Murphy v Lewkovitz; Lewkovitz v Murphy
[2021] NSWDC 361
•11 July 2021
District Court
New South Wales
- Amendment notes
Medium Neutral Citation: Murphy v Lewkovitz; Lewkovitz v Murphy [2021] NSWDC 361 Hearing dates: 08, 09, 10 and 11 February 2021
Plaintiff’s written submissions: 1 March 2021
Defendant’s written submissions: 17 March 2021
Plaintiff’s written submissions in reply: 26 March 2021
Plaintiff’s supplementary submissions: 8 June 2021
Defendants’ supplementary submissions: 8 June 2021Date of orders: 11 July 2021 Decision date: 11 July 2021 Jurisdiction: Civil Before: Hatzistergos AM DCJ Decision: See [329]
Catchwords: CONTRACT –– Contractual breaches by reason of sections 52 and 63 of the Residential Tenancies Act 2010 (NSW) established – Requirement of fitness for habitation at the commencement of the tenancy agreement and landlord’s duty to repair – Consideration of whether a breach section 26 of the Residential Tenancies Act 2010 (NSW) can give rise to a claim for breach of statutory duty – Unnecessary to resolve claims under section 26 of the Residential Tenancies Act 2010 (NSW) and section 30 of the Australian Consumer Law
TORT –– Breach of common law duty of care – Breach by landlord to tenant established where the risk of harm of sustaining loss by water damage and mould due to structural defects in the dwelling
EVIDENCE –– Unexplained failure to call witness does not lead to adverse inference where proof otherwise made out – drawing of inferences where witnesses’ evidence not accepted – consideration of Kuligowski v Metrobus
DAMAGES –– Quantification of damages where chattels not remediable – Quantification of damages where remediable repairs have not been carried out
CROSS-CLAIM –– Contractual claim for rental arrears made out – Claim of absence of consideration based on breach of agreement not established – Other potential remedies not advanced.
Legislation Cited: Australian Consumer Law, ss 20, 30, 236
Civil and Administrative Tribunal Act 2013 (NSW), Clause 8 Schedule 4
Civil Liability Act 2002 (NSW), ss 5B, 5C, 90
Evidence Act 1995 (NSW), ss 136, 164
Residential Tenancies Act 2010 (NSW), ss 26, 43, 52, 63
Residential Tenancies Amendment (Review) Act 2018 (NSW), clauses 3, 25
Residential Tenancies Regulation 2019 (NSW), clause 7
Residential Tenancy Act 1995 (SA), s 68
Uniform Civil Procedure Rules 2005 (NSW), rr 31.23, 31.27
Cases Cited: Ahluwalia & Ors v Robinson [2003] NSWCA 175
Aldred v Stelcad Pty Ltd [2015] NSWCA 201
Bannister v Cheung [2014] NSWCATCD 105
Bartley and Zawiolkowski v Harris Park Holdings Pty Ltd [2010] NSWCTT 592
Bole v Huntsbuild Ltd [2010] All ER (D); [2009] EWCA Civ 1146
Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64
D’Ambrosio v Tyler [2009] ACAT 33
Dasreef Pty Ltd v Hawchar [2011] HCA 21; (2011) 243 CLR 588
De Solei v Palmhide Pty Limited [2010] NSWCTTT 464
Dennis v Brownlee [1964] NSWR 544; (1963) 9 LGRA 415; [1963] SR (NSW) 719
Doe d Murray, Lord Bishop of Rochester v Bridges (1831) 1 B & Ad 847; (1831)109 ER 1001 at 859 (B & Ad)
Ermel v DuluxGroup (Aust) Pty Ltd (No 2) [2015] FCA 17
Fazio v Fazio [2012] WASCA 72
Fin v Finato [2004] NSWCTT 179
FT Eastment & Sons Pty Ltd v McLeish (1970) 91 WN (NSW) 268
Goodhue v Volunteer Marine Rescue Association Incorporated [2015] QCA 234
Gray v Queensland Housing Commission [2004] QSC 276
Hampel v South Australian Housing Trust [2007] SADC 64
Hoblos v Alexakis [2021] NSWCA 126
Jones v Bartlett (2000) 205 CLR 166; (2000) 176 ALR 137; (2000) 75 ALJR
Kuligowski v Metrobus (2004) 220 CLR 363; (2004) 208 ALR 1; (2004) 78 ALJR 1031; [2004] HCA 34
Lewin v Zhou [2018] NSWCATCD 54
Libra Collaroy Pty Ltd v Bhide [2017] NSWCA 196
Loose Fit Pty Ltd v Marshbaum [2011] NSWCA 372
Makita v Sprowles (2001) 52 NSWLR 705
March v E & MH Stramare Pty Ltd (1991) 171 CLR 506
Nelson-Hauer v Calman (1954) 73 WN (NSW) 449
New South Wales Department of Housing v Hume bhnf Donna Hume & Anor (2007) Australian Tort Reports 81-879; [2007] NSWCA 69
Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; (1997) 188 CLR 313; (1997) 146 ALR 572; (1997) 71 ALJR 1428
O’Brien v Roberts [2012] NSWCTTT 372
Proudfoot v Hart (1890) 25 QBD 42
Rendlesham Estates plc v Barr Ltd [2014] EWHC 3968
Rhesa Shipping CO SA v Edmunds [1985] 1 WLR 948 at 955; [1985] 2 All ER 712
Roberts v Bell [2001] NSWRT 6
Roberts v NSW Aboriginal Housing Office [2017] NSWCATAP 9
Sakoua & Anor v Williams (2005) 64 NSWLR 588; [2005] NSWCA 405
Summers v Salford Corporation [1943] AC 283
Summers v Salford Corporation [1943] AC 283
Tito v Wadell (No 2) [1977] CH 106
Varricchio v Wentzel (2016) 125 SASR 191
Texts Cited: Allan Anforth, Peter Christensen, Christopher Adkins, Residential Tenancies Law and Practice New South Wales (Federation Press, 7th ed, 2017)
McGregor on Damages by James Edelman, revised by Simon Colton and Jason Varuhas (2021) 21st Edition
Category: Principal judgment Parties: Christopher Murphy (Plaintiff/Cross Defendant)
George Lewkovitz and Ilana Lewkovitz (Defendants/Cross Claimant’s)Representation: Counsel:
Solicitors:
Mr D Hand (Plaintiff/Cross Defendant)
Mr A Maroya (Defendant/ Cross Claimant)
Kalantzis Lawyers (Plaintiff/Cross Defendant)
Allsop Glover Lawyers (Defendant/ Cross Claimant)
File Number(s): 2017/00327881
Judgment
Witnesses
Proceedings
The Facts
Dr Lewkovitz’s Letter dated 6 April 1990 to Woollahra Council as to Rising Damp
Tenancy of Donald and Christina Graham
Plaintiff’s Tenancy
Leather Jackets
Further Water Penetration
Mould in March 2017
Zenith
Mould Rescue
MouldLab
Prime Restorations
Stuart Skeoch
Tall Ideas Pty Ltd
NCAT Proceedings, Tenancy Termination, Property Renovation and Sale
Ray Fakhoury
PLAINTIFF’S CLAIM
Did the Defendants comply with s 52 of the 2010 Act at the commencement of the tenancy?
The Issue
Plaintiff’s Submissions
Defendant’s Submissions
Consideration
Did the Defendants comply with section 63 of the 2010 Act?
The Issue
Plaintiff’s submissions
Defendant’s Submissions
Consideration
Did the Defendants contravene section 26 of the 2010 Act?
The Issue
Plaintiff’s Submissions
Defendant’s Submissions
Consideration
Common Law Duty
Duty of Care
Breach of Duty
The existence of dangerous and patent defects
Consideration
The Defendants knew, or should have known, about the defects
Failure of the Defendants to take reasonable steps to repair the defects or otherwise to prevent the harm from occurring
Section 30 of the ACL
The Issue
Plaintiff’s Submissions
Defendant’s Submissions
Consideration
Causation
DAMAGES
Destroyed Items
Defendants’ Submissions
Plaintiff’s Submissions in Reply
Consideration
Other Expenses
Items for Mould Remediation
Consideration
Artworks
Plaintiff’s Submissions
Defendant’s Submissions
Consideration
CROSS CLAIM
ORDERS
Judgment
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These proceedings relate to a claim brought by the Plaintiff tenant (Christopher Murphy) against the First and Second Defendants (George and Ilana Lewkovitz) landlords, for damage occasioned to his property by mould during his occupation of the tenanted residential premises at 8 Rivers Street, Bellevue Hill in the State of New South Wales (the property). [1]
1. Statement of Claim at [16].
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The Defendants have in turn cross claimed an amount of $41,393.61 for unpaid rent for the period of 5 April 2017 to 21 July 2017. [2] The Plaintiff contended that he was not under any obligation to pay the said rent in circumstances where the Defendants had breached the terms of a tenancy agreement by providing premises that were not in:
A reasonable state of cleanliness and fit for habitation; and
In a reasonable state of repairs such that it remained fit for habitation. [3]
2. First Cross Claim filed 6 June 2018.
3. Defence to Cross claim at [5(c)] and [8(b)].
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Alternatively, the Plaintiff sought a set off from the amounts claimed by him. [4]
4. Defence to Cross Claim at [5(d)].
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The Plaintiff’s claim pleaded:
Breaches of section 52 and 63 of the Residential Tenancies Act 2010 (NSW) (the 2010 Act); [5]
Breach of section 26 of the 2010 Act; [6]
Breach of the common law duty of care; [7] and
Breach of sections 20 and 30 of the Australian Consumer Law [8] (the ACL).
5. Statement of Claim at [7] and [13]
6. Statement of Claim at [25].
7. Statement of Claim at [9]-[11] and [15]-[16].
8. As adopted by the Fair Trading Act 1987 (NSW). See Statement of Claim at [17]-[23].
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In opening, the Plaintiff foreshadowed only one claim under the ACL. [9] No submissions were ultimately advanced in respect of the alleged breach of section 20 of the ACL and accordingly this matter will be considered no further.
9. T 13.5-.7 and Plaintiff’s Outline of Opening Submissions MFI 5.
Witnesses
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Apart from the respective parties, oral evidence was given by Ms Christina Graham a previous tenant of the property.
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It is apparent that the Plaintiff and Ms Graham have fallen out with the Defendants and the respective positions of each were entrenched. There were times during cross examination where I had cause to draw to the attention of witnesses a lack of responsiveness to questioning. [10]
10. T 32.11-.18 (Ms Graham), T 78.37-.46 (Plaintiff), First Defendant T 171.1-.20.
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In the circumstances, I have sought to carefully examine each witness’s evidence alongside each other and the documentary evidence.
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As will become apparent the Plaintiff relied on a number of expert reports. The Defendants did not rely on any expert evidence of their own nor take steps to require the attendance of expert witnesses relied on by the Plaintiff. The Defendant further elected not to take up a proposal to cross-examine the Plaintiff’s expert witnesses if available by telephone. [11] The Defendants advanced no objection to expert reports other than to the quantum report going to damages prepared by Mr En-Lai Chan; a loss adjuster. After being provided with some supporting receipts the Defendants withdrew that objection reserving the right to make final submissions about what were described as usual matters such as weight. [12]
11. T 7.15-.33.
12. T 107.24-.35.
Proceedings
-
The matter was heard before me on between 8 and 11 February 2021. Following discussions between the parties, I made consent orders on 11 February 2011 as to a timetable for filing of written submissions. [13] By consent, I made chamber Orders on 26 February 2021 extending the time for each party to file their written submissions. The parties indicated on 11 February 2021 that they were content to rely on written submissions except to the extent the Court may otherwise require. On 27 May 2021, the parties were invited to provide submissions as to whether the Civil Liability Act 2002 (NSW) (the 2002 Act) applied and if so, how. Both parties forwarded additional written submissions in response.
13. T 268.10-.38.
The Facts
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The Defendants were at all times the registered proprietors of the property. They had owned it for 40 years and had been residents in it for around 30 years. [14] During that time there was evidence of previous incidence of rising dampness affecting the residence.
Dr Lewkovitz’s Letter dated 6 April 1990 to Woollahra Council as to Rising Damp
14. T 250.15.
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On 6th of April 1990, the First Defendant wrote to Woollahra Municipal Council in connection with a building application that he was advancing. In that correspondence, the First Defendant stated:
“Further, the above residence has problems with damp in the south facing wall. This requires as a solution the application of an external membrane to the entire house. It is intended that this membrane be applied when the building works and the above B.A. are completed. Delays in the B.A. have resulted in continued hardship with damp penetration not being able to be resolved”. [15]
15. Exhibit A, tab 21 at p 437.
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The floor plan of the subject property was tendered. [16] The First Defendant marked on the floor plan at the bottom left hand corner side of the residence the area to which he was referring in his letter of 6 April 1990 describing this as the “southern wall”. [17]
Tenancy of Donald and Christina Graham
16. Exhibit A, tab 25 at p 617.
17. T 239.4-24.
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In about 2011, Donald and Christina Graham entered into a residential tenancy in relation to the property. Ms Graham gave evidence that at that point, the Defendants told them to “be aware that there would be mould and damp in the downstairs garage consistent with Sydney humidity.”[18] Ms Graham said that both Defendants told them not to use the single garage because of the mould problem there but to use the double garage instead. [19] Ms Graham stated that the Defendants also told them they “had to” renovate the main bedroom and the attached bathroom but offered no explanation as to why. [20] I interpret “main bedroom” as a reference to the “master bedroom” which was adjacent to the southern wall marked on the aforesaid floor plan.
18. Exhibit A, tab 15 – Affidavit of Christina Graham dated 31 August 2018 at [5].
19. T 27.1-8.
20. Exhibit A, tab 15 – Affidavit of Christina Graham dated 31 August 2018 at [5]. The Second Defendant also gave evidence of brand new cupboards being installed T 168.26-.28.
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Email correspondence between Mrs Graham and the Defendants was tendered. [21] On 7 November 2012, Ms Graham emailed the First Defendant inter alia stating:
As previously advised we have on-going humidity problems in our bedroom/walk in robe. This results in our de-humidifier taking out 20 litres of water every two days. Putting aside the additional electricity cost the inconvenience of having to do this is not acceptable. Please arrange for this problem to be fixed immediately. [22]
21. Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p220-227.
22. Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p 227.
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On or about 30 November 2012, Ms Graham stated that she had a conversation with the Second Defendant where she complained about what she perceived and observed as “constant damp and mould problem”. She stated that the Second Defendant said words to the effect of:
“I have lived here for 32 years without a damp problem in the bedroom. The soil underneath had no moisture and was sandy. My builder said there was no damp problem. It is the humidity in the air. Having to empty out damp absorption boxes once a month is hardly an onerous task”. [23]
23. Exhibit A, tab 15 - Affidavit of Christina Graham dated 31 August 2018 at [12].
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At one point, Ms Graham stated that the First Defendant acknowledged that there was a mould problem. She stated that he came over several times to the house. She showed him her bags that she had to throw out that had mould growth on them and her clothes that she had to take to the drycleaner because they had leather jackets that were full of mould. [24] She later added that “there was mould growing on everything that we owned.” [25]
24. T 26.35-.40.
25. T 27.2-.3.
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Ms Graham stated that on one occasion the First Defendant brought a builder and he stated “Look, I think there’s evidence of rising damp.” [26] In re-examination, Mrs Graham stated that after she showed the builder where the mould was and where they had to take water out the builder responded “no wonder you’ve got mould problems.” [27] Although she omitted this in her affidavit evidence she stated that it was a matter of distinct re-collection as she discussed it with her family and “they have the same recollection.” [28] She rejected the suggestion that her email indicated that the builder indicated the symptom but not the cause. [29] Ms Graham referred to the conversation with the builder as taking place during the second half of the 2 year tenancy. [30]
26. T 26.42-.45
27. T 36.41-.45.
28. T 37.20-.24.
29. T 37.48- 38.2.
30. T 27.30-.39.
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Thereafter, the First Defendant came over and Ms Graham described telling him “Look, I’ve spoken to the builder. The builder thinks its rising damp.” The First Defendant is said to have replied “That's what we were told but I think it's just Sydney living but clearly you've got a mould issue so these rechargeable will help” [31] and “Look, this is what the builder told me - that you’ve got a rising damp problem.” [32] Ms Graham stated that the First Defendant said that he would order rechargeable damp absorbers [33] and if this didn’t work, he would have to look at other ways”. [34] Ms Graham stated that these were never provided.
31. T 26.45-.48.
32. T 27.18-.25.
33. T 26.33-.48.
34. T 27.23-.25.
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Ms Graham stated that at the time they began to “escalate this mould issue” she added that she also experienced respiratory symptoms which her doctor related to the mould and ceased after they had moved out. [35]
35. T 27.47-.28.3.
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Ms Graham’s email to the Defendants dated 30 November 2012, stated as follows:
“Re the damp. We have lived in Sydney for over 20 years and have never had a damp problem like this. The de-humidifier we bought is taking out a significant amounts of water and the damp absorption boxes I bought to put in each of the wardrobes to absorb any residual damp are now full of water (after one month). I should also note that David noted evidence of rising damp outside the house and on the carpet in our wir [walk in robe] and bedroom so whilst he may not have been able to find the cause there is evidence of it. I note your comments regarding cost of his looking at this issue (for approximately less than one hour) and also note he is not a damp specialist”. [36]
36. Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p 226.
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The Second Defendant responded to Ms Graham’s email on 30 November 2012 as follows:
“We cannot find a source of moisture other than airborne. To assist I have ordered 3 rechargeable dehumidifiers for the dressing room cupboards. You have never mentioned dampness in the bedroom area until recently. We have responded accordingly. As I recall the floor is polished floorboards and not carpeted. We are not ignoring the source of problem but thus far cannot find the cause other than the usual Sydney humidity. This is a common problem and having to empty out the damp absorption boxes once a month is hardly an onerous task. We have been renting out the house for the past eight years and none of the previous tenants have complained and they did not have the brand-new walk in wardrobes installed prior to your occupancy.” [37]
37. Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p 222.
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The First Defendant could not recall the person referred to as “David” other than he recalled someone by that name who was an air conditioning consultant. He stated with reference to the email of 30 November 2012:
Q. Do you have any recollection of back in November 2012 when Christina Graham raised with you an issue about rising damp
A. No, look, I read that but quite frankly no one has ever proved rising damp. I’ve been under the house approximately once a year in 32 years for various reasons and one of the things I looked at the time - aside from dead possums, dead cats and other technical issues - was what’s the evidence of rising damp or any other ventilation problems under the house, and haven’t found any that are worth proceeding with.
Q. In answer to the question, you addressed rising damp and ventilation.
A. Yes.
Q. Do you say that you yourself carried out inspections of the subfloor area as to whether or not it was properly ventilated?
A. Yes.
Q. You’d determined yourself, did you, that it was properly ventilated?
A. No, because on some of the occasions I was down there with an appropriate professional and this is something that we happened to discuss over the time, and no specific issues came up that should be pursued. [38]
38. T 252.1-.20.
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On 1 December 2012, Ms Graham emailed the Defendants in reply stating:
“The bedroom and walk in robe is carpeted and your builder indicated he could see from the darkness vs lightness areas of the carpet that there may be rising damp i.e. he said while it could look like normal wear and tear he, as a builder, could see a pattern”. [39]
39. Exhibit A, tab 15, Annexure A to Affidavit of Christina Graham dated 31 August 2018 at p 224.
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Ms Graham conceded that she did not mention the word “mould” in her emails. In cross examination, it was put to Ms Graham that if she was extracting water of the magnitude she described she would have recorded mould as a consequence. Ms Graham responded that she thought it was sufficient to say to the landlord “Look, there is a mould issue”. Nonetheless, Ms Graham accepted that those words were not in her email. She added that the mould was the underlying cause of her having to buy the dehumidifier and having to spend a lot of money on damp prevention. [40]
40. T 30.5-.41.
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The Second Defendant could not recall as to whether any steps were taken to address the issue of the state of the carpet but insisted that “we did not ignore the tenant’s complaint.” She could not recall the precise action taken apart from calling the person “David.” [41]
41. T 177.15- 178.17.
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In cross examination, the Second Defendant accepted that Ms Graham raised the matter of dampness in the dressing room but stated there was no mention of mould. She later conceded that mould was part of Ms Graham’s subsequent application to the then New South Wales Civil and Administrative Tribunal (NCAT). [42]
42. T162.9-164.8.
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In his Affidavit evidence, the First Defendant stated:
“At no stage did we deny the presence of mould. The dilemma was why was there so much. This was totally different to the occasional minor mould (particularly during the summer months) experienced by us in the past, despite rain almost every day for many weeks preceding. [43]
43. Exhibit 3 – Affidavit of George Lewkovitz dated 17 September 2019 at [73].
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Also in cross examination, the First Defendant acknowledged that Ms Graham had referred to a mould problem. The transcript records:
Q. She gave evidence that you acknowledged to her that there was a mould problem because you’d come over several times. She said, “I showed him my bags that I’d had to throw out and that had mould growth on them and my clothes that I had to take to the drycleaner because we had, like, leather jackets that were full of mould,” and he said, “Look, I can see there’s a mould problem. I’ll order these electric rechargeable damp absorbers that will help with the mould problem.”
A. Yes.
Q. You accept that her evidence is a correct statement of her dealings with you at that time?
A. Sorry, I’d have to go through - that’s a general statement. Was there a particular issue that you-- [44]
44. T 259.11-.24.
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In about late 2012, Mr and Mrs Graham vacated the property after being given the notice of termination. [45] The property thereafter remained unoccupied until August 2013. [46]
Plaintiff’s Tenancy
45. Exhibit A, tab 15 – Affidavit of Christina Graham dated 31 August 2018 at [15].
46. T 266.29-.38.
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The Plaintiff’s evidence was that in July-August 2013, he engaged Farquharsons Executive Rentals to find a quality place for his wife and children and to allow him to work from home. [47] On 26 July 2013, the Plaintiff entered into a lease for 12 months commencing 5 August 2013 with a 12 months option and ascertained that the Defendants were self-managing the property. [48]
47. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [4].
48. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [5]. See lease at Exhibit A, tab 25, Exhibit GL-1 at p 688.
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In August 2014, the tenancy agreement was extended for a further period of 12 months. [49]
49. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [7].
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In August 2015, the Plaintiff stated that he entered into a new lease on the same terms and conditions with the exception that the rent was increased by 5%. [50] The new tenancy agreement for 12 month is in fact dated 3 July 2015 although it commenced on 5 August 2015. A condition report in respect of the property was not prepared by the Defendants and was not provided to the Plaintiff. [51]
Leather Jackets
50. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [8]-[9].
51. Exhibit A, Exhibit GL-1 at pp 711-724.
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The Plaintiff gave evidence that around the time of the 2015 lease renewal he and his partner (Ms Agnes Bruck) were standing in the walk in wardrobe area which had floor to ceiling robes with mirror sliding doors on three sides and where he kept his leather jackets in a partly concealed wardrobe. He stated that he then showed the First Defendant that he had just discovered mould on his leather coats. The First Defendant responded with words to the effect:
“It is an air circulation issue. You should open the window at the end of the walk in wardrobe corridor. Keep the bathroom door shut. It is a ‘ventilation problem’. It is your fault for not keeping the air circulating”. [52]
52. Exhibit A, tab 16 Affidavit of Christopher Murphy dated 27 March 2019 at [19]-[20].
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He stated that the First Defendant did not suggest that there was any danger in mould. He accepted what the First Defendant said as he knew he was an Ear, Nose and Throat Specialist. During the inspection, when the Plaintiff showed the mouldy jackets, the Plaintiff stated that the Second Defendant said words to the effect “Sydney is a humid place. You should buy a packet of Damp Rid’. That is how I deal with the damp”. [53] The Second Defendant denied saying these words adding that the only occasion on which she recalled discussing the topic of humidity was when she met the “Murphys” one summer at Westfield at Bondi Junction. [54]
53. Exhibit A, tab 16 Affidavit of Christopher Murphy dated 27 March 2019 at [21]-[22].
54. Exhibit 3, Affidavit of Ilana Lewkowitz 17 September 2019 at [8].
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The Plaintiff said that he took the leather jackets to the backyard and scrubbed them with vinegar and water to remove the mould and left them in the sun for a few days on the pool fence before putting them back in the hall cupboard. He stated that Ms Bruck bought a packet of Damp Rid and he left the windows open as the First Defendant had said. In addition, in the bathroom area, two windows were never closed again except when they were absent. The hall cupboard window was open during most days but closed it at night to avoid mosquitoes.
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In cross examination, the Second Defendant said that she considered the leather jackets to be “prone to that [mould] if they weren’t regularly ventilated”. [55]
55. T 258.5-8.
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Whilst the Plaintiff was cross examined as to his own evidence, it was not put to him that the incident did not occur. Rather, it was suggested that after he had sought to treat the mould using amongst other things a hose, he couldn’t exclude the possibility of residue moisture. The Plaintiff stated that he washed the jackets as best as he could scrubbing away, treating them with vinegar and expecting “these invisible and scentless spores would be dealt with.” He said that he then hung them on the fence on wire coat hangers in the sunshine for probably ten days. [56] According to the Plaintiff, they were absolutely dry and that there was no suggestion of any water being carried. [57] Thereafter, he said that he was in and out of his cupboard getting other things but didn’t see any mould on them again until 2017. [58]
Further Water Penetration
56. T 77.38-47.
57. T 77.49-78.8.
58. T 78.19-.25.
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The Plaintiff gave evidence of other defects in the property.
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On 3 August 2013, the Second Defendant sent an email to Ms Bruck stating that they would organise a plumber to repair the leak in the garage that was sighted the previous day. The Plaintiff stated that this was not attended to prior to his and his family’s departure. [59] The First Defendant stated that this has been a long standing problem which defied several extensive attempts at rectification but despite the work the leakage continued sometime after each repair. [60]
59. Exhibit A, tab 16- Affidavit of Christopher Murphy dated 27 March 2019 at [6].
60. Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [33]-[34].
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The Plaintiff gave further evidence of a plumbing leak under the kitchen sink and a leaking tap. He stated that he asked the First Defendant to get a tradesman to repair it however he said he was busy and suggested that the Plaintiff tape it up. The Plaintiff stated that nothing was done and it stayed leaking until he ended up sliding on the floor sustaining injury on 30 November 2015. [61]
61. Exhibit A, tab 16- Affidavit of Christopher Murphy dated 27 March 2019 at [16].
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The First Defendant conceded that the issue of the leak had been reported on one occasion only and he thereafter sought to call the plumber on several occasions. He did not dispute that the repair had not been otherwise attended to. [62]
62. Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [51].
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There was also a skylight in the kitchen which the Plaintiff asserted had water pouring in each time it rained, and had lifted and moved in the wind. The Plaintiff stated that he notified the First Defendant but nobody came to fix it. He stated that he climbed on the roof and used a bulldog clip and a child’s screw toy to hold it down and they were still there when he vacated the property. [63]
63. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [16]-[17].
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The First Defendant responded that these issues were not identified or reported. He asserted that tile breakages were noted on roof inspection when the occupancy was released and that this would have caused moisture penetration of the kitchen in the meantime and damage to the parquetry floor. [64] Further, the First Defendant records that he was advised on one occasion only as to water dripping from the kitchen lights and not subsequently. He added that after the commencement of the proceedings the Defendants were advised that this had happened on more than one occasion. [65]
64. Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [52].
65. Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [58]-[59].
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On 24 August 2016, the Second Defendant wrote to Ms Bruck via a David Stern confirming agreement to extend the lease by 12 months ending on 5 August 2017 on the monthly rental of $11,626.00 and that the rental conditions remained unchanged. [66] The Plaintiff agreed to take up the property for a further year. He did not recall signing a residential lease but did recall accepting the offer. [67]
Mould in March 2017
66. Exhibit A, tab 25 at p 725.
67. Exhibit A, tab 16 Affidavit of Christopher Murphy dated 27 March 2019 at [10].
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On 4 March 2017, the Plaintiff advised the Second Defendant:
“There is a pool of water in the downstairs bedroom wardrobe. The damp destroyed my expensive leather jackets from Paris and New York. I accepted your husband’s guess it might have been shower damp but in fact despite our moisture absorbers in this heavy rain it has come up through the floor”. [68]
68. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [29].
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On 5 March 2017 at 6.34pm, the Plaintiff texted the Second Defendant photographs of the leather jacket with shoes and mould stating:
“I treasured this jacket, also from New York. See the grey damp mould on it and the shoes. See the pic inside the robe with the wet piece of paper.
See the 5 dehumidifier packets in the wardrobe situate under my clothes. See the two located where the water is now on the floor of the wardrobe at right angles to it where the track pants bottom is wet and the wet blue paper lies”. [69]
69. Exhibit A, tab 25 at p 732.
-
The Plaintiff referred to track pants as starting to wick up moisture because the trouser legs of the pyjamas were in contact with the floor. He did not remove the clothing at that stage from the wardrobe. [70]
70. T 79.41-81.7.
-
In any event, the Second Defendant responded on 5 March 2017 stating inter alia:
“We will get an expert to look into it tomorrow and be in touch as it obviously needs to be investigated and repaired asap”. [71]
71. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [29] and also Exhibit A, tab 25 at p 732.
-
The following morning at 11.50am, the Second Defendant contacted the Plaintiff by SMS stating:
“Hi Agnes and Chris I have given Agnes’s phone no to a company called AWS Sydney [redacted] who are rising damp specialists and will phone you to arrange access. I assume probably coming from under the house (?) but obviously need to find out and fix. I will contact others and give them Agnes’s no. If that’s ok with you. Regards Ilana”. [72]
72. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [30] and Exhibit A, tab 25 at p 733.
-
The Plaintiff responded:
“A builder engineer said this in the kitchen is rising damp.
BTW I don’t speak much on the phone because each time someone calls I need to set up hearing aids and dongles. Would you please let me know how much is owing on the rent rise and how much it is per month. Best Agnes takes phone calls. I cannot hear a phone. CM”. [73]
73. Exhibit A, tab 25 at p 733.
-
The Second Defendant responded:
“Do you know any experts? We need to fix. I am just going off Google but have left a message for above company to contact you. We didn’t know it was a problem. Llana”. [74]
74. Exhibit A, tab 25 at p 733.
-
The Plaintiff responded:
“I don’t know this area at all. I did mention the damp and mould to your husband. I wanted to pass those jackets to my son. I hope they can be fixed. I threw one out handmade by a client after I won his case. I had two building guys one recently committed suicide and the other drank himself to death. Must be a depressing trade”. [75]
75. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [30] and Exhibit A, tab 25 at p 733.
-
The Second Defendant responded:
“I have got a rising damp specialist to contact you and have left a message for a project manager we trust to call me. We’ll get it fixed soon hopefully. There is definitely a large cavity under the house so show them the opening on side of front living room. So sorry about the jackets etc I wish you had told us earlier of how bad the problem and of course we would have attended to it. Illana”. [76]
76. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [30] and Exhibit A, tab 25 at p 733.Exhibit A, tab 25 at p 733.
-
The Plaintiff thereafter responded:
“I did mention it and assumed what your husband said was correct. On reflection I suppose I could have checked with an expert I assumed that you knew the house well. Anyway when the expert …”. [77]
77. Exhibit A, tab 25 at p 733.
-
The Second Defendant was cross examined on what was described as her immediate assumption. The transcript records the following:
Q. The issue of rising damp on the exterior walls and in the carpet in the
bedroom had been raised with you in late 2012, and I suggest to you that is
the basis upon which you made this assumption that it’s probably coming from under the house.
A. Well, it wasn’t coming from above at that point, so.
Q. How do you know it wasn’t coming from above at that point?
A. Well, no water was coming down or anything.
Q. When you said, “I assume it’s probably coming from under the house,”
what you meant was, “I think it’s rising damp.” That’s correct, isn’t it?
A. The other thing I thought - sorry - there’s a bathroom next door and I sent
her another email saying, “Could you check the little toilet next door in case
there’s a leak there?” - and I have that email somewhere - when I thought it
might have been the toilet next door or something that was leaking into the
dressing room which is adjacent to it.
Q. I suggest to you that the reason you went immediately to calling a rising
damp specialist was because you were aware of the fact that the property had a rising damp problem.
A. No, I obviously called the wrong specialist.
Q. You accept, don’t you, as you sit here before this Court today that at the
time your suspicion was it was rising damp.
A. It’s just a term that one comes up with. I don’t even know what rising damp
- I’m not a builder. I’m - you know. I called in the experts. I wanted to
establish what the problem was. I went to Google or the phone book and
looked up people who were commenting on waterproofing.
…
Q. Immediately after my client raised with you his concerns about mould and
damp in the walk-in robe on 5 March 2017, your mind turned straight away to
rising damp. You accept that?
A. No. There’s a reply to him below that. “We will get an expert to look into it
tomorrow and we’ll be in touch as obviously it needs to be investigated and
repaired ASAP.” That’s exactly my reply to him immediately below his email
and which is - that’s what I did.
Q. I’m asking you, over on page 733, you’ve gone immediately to a rising
damp specialist. Do you see that?
A. 733. Sorry, which one do you want me to look at?
Q. The one at the top right-hand side of the page.
A. What, “Hi Agnes and Chris”?
Q. Correct.
A. “I’ve given Agnes’ phone number to a company called AWS who are a
rising damp” - well, I don’t know that they - they just do waterproofing and
whatever. I needed to know what was the problem.
Q. Do you say to this Court that rising damp was not a--
A. I hadn’t even seen the property. They emailed me and I looked up the
phone book and I got people to come and look at it. I took them at their word
30 and that was that.
Q. Do you say as at March 2017 and following you did not suspect it was
rising damp? Is that what you say to the Court?
A. I had no idea. I knew they were complaining about water, I have to find out
what’s causing the water or the mould or dampness, and it had been raining
for a month nonstop.
Q. Did the possibility of rising damp feature in your--
A. That’s what I called the experts in to investigate.
Q. Are you attempting to downplay--
A. Am I what, sorry?
Q. Do you accept, before I move on from this topic, that at the time you
formed the view that the dampness - when I say “at the time”, I’m talking about at or about 4 March 2017 - you thought that the dampness was caused by rising damp?
A. I am not qualified to say that. That’s why I called in the experts.
Q. You may not be qualified to say it, but I’m asking you did you at the time
have the thought that the dampness was caused by rising damp?
A. No idea.
Q. No idea, do you say?
A. I called in the experts. [78]
78. T181.11-38; T182.7 – 183.5.
-
The Second Defendant was shown a statutory declaration she completed dated 8 June 2017 in which she stated with reference to her message referred to at [50]:
“At the time, I thought that the dampness was caused by rising damp and I contacted two companies who I though specialised in rising damp to inspect the Premises.”[79]
79. Exhibit D at [4].
-
The Second Defendant would not concede that rising damp was on her mind at the time maintaining that was why she was calling in the experts. She rejected the suggestion that the reason she suspected rising damp in March 2017 was because she was well aware from late 2012 that the premises had a rising damp problem. [80]
Zenith
80. T 183.13-184.16.
-
On 9 March 2017, a representative from Zenith attended the property being a Mr Marcus Pine. [81] The quotation dated 14 March 2017 was in the sum of $14,630 and advised that:
81. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [32].
Rising damp:
6 lineal metres of wall in the dining room
Disconnect the air conditioner and remove it from the wall
Remove the render from the wall up to the height of the window sill
Install Techdry silicon Damp Proof Course (DPC) into the lowest mortar course to the floor
Re-render the wall using a salt retarder in the render mix
White set over the render to match existing
Refit the Air conditioner
Other recommendations:
At the time of inspection there was a significant mould growth in the main bedroom and robe.
This is extremely unhealthy and should be remediated for mould ASAP, the room and all of the contents need to be treated for mould.
There may be a few sources for the dampness in the bedroom which is causing the mould
The subfloor crawl space has no ventilation, this needs to be ventilated with mechanical ventilation (quote attached)
The exhaust fan in the ensuite has an exhaust fan, however this fan is not ducted anywhere, therefore it is inadequate. I recommend that an exhaust fan be fitted into the ceiling and connected to ducting which ducts to atmosphere. This may be a large job as the ceiling may need to be removed in order to run the duct
Ventilation of the actual room is also important. If natural ventilation can’t occur, a dehumidifier and air purifier are recommended [82]
82. Exhibit A, tab 21 p441-2.
-
Zenith identified the sources of dampness that led to the mould as the inadequate subfloor ventilation and the inadequate exhaust system in the en-suite.
-
On 10 March 2017, the Plaintiff stated that he advised the Second Defendant that he closed the downstairs bedrooms wardrobe and bathroom until the problem was resolved and had moved to a spare room upstairs with his son sharing his mother’s bed until things are remedied. He further requested that he be supplied with a copy of any mould reports so that he could work out what to dispose of and what had to be cleaned. He stated that the Second Defendant responded stating she would do this but had another company coming and would report once she had heard from them. [83] The First Defendant stated that at this point it was apparent that the Plaintiff was contemplating legal action. He stated this placed pressure on both the Second Defendant and himself to complete the repairs even before the cause of the water related-difficulties was yet to be reliably apparent. [84]
83. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [34].
84. Exhibit 3- Affidavit of George Lewkovitz dated 17 September 2019 at [63].
-
On 15 March 2017, AWS services emailed the Second Defendant at 4:32am recommending thermal imaging “to see the areas more appropriately.” [85] That work was not carried out.
85. Exhibit A, tab 25 p770.
-
The First Defendant stated on 16 March 2017 a request was “repeatedly” made by the Second Defendant to Ms Bruck for a list of all the problems in the house she had previously alluded to and this was not supplied. [86]
86. Exhibit 3 Affidavit of George Lewkowitz dated 17 September 2019 at [63]-[64].
-
Further, on 16 March 2017, the Plaintiff contacted the Second Defendant by email noting that it was almost two weeks since he was forced to vacate the downstairs bedroom, wardrobe areas and bathroom “due to rising damp but still no progress to resolution.”[87] The Second Defendant responded:
I have got a trusted builder ‘Stuart’ coming tomorrow he will contact Agnes for access as not happy with what AWS suggested so most likely will go with Zenith but wanted to confirm that it is definitely rising damp etc. Sorry but I am doing the best I can. I understand your frustration but there are four bedrooms upstairs. Stuart with be in touch. [88]
87. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [36].
88. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [37].
-
The Plaintiff responded pointing to the inconvenience of not having safe access to his things and how he needed a commitment to remedying the situation. [89] The Second Defendant responded stating:
“Doing our best but as we don’t live there we were not earlier informed of how bad the situation had become. February is always humid but no doubt something more contributing to the amount of ventilation in rooms. I am well aware of your frustration and on a more general note have been asking Agnes since well before Xmas to provide a list of issues (still waiting although I appreciate she had fracture) and this matter was not raised. It is not being neglected but want to make sure that with such huge expense it is the correct diagnosis and solution. I know you are paying a lot of rent but we are also the owners of a very valuable property which we want to maintain in good order and all houses have occasional problems. I appreciate your cooperation so bear with me”. [90]
89. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [37].
90. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [37].
-
The Plaintiff responded stressing the urgency of a solution and how there are 5 full dehumidifiers on the floor and one hanging all to no avail. He added that “he would rather just fix things and telling him after two weeks of gross inconvenience someone called Stuart is going to ring is very disappointing.”[91] The Plaintiff added that he doesn’t want to wait weeks to be able to enjoy the safety of the house adding “Let’s get it fixed pronto.” The Second Defendant responded “Absolutely.”[92]
91. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [37].
92. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [37].
-
On 20 March 2017, the Second Defendant forwarded an email to the Plaintiff and his partner stating inter alia:
“I appreciate your concerns re possible mould downstairs and the inconvenience of temporarily sleeping upstairs and have therefore arranged for a specialist to inspect and report on the problem and arrange remediation asap.
We have still not determined the cause of dampness other than unusually humid weather (always the case in Sydney) and poor ventilation but have decided in order not to inconvenience you longer to remediate first and once we know exactly what the underlying cause is to fix it and prevent recurrence. As I previously explained this is the wrong order but we need to do what we can in the meanwhile.
I have therefore given Mr Greg Willis Agnes’s phone number to arrange for access today and await his urgent report in order to remediate asap”. [93]
93. Exhibit A, tab 25 p737.
-
On 21 March 2017, the Second Defendant wrote to the Plaintiff and his partner again stating:
Thank you for allowing Greg Willis to inspect the property yesterday to report on the presence of mould and make recommendations re remediation.
Following a conversation with him he says he did detect mould through the wardrobes and clothes within and the bedroom. This will obviously need to be cleaned up asap in order to enable you to return to sleep there and clean the contents therein.
He commented on the possible presence of water penetration from the small guest bathroom which abuts one of the wardrobes and also the possibility of water coming from upstairs which may explain moisture in the ensuite ceiling. This is apart from possible rising damp yet to be determined.
You will appreciate how complex this is and I will tomorrow contact a company called Megaseal who waterproofed the upstairs bathrooms sometime ago to ensure that is not another one of the causes.
They will contact you re access and I once again apologise for these instructions but once we undertake the cleanup we obviously need to prevent recurrence by fixing the underlying causes.
The mould has obviously been growing over a very long period and whilst George and I inspected the property a few months ago by arrangement, neither you nor Agnes was home and we of course did not check inside the cupboards as a matter of respect for your privacy. Had we been alerted to the longstanding severity of the problem at that time or earlier of course we would have so done and attended to repairs.
The same goes for water damage in the kitchen. These things don’t happen overnight and it is your responsibility to alert us to these problems. I have been asking Agnes for months to itemise problems.
I thank you for your patience and cooperation in allowing tradesmen to inspect and assure you of our intention to minimise your inconvenience as best we can but this has become a complex problem with what appear to be multiple causes and will unfortunately involve further inconvenience ongoing. [94]
94. Exhibit A, tab 25 p737-738.
-
The First Defendant stated that he initially thought that the water coming into the downstairs en-suite bathroom ceiling was penetrating the tiles in the upstairs bathroom immediately above. He confirmed that the initial repairer Megaseal Pty Limited subsequently attended. [95]
95. Exhibit 3- Affidavit of George Lewkowitz 17 September 2017 at [66]-[67].
-
On 22 March 2017, the Plaintiff was contacted again by the Second Defendant stating:
“Good morning Chris and Agnes. This morning Penny Tralau Tel [redacted] from Mould Rescue Pty Ltd will contact you in order to assess what needs to be done and hopefully soon thereafter go about cleaning the downstairs area etc so you can move beck in asap. This is the wrong order to go about remediation and we hope then to fix the underlying cause so mould does not reoccur. I will also give your contact detail to some pool fencing contractors with a view to replacing the pool fence. We intend to do this asap given Agnes’s recently telling me it is unsafe. They will need only go in though the side and eventually all the work of course will be out doors but a big job. …. Am doing my best”[96]
96. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [44].
-
On 23 March 2017, the Plaintiff wrote to the Defendants asserting that they were in serious fundamental breach of the lease of the premises by the failure to provide a safe and healthy usage of the house. He pointed out that 4 mould experts had been sent including two from Prime and now they were proposing to send one more. He stated that they had failed to provide any feedback as to what they have said and why they have apparently been rejected. The Plaintiff pointed to inconvenience suffered by him and his family and how he was uncomfortably placed upstairs. He added “there are aspects of impact on my life and our health involved here and what we did to deal with the impact of the damp not realising the danger or effect of the problem.” Further, he stated “I would rather things were resolved amicably but if you can’t make full disclosure of the state of the property from your experts’ consultations I will be forced to take legal action against you.” [97]
97. Exhibit A, tab 16 at [45] and Exhibit A tab 25, p763-4.
-
At around 4.44pm on 23 March 2017, it appears that the Plaintiff sought and obtained advice regarding the matter from Mr George Thomas [98]
98. Exhibit A, tab 22 at p549.
-
At 4.56pm, Ms Tatiana Stack (principal solicitor) from Shore Stack solicitors responded that with some advice about proceeding to NCAT to obtain rectification, rent abatement and compensation. The Plaintiff was also asked if he could obtain a report from a mould expert. [99]
99. Exhibit A, tab 22 at p549-50.
-
What followed thereafter were a series of further emails between the Plaintiff and the Second Defendant much in a similar vein as the earlier ones. At 6.10pm the Second Defendant sent an email stating inter alia:
… My replies are not self-serving but explaining what were are trying to do. If you read it you know that we will pay for professional mould removal and repairs to the house. I hope to hear from Penny [Tralau] tonight as I have left her a message to call me and I expect her company to proceed asap with the clean-up in order to get you back into the bedroom. Trying my hardest. We have been in touch with a handyman who will contact you soon but unlikely to be before about a week as very busy. We would appreciate it if when he comes you show him the listed items and any other necessary repairs. Right now priority one is the mould and to fix the water issues causing it. [100]
100. Exhibit A, tab 22 at p550.
-
The Plaintiff responded at 6.35pm asking for the mould to be fixed and reiterating the need to see any reports from the mould experts that had been there. [101] At 7.07pm the Second Defendant wrote stating inter alia:
Still waiting to hear from Penny and will be in touch when I do. Obviously were want you back in the downstairs area asap. [102]
101. Exhibit A, tab 22 at p550-1.
102. Exhibit A, tab 22 at p553.
-
At 7.14pm the Plaintiff emailed “Tatiana, George” under the heading of “Legal Professional Privilege. Solicitor Client Communication.” The email inter-alia stated:
I innocently wrote to her “I really need to see any reports you have from the mould experts who have been here. Have they sent reports or merely one line price quotes?”
Ilana is going to get a rocket. She is getting a report from Penny after two hours of testing today. This expert Penny from will be telling her the house is not fit for habitation and she must spend $20000 immediately cleaning up the mould including tearing up the carpet etc.
I’ll keep you in the loop. She is blaming us for things that the experts have confided to me are not true eg damage in the kitchen wall onto the garden
All the experts apart from Penny came her to examine and quote without fee. Everyone is well disposed toward me and have suffered being used and discarded without fees. [103]
103. Exhibit A. tab 22, p551-2.
-
At 9.05pm the Second Defendant wrote to the Plaintiff stating:
I have had preliminary talks with Penny who with your permission would like to return on Monday to complete her inspection and then proceed to removal of all your mould contaminated belongings in order to clean and restore them. Whilst this is being done building works, drainage, plumbing, cabinet and necessary carpentry will be carried out where necessary. You will appreciate that all this will be disruptive and should you prefer to discontinue your tenancy we would understand. We are as concerned about these problems as yourselves but now have no choice but to proceed to rectification which will involve much disruption over the coming weeks. There is no choice. [104]
104. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [50].
-
The Plaintiff appears to have received a response from Mr Thomas to his email of 7.14pm at 10.26pm on 23 March 2017. This email strongly encouraged litigation action. [105]
105. Exhibit A tab 22, p552-3.
-
The following morning at 6.51am on 24 March 2017 the Plaintiff sent an email to the Second Defendant stating inter-alia:
Ilana.
…..
Please forward me any report or comments about the mould that you have from Penny so that I can assess the situation. Please forward any reports from the other mould experts you have sent. Please do not withhold any information that my concern my family’ health and safety.
Be assured that I will expect you to compensate me for any damage or loss and I want you to consider the rental position. It is easy to suggest ‘discontinue your tenancy’ but very difficult to do at short notice. You have spent weeks sending experts back and forth. We have a lease that expires in September. We cannot just walk out and find somewhere else as short notice. We hold you totally responsible for any loss or inconvenience and expect solatium to compensate this distress. I am happy to speak with you and see what can be arranged otherwise I will pass this on to my lawyers. I am conciliatory. I don’t want a public court case that will no doubt focus on my children and attract media attention which endangers them. I have always tried to keep their live and my address private. We have paid you around $500,000 in rent, please stop being unpleasant and blaming and show me and my family respect. [106]
106. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [51] and Tab 22 at p554.
-
Yet further correspondence followed much in a similar vein. In short, the Plaintiff was reiterating holding the Defendants responsible expressing concerns as to the impact of the mould, renewing requests for the reports, threatening legal action and stating that he and his family had nowhere else to go. The Second Defendant reiterated that they were previously unaware of the extent of the problems, that work was being arranged but it would be disruptive so that a rent reduction could be negotiated, the Plaintiff’s possessions would be demoulded at the owners’ expense and a rent reduction offered. [107] Interspersed with those communications the Plaintiff sent further emails to “George and Tatiana” including one stating “and on it goes… I am interested in litigation.” [108]
Mould Rescue
107. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [52]-58].
108. Exhibit A, tab 22, p562.
-
On 24 March 2017 at 2.30pm the Second Defendant emailed Penny Tralau of Mould Rescue Pty Ltd. That email stated:
Hi Penny thank you for discussing the situation in a preliminary way last night.
Having issues with an aggressive tenant but I have told him you will be returning Monday to complete your inspection and that we will professionally de-mould his possessions at our expense asap. and would negotiate a rent reduction for his inconvenience and unavoidable disruption.
Alternatively he can move out permanently. There are no winners in this.
George and I agree the in order to expedite building works and remediate damage it should be handled by one company rather than do various trades so Horizon if you have successfully worked with them in the past and they can do it all would be a good fit. [109]
109. Exhibit A, tab 22 p451.
-
Ms Tralau’s report dated 24 March 2017 appears to have been forwarded to the Second Defendant on 29 March 2017.
-
That report identified significant mould contamination including from rising dampness in the ground floor bedroom. That mould was described as including condition 2 and 3 mould. Condition 3 moulds were described “as an indoor environment contaminated with the presence of actual mould growth, associated spores and fungal fragments.” Condition 2 moulds were described as “an indoor environment that is primarily contaminated with settled spores or fungal fragments that were dispersed directly or indirectly from condition 3 areas, and which may have traces of actual growth.” Ms Tralau recommended immediate action to determine the extent of cross contamination of the rest of the home and remediation of the ground floor areas and the dining room. [110]
110. Exhibit A, tab 22 p452.
-
The Plaintiff stated that Ms Tralau went over the house and started by placing the leather jackets in sealed bags stating “these are a health hazard” and she took them away. He stated that Ms Tralau warned that it was not safe to inhabit downstairs and said words to the effect “it is particularly dangerous in the front bedroom suite and the front lounge room on the eastern side as the mould is very severe.”[111]
111. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [70].
-
Recounting a conversation on or about 24 March 2017 the Plaintiff described Ms Tralau advising that she was told to do whatever to fix the problem.
-
The Plaintiff then gave evidence that Ms Tralau told him that the day after she forwarded her report, the Second Defendant advised her that:
“It is too much money. We have to think about it. It’s a lot of money to spend just because the tenant hasn’t opened a window”. [112]
112. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [71].
-
Ms Tralau indicated to the Plaintiff that she thereafter stopped work at the owner’s request. [113] The Plaintiff stated that he confined himself and his family to the upstairs area of the property using the kitchen briefly for meal preparation. [114]
MouldLab
113. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [71]
114. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [72].
-
On 27 March 2017, samples obtained by Ms Tralau were forwarded to MouldLab for laboratory analysis. [115] The MouldLab report stated that:
The levels of airborne mould detected in the samples collected from within the premises ranged from “elevated” (in an upstairs bedroom) and “high” (in other upstairs bedrooms) and “very high” (in the downstairs area) being samples from the downstairs bedroom, walk-in robe, downstairs lounge, kitchen, downstairs art/lounge and laundry. [116]
115. Exhibit A, tab 25 p784 and Exhibit A, tab 9.
116. Exhibit A, tab 9 p126-127.
-
The label “very high” was utilised where the airborne mould spore and hyphal concentration exceed 10,000 per cubic metre. It describes that all occupants should be excluded; however, if occupants have pre-exposing health conditions a lower exclusion limit should be considered. The results included a 161,440 per cubic metre in the main bedroom and 164,747 per cubic metre in the lounge, 110,667 per cubic metre in the kitchen, 193,120 per cubic metre in the downstairs art/lounge and 166,293 per cubic metre in the laundry. The MouldLab report stated at [4.7] and [4.9]:
Based on the results of the samples submitted for analysis, the levels and genera of mould detected from samples taken from within the premises taken from … constitute a health hazard … Therefore continued use of the assessed premises must not be permitted until remediated.
……
The premises and its contents require remediation by an accredited remediator, employing methods in accordance with Reference 2 or equivalent. [117]
117. Exhibit A, tab 9 p126-127.
-
The First Defendant conceded that the very considerable expenses outlined by Ms Tralau for cleaning plus the many additional building works, (kitchen and other cabinets, plus other trades fees) at a time when it was still not clear as to why the house was suffering from the extensive mould that was never previously experienced, was of much concern. [118]
118. Exhibit 3 Affidavit of George Lewkovitz dated 17 September 2019 at [74].
-
The Second Defendant stated that the quote from Ms Tralau was approximately five times the amount quoted by Prime Restoration and the difficulty was that to clean the mould without addressing the underlying problem would only result in the return of the mould. [119]
119. Exhibit 3 Affidavit of Ilana Lewkovitz dated 17 September 2019 at [12].
-
The Second Defendant conceded that she read the summary of the MouldLab report after being provided with a copy by Ms Tralau. She added that Ms Tralau had already provided the information to the Plaintiff and that was why he moved upstairs. She stated that to remediate the problem it was necessary to first work out where all the moisture was coming from which occurred after the Plaintiff and his family moved out. [120]
120. T 209.29-210.5.
-
The Plaintiff complained that the Defendants would not forward Ms Tralau’s report to him despite repeated requests. [121] The Second Defendant stated that she wasn’t going to hand over reports that she had paid for just because the Plaintiff was demanding them where she was the client not him. [122]
Prime Restorations
121. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [77].
122. T 199.5-.26.
-
The report of Prime Restorations appears to be received by the Second Defendant on 28 March 2017 from Mr Greg Willis the project manager. [123] That report identified that high moisture content was emanating from the sub floor, lower section of the wall within the small toilet and cavity above the main bedroom toilet. The report identified that all items within the main bedroom, en-suite and bathroom would be subject to an inventory that would be identified as restorable and non-restorable. The items would be prepared and packaged, then housed and prepared for reinstatement. The restorable items would be decontaminated utilising a variety of methods including applying an anti-microbal and cleaning. The items would then be remediated utilising Ozone and air scrubber systems before being restored to the premises. Overall, the report indicated an estimated cost of $7,773 excluding GST. That did not include costs if found necessary of structural drying and dehumidification associated with building repairs. Nor did it include dry cleaning costs. [124]
123. Exhibit A, tab 21 p462.
124. Exhibit A, tab 21 p462-4.
-
The Plaintiff said that he was frustrated by the refusal of the Defendants to clean up the mould having initially offered to do so and that he was told by “Prime Mould’s Greg and Omar” that they had been re-engaged to deal with the problem but the Second Defendant had tried to negotiate the work that they would do and the cost. [125] The Second Defendant denied the suggestion that she and the First Defendant did not want Prime Mould to carry out Mould Rescue’s work but stated that it was first necessary to determine the cause of the mould. [126]
125. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [78].
126. Exhibit 3 Affidavit of Ilana Lewkowitz dated 17 September 2019 at [13].
-
The Second Defendant accepted that having informed the Plaintiff that she was prepared to deal with the mould she did not proceed with the Prime Restorations quote. In cross examination, she stated her reasons as follows:
“I would’ve, but by that stage Mr Murphy was becoming increasingly aggressive, demanding, he was sending me ten emails a day starting at 5am, practically. And I knew that we were heading towards litigation. Emails of the order of “don’t you know I’m a lawyer” blah, blah, you know “don’t you know who I am”. [127]
Stuart Skeoch
127. T 198.46-.50.
-
The Second Defendant gave evidence that on 28 March 2017, she emailed Mr Stuart Skeoch of Expression Constructions Pty Ltd who she considered to be a good builder and whom she trusted. [128] The Second Defendant conceded that on instructing Mr Skeoch she had provided to him the quote from Prime Restorations and Ms Tralau. [129] The Second Defendant conceded that she had informed Mr Skeoch that she was likely to use Prime Restorations as she had a quote for virtually the same work for significantly less costs. [130] She stated that she was anxious at that point to find out the cause of the mould and it was for that reason that Mr Skeoch was engaged. Mr Skeoch provided a report on 30 March 2017 stating:
128. T 216.45-218.5.
129. Exhibit A, tab 21 p461-462.
130. T 217.45-.50.
Firstly, my opinion from my visit without influence from other inspections
• Yes a higher level of moisture was present in the Walk in Robe and Bedroom
• There was a strange centralised gathering of water within the centre of the Walk in Robe (attached photo 1), this also lined up with the dampness on the underside of the flooring (attached photo 2)
• I did access the sub floor in these locations, in my opinion the moisture levels were not severe however apparent that a better system of ventilation is required. This would not necessarily mean a mechanical system, additional vents installed to the perimeter of the house would also assist greatly. In addition someone spending time cleaning out the existing vents would be a given. (attached photo 3)
• I was told there was no bathrooms in the vicinity so I was not able to inspect the likelihood of these being an issue.
• Regarding the dining room, I am not disagreeing that there is a combination of moisture entry and rising damp in this location and I do agree that remedial works would need to take place. However I would also be removing the overgrown vegetation and cleaning out the external drains (attached photos 4 & 5) as a first response.
The report prepared by Mould Rescue is very thorough and also intense, although you have a duty of care I would be sharing this with the tenant. (but in your hands)
The process and pricing they have given you is significant. I would avoid there proposal.
Primes evaluation and pricing is considerably cheaper, although clearly not the same scope [131]
131. Exhibit A, tab 21 p466.
-
The Second Defendant was cross-examined in relation to Mr Skeoch’s report maintaining that there was no rising damp. [132]
132. T 218.14-.19.
-
The Second Defendant nevertheless described acting on the advice of Mr Skeoch four months later when the Plaintiff and his family moved out. [133] The Second Defendant was questioned as to what that advice was and the transcript records:
133. T 218.11-.12.
Q. Do you recall what his advice to you was?
A. Sorry?
Q. Do you recall what his--?
A. Yeah, he said there was no rising damp and it was a horrible experience that morning for me anyway. I can tell you why.
Q. I am asking you about what Stewart Skeoch advised you.
A. That - I don’t exactly remember but there was - and not just him - but no one definitively identified rising damp under the house in which we had lived for thirty something years and had tenants. This was a, a very new situation with moisture penetration.
Q. I have asked you what advice did Stewart Skeoch give you.
A. But there was no rising damp.
Q. Go to page 466 of the bundle please.
A. Okay, let’s have a look. “Dear Ilana” -yes - “a high level of moisture was present.”
Q. This was the email that Stewart Skeoch sent to you in response on 30 March 2017.
A. Right. He is saying he would avoid their - excuse his spelling - their proposal.
Q. What he said to you was that he accessed the subfloor and “it was apparent” - he said - “that a better system of ventilation is required.” Do you see that in the third dot point?
A. Mm-hmm.
Q. He also told you that additional vents installed to the perimeter of the house would greatly assist. Do you see that?
A. Yeah.
Q. Do you accept that advice from him?
A. Yes, but later on we found out the water was coming from above not below, when we were able to totally inspect the premises. It was - the water was not coming from below.
Q. And he said next, “That it would be necessary” - I’m summarising here - “to clean out the existing vents.” Do you remember reading that advice from him?
A. I just did now. I don’t remember but I have just read it now.
Q. Do you see in the fifth dot point he says, “Regarding the dining room, I’m not disagreeing that there is a combination of moisture entry and rising.” Is it the case that the word “damp” also appeared in this email but it has been cut out of the email?
A. Possibly, I don’t know. It’s not there is it.
Q. The word “rising” is there, isn’t it?
A. Well, the word “rising” not ended, yeah.
Q. I suggest to you that he was telling you that there was a combination of moisture entry and rising damp in the location of the dining room. Do you accept that?
A. I can only say that we had lived there - we had owned the house for forty something years and we had not had a rising damp problem. [134]
134. T 218.14-219.20
-
In April 2017, the Plaintiff took a series of photographs of the property which was in evidence. [135] He described what was depicted in the photographs. [136]
135. Exhibit A, tab 24 p608-616.
136. T 69.37-71.31.
-
On 2 April 2017 the Plaintiff issued a tweet which stated:
Renting? Don’t fall for that …landlord “blame the tenant” trick. #sue them.
Sydney outbreak: dangerous mould. [137]
137. Exhibit 1.
-
That tweet accompanied a Sydney Morning Herald article under the title “Sydney’s Rain and Humidity triggers outbreak of dangerous mould”. [138] The article described March 2017 as the “wettest March in 42 years” and one that “[had] created the ‘perfect’ conditions for mould, according to Ibrahim Ech, the principal work health safety consultant with Safety and Environmental Services.”
138. Exhibit 2.
-
In cross examination, the Plaintiff stated that it did not remind him of the conditions at the time but did serve to remind him of reading an article that said “A landlord may blame the tenant for failing to keep the property clean or to ventilate effectively.” He maintained that that was written after a month of him dealing with the landlord. [139]
Tall Ideas Pty Ltd
139. T 84-.5-85.45.
-
On 24 April 2017, Tall Ideas Pty Ltd provided a report to the Plaintiff in respect of the subject premises. After making observations the Tall Ideas report stated:
The house was originally built in 1930, with multiple additions to the base structure. In general the house is poorly designed with no consideration to site drainage and flashing.
We believe the main source of the high moisture content in the house is from the stormwater runoff. Stormwater runoff would enter the subfloor zone through the Northern elevation behind the dining room wall due to the poor drainage, and along the Western elevation due the permeable side path and slope toward the house. There is also the risk that the swimming pool shell or plumping is leaking and contributing the problem.
Once the water is in the subfloor zone area, there is now way for it to leave as there is no natural or mechanical sub floor ventilation. The lowest part of the house is where excessive moisture content would occur. The lowest area of the house are the front 2 rooms. Since there is no visible signs of a damp proof course or ventilation we would expect that the front two rooms would develop mould and mould spores growth, to extreme levels.
In addition to the above, there are also additional elements that need to be addressed:
• Roof flashing
• Cracked roof tiles
• Rotten window sills and flashing
• Displaced gutters
• Displaced downpipes
• Perimeter stormwater collection points
All the defects we have identified above are the direct result of incorrect construction, poor maintenance or building failure and all could of have been rectified at any time. The property has numerous inherent building defects and none of these defects have been caused by the occupation of the house. [140]
140. Exhibit A, tab 23 p576.
-
The First Defendant gave evidence that when he received Tall Ideas report he was furious with the Plaintiff as he and his wife had repeatedly asked if there was anything wrong and the report demonstrated problems which should have been referred to them at the earliest opportunity. He acknowledged that he had inspected the property previously in September 2016. In cross-examination, he stated that he was suggesting that the problems that emerged in the Tall Ideas report emerged between September 2016 and April 2017 because Sydney at that time had rained almost every day, there was warm weather and water penetrated the house. [141] He acknowledged that it was his responsibility to carry out inspections of the property to ensure that it was in a proper state of repairs. [142]
141. T 265.43-.48.
142. T 265.50-266.2.
-
The First Defendant stated:
When Ilana first heard about the mould and raised it with me, we both saw this within the context of our previous 34 years’ experience living in the house: namely, that some manifestation of mould was an occasional issue in Sydney during the high humidity in the summer. However, it later became clear that something unusual was occurring and the more consultants that attended at the Property, the more complex became the need for more consultants that attended at the Property, the more complex became the need for investigations and subsequent repair works. This could not be done whilst tenants were still in the house as the kitchen, bathrooms and laundry need to be demolished.
Earlier mould cleaning emerged as a need for major building works. [143]
143. Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [85]-[86].
-
The First Defendant also gave evidence that the drainage of the swimming pool had been completely excavated by Holford’s Pool services at Bellevue Hill however they did not determine an obvious pipe leakage and that the dropping of the level was associated with evaporation. After the Plaintiff vacated, the First Defendant stated the investigation was repeated with a pool company with specialised detection devices for locating water leakage from the pipes and this work was satisfactorily carried out. [144]
NCAT Proceedings, Tenancy Termination, Property Renovation and Sale
144. Exhibit 3, Affidavit of George Lewkovitz dated 17 September 2019 at [90]-[91].
-
On 13 April 2017, the Plaintiff lodged an application to NCAT for orders including compensation to his personal property ($15,000), an abatement or reduction of rent and for repairs. [145]
145. Exhibit A, tab25 p838.
-
On 3 May 2017, the Defendants wrote to the Plaintiffs response to a letter sent by his solicitors accepting that the property was “wholly or partly uninhabitable” and enclosing a notice to terminate the tenancy. [146] A covering letter stated “we accept that the property is presently uninhabitable in whole or part otherwise than as a result of a breach of the RTA”. [147]
146. Exhibit A, tab 25 p618-620.
147. Exhibit A, tab 25 p618.
-
On 18 May 2017, the Defendants lodged a claim in NCAT for compensation as follows:
A claim for $2,200 in respect of damage to the skylight and break of surrounding tiles said to have been occasioned when the Plaintiff sought to repair a leak in the skylight;
A claim for $14,860 in respect of a failure by the Plaintiff to keep the premises reasonably clean arising from the leakage of water through defective windows and from an upstairs bathroom, broken roof tiles and blockage of drains from leaves and debris;
A claim for rental arrears amounting to $21,030;
An order for the Plaintiff to remove the mould damage;
An order that termination notices issued on 6 April 2017 and 17 May 2017 were valid; a termination order and order for possession of the land and an order for an occupation fee. [148]
148. Exhibit A, tab 25 p840.
-
By consent on 7 July 2017 both NCAT proceedings were transferred to this Court by an Order made pursuant to clause 8 schedule 4 of the Civil and Administrative Tribunal Act 2013(NSW). [149]
149. Exhibit A, tab25 p 869 at [1].
-
The Plaintiff gave evidence to the effect that he engaged five real estate agents “to find alternative accommodation seeking four bedroom house in the Eastern Suburbs to suit the children’s schooling and friendships. We viewed several properties and settled on a house in Bondi Beach. We moved in or about July/August 2017.” [150]
150. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at [126(h)].
-
After the Plaintiff’s family vacated the property, the First Defendant conceded that remediation work was carried out at a cost of more than $300,000 before the property came to be sold in April 2018. [151]
151. Exhibit F.
-
On 14 July 2017, the Defendants stated that they applied to New South Wales Fair Trading for payment of the rental bond of $9,900 which the Second Defendant acknowledged as having been paid to them. [152] In fact the bond amount was accepted by the Plaintiff as $9,600. [153] On 21 July 2017, the tenancy was terminated by agreement by the parties. [154]
152. T 232.32-.41.
153. Exhibit A, tab 16 – Affidavit of Christopher Murphy dated 27 March 2019 at p297. Also see Plaintiff’s Schedule of Damages MFI 4(2) p4.
154. Statement of Claim at [8] and Defence at [1].
-
There was no evidence that indicted that at the time of entering into the first tenancy agreement or at any point prior to extending the tenancy, either Defendant had informed the Plaintiff of the experience recounted by Ms Graham [155] with regards to the property in 2012 or that the Plaintiff was otherwise aware of those events.
155. T 171.30-.37.
-
The First Defendant gave evidence that after the vacation of the property by the Plaintiff, repairs to the house were commenced. He indicated that there was an overnight storm which dislodged a drain in the side of the house and it was particularly interesting because it identified some rotted timbers. He observed water was escaping from the drain causing some rotting in the area and there was also rotting in the area of the two windows which was quite prominent and didn’t occur over night. He stated that this alerted to where the problem of water entry at the upper level was occurring which had not been seen by the consultants that had come to see the property nor the roofing company that patched up the mortar on the roof. The First Defendant suggested that this was a source of water entry. [156]
156. T 244.40-.50.
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Secondly, loss of rental income from the garage at the University House in Glebe, where the Plaintiff has stored the damaged goods since they were moved out of the Chippendale property in March 2018. Mr Murphy’s evidence was that the rent payable on that garage was $100 a week. [275] Calculated to the date of the filing of the Plaintiff’s Schedule of Damages (MFI 4(2)) on 9 February 2021, less the discount (“salvage value”) of $4,050 applied by Mr Chan, the rental amount claimed is $5,476. The alternative costs appear to be referenced to commercial self-storage costs.
275. Exhibit A, tab 19 to Affidavit of Christopher Murphy 12 July 2019 (3) - Annexure A Item 39 p419.
-
A further claim is also made for monthly rent and loss of rental income. According to the Plaintiff’s schedule $4000 monthly was paid for rent for storage at Dover Heights. [276]
276. Exhibit A, tab 19 to Affidavit of Christopher Murphy 12 July 2019 (3) - Annexure A Item 25 p415.
-
The evidence does not explain the circumstances of the various storage sites being used. Clearly part of the reason for the cost being incurred has been the Plaintiff’s failure to effect repairs during the period thus far. Doing the best I would allow $4000 for storage in lieu of the rental costs claimed as reasonable and necessary.
-
As the Plaintiff is being compensated for the replacement cost of the various items of bedding, mattresses and lounges, I do not consider it reasonable and necessary to allow for the temporary purchases made from Ikea ($562.50 and $3511.17). The cost of International Conservation Service for a site visit ($283) and the costs of DW Knox and partners for an engineering report ($4,446) are more properly legal expenses and not part of the Plaintiff’s entitlement to damages.
-
Overall, this makes a total claim for other expenses of $17,281.05 excluding the claim for the bond which is considered in the context of the Cross Claim.
Items for Mould Remediation
-
The Plaintiff’s schedule included the sum of $53,229.00 for mould remediation based on the report of Penny Tralau from Mould Rescue Pty Ltd.
-
As noted earlier, Ms Tralau first inspected the tenanted property on 23 March 2017 at the request of the Defendants. In a report dated 24 March 2017, Ms Tralau commented on the furnishings in the ground floor bedroom stating:
Both beds, the carpet, furniture, artwork and general contents have condition 2 moulds. All the leather items, like jackets and shoes have condition 3 moulds. [277]
277. Exhibit A, tab 5 p58.
-
Ms Tralau further commented on the ground floor bedroom stating:
The entire contents of this room needs to be packed out and transported offsite for remediation and storage whilst the remediation is in progress.
…..
During the pack-out process a picture inventory of all items will be done and provided to all materially interested parties.
There will a number of items that will be identified as non-restorable, this will be set aside for discussion.
In this room there are several pieces of artwork that have been affected by mould and will be taken to a specialised Art Restoration Company called David Stein & Co conservation located in Darlinghurst, they will provide for restoration which will be passed on to you for restoration. [278]
278. Exhibit A, tab 5 p59.
-
Ms Tralau’s first quotation was for $40,535. although it appears to include remediation of the property.
-
Ms Tralau was asked to inspect mould on items on 20 June 2019. [279] Ms Tralau’s report of 12 July 2019 describes her as a having the highest designations as a certified restorer, mould professional and contents loss specialist with the Restoration Industry Association. It describes Mould Rescue as providing assessments for indoor air quality, mould, damp and water damage on residential and commercial properties and conducting mould remediation and structural drying remediation.
279. Exhibit A, tab 7 p85.
-
Ms Tralau documents that she attended a garage in Glebe supervised by Ms Bruck where the various items were kept. She was also provided with a copy of a schedule of loss dated 24 June 2019 prepared by Ms Bruck which was annexed. Ms Tralau states that the scope of remediation is to the items that were stored in the garage since 21 July 2017.
-
Ms Tralau emphasised that she did not mean to restore items to the original condition such as to fix legs or re-attach a finial. She stated she would test using the ATP method during the remediation until she achieved a result of zero and at the end and before delivery she would take a surface sample from each piece of furniture which is then sent to a lab from processing. She stated that the restorability of mould contaminated contents within a water damage house depended upon porosity, level of contamination vs risk factor and economic value vs intrinsic value.
-
To demonstrate this she described:
To demonstrate this: a piece of Ikea furniture that has condition 3 mould I could restore but wouldn’t bother because of its low value. Antique timber furniture that has potential actual value as well as intrinsic value is complex to restore and takes time but is restorable and worth it.
Items like lounges and mattresses I would not restore because of their complexity and risk factor. I can only remediate the outside, not the inside, for example I could only remediate the leather or fabric but could not open up the cushion to remediation the foam on the insides. Mattresses have a complex structure of layers of foam and coils m similarly, couches often have a wooden or metal frame along with cushion padding. [280]
280. Exhibit A, tab 7 p87.
-
Ultimately, Ms Tralau listed the various items with her conclusions with estimates (including GST) comprising:
Transport to and from $ 5,500
Storage of contents during remediation process (2 months) - $ 1,815
Administration and co-ordination - $ 5005
Consumables -$ 1,100
Labour for remediation of books -$ 6,006
Labour for remediation of furniture -$18,018
Testing (both ATP (adenosine triphosphate) and lab) -$11,550
-
Ms Tralau assessed the costs at $48,994 (inclusive of GST) but this did not include the art work and the failure to release the bond of the rental income of the garage in Glebe. These estimates were revised on 5 February 2021 in the amount of $53,229.00 inclusive of GST based on storage cost of $2750, ATP testing and for laboratory testing of $14,850. [281]
Consideration
281. Exhibit A, tab 8 p109.
-
The Defendant drew attention to the fact that Ms Tralau proceeded on the basis of the Schedule of Loss compiled by Ms Bruck in circumstances where she did not give evidence. I have earlier commented on that submission. There was no challenge to the Plaintiff’s ownership of the items
-
Ms Tralau did not report findings in respect of the various items of property that she examined. Nor did she explain what specific items in the schedule she proposed to work on and which items she proposed to discard. One can infer from the schedule that the items Ms Tralau proposed to work on were those that were not discarded or the subject of Mr Volante‘s report. The schedule provides some statements as to advice given by Mould Rescue relating to items but were not the subject of cross examination or restriction under s 136 of the Evidence Act 1995 (NSW).
-
The books referred to in the Plaintiff’s schedule as item 15 appear to be incorrectly cross referenced to a Mould Rescue quote in item 32. It describes them as having been sealed in plastic containers and a small portion were cleaned but kept away from the family residence. This is presumably a reference in item 33 to “Part Mould remediation fee and Chis Laycock books furniture removal at a total of $1,800.”
-
Item 18 in the schedule is a quote which was given for restoration of art work by the International Conservation Art Service as a cost of $13,596 but it stated that a deduction should be made for 4 art works cleaned by Ms Tralau. That appears to be a reference to item 42 which described the costs of restoration of 2 Persian rugs and 4 art works by Ms Tralau by Mould Rescue at a cost of $1199 being a sum earlier referred to.
-
Item 34 in the schedule described as a Mould Rescue quote for remediation dated 26 May 2017 totalling $111,474. The significance of this in the context of the Plaintiff’s claim was not explained.
-
The Defendant did not ultimately object to the tender of Ms Tralau’s reports. [282] No issue was taken as to the Plaintiff’s ownership of the items proposed to be remediated or the damage asserted as having been sustained. The fact that the relevant remedial action has not yet been undertaken is not a factor precluding recovery. In McGregor on Damages the learned authors state:
In the case of goods other than ships the cost of repair has now become established as, prima facie, the correct measure of the claimant’s loss. Accepted some time ago in a number of first instance cases, this was confirmed by the Court of Appeal in Darbishire v Warran where it was said by Harman LJ that “it has come to be settled that in general the measure of damage is the cost of repairing the damaged article”. Moreover if, despite the repairs, the market value of the goods is less than before, the claimant should be entitled to such diminution in value in addition to the cost of repair. Thus in Payton v Brooks, Roskill LJ said:
“There are many cases … where the cost of repairs is a prima facie method of ascertaining the diminution in value. It is not, however, the only method of ascertaining the loss. In a case where the evidence justifies a finding that there has been, on top of the cost of repairs, some diminution in market value … I can see no reason why the plaintiff should be deprived of recovery under that head of damages also.”
Thus in The Georgiana v The Anglican, the claimant was held entitled to recover, in addition to the cost of partial repairs to a yacht which did not make her as strong and seaworthy as formerly, the amount by which the value of the partially repaired yacht was less than before the damage occurred.(omitting citations) [283]
282. Matika (Australia) Pty Ltd v Sprowles [2001] NSWCA 305; (2001) 52 NSWLR 705 at [59].
283. See McGregor on Damages by James Edelman, revised by Simon Colton and Jason Varuhas (2021) 21st Edition at [37003].
-
Generally damages are assessed as at the time of the relevant breach. [284] That is not absolute and a departure from the general rule arises where the damages reflect a cost or repairs which is heavy in relation to the Plaintiff’s financial position. That may arise where liability is denied and in consequence the Plaintiff postpones the carrying out of repairs until judgment. [285]
284. Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR at p161-2.
285. Alcoa Minerals of Jamaica Inc v Broderick [2002] 1 AC 371 at p378
-
In this instance the Plaintiff’s evidence as referred to by the Defendants leaves uncertainty as to when and if repairs will be carried out. I have earlier allowed a partial claim for storage sufficient to facilitate repair. As to the loss incurred I would allow reasonable repair costs as at the time of breach. The Plaintiff did not advance a case otherwise.
-
Ms Tralau’s report describes an overall cost but does not indicate the application of the methodology described. Beyond that it is a particularly high cost relative to the quotation of $7,773 plus GST prepared by Prime Restoration. Mr Skeotch noted that the process and pricing of Ms Tralau was significant and the proposal to be avoided. Although the Prime quote was not same scope Mr Skeotch noted that it was considerably cheaper.
-
Overall, despite the difficulties involved in assessment the Plaintiff has clearly sustained loss and however difficult the task is the Court is required to quantify the damage. [286] The Plaintiff did not seek to explain the high cost of Ms Tralau’s treatment relative to the quotation of Prime. Overall, doing the best I can I would allow the sum of $20,000 being an amount calculated on a basis proximate to when the damage occurred.
Artworks
286. Hoblos v Alexakis [2021] NSWCA 126 per White JA at [20] McCallum JA at [64]-[65].
-
The Plaintiff claimed restoration costs for 40 artworks.
-
Mr Matteo Volanté prepared a report dated 27 June 2017 as to the condition of 40 art works inspected on 20 June 2017. That report was updated by a further report dated 12 July 2019 and 5 February 2021. [287]
287. Exhibit A, tab 11 p157.
-
The first report indicates that most of the artwork had visible mould at the front in the form of grey, white or discoloured dots and stains. Some artworks have been affected only at the back, with “foxing-type” stains. He stated that where mould had not been detected there was a likelihood of a high concentration of mould spores being present on the surface, between the canvas and the auxiliary support, as the artworks have been stored or hanging in the same environment as the others. He recommended a two-stage treatment proposal comprising mould remediation and potential aqueous cleaning. In some cases he stated that the mould may have permanently damaged the surface sheen or paint layer. In these instances, local application of surface coating or in-painting may be required. In his second report he indicated that this may be required for the artwork most significantly affected.by mould which can only be determined after Stage 1 cleaning.
-
Mr Volonté stated that the range in cost of Stage Two treatment is due to the current uncertainty of how many artworks require further treatment, and what those treatments might include. He indicated the price may change should further work be required and any price increase would be sought before work is undertaken.
-
That first report indicated costs as at 27 June 2017 as $13,596 (including GST) with Stage 2 cost to be confirmed. As at 12 July 2019 those costs rose to between $27,444 and $56,244 including a Stage 2 estimate of between $14,400 and $43,200 plus GST. The costs (including GST) as at 5 February 2021 were estimated at between $30,827.50– $63,211.50 including Stage 2 estimated $16,192 – $48,576.
Plaintiff’s Submissions
-
The Plaintiff in reply stated that the Defendants did not call for the production of any notes that Mr Volonté may have taken of his instructions form Ms Bruck which would be the usual course to adopt and they did not require Mr Volonte for cross examination. It was argued that as Mr Volonte gave evidence that he inspected the artworks on 20 June 2017 such that the Court would be satisfied that his assessment is based on his own observations particularly since he described the observable damage. The Plaintiff argued that if the Defendants wished to run a case on the Plaintiff’s loss and damage based on the intrinsic value of his damaged good then they were required to plead such a defence and adduce evidence relevant to it. They took neither one of those steps and it was not now open to them to attempt to avail of such a defence at in their submissions
-
The Plaintiff argued that the Defendants complaint as to his failure to carry out remedial work to date should be rejected. This is so as he was not obliged to have carried out the remedial works before the hearing date, and the Defendants have not pleaded any defence to suggest that he has not mitigated his loss and damage. The Plaintiff further contended that the very fact that the Plaintiff has engaged in this lengthy litigation gives rise to the inference that it is his intention to carry out the remedial works, including remedial work to his artworks that were produced by Ms Bruck.
Defendant’s Submissions
-
The Defendant’s argued that the salient features of Mr Volonté’s reports are as follows:
Mr Volonté’s report was first prepared at Ms Bruck’s request. As earlier noted, Ms Bruck has not given evidence in the proceedings. Mr Volonté’s further report dated 12 July 2019 was also addressed to Ms Bruck;
A further difficulty is that the Plaintiff has not put into evidence an inventory of each of the 40 allegedly mould-affected artworks. Nor is there a photograph of each of the allegedly affected artworks;
There is no evidence in the proceedings of the ownership of the 40 artworks;
Nor is there any evidence of the market value of the artworks. That makes, applying Ms Tralau’s methodology of “restorability”, referred to above, the Court’s task of assessing damages impossible, because the Court has no evidence as to whether the costs remediation of the artworks is justified;
A further difficulty in the assessment if damages lies in the very loose estimate given by Mr Volonté’ for the cost of undertaking Stage Two cleaning. [288] Including GST, the very broad range of $30,827.50 –$63,211.50. It is not appropriate for the highest total estimated figure of $63,211.50 to have been stated in the Plaintiff’s schedule of damages. [289]
288. See Exhibit A p 157.
289. Defendant’s Written submissions at [108].
-
The Defendants contented that that none of the works have to date been carried out and that in order to recover damages of the sort that the Plaintiff seek in the present case he must either point to the fact that the work has been done to a sufficient fixity of intention in his resolve to carry out the remedial work it. It was submitted that there was no evidence before the Court that the Plaintiff ever intends to carry that work and there is no evidence capable of proving that the Plaintiff ever intends to carry out that work and there was no evidence in his affidavits of a fixity of intention to carry out the works. To the contrary, the Defendants assert that the Plaintiff in cross examination attempted to evade the issue such that he cannot establish that he has in fact suffered damage in the amount claimed. [290] The Defendants relied on Tito v Wadell (No 2). [291]
Consideration
290. T 92.42-93.15.
291. [1977] CH 106.
-
The Plaintiff’s evidence made reference to paintings as “my paintings” and given to me by my partner. [292] Photographs of some paintings were also tendered in evidence. [293] The question of ownership was not specified in the Defendants’ Statement of Issues and the matter appears raised first in submissions.
292. T 70.1 and 71.20.
293. Exhibit A, tab 17 – Affidavit of Christopher Murphy at 12 July 2019 at CM6 from pp 364 and Exhibit A, tab 24.
-
Mr Volonté’s reports did not acknowledge that the author had read the Code of Conduct pursuant to schedule 7 of the Uniform Civil Procedure Rules 2005 (NSW) (UCPR) in accordance with UCPR 31.23. Nor did the report comply with UCPR 31.27. Notwithstanding this no objection was advanced as to admissibility.
-
I accept the Plaintiff’s argument that if the Defendants wished to argue that the cost of repairs exceeded the value in the market of the damaged article then it was obliged to plead this as a matter of mitigation and seek to establish this. Although the Defendants at one point foreshadowed such an argument being advanced and seeking an amendment to do this was ultimately not advanced.
-
I have addressed the Defendants’ submissions as to the failure to effect repairs at [299]-[300]. In my view, the Plaintiff has clearly suffered loss and the question is one of assessing the compensatory damages payable. Whether or not the Plaintiff actions the repairs matters not, as the value of the repairs is to compensate for the diminution in value.
-
The context in which Tito v Wadell (No 2) cited the need to demonstrate a fixity of intention involved a contractual obligation to do certain work. [294] Needless to say the facts of Tito are distinguishable from those in the instant proceeding which involved damage to chattels.
294. Tito v Wadell (No 2) [1977] CH 106 at p 333.
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In assessing the loss sustained by the Plaintiff I bear in mind the value of the repairs at the time as indicated in the first report. I acknowledge that the Stage 2 costs were not particularised until the second and third reports and even then within a range. The reports do not identify the basis of the estimates bearing in mind Mr Volonté’s acknowledgement that this can only be ascertained after the completion of Stage 1 work. Bearing in mind the uncertainty of Stage 2 and doing the best I can I would allow transport costs, Stage 1 work costs as well as a modest allowance to account for the possibility of Stage 2
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Accepting that the question of the need and extent for stage 2 repairs is uncertain, I would overall allow $22,000 ($20,000 plus GST).
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Overall the Plaintiff’s damages allowed are:
Replacement of destroyed items based on Ms Chan’s report – $28, 426.30
Other expenses as claimed – $17,881.05
Remediation of items described in Ms Tralau’s report – $20,000
Paintings described in Mr Volonté’s report – $22,000
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This makes a total of $88,307.35
CROSS CLAIM
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The Defendants/Cross Claimants by their Cross Claim asserted that on or about 24 August 2016 the term of the residential tenancy agreement dated 26 July 2013 was extended for twelve months ending on 5 August 2017 and the rent payable would be increased to $11,626 per month. The Defendants/Cross Claimants claimed that in breach of their agreement the Plaintiff/Cross Defendant failed to pay any rent for the period 5 April 2017 to 21 July 2017 being an amount of $41,393.61. [295] That amount was admitted by the Plaintiff/Cross Defendant. [296]
295. First Cross Claim at [4]-[5] and Defendant/Cross Claimants’ Schedule of Damages MFI E
296. Defence to First Cross Claim at [5(a)]
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By their Defence to the Cross Claim the Plaintiff/Cross Defendant admits that he did not pay the rent for the period alleged but asserts that he was not required to pay rent in circumstance of the Defendant/Cross Claimants’ failure to provide the property in a state that was fit for habitation or to maintain it in a reasonable state of repair such that the property was at all times vulnerable to water perpetration and in fact suffered from such water penetrations such that mould existed and proliferated with the property to the extent that it was not fit for habitation by the Plaintiff/Cross Defendant. Alternatively it was asserted that it is entitled to set off any amount that the Court finds the Defendants/Cross Claimants are liable to pay him against any unpaid rent that the Court finds he is liable to pay the Cross Claimants.
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The Plaintiff/Cross Claimant submitted that the Cross Claim for unpaid rent did not account for the bond monies that were wrongly claimed by the Defendants in their reckoning of outstanding rent. Moreover in circumstances where the property was uninhabitable because of the extent of the dangerous mould contamination, the Defendant/Cross Claimants are not entitled to demand or to receive payment of any amount of the monthly rent as they provided no consideration under the lease during the period when the Plaintiff/Cross Defendant and his family were unable to use the property for its intended purpose as a dwelling that was fit for habitation.
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Although the Plaintiff/Cross Defendant in submissions foreshadowed addressing the matter further in response to the Defendant/Cross Claimant’s submissions the latter did not do so except to concede their recovery of the bond monies. The Plaintiff/Cross Defendant in reply reiterated his earlier submissions contending that in the event the Court were to dismiss his claims for the Defendant’s breaches that the rent would be abated pursuant to section 43 of the 2010 Act.
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In circumstances where I have found a breach of the terms of the agreement between the parties section 43(2) of the 2010 Act can have no application. The Plaintiff/Cross Defendant’s obligation to pay rent remains notwithstanding that his ability to use the premise is affected as the obligation of the Plaintiff to pay rent is independent of the landlord’s covenants. I do not accept in circumstances where the Plaintiff continued to reside in the premises there was a total failure of consideration. The statutory remedies available to the Plaintiff are to seek a reduction in rent under s44 of the 2010 Act or to seek termination. Alternatively the Plaintiff could seek compensation in NCAT pursuant to section 187(1)(b) of the 2010 Act. In this respect the authors of Residential Tenancies Law and Practice New South Wales (7th edition) state:
Often the awards of compensation for various breaches are assessed by reference to the rent payable-for example the compensation for the loss of the facility is compensated by the amount of one weeks rent. There is nothing intrinsically wrong in such an approach as long as the quantum is truly proportional. Part of the logic is that the tenant should not normally be compensated for inconvenience in living in premises to a greater extent than the rent payable. This method of making a global assessment was recommended by the English Court of Appeal in Wallace v Manchester (1998) 30 HLR 1111 and also English Churches Housing Group v Shine [2004] EWCA 434. [297]
297. Allan Anforth, Peter Christensen, Christopher Adkins, Residential Tenancies Law and Practice New South Wales (Federation Press, 7th ed 2017) at p375.
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The Plaintiff/Cross Defendant in this Court did not advance any case for either statutory set off pursuant to s 21 of the Civil Procedure Act2005 or equitable setoff. [298]
298. D’Ambrosio v Tyler [2009] ACAT33 at [25]--[42] which doubted that equitable setoff would be available.
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In the circumstances the Cross Claimant/Defendants are entitled to the balance of rental owing after deduction of the bond monies of $9,600 which have been received. This leads to an amount of $31,793.61
ORDERS
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For the reasons herein stated:
The Plaintiff has succeeded on his claim in the sum of $88,307.35
The Defendant/Cross Claimants succeed on their Cross Claim in the $31,793.61
Pursuant to s 90(1) of the Civil Procedure Act 2005(NSW) there will be a verdict and judgment in favour of the Plaintiff in the sum of $56,513.74
Pre-judgment interest is allowed on the sum referred to in (3) at the rate to be calculated in accordance with District Court Practice Note (Civil) No 15 from 27 October 2017.
I defer entry of final orders to enable the parties to confer, check my calculations, with a view to presenting proposed Consent Orders that accord with this judgment and any agreement as to costs within 14 days.
Parties have liberty to lodge with my Associate in Chambers any agreed Consent Order.
In the event of any disagreement, the parties are to:
Approach my Associate with a view to relist the matter for further argument as to proposed final orders within 14 days.
Submit to my Associate within the period referred to in (7)(a) their proposed orders, and any documents and written submissions proposed to be relied upon.
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Endnotes
Amendments
29 July 2021 - Reasons as published incorporate typographical amendments made with consent of the parties and advised amendments pursuant to UCPR 36.17
Decision last updated: 29 July 2021
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