Sheriff v Compass Housing Services Co Ltd

Case •

[2023] NSWCATCD 47

•

03 April 2023

Civil and Administrative Tribunal


New South Wales

Medium Neutral Citation: Sheriff v Compass Housing Services Co Ltd [2023] NSWCATCD 47
Hearing dates: 22 March 2023
Date of orders: 03 April 2023
Decision date: 03 April 2023
Jurisdiction:Consumer and Commercial Division
Before: G Ellis SC, Senior Member
Decision:

1.   The respondent is to pay the applicant $4,110.12 immediately.

Catchwords:

LAND LAW – Residential tenancies – landlord’s statutory and contractual obligation to repair –

tenants’ claim for compensation due to mould

Legislation Cited:

Residential Tenancies Act 2010 (NSW) – s 44, 63, 187

Residential Tenancies Regulation 2019 (NSW) – s 40

Cases Cited:

Banco de Portugal v Waterlow and Sons [1932] AC 452

De Chazol v Scala [2010] NSWCTTT 135

Hasell v Bagot, Shakes & Lewis Ltd [1911] HCA 62

Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313

Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; 188 CLR 313

Murarer v Andresson [2016] NSWCATAP 15

Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151

Shrestha v Crandell Pty Ltd [2010] NSWCTTT 240

Spiers Earthworks Pty Ltd v Landec Projects Corp Pty Ltd (No 2) [2012] WASCA 53

TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd [1963] HCA 57

Texts Cited:

None cited

Category:Principal judgment
Parties: Applicant - Jasmine Sheriff
Respondent - Compass Housing Services Co Ltd
Representation:

Counsel:
Applicant - M Bridgett

Solicitors:
Applicant - Homeless Persons Legal Service

Respondent - Self-represented (K Hall)
File Number(s): SH 23/01623
Publication restriction: Nil

REASONS FOR DECISION

Outline

  1. The applicant (the tenant) sought compensation of $15,000 from the respondent (the landlord) in relation to her occupation of a unit in Mount Hutton, based on the appearance of mould in that unit.

  2. Having considered the submissions of both parties, the Tribunal determined that the landlord had breached its duty to repair the premises and that the tenant was entitled to recover compensation of $4,110.12.

Procedural history

  1. After the application was filed on 12 January 2023, on 3 February 2023 an order was made extending the time for the application, the tenant was granted leave to be legally represented, and directions were made for the provision of the documents upon which the parties wished to rely at the hearing: by 17 February 2023 in the case of the tenant and by 3 March 2023 in the case of the landlord.

  2. On 8 February 2023 a notice was issued to advise both parties of the date and time of the hearing. The tenant lodged documents received by the Tribunal on 27 January 2023 and 17 February 2023. The landlord lodged documents received by the Tribunal on 3 February 2023 and 2 March 2023.

Hearing

  1. Due to difficulties with the audio-visual link (AVL) system, it was necessary to conduct a telephone hearing to avoid an adjournment. The tenant’s counsel sought to have herself, two solicitors, the tenant, and her carer on the telephone link. Adding the landlord’s representative plus her colleague meant there were seven people wanting to be included on a telephone system that only permitted the Tribunal to accommodate four callers. In those circumstances, Ms Hall’s colleague and the tenant’s solicitors were omitted although it transpired that an instructing solicitor was in the same room as the tenant’s counsel.

  2. The tenant relied on the documents received on 17 February 2023 which were admitted as Exhibit T. The landlord relied on the documents received on 2 March 2023 which were admitted as Exhibit L. As there was no witness statement, statutory declaration, or affidavit in either of those exhibits, there was no cross-examination, and it only remained to hear submissions.

  3. Those submissions followed the usual sequence of applicant then respondent then applicant in reply so that an opportunity was provided for each party to not only speak in support of their case but also to respond to the case of the other party. A copy of the 19 pages or written submissions which formed the basis for the oral submissions for the tenant was provided to the Tribunal, by email, following the hearing and has been marked for identification as MFI 1.

Jurisdiction

  1. There was a residential tenancy agreement between the parties dated 10 January 2020 (L35, ie from page 35 in Exhibit L). As a result, the Tribunal has jurisdiction under the Residential Tenancies Act 2010 (the RTA) to hear and determine these proceedings.

Relevant law

  1. The application relied on s 44(1)(b) of the RTA, which provides for an order to be made reducing a tenant’s rent, but that provision has no application in this instance since the tenancy came to an end on 12 October 2022, prior to the lodgement of the application.

  2. In the RTA, s 187(1) sets out the orders which the Tribunal may make, and paragraphs (c) and (d) respectively enable an order to be made for the payment of money and compensation. However, it is not sufficient to merely refer to that section since an applicant needs to establish a basis for such an order.

  3. Although no reference was made in the tenant’s evidence or submissions to any such basis, it appears the tenant’s case rested on a claim that the landlord was in breach of s 63 of the RTA which is set out in full below:

  1. A landlord must provide and maintain the residential premises in a reasonable state of repair, having regard to the age of, rent payable for and prospective life of the premises.

  2. A landlord’s obligation to provide and maintain the residential premises in a reasonable state of repair applies even though the tenant had notice of the state of disrepair before entering into occupation of the residential premises.

  3. A landlord is not in breach of the obligation to provide and maintain the residential premises in a reasonable state of repair if the state of disrepair is caused by the tenant’s breach of this Part.

  4. This section is a term of every residential tenancy agreement.

    1. Relevant to s 63, in Northern Sandblasting Pty Ltd v Harris [1997] HCA 39; 188 CLR 313 at 370-371 Gummow J stated:

In general, there is no breach of an express covenant by a landlord to keep the demised premises in repair unless two criteria have been met. First the landlord must have information as to the existence of the defect such as would put a reasonable landlord on inquiry as to whether works of repair are needed and, secondly, thereafter the landlord must have failed to carry out the necessary works with reasonable expedition.

  1. The obligation imposed by s 63 is not excused by conduct or delay caused by tradesmen or suppliers: Shrestha v Crandell Pty Ltd [2010] NSWCTTT 240; De Chazol v Scala [2010] NSWCTTT 135, cited in Murarer v Andresson [2016] NSWCATAP 15 at [13]. However, it is also necessary to also consider delay caused by the tenant.

  2. Clause 18.3 of the lease (L40) imposed a contractual obligation on the landlord which overlapped the obligation imposed by s 63 of the RTA, and the prevention principle is part of the law of contract. That principle was considered in Probuild Constructions (Aust) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151 at [114] in which the Court of Appeal quoted what was said in Spiers Earthworks Pty Ltd v Landec Projects Corp Pty Ltd (No 2) [2012] WASCA 53 at [77] where it was observed that:

The essence of the prevention principle is that a party cannot insist on the performance of a contractual obligation by the other party if it itself is the cause of the other party’s non-performance.

  1. Hence, the tenant cannot complain of the landlord’s failure to do complete remediation work to the extent that the reason for the landlord’s failure was something the tenant did or failed to do. Clearly, even if the landlord had no contractual obligation and only the statutory obligation, it would not be reasonable to count against the landlord a period when the tenant prevented the landlord from carrying out remediation work.

  2. There is a jurisdictional limit of $15,000 in these proceedings by reason of s 187(4)(a) of the RTA and s 40(a) of the Residential Tenancies Regulation 2019. Although the tenant’s claims totalled $19,987.15, it was indicated that she was willing to submit to the limit of the Tribunal’s jurisdiction.

  3. The right to recover damages is always subject to the requirement that the party claiming damages (the innocent party) take reasonable steps to mitigate their loss, but the onus is on the other party to show the innocent party acted unreasonably: TC Industrial Plant Pty Ltd v Robert’s Queensland Pty Ltd [1963] HCA 57. However, it must be noted that when an innocent party is required to take steps to mitigate, the steps required will not be set too high: Banco de Portugal v Waterlow and Sons [1932] AC 452 at 506.

  4. Where there has been a failure to mitigate loss, the damages are reduced to what they would have been had the innocent party acted reasonably: Hasell v Bagot, Shakes & Lewis Ltd [1911] HCA 62, Karacominakis v Big Country Developments Pty Ltd [2000] NSWCA 313 (Karacominakis) at [187].

Tenant’s evidence

  1. Exhibit T contained a chronology followed by a nine-page submission, 155 pages of evidence, predominantly tax invoices and receipts, but also including expert reports, six further pages of submissions, then 75 further pages of exhibits. At the outset of the hearing, it was clarified that the submissions did not constitute evidence. The expert reports were a report from the tenant’s psychologist and two reports from a mould expert.

Admissibility

  1. Counsel for the tenant sought to rely on two further pieces of evidence, neither of which had been provided to either the Tribunal or the other party prior to the hearing. The first was a copy of the reasons delivered on 29 September 2020 in earlier proceedings which involved an application by the landlord and a cross-application by the tenant, relating to different premises. The second was what is said to appear on the landlord’s website.

  2. During oral submissions for the tenant, reference was made to what were said to be previous proceedings in relation to different premises, said to be SH 20/00706 but that application did not involve either of these parties. In submissions in reply, it was contended that the Tribunal’s decision in the proceedings with the reference SH 20/22006 would assist the Tribunal. However, no document from those proceedings was included in the tenant’s evidence. A copy of the decision in that matter, dated 29 September 2020, was emailed to the Tribunal after the hearing.

  3. To the extent that lawyers commonly refer to prior decisions because they assist consideration of a question of law, such as the interpretation of a statutory provision, it is common to supply a copy of that prior decision to a court or Tribunal, although not without providing a copy to the other party. Having considered the reasons published in that case, the Tribunal did not obtain such assistance. To the extent that prior decision was intended to form part of the evidence in the tenant’s case, that is rejected.

  4. It is not sufficient to state that the landlord was aware of that decision because the landlord needs to be put on notice of the desire to rely on that decision in order that it may consider not only its impact on the tenant’s case and its case, but also whether it wishes to provide any evidence in response. There would be clear procedural unfairness if the tenant were permitted to rely on a document only referred to in submissions in reply and only provided to the Tribunal after the hearing. Accordingly, that decision has been marked for identification as MFI 2.

  5. During the initial oral submissions for the tenant, reference was made to words said to be from the landlord’s website. During submissions in reply, it was suggested that, contrary to the submissions for the landlord, the landlord referred to tenants as clients and submitted that was “all over their website”.

  6. Despite the first oral submission made on behalf of the tenant being that the relationship between the parties was more than just landlord and tenant, there was no evidence of what appears on the landlord’s website in the tenant’s evidence.

  7. That deficiency cannot be remedied after the evidence was closed, at a time when the landlord has no opportunity to make submissions in response. The tenant had the benefit of legal advice from both solicitors and counsel, the directions made on 3 February 2023 were clear, and it is plainly not appropriate for the Tribunal to scour the landlord’s website to see if the tenant’s allegation is made out.

  8. In those circumstances, it is sufficient to indicate that, in reaching its decision in relation to this application, the Tribunal has not considered what appears on the landlord’s website.

Landlord’s evidence

  1. Exhibit L included a two-page submission, documents from earlier proceedings involving these premises (notably two access orders), communication notes, an expert report, analysis certificates, and inspection reports.

Submissions for the tenant

  1. It was contended the relationship between the parties to these proceedings was not the usual landlord-tenant relationship because the landlord was a social housing organisation and the tenant had health conditions, namely autism spectrum disorder (level 2 of 3), ADHD, plus depressive and panic disorders, as set out in a psychologist’s report (T57, ie page 57 in Exhibit T).

  2. The relationship between the parties was said to include that of service provider and client with the suggested result that the landlord’s responsibilities go beyond the “purely commercial” landlord-tenant relationship.

  3. The expert reports as to mould were identified. They are the reports of Mr Neill dated 4 December 2021 (T30) and 5 August 2022 (T178) as well as that of Ms Ritter dated 12 July 2021 (L3). It was said that there was no dispute (1) that there was mould, (2) as to the cause of that mould, and (3) that works were required.

  4. There was then reference to findings made in prior proceedings between the same parties in relation to different premises, but Exhibit T contained no evidence in relation to those proceedings and, even if it did, findings in relation to other premises do not aid a determination of what occurred in this instance. If the tenant wished to rely on what is commonly called similar fact evidence, the landlord was entitled to have that evidence provided prior to the hearing.

  5. Inspection reports dated 10 January 2020 (L169), 27 February 2020 (L195), 30 November 2020 (L211) were noted but the tenant’s chronology, Exhibit T at A1, does not even refer to those reports. It was only to portions of the 7 April 2021 (L226) that the Tribunal’s attention was directed. It was noted that, on 9 April 2021, the landlord “booked maintenance to investigate mould” (L31) and that on 13 April 2021 the landlord requested an inspection and report in relation to mould within seven days (L149).

  6. Reference was then made to the landlord’s attempts to inspect the premises which were refused by the tenant and to a communication note which suggested that the tenant attended hospital due to mould on 4 May 2021 (L31).

  7. It is noted by the Tribunal that within that communication note was an indication that the tenant needed to fill out a form so she could be transferred to another property. Reference was also made to an 11 May 2021 request by the tenant’s carer for alternative accommodation, but it is necessary to consider the entirety of the communication note which contains that request (L33).

  8. It was submitted that, at no time during the period from April to June 2021 did the landlord offer the tenant “alternate accommodation” and that the landlord going to the Tribunal to seek an access order increased the tenant’s stress.

  9. The Tribunal was taken through the sequence of events from 30 June 2021, when the Tribunal made an access order (T72), to 8 July 2021 when two inspectors visited the premises, and subsequent emails between 16 July 2021 and 6 January 2022, and the landlord’s communication notes (L152) suggesting no contact between 30 June and 23 December in 2021.

  10. It was contended that the 12 July 2021 report (L3) was such that the tenant should have been moved to different premises. Submissions were then made as to where the tenant slept between May 2021 and January 2022, but only by reference to submissions (Exhibit T, at A6 and A8) and not to any evidence.

  11. Next, it was noted that a tradesperson attempted to conduct repair works on 21 December 2021 was not even permitted by the tenant to measure a cupboard (T165): “The support worker said this would not be possible because the tenant says she was told that the cupboard should not be opened at anytime (sic) because the mould fumes will escape the cupboard and fill the room and the tenant is prone to complications from mould”.

  12. Reference was also made to a 22 December 2021 email in which the tenant’s solicitor suggested notice of that visit had not been given (T167). It was said that entry was again refused by the tenant on 7 January 2022 because she feared being exposed to mould and as no notice had been given but there was no reference to any supporting document in relation to what is said to have occurred on that occasion.

  13. Submissions were also made as to “previous dealings” between the tenant and the landlord which made various allegations but did not refer to any evidence. It was then said that gave the tenant good reason to refuse access.

  14. After referring to correspondence between 11 and 27 January 2022, but not identifying that correspondence other than the landlord’s 26 January 2022 email (L128) which advised of another application to the Tribunal for an access order and the next day response from the tenant’s solicitor (L127) which sought time for the tenant to make arrangements, it was suggested that a second application for an access order was made on 31 January 2022.

  15. Reference was made to the 20 April 2022 access order (T54), made by consent on terms which included the provision of alternative accommodation.

  16. It was suggested that, on 11 May 2022, the landlord requested that work be undertaken between 20 and 24 June 2022 due to a shortage of mould specialists (L83), but the date of that email was 4 May 2022. It was also suggested that the tenant lived in “medium term rental” from mid-January 2022 until the conclusion of her tenancy with the landlord but no reference was made to any evidence. It would appear the only supporting evidence is tax invoices for a total of 21 nights from 25 August 2022 (T119-121)

  17. After providing the landlord with a notice of termination dated 23 September 2022 which specified a termination date of 14 October 2022 (T1), it was said the tenant vacated the premises on 12 October 2022.

  18. In the submissions for the tenant, it was then contended that: (1) after the access order was made on 20 April 2022, the landlord did not seek to work with the tenant in a cooperative and supportive way, (2) during the period from 20 April 2022 to June 2022 the tenant attempted to arrange a solution with the landlord, and (3) the landlord did not adequately remediate the mould problem in June 2022. In support of the last contention, reference was made to the three reports from the two mould experts: Mr Neill, and Ms Ritter (L3, T30, and T178).

  19. Submissions were then made as to the alleged impact on the tenant and her wellbeing. It was suggested the landlord was aware of how mould impacts the tenant physically and mentally.

  20. A report from the tenant’s psychologist dated 27 April 2021 and a copy of that report, but not any email, was part of the landlord’s evidence (L63). The fact that the 27 April 2021 report was included in the landlord’s evidence suggests it was sent but does not indicate when, although it is a reasonable inference it was sent soon after 27 April 2021. The other report from that practitioner is dated 11 November 2021 (T57).

  21. Reference was also made to what it was claimed the landlord was required to do by its “business model” but no copy of that business model is in evidence.

  1. Submissions were made as to the impact of the mould on the tenant but the only supporting evidence is that contained in incident reports from the tenant’s support service (T61-62 and T122-127) which contain records relating to incidents in 2021 on 8 and 10 August, 20 August, 8 October, and 31 December.

  2. The Tribunal’s attention was directed to an underlined passage in the psychologist’s report dated 11 November 2021 (T57) in which it was said: “For many months now, [the tenant’s] mental health has been severely undermined by an untenable living situation due to the presence of mould in her residence.”

  3. Before outlining the tenant’s compensation claim it was said that the mould had impacted the ability of the tenant to study and work but there is no evidence of either of those aspects of her life with the result that the Tribunal does not know what the tenant was studying or where she was working.

  4. The first amount claimed was $6,940.88 by reference to a table (T153) which contained details under four headings: (1) expenses incurred remediating mould problem, (2) damaged good replacement, (3) storage unit expenses, and (4) alternative accommodation. The second component was a claim for $13,046.27, said to be a 50% rent reduction for the period from 10 January 2020 to 13 October 2022. Since the total of those two amounts, namely $19,987.15, exceeded the upper limit of the Tribunal’s jurisdiction, that upper limit of $15,000 was sought.

Submissions for the landlord

  1. Ms Hall indicated the landlord was a social housing provider and suggested that the landlord was not a support worker, or a service provider beyond the landlord-tenant relationship. Further, that the landlord comes to the Tribunal to obtain a determination of what is fair and reasonable.

  2. It was said that the landlord tried to obtain access to address the mould and that, as there was no correspondence prior to its receipt of the tenant’s termination notice, the landlord was not aware of any reason why it was not permitted to rectify the premises.

  3. Particular reliance was placed on the timeline in the landlord’s evidence (L31-58) and it was noted that, on 5 May 2020, the tenant and her support worker (Steven) sought a transfer to another property and were provided with the relevant form. It was said that form was never provided despite it being stated that the tenant was eligible for such a transfer to alternative accommodation. Instead, the landlord found it necessary to come to the Tribunal on two occasions to obtain access to the premises. Ms Hall said the landlord relied on its communication notes (L149-156).

  4. After referring to the landlord’s applications to be Tribunal (the first being filed on 10 June 2021 with an access order being made on 30 June 2021, and the second being filed on 10 February 2022 with an access order being made on 26 April 2022), it was said that the Lismore floods meant there was a lack of available suppliers. It was also said that, after carrying out remedial work, the landlord was not given an opportunity to carry out any further work that was required because the tenant chose to terminate the tenancy.

  5. Ms Hall reminded the Tribunal that the landlord: (1) has over 7,000 tenants in New South Wales, (2) did not believe that its good name and reputation should be damaged by these proceedings, and (3) never intended to cause the tenant any harm.

  6. It was submitted that the compensation sought by the tenant was excessive, having regard to the periods of time when the landlord was unable to gain access, and that 12 weeks of rent, from 30 November 2020 to 25 February 2021 was reasonable. Further, that it was not disputed that there was mould but that the landlord was not given an opportunity to undertaken work after the “second report”, presumably a reference to the 5 August 2022 report of Mr Neill (T178). Finally, it was noted that, in relation to mould, some responsibility rests with a tenant, in relation to ventilation and cleaning.

Submissions in reply

  1. In response to the landlord providing an opportunity to transfer to alternative accommodation, it was said that was not what the tenant wanted as what she was seeking was temporary accommodation.

  2. It was said that a reason was provided on 16 April 2021 for refusing access (L31) and that the tenant’s two reasons for refusing access were (1) she needed her support worker present, and (2) she was concerned about work being carried out in the premises.

  3. A submission was also made that the landlord should have provided the tenant with a copy of its expert report. While it was said that the tenant’s lawyer asked for it, there was no indication of the basis for any such obligation. Another contention was that the tenant had to leave after the 5 August 2022 report was obtained (T178) because the remediation work had failed.

Consideration

  1. It is not sufficient for a tenant to point to evidence of mould, provide evidence of loss, and seek an order for compensation. The power to award compensation requires a basis for such an award. That basis will usually be that there has been a breach of a provision in either the residential tenancy agreement or an obligation imposed by the RTA.

  2. In the RTA, s 63 requires a landlord to maintain the tenanted premises in a reasonable state of repair. But the mere presence of mould does not constitute a breach. There cannot be a breach of s 63 until the landlord is made aware of the mould and has had a reasonable opportunity to deal with that mould. Merely removing the mould is unlikely to be sufficient since that would usually be to address the effect but not the cause in which case the problem may recur. Accordingly, there cannot be a breach of s 63 until the landlord has had reasonable time to investigate and then deal with the mould, which may involve not only removing the mould but also removing the cause of that mould. Hence the need to determine matters such as when the landlord was notified of the mould, what was done after that, and when.

  3. Given the differing cases put to the Tribunal for the tenant and the landlord, it is necessary to first set out a chronology of the events relevant to liability, as established by the evidence (omitting matters only raised in submissions):

10 Jan 20   Landlord and tenant entered into tenancy agreement (L35)

07 Apr 21   Routine inspection conducted (L226)

09 Apr 21   Landlord asked maintenance to investigate (L31)

13 Apr 21   Landlord requested mould inspection and report within 7 days (L149)

15 Apr 21   Landlord left message for tenant, seeking mould inspection (L149)

15 Apr 21   Tenant replied: call to make appointment before attending (L149)

16 Apr 21   Landlord contacted tenant by phone and email, re inspection (L31)

16 Apr 21   Tenant declined as her support worker was away (L31)

21 Apr 21   Landlord emailed tenant, seeking to arrange inspection (T162)

27 Apr 21   The tenant replied to that email, saying “Thanks heaps” (T162)

05 May 21   Tenant and support worker contacted landlord about moving

tenant to another property, told to fill in transfer form. Appointment made for 11 May 2021 for landlord to assist tenant and her support worker to complete that form. Support worker said tenant had been to hospital, being sick from mould (L32, L150)

05 May 21   Landlord sent letter, seeking inspection on 10 May 2021 (L59)

07 May 21   A person from the office of the tenant’s State MP emailed and rang the landlord, suggesting alternative accommodation be found (L150)

07 May 21   The landlord sought to confirm an 11 May 21 appointment for completion of the transfer paperwork (L69)

11 May 21   Tenant’s support worker cancelled appointment, saying they had started completing the documents and it would take more time as the tenant does not have a passport or birth certificate. He was emailed a consent form and asked to keep the landlord updated. (L33)

25 May 21   The landlord followed up completion of the transfer form (L68)

10 Jun 21   Landlord lodged 1st Tribunal application, seeking access order (L29)

30 Jun 21   Tribunal made 1st access order (T72)

08 Jul 21   Inspection conducted (L6)

12 Jul 21   Landlord obtained mould report from Ms Ritter (L3)

08 Nov 21   Landlord asked tenant to allow measurement under the sink (T198)

11 Nov 21   Tenant obtained report from psychologist (T57)

04 Dec 21   Tenant obtained first mould report from Mr Neill (T30)

21 Dec 21   Tenant did not permit entry to measure cupboard under sink, as opening cupboard would allow mould fumes to escape (T165), tenant’s lawyer suggested that no prior notice was provided (T167)

07 Jan 22   Tenant did not permit entry to measure cupboard under sink, as opening cupboard would allow mould fumes to escape (T154)

11 Jan 22   Tenant’s lawyer asked why access was sought (L154)

12 Jan 22   Landlord offered to attend when tenant not there (L154)

21 Jan 22   Tenant’s lawyer provided written response (L154)

26 Jan 22   Landlord advised of another access application to the Tribunal (L128)

27 Jan 22   Tenant’s solicitor asked landlord to wait two weeks (L127)

10 Feb 22   Landlord lodged 2nd Tribunal application, seeking access order (L99)

20 Apr 22   Tribunal made 2nd access order (T54)

11 May 22   Landlord sought 20-24 June 22 for work due to shortage of specialists due to result of floods in Lismore (L83)

20-24 Jun 22   Remediation work carried out at the premises (L155)

22 Jun 22   Testing conducted, and certificate of analysis issued (L92)

05 Aug 22   Tenant obtained second mould report from Mr Neill (T178)

23 Sep 22   Tenant’s solicitor sent notice of termination to landlord (T1)

12 Oct 22   Tenant vacated the premises

12 Jan 23   This application was lodged with the Tribunal (L1)

  1. There was an unsigned and undated document headed “Supporting Letter” from one of the tenant’s support workers (T59). Otherwise, there was no witness statement, statutory declaration or affidavit despite the orders made on 3 February 2023 stating, in note 7: “All evidence from each party and the witness(es) must be in the form of a written witness statement, statutory declaration, affidavit, or expert report as appropriate.”

  2. As a result, apart from the three reports from two mould experts, and the report from the tenant’s psychologist, (none of which made any reference to the Tribunal’s Code of Conduct for Expert Witnesses) the Tribunal has had to base its decision on the contemporaneous documents contained in Exhibits T and L.

  3. Based on the evidence, the Tribunal makes the following findings of fact relevant to the question of liability:

  1. A routine inspection on 7 April 2021 revealed mould which required investigation and work to both remove the mould and address its cause. (L226)

  2. On 9 and 13 April 2021 respectively, the landlord promptly sought an investigation by maintenance personnel and a mould inspection and report. (L31, L149)

  3. From 15 April 2021, the landlord’s attempts to gain access were unsuccessful. (L149, L31, T162)

  4. On or shortly after 27 April 2021 the landlord was advised, by a report from the tenant’s psychologist, that the tenant would be “at severe risk in terms or her mental health and functioning” if the mould was not addressed. (L63)

  5. On 5 May 2021 the tenant and her support work contacted the landlord about the tenant moving to another property and were provided with a transfer form. (L150)

  6. On 7 May 2021 the landlord sought confirmation of an 11 May 2021 appointment in relation to the transfer paperwork, but that appointment was cancelled by the tenant’s support worker (L69).

  7. On 25 May 2021 the landlord followed up the completion of that form and attached a copy. (L68)

  8. Being unable to gain access to conduct an inspection, on 10 June 2021 the landlord applied to the Tribunal for an access order which was made on 30 June 2021. (L29, T72)

  9. On 8 July 2021 an inspection was conducted and the analysis certificate, issued by eurofins Environment Testing (eurofins), showed elevated readings in the four areas identified by Ms Ritter in her report (L23).

  10. The resulting report from Ms Ritter, dated 12 July 2021, found mould (i) under the kitchen sink, (ii) in the wall under that sink, (iii) on top of the kitchen cupboards, and (iv) under the basin in the bathroom, but no malodour. (L3)

  11. On 8 November 2021 the tenant was requested to permit measurements to be taken of a cupboard under the sink. (T198)

  12. On 4 December 2021 the tenant obtained a mould report from Mr Neill. It referred to the same areas as Ms Ritter’s report and set out what work he considered should be done. (T30)

  13. On 21 December 2021 the tenant refused access on the basis that opening that cupboard would allow mould fumes to escape. The position was the same on 7 January 2022. (T167, T154)

  14. On 11 January 2022 the tenants’ lawyer asked why access was sought and on 12 January 2022 the landlord offered to attend when the tenant was not present. (L154)

  15. Being unable to obtain access, on 26 January 2022 the landlord advised it was intending to make a second application to the Tribunal, and on 27 January 2022, when the tenant’s lawyer asked the landlord to wait two weeks, it did so. (L127, L128)

  16. On 10 February 2022 the landlord filed a second application for access and on 20 April 2022 an access order was made, this time by consent, and this time with a provision for temporary accommodation. (L99, T54)

  17. After a delay due to a shortage of specialists, remediation work was carried out, between 20 and 24 June 2022. On 21 June 2022 workers were not willing to continue until cameras were turned off. (L155)

  18. On 22 June 2022 testing was conducted and the analysis certificate, again from eurofins, did not reveal any elevated results (L92).

  19. On 5 August 2022 Mr Neill issued a second report but did not indicate the date of his inspection. He suggested: “The level of decontamination is poor and far from acceptable”. (T178)

  20. On 23 September 2022 the tenant’s solicitor gave notice of termination and on 12 October 2022 the tenant vacated the premises. (T1)

  1. The Tribunal considers the tenant is entitled to compensation of $4,110.12. The reasoning for that conclusion is as follows.

  2. The landlord was put on notice of the existence of mould which required attention on 7 April 2021 and normally would be allowed perhaps up to two months to investigate and then carry out remediation work to remove both the mould and its cause. However, in this case, due to the tenant not providing access, it was not until 8 July 2021 that the landlord was able to inspect the premises. It would clearly be unreasonable to find that the landlord should have completed investigation and remediation by 7 July 2021 when the landlord was unable to inspect the premises until 8 July 2021.

  3. While it would normally be expected that the necessary remediation work would be completed within one month after inspection, in this instance the landlord sought to commence work on 21 December 2021, by measuring a cupboard, but it was not until 20 June 2022, six months less one day later, that the landlord was able to carry out work. Again, the reason for most of that period was the tenant not providing access.

  4. The periods from 7 April 2021 to 12 October 2022 are assessed as follows:

  1. From 7 to 15 April 2021 the landlord acted reasonably, seeking to investigate the mould.

  2. From 15 April 2021, when a request for access to conduct an inspection was made, to 8 July 2021, when access was obtained, the prevention principle applied as the landlord was unable to obtain access.

  3. Having been able to access the premises and inspect the mould on 8 July 2021, the landlord should have completed remediation work within a month, ie by 8 August 2021.

  4. Instead, the remediation work was not completed until 24 June 2022.

  5. However, from 21 December 2021 to 20 April 2022 the prevention principle applied again since the landlord was unable to obtain access to the premises until an order was obtained from the Tribunal.

  6. The period from 24 June 2022 to the end of the tenancy, on 12 October 2022, cannot be regarded as a period during which the landlord was in breach of its obligation to repair. First, the landlord was entitled, based on the analysis certificate dated 22 June 2022 (L92), to consider that the remediation work has been successful. Secondly, it was not until a report dated 5 August 2022 that a contrary view was expressed, being the opinion expressed by Mr Neill in his second report (T178) that: “The level of decontamination is poor and far from acceptable.” Thirdly, there is no evidence that a copy of that report was provided to the landlord. As a result, the landlord cannot be held to blame for what would be a second breach of s 63 of the RTA because it did not have the requisite knowledge.

  1. Plainly, the landlord cannot be held liable for amounts incurred prior to a breach because the landlord is only liable for loss or damage caused by that breach. Nor can the landlord be held responsible for loss or damage after 24 June 2022 because that is when the breach is taken to have ceased and thus cannot cause any subsequent loss or damage.

  2. Accordingly, the Tribunal considers the landlord breached s 63 of the RTA on 8 August 2021 but can only be considered responsible to the tenant from 8 August to 21 December in 2021 and from 20 April to 24 June in 2022.

  3. From the tenant’s schedule of amounts (T153), the claims falling within the two periods identified in the previous paragraph are as follows:

  1. Under the hearing “Expenses incurred in remediating mould problem”, the last three claims (T70-74) which total $962.

  2. Under the heading “Damaged goods replacement”, the second to fifth claims (T76-80) which total $210.30.

  3. Under the heading “Assistance with sleeping outside”, the 15 December 2021 claim (T109) which is for $7.50.

  4. Under the heading “Alternative accommodation”, the first and second claims (T116-117) which total $308.46.

  1. The total of those four amounts is $1,488.26, there are supporting documents for those claims, and they were not challenged by the landlord.

  2. The tenant’s rent account (T141 at T150) suggests that the tenant’s rent was $180.79 from 9 June 2021 to 29 November 2021, and $183.53 from 30 November 2021 to 29 June 2022. Using the higher figure, the rent for the periods from 8 August to 21 December in 2021 (135 days) and from 20 April to 24 June in 2022 (65 days) is calculated to be $5,243.71 ($183.53 per week for 200/7 weeks).

  3. From the reports of the mould experts, it appears that the affected areas in the premises were the bathroom and the kitchen. Compensation at a rate of 50% of the rent was sought and, given (1) the significance of those rooms, (2) the impact on the tenant, and (3) the absence of any submission to the contrary from the landlord, that percentage is considered reasonable. Taking 50% of the amount calculated in the previous paragraph gives $2,621.86.

  4. Adding $1,488.26 and $2,621.86 gives $4,110.12 as the amount of compensation to which the tenant is entitled to recover from the landlord.

  5. For the sake of completeness, and to cater for the contingency that the landlord may appeal this decision, the Tribunal considers the landlord’s case that it offered alternative accommodation which is a claim that the tenant failed to mitigate her loss by not completing and submitting the form which would have enabled her to transfer to alternative accommodation.

  6. The tenant only had to complete a form to transfer from the subject premises. She began to complete that form. She had the assistance of her carer. The landlord offered an appointment to help complete that form. That appointment was cancelled by her carer. The landlord provided a consent form to enable the carer to deal with the paperwork for the tenant. (L31-33, 68-69, 150)

  7. The tenant did not provide that consent to the landlord but, at the same time, was able to provide consent for the office of her local MP to contact the landlord. (T66)

  8. What was being proposed by the landlord, being offered within a week of receiving a psychologist’s report suggesting serious health impacts for the tenant, was accommodation that would have provided the tenant with permanent separation from the mould at the subject premises.

  1. If the reasons for the decision in the prior proceedings (MFI 2) were admissible and formed part of the evidence, the position would be even stronger because that case involved a finding of fact that “The actions undertaken by the landlord do not appear to have completely remedied the problem with the mould” (MFI 2 at [23](10)).

  2. However, there is no evidence either (1) that the tenant’s application, if completed and submitted, would have been successful, or (2) that alternative accommodation, known to be mould-free, was available. A submission that the tenant was eligible for a transfer is not sufficient.

  3. While it is reasonable to find that the tenant should have mitigated her loss by submitting the transfer form or by submitting a consent form that would have allowed her carer to submit a transfer form, that was only the first step in a process. The landlord’s case is that the tenant could and should have applied for alternative accommodation but that falls short of enabling the Tribunal to find that there was alternative accommodation available to which the tenant could and should have relocated.

  4. If there was a failure to mitigate loss by the tenant, applying what was said in Karacominakis, the question would become what loss would the tenant have sustained if she had mitigated her loss?

  5. If there was evidence that the tenant’s application to transfer had been approved and that suitable premises were available prior to the date when the landlord has been found to have been in breach of s 63 of the RTA, namely 8 August 2021, then the tenant would not be entitled to any compensation as she would have no loss resulting from that breach.

  6. For the sake of completeness, the Tribunal considers that, while the RTA contains provisions which only apply to social housing, the evidence does not enable a finding that the relationship was anything more than that of landlord and tenant in relation to the provision of social housing accommodation.

Orders

  1. For the reasons set out above, the following orders are made:

  1. The respondent is to pay the applicant $4,110.12 immediately.

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


Registrar

Decision last updated: 17 July 2023

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Northern Sandblasting Pty Ltd v Harris [1997] HCA 39