Panna and Patel v Markland

[2014] NSWCATCD 238

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	Panna and Patel v Markland [2014] NSWCATCD 238
Hearing dates:	30 October 2014
Decision date:	09 December 2014
Jurisdiction:	Consumer and Commercial Division
Before:	C R Xuereb, General Member
Decision:	The Rental Bond Services is directed to pay the tenants, Krishna Panna and Zuheir Patel, the whole of the Bond plus interest of Rental Bond number K718588-3.
Catchwords:	Landlord’s obligation to provide and maintain premises in reasonable state of repair, termination by tenant, break-fees
Legislation Cited:	Residential Tenancies Act 2010
Category:	Principal judgment
Parties:	Kishwar Panna and Zuheir Patel (applicants) Amanda Markland (respondent
Representation:	Kishwar Panna for applicants Eleni Kolotas (agent) for respondent
File Number(s):	RT 14/41599
Publication restriction:	Nil

reasons for decision

APPLICATION

1. This is an application by former tenants of the respondent for an order that the Rental Bond including interest be paid to them following their termination of the Residential Tenancy Agreement.

JURISDICTION

2. The dispute between the applicants and the respondent arises from their relationship as tenants and landlords under a Residential Tenancy Agreement governed by the Residential Tenancies Act 2010. Part 9 of the Residential Tenancies Act confers jurisdiction on the Tribunal to hear and determine disputes.

BACKGROUND

3. The applicants entered into a Residential Tenancy Agreement with the Respondent in June 2014. The Residential Tenancy Agreement is dated 20 June 2014 and provides that the term of the agreement is 104 weeks, starting on 27 June 2014 and ending on 23 June 2016.

4. The applicants contend that the premises were not in a reasonable state of repair when they entered into occupation of the premises. Furthermore, despite requests made by them to the respondent’s agent, the works necessary to bring the premises to a standard of repair which was adequate were not carried out during their occupation of the premises.

5. As the repair works were not carried out, the applicants served a Notice of Termination on the respondent. The Notice of Termination cited the respondent’s breaches of the Residential Tenancy Agreement.

6. The applicants vacated the premises and sought a refund of the Bond. The respondent declined to authorise a release of the Bond on the basis that the tenant was bound to pay break costs for the early termination of the Residential Tenancy Agreement. The Bond held was an amount equivalent to four weeks’ rent. The respondent asserted that the applicable break fee was an amount equal to six weeks’ rent. The respondent did not, however, file any cross-application claiming the six weeks’ break fee.

7. The applicants brought the application to the Tribunal to recover the Bond which they had paid.

LAW

8. Section 63 of the Residential Tenancies Act sets out the general obligations of a landlord in relation to the state of premises leased to tenants. The section imposes an obligation on the landlord to provide and maintain premises in a reasonable state of repair. That obligation is imposed on the landlord even though the tenant had notice of the disrepair before taking possession of the premises.

9. The Residential Tenancies Act provides that s 63 is a term of every Residential Tenancy Agreement.

10. Section 98 of the Residential Tenancies Act permits a tenant to give a termination notice to the landlord on the ground that the landlord has breached the Residential Tenancy Agreement.

11. If a tenant gives a termination notice under s 98, subsection 4 allows the landlord to apply to the Tribunal for an order revoking the termination notice by the tenant. If such an application is made, the Tribunal must be satisfied that the landlord has remedied the breach and that it is appropriate to continue the tenancy in the circumstances of the case before it makes the order sought by the landlord.

12. Any application by a landlord under s 98(4) of the Residential Tenancies Act must be made within seven days of being served with the termination notice.

13. Section 107 of the Residential Tenancies Act provides that compensation payable by a tenant under a fixed term agreement is limited to an amount equal to 6 weeks’ rent if less than half of the fixed term had expired when premises were abandoned by a tenant, provided that the Residential Tenancy Agreement provides for such a limitation.

14. Section 113 of the Residential Tenancies Act allows the Tribunal to make a termination order for a Residential Tenancy Agreement even though there is a defect in the relevant termination notice or the manner of service of the notice, provided that the Tribunal is satisfied that the recipient of the Notice of Termination has not suffered any disadvantage because of the defect in the notice or service of it.

EVIDENCE

Applicants’ evidence

15. Sworn evidence was given by Kishwar Panna on behalf of the applicants. Mrs Panna told the Tribunal that at the commencement of the tenancy there were defects in the premises which included:

1. Dangerous conditions in the laundry because the taps leaked and sprayed water to the extent that the washing machine could not be used because of the presence of water in proximity to the electrical connections to the washing machine.

2. The intercom buzzer which allowed the ground floor door to be unlocked to allow visitors into the building to enable access to the premises was not functional.

3. No smoke alarms were installed in the premises.

4. The shower fittings in the bathroom leaked and sprayed water around the bathroom generally and in close proximity to electrical outlets.

5. The waste drain in the shower recess was partially blocked and this resulted in substantial ponding of water when the shower was used. This was of particular concern to the tenants as the ponding resulted in water accumulating around the person’s feet while showering. This made cleansing for religious purposes difficult.

16. Ms Panna also gave evidence that she and her husband had moved from premises which were serviced by a shared laundry. Ms Panna testified that she made it clear to the landlord’s agent before she and her husband entered into the lease that the availability of an operational laundry was an important consideration to them.

17. The Residential Tenancy Agreement commenced on 27 June 2014. As early as 30 June 2014, the applicants brought the defects to the landlord’s agent’s attention in an email which confirmed a prior conversation between Ms Panna and a staff member of the respondent’s agent. The prior conversation occurred in the week previous to the email.

18. A follow up email was sent on 1 July 2014.

19. On 8 July 2014, a further email was sent to the landlord’s agent by Ms Panna referring to the email dated 30 June 2014 and to the prior telephone conversation with the landlord’s agent which is recorded as having occurred on 28 June 2014.

20. The landlord’s agent responded by email on 8 July 2014. The email informed Ms Panna that the tradesmen had been organised “to have a look at these issues”.

21. Evidence given by Ms Panna informed the Tribunal that, at about 6pm on 8 July 2014, she sent a Notice of Termination by email to the landlord’s agent, Eleni Kolotas. The Notice of Termination gave notice of the tenants’ intention to vacate the premises on 23 July 2014. The notice specified the grounds on which the notice was being given – the fact that the premises were not in a suitable condition when the tenants moved in. It particularised the landlord’s breaches: flooding and leakage in the shower, inability to operate the laundry, and security buzzer not working.

22. On 9 July 2014, Ms Kolotas sent an email to Ms Panna stating that “the repairs are getting attended to” and informing Ms Panna that “if you vacate before your lease expires you will be liable for rent until the keys are returned to the office and the break lease fee.”

23. The Notice of Termination was also hand delivered to the respondent’s agent on 10 July 2014.

24. The applicants lived in the premises with their two year old daughter. They vacated the premises on 31 July 2014.

25. During the month in which they resided in the premises, the works requested by the applicants were not carried out.

26. The inability to use the washing machine in the laundry required Ms Panna to hand wash the family’s clothing.

27. Arrangements were made by the landlord’s agent to have a plumber attend the premises on 24 July 2014. When the arrangements were made, Ms Panna requested the agent to ensure that the plumber was provided with a key to the ground floor vestibule door so that he could let himself into the building. The plumber arrived without a key as arranged.

28. The plumber said that he would call back on another occasion. By 31 July 2014, the day on which the applicants vacated the premises, the plumber had not made any arrangements to return.

Respondent’s evidence

29. The respondent was represented by Eleni Kolotas who gave evidence by affirmation.

30. There is little divergence in the evidence given by Ms Kolotas to that given by Ms Panna.

31. The only real issue in dispute related to whether or not smoke alarms were installed in the premises. Ms Kolotas asserted that smoke alarms were installed because that item was ticked on the ingoing condition report. Ms Panna produced photographs which showed ceilings which did not have smoke alarms fitted.

32. Emails produced by Ms Kolotas show that she sought quotes from the plumber on 7 July 2014, that a quote was provided on 8 July 2014 and that authorisation to undertake the plumbing repair work was given on 9 July 2014.

33. A letter was produced by the agent that she wrote to the strata manager about the defective intercom buzzer on 1 July 2014.

34. A tax invoice dated 7 August 2014 was issued by Complete Carpet and Maintenance for part of the work which the applicants sought. The invoice showed that repairs were done to the leaking shower fittings and the leaking laundry fittings. The tax invoice also had a comment that on investigation of the shower base, it was noticed that there was a possible blockage which may need further investigation by using a jetblast which would incur additional cost.

35. The respondent’s agent also produced an invoice dated 15 October 2014 for the work carried out to unblock the shower using acid and a hand eel.

36. The agent also produced a copy letter dated 24 September 2014 sent by her to the current tenants of the premises about the intercom upgrade proposed by the owners’ corporation. It confirms that, as at least as late as 24 September 2014, the access issue on the ground floor had not been remedied.

DETERMINATION

37. On the evidence of both Ms Panna and Ms Kolotas, the laundry and the bathroom were both in need of repair. The laundry was unusable in any practical sense. The bathroom was poorly maintained. Whilst the condition of the laundry and the bathroom were below standard, the work necessary to remedy the problems was not major and the cost was relatively small.

38. However, the landlord did not ensure that the defects were rectified in prompt manner. It is common ground that the defects were not attended to until after the tenants vacated the premises.

39. The tenants gave a Notice of Termination under s 98 of the Residential Tenancies Act at about 6pm on 8 July 2014. It was sent to the landlord’s agent by email. The Notice informed the landlord’s agent that it was the tenants’ intention to vacate the premises on 23 July 2014. It specified a termination date that was not earlier than 14 days after the date on which it was served.

40. Ms Kolotas did not deny that the email giving the Notice of Termination was received, but she was unwilling to concede that the email was, in fact, received.

41. An email dated 9 July 2014 sent by Ms Kolotas to Ms Panna confirms that the landlord’s agent was aware that the tenants intended to vacate. The landlord’s agent, in that email, expressed the landlord’s intent to claim rent until the keys were returned to the landlord’s agent and to also claim the break lease fee.

42. The Tribunal accepts the evidence of Ms Panna that the Notice of Termination was sent to the landlord’s agent on 8 July 2014 by email. In any event, a hard copy of the Notice of Intention to Vacate was hand delivered to the landlord’s agent by Ms Panna’s husband, Mr Zuheir Patel, on 10 July 2014.

43. The Tribunal considers that, in all the circumstances of the case, the Notice of Termination was adequately served by email on the respondent’s agent on 8 July 2014. If there were a defect in the manner of service, the Tribunal is satisfied that the respondent has not suffered any disadvantage. The landlord’s agent was clearly aware by no later than 9 July 2014 that the tenants intended to vacate the premises and the reason for the tenants’ decision.

44. The landlord could have made an application under s 94(4) of the Residential Tenancies Act to revoke the termination notice by the tenants. The landlord could have made the application before the termination date and within seven days of receiving the termination notice. The landlord would have had to, however, satisfy the Tribunal that the landlord had remedied the breach. On the evidence of both parties, the repairs were not carried out until after the tenant vacated.

45. The fact that a plumber attended the premises on 24 July 2014 and was unable to gain access to the premises is irrelevant for the following reasons:

1. The plumber did not attend with a key to enable him to enter the ground floor foyer door (which was not operational remotely from the tenants’ unit).

2. The plumber attended after the date of termination of the lease by the tenants.

3. Even if he had gained access to the tenants’ premises on 24 July 2014, all the remedial work would not have been carried out (the Tax Invoice dated 7 August 2014 which relates to the shower rose and taps defects and the laundry taps defects makes comment that there was a possible blockage in the shower base which required further investigation).

4. The landlord did not seek to have the tenants’ termination notice revoked by bringing an application under s 98(4) of the Residential Tenancies Act, within seven days of receiving a Notice of Termination from the tenants.

46. Accordingly, the tenants are entitled to a refund of the Bond as they validly terminated the Residential Tenancy Agreement dated 20 June 2014.

47. For the sake of completeness, the Tribunal notes that the respondent did not bring a Cross Application for the break fee which was asserted as being payable by the tenants. However, this is of no consequence as the Tribunal has made a finding that the Residential Tenancy Agreement was terminated by the tenants by their notice dated 8 July 2014.

ORDERS

48. The Rental Bond Services is directed to pay the tenants, Krishna Panna and Zuheir Patel, the whole of the Bond plus interest of Rental Bond number K781588-3.

C R Xuereb

General Member

Civil and Administrative Tribunal of New South Wales

9 December 2014

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 12 February 2015