backed into the back yard for easier removal of their goods, but later became bogged in the area where the earth mound had been removed for the installation of the fence. The photographs in evidence are consistent with this contention.

26. There is no dispute that the residential premises incorporated “off street parking”. Nothing in the advertising of the premises for rent suggested that this facility would only be available for a sub-set of vehicles with high undercarriages or 4 wheel drive capacity. The tenants were entitled to think that the off-street parking facility would be accessible to ordinary domestic vehicles.

27. I am satisfied that it was not. Until on or about 26 February 2021 there was a mound of earth, constituted by building materials, roots and earth which prevented the use of the designated car parking area by the tenants’ ordinary domestic vehicle. After on or about that date the mound was removed, but this resulted in a mud flat that was likely to result in bogging of a motor vehicle, and which did bog the tenants’ removalist. This area was clearly not suitable for parking a domestic vehicle even after the mound was removed.

20. On the basis of these factual findings I conclude as a matter of law that the designated car park provided with the residential premises under the residential tenancy agreement was constructively withdrawn from the tenants by the landlords over the whole period of the tenancy.

21. The final issue to be considered is by what amount, if any, rent was excessive due to the withdrawal of the car park. The tenants contend that the rent was excessive by $80.00 per week, or by approximately 14.5% of the rent payable. The landlords’ submission was that the car park was not withdrawn and that no rent reduction is therefore applicable.

22. Neither party has filed any objective evidence (such as evidence of car park rents in the locality, or rents for similar premises in the locality which do not have car parks). However, it must be accepted that a car park has substantial value as a factor of the performance interest/consideration in return for which rent is paid. It affords convenience in daily living and at least partial security for a valuable asset. The withdrawal of such a facility therefore reduced the value of the tenants’ possession of the premises relative to the rent they paid.

23. Nevertheless, the car park is only one component of the totality of goods, services and facilities the tenants received as the rented premises. Any reduction in rent allowed in relation to the car park must therefore be proportionate to the loss of that facility considered in the context of the totality of the rented premises. In this case this was a three bedroom home with several other rooms and a front and back yard (see above).

24. Weighing these considerations in the balance I am satisfied that rent was excessive by $50.00 per week (or 9%) due to the withdrawal of the car park over the whole period of the tenancy from 15 August 2020 to 26 March 2021.

Alleged withdrawal of keys

33. When the tenants signed the residential tenancy agreement they also signed a key register which incorporated a photograph of the four keys that were handed over. They are a front and back door key to those primary doors (not the associated front and back screen doors) and two of the same window key which operated the window locks in bedrooms 1, 2 and 3. The tenants were not provided with any additional keys to the kitchen, laundry or bathroom windows or to the security screens doors at the front and back.

34. In the course of the hearing I was taken by both parties to various email communications where the tenants appear to communicate different things to the landlords’ agent about the number of windows and doors to which they do not have keys (in particular an email dated 7 September 2020 where the tenants appear to say that it is only the kitchen windows that don’t open, and an email dated 1 October 2021 where they state that it is 75% of the windows that don’t work). The inference I was asked to draw from these apparently inconsistent emails is that the tenants’ evidence in relation to this element of the claim is exaggerated and unreliable.

35. However, these communications must be considered in context of the totality of the email and other communications that passed between the parties concerning this element of the dispute. In this respect I am satisfied that by 17 September 2021 the landlords’ agent could have been under no doubt, following persistent complaints by the tenants about their inability to open windows or lock screen doors up to that point, that the tenants did not have keys to the kitchen, laundry or bathroom windows or to the security screen doors at the front and back of the premises (see Ms Mazengarb’s email to Nicole Johnson dated 17 September 2021 at page 51 of Exhibit A1). Equally decisive of the issue is the work the landlords’ locksmith actually carried on 7 December 2020 which was to remove and rekey a chain window lock, “group keyed alike window locks” (apparently indicating a multiple), rear security screen door lock, and front security screen door lock (see page 38 of Exhibit R1). That work would not have been necessary if the tenants already had these keys.

36. The tenants contend that their inability to open the kitchen, laundry and bathroom windows or lock the security screen doors had a serious negative impact on their ability to ventilate the premises and therefore on their comfort and amenity. They contend they were unable to allow steam to evacuate from the bathroom, to remove cooking smells from the kitchen or otherwise to cool and refresh the house. The landlords’ representative put to the tenants in argument that the screen doors were functional even if they could not be locked. However, in reply, the tenants contended that they could not leave open the primary front and rear doors for security reasons, including out of a concern that their children might open the screen doors and walk out unnoticed.

37. Ultimately, there can be no doubt that the ability of the tenants to use the windows of the kitchen, laundry, and bathroom to ventilate the premises was withdrawn by the landlords from 15 August 2020 to 7 December 2021 because the landlords failed to provide the tenants with keys to these locks. There can also be no doubt that that the tenants ability to use the front and back screen doors to ventilate the premises was significantly reduced by the landlords from 15 August 2020 to 7 December 2021 because the landlords failed to provide the tenants with keys to these doors which would enable them to be locked. They could therefore only be in use when they could be closely monitored.

38. The tenants contend that the rent was excessive by $50.00 per week due to the withdrawal of the keys to the kitchen, bathroom, and laundry windows and front and back security doors. The landlords’ submission is to the effect that no rent reduction is applicable. I have set out above in relation to the car park the analysis used to determine if rent was excessive and if so by what amount, due to the withdrawal of a facility.

39. The landlords’ submission, in effect, that these keys had no value relative to the rent the tenants paid under their residential tenancy agreement cannot be accepted. The failure to provide these keys plainly had a negative impact on the tenants’ ability to ventilate the premises and as a consequence, their comfort and amenity. With respect to the security screen doors, it additionally had a serious negative impact in terms of the security of the premises.

40. The tenants’ inability to open the kitchen, laundry and bathroom windows, and lock the security screen doors has to be considered as part of the totality of goods, services and facilities provided with the premises, and any reduction in rent awarded by the Tribunal must be proportionate to the value of these facilities relative to that totality. Weighing the relevant considerations in the balance I have determined that the rent was excessive by $25.00 per week (or 4.5%) due to the withdrawal these keys for the period 15 August 2020 to 7 December 2020.

Alleged withdrawal of rear fence and associated reduction in use and amenity of back yard

41. It is not in issue that in the pre-contract period the tenants requested and the landlords agreed to install a rear fence to the property which would enclose the backyard. The tenants contended that they made this request because they had two children who would be living at the premises with them who they wanted to have safe use of the backyard as a play area. They wanted to avoid the risk of strangers entering the back yard from the rear lane and their children wandering off from the back yard into the back lane.

42. It is clear on the evidence that it was agreed between the tenants and landlords that the back fence was to be installed before or shortly after the start date of the tenancy on 15 August 2021. As the provision of that facility under the residential tenancy agreement was the subject of a concluded pre-contractual negotiation I am satisfied that it became part of the residential premises that was the subject of the residential tenancy agreement. In fact, the back fence was not installed until 19 February 2021, more than 6 months after the start of the agreement. The landlords claim that the delay in installation was caused by their fencing contractor, but beyond that there is no explanation for the delay.

43. On the basis of these factual findings I conclude as a matter of law that the rear fence provided with the residential premises under the residential tenancy agreement was constructively withdrawn from the tenants by the landlords from the start of the tenancy on 15 August 2021 up to the date its installation was completed on 19 February 2021.

44. I am satisfied that the withdrawal of the fence had a significant impact on the comfort, privacy and amenity of the premises. The tenants could not allow their children to play in the back yard unsupervised and there was a reduction in security of the premises overall arising from the absence of a secure perimeter fence. Anyone present in the rear lane could see into the back yard and the rear of the dwelling.

45. The tenants contend that the rent was excessive by $50.00 per week due to the withdrawal of the rear fence. The landlords’ submission is to the effect that no rent reduction is applicable in relation to the back fence. I have set out above in relation to the car park the analysis used to determine if rent was excessive and if so by what amount, due to the withdrawal of a facility.

46. The landlords’ submission, in effect, that the fence has no value relative to the rent the tenants paid under their residential tenancy agreement cannot be accepted. The absence of a fence plainly had a negative impact on the security of the premises, the tenants’ privacy, and the amenity with which the back yard could be used. In this respect, the landlords know that they were leasing the premises to a family with young children and that a secure play space was an important priority to the tenants.

47. On the other hand the rear fence and the security of the back yard has to be considered as part of the totality of goods, services and facilities provided with the premises, and any reduction in rent awarded by the Tribunal must be proportionate to the value of that facility relative to that totality.

48. Weighing the relevant considerations in the balance I have determined that the rent was excessive by $25.00 per week (or 4.5%) due to the withdrawal of the back fence for the period 15 August 2020 to 19 February 2021.

Compensation claims

49. The tenants claim compensation from the landlords in relation to the following alleged heads of damage:

1. $480.00 for the replacement of a vandalised car windscreen which they contend resulted from them not being able to park their car in a secure car park. The windscreen was replaced on or about 21 October 2020;

2. $885.00 for the repair of tree damage to their motor vehicle which occurred on or about 26 September 2020, which they contend resulted from them not being able to park their car in a secure car park. The amount claimed is the insurance excess they claim to have paid for this repair;

3. $359.00 for the replacement of a dining table they contend was damaged by steam exhaust from the bathroom because the bathroom could not be ventilated due to the alleged failure by the landlord to provide a key to the bathroom window. The alleged failure to provide the key to the bathroom crystalized when possession passed to the tenants on 15 August 2020. The tenants first (at least written) complaint about damage to the dining table is found in an email to the landlord’s agent dated 1 October 2020.

4. $412.00 for the cost of cleaning the carpet at the start of the tenancy, which the tenants contend resulted from the landlords’ failure to pass possession of the premises to them reasonably clean. The invoice upon which this element of the claim is based is dated 19 August 2020.

50. In order to succeed in relation to each of these claims it is necessary for the tenants to establish that the landlords breached an obligation that they had to them under the residential tenancy agreement which resulted in them incurring the damage and loss they contend for on a reasonably foreseeable basis. It would appear that the landlord obligations that are engaged by these claims are the obligation to pass possession of the premises to the tenant reasonably clean and in a state fit for habitation (sections 52(1) and 52(1)(A)(c) of the RT Act).

51. However, the threshold difficulty for the tenants is that an application in relation to an alleged breach of the residential tenancy agreement must be made to the Tribunal within three months of the applicant becoming aware of the alleged breach: section 190(1) of the RT Act and Regulation 39(9) of the RT Regulation. In this case, as noted above, the tenants application was made on 16 February 2021, which was 6 months and 1 day after they took possession of the premises at which time they may be taken to have become aware of the landlords’ failure to provide a key to the bathroom, to clean the carpet, and provide a secure car space. It was also 3 months and 46 days after they became aware of the alleged steam damage to the table, 3 months and 26 days after their car windscreen was vandalised, and 4 months and 31 days after their car was damaged by a falling tree.

52. Each of the tenants’ compensation claims are therefore out-of-time. In this respect I note that while it is arguable that the underlying alleged landlord breaches in failing to provide a secure car park and keys to all windows was continuing conduct up to 26 March 2021 and 7 December 2020 respectively (see discussion in relation to rent reduction), for the purpose of the tenants compensation claims time runs from the date the actual loss asserted above was incurred. That is because the tenants’ compensation claim is limited to the actual loss they contend for, rather than loss of performance interest/consideration relative to the rent they paid. The tenants have succeeded in obtaining orders reducing the rent payable for the premises in relation to their complaints about the car park and keys. They cannot be compensated for the same wrong twice in relation to the performance interest/consideration they paid in return for possession of the premises.

53. The Tribunal has discretion pursuant to section 41 of the NCAT Act to extend the time in which an application may be made to the Tribunal under section 190(1) of the RT Act. That discretion is unfettered but it must be exercised judicially having regard to established legal principle. In short summary, time limits are to be strictly enforced unless to do so would work an injustice to an applicant. The relevant considerations are the length of the delay, the applicant’s explanation for the delay, whether the respondent would suffer prejudice if time were to be extended, and the merit of the applicant’s claim. If the delay is relatively short the applicant is required to establish that their claim is fairly arguable. It the delay is extensive, it is necessary for the applicant to establish that their claim has substantial merit: see generally Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22.

54. In the course of the hearing the parties were invited to make submissions on the issue of whether time should be extended to enable the tenants to pursue each or any of their compensation claims. The tenants submitted that time should be extended in each case. The landlord submitted it should not. Their respective reasons will be referred to in outline in the consideration of the issue that follows.

55. The RT Act establishes a regime for dispute resolution between, relevantly, a landlord and tenant that fixes relatively short time frames for the doing of things. It may reasonably be inferred from this regime that Parliament intended that such disputes be raised and determined in temporal proximity to the events that gave rise to the dispute. It is against this legislative scheme that any delay in the doing of things is to be considered, as distinct from other legislative schemes that may provide much longer periods for the doing of things.

56. In this case the length of the delay in the application being made is significant in each case, being a period of between 3 months and 1 day and 26 days. This delay weighs against the exercise of the discretion to extend time.

57. The tenants were not able to offer any reasonable explanation for their delay in bringing the application. They referred to ongoing correspondence with the landlord’s agent in relation to these issues and to the hope that they had that the issues could be resolved cooperatively without an application to the Tribunal. However, having reviewed the relevant correspondence there is nothing the landlords or the landlords’ agent did or said that is capable of giving rise to a reasonable hope on the tenants’ part that they would be satisfied in relation to their compensation claims. It is clear that the landlords rejected liability for any of these claims from the outset. The landlords did not act in any misleading or deceptive way that had the effect of ‘stringing the tenants along’ in the expectation that their claims would be satisfied.

58. The tenants also submitted that they were unaware of the applicable time limits until the issue was raised with them by the Tribunal. Ignorance of the law is not a reasonable explanation for the delay in the circumstances of this case. It is not submitted that the tenants lacked capacity, or that they were subject to any disability or social disadvantage which prevented or inhibited them from ascertaining their legal rights and any limitations that pertained to their exercise.

59. The absence of a reasonable explanation for the delay weighs against the exercise of discretion to extend time.

60. Leaving aside the forensic advantage to the landlords that is associated with the strict enforcement of the applicable time limit, I cannot see that there would be any relevant disadvantage to the landlords should time be extended to allow the tenants to pursue their compensation claims. Despite the claims being out of time, the events they arise from remain relatively recent, and the landlord’s Managing Agent who dealt with the events at the time remains available to respond to them now. This weighs in favour of an extension of time being granted.

61. In relation to the claim for compensation for cleaning costs, it appears to me on a prima facie basis, that this element of the tenants’ compensation claims has substantial merit. It is based on an allegation that the landlords failed to pass possession of the premises to the tenants with the carpets reasonably clean. There is contemporaneous email correspondence and associated photographs in evidence which appear capable of establishing that fact. The substantial merit of this element of the claim weighs in favour of an extension of time being granted. Of course, substantial merit does not necessarily mean the claim is bound to succeed. In this case, the landlords have an arguable defence based on email communications that passed between Ms Mazengarb and the landlords’ agent that the tenants voluntarily assumed responsibility to clean the carpets and waived any right to recover the costs of doing so from the landlords.

62. In relation to the tenants’ compensation claim for the replacement of their dining table it appears to me on a prima facie basis that this claim is barely arguable. It is likely to fail in relation to causation; that is, even if the tenants establish that the landlords failed to provide a key to the bathroom window, it would remain for them to establish a causal connection between that circumstance and any change in the condition of the table. They contend this was as a result of water vapour expelled from the bathroom which could not escape through the window. There is no expert or other satisfactory independent evidence which would establish that causal effect. Even if that issue could be resolved in the tenants favour, this element of the claim would likely fail on the basis that the tenants did not take reasonable steps to mitigate their loss by either moving the table out of harms’ way, or covering it with a water resistant cover, or keeping the bathroom door closed. The prima facie lack of merit in this element of the claim weighs against time being extended.

50. In relation to both of the motor vehicle repair claims it may be accepted that the tenants have an arguable case; that is, it is open to argument that this damage would not have been incurred had they been able to securely park their motor vehicle at the rear of the property in a designated car park rather than on the street and under a tree. However, while these elements of the claim are arguable I cannot see, on a prima facie basis, that they have substantial merit because, even if they have some theoretical relationship to a an alleged breach of the agreement by the landlord (being the failure to pass vacant possession of a secure car park in a state fit for habitation), I am not satisfied that they are a reasonably foreseeable consequence of the breach.

51. The damage to the windscreen was the result of unlawful, malicious damage by strangers. There is nothing in the evidence that would allow me to conclude that this sort of behaviour was foreseeable by the parties either on the basis that it was in their contemplation when the residential tenancy agreement was made or on the basis that it arises naturally from the alleged landlords’ breach of the agreement. On a normative basis parties to a residential tenancy agreement do not foresee that they may be victims of criminal conduct in relation to the residential premises.

52. Similarly, the damage to the motor vehicle caused by a falling tree during a storm is accidental damage that would not reasonably have been in the contemplation of the parties when the residential tenancy agreement was made and nor does it arise naturally from the landlords’ alleged breach of the agreement. Further to this, the claim is based upon an insurance excess which is even more remote from the breach alleged and unlike the tenants’ windscreen claim there is no actual evidence of loss in terms of an excess paid.

53. The lack of prima facie substantial merit in relation to these elements of the claim weighs against time being extended.

54. Weighing the relevant considerations in the balance I am not satisfied that it would work an injustice to the tenants if the time limit for making an application to the Tribunal in relation to the landlords’ alleged breaches of the residential tenancy agreement is strictly enforced. The length of the delay and the absence of any reasonable explanation for the delay outweigh any merit the tenants’ compensation claims may have and the absence of any prejudice to the landlord if time were to be extended.

55. The tenants’ compensation claims must therefore be dismissed.

Conclusion

69. For the foregoing reasons, the landlords must pay the tenants the sum of $2,685.70 immediately. The application is otherwise dismissed.

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: 20 August 2021