Shik v Wu

[2021] NSWCATCD 96

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Shik v Wu [2021] NSWCATCD 96

Hearing dates:

12 July 2021

Date of orders:

15 September 2021

Decision date:

16 September 2021

Jurisdiction:

Consumer and Commercial Division

Before:

P French, Senior Member

Decision:

(1) Shen Hua Wu must pay Lydiawati Shik $3,265.43 immediately.

(2) Rental Bond Services must pay the tenant, Lydiawati Shik, the whole of Rental Bond No. S954405-7.

(3) The application is otherwise dismissed.

Catchwords:

LEASES AND TENANCIES: Residential Tenancies Act 2010 (NSW) – frustration – where premises become wholly uninhabitable – termination notice – defects in a termination notice – whether landlord entitled to a break fee - landlord’s liability for damage and loss suffered by a tenant where there is no breach of a landlord obligation

Legislation Cited:

Civil and Administrative Tribunal Rules 2014 (NSW)

Residential Tenancies Act 2010 (NSW)

Cases Cited:

Abdel Messih v Marshall [2018] NSWCS 648

De Soleil v Palmhide P/L [2010] CTTT 464

Kenny v Killalea [2015] NSWCATAP 66

Menashi v Ly [1997] NSWRT 162

Texts Cited:

Coronavirus (COVID 19) Temporary Changes to NCAT Operations procedure (18 March 2020 and as subsequently updated)

Category:

Principal judgment

Parties:

Lydiawati Shik (Applicant)
Hen Hua Wu (Respondent)

Representation:

Applicant (Self Represented)
Melody Wu, Property Manager (Respondent)

File Number(s):

RT 21/21262

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. This is an application by Lydiawati Shik (the tenant) for an orders pursuant to sections 45 and 187(1)(d) of the Residential Tenancies Act 2010 (RT Act) that would abate the rent payable for the premises in its entirety between 12 April 2021 and 16 June 2021, and require Hen Hua Wu (the landlord) to pay her a total of $8000.00 in compensation for damage and loss she contends she suffered due to a sewerage flood at the residential premises. The tenant also applies for an order under section 175 of the RT Act that would direct Rental Bond Services to pay her the whole of her rental bond which has been frozen pending the outcome of these proceedings. The tenant also originally sought an order under section 103 of the RT Act that would have terminated the residential tenancy agreement on the ground that the landlord had breached the agreement. However, by the time the application came before the Tribunal for hearing, the tenant had returned possession of the premises to the landlord and the residential tenancy agreement had terminated accordingly. This application was made to the Tribunal on 15 May 2021 (the application).

2. The landlord denies the tenant’s claim in its entirety and in relation to the rental bond asks the Tribunal to order that the whole bond of $1600.00 be paid to him in satisfaction of 4 claims totalling $2,726.00 being compensation for cleaning and rubbish removal, rent in lieu of notice and a break fee. There is no related application filed by the landlord so his claim must be limited by the amount of the bond.

3. For the reasons set out following the Tribunal has determined that the rent must be abated in its entirety for the period 12 April 2021 to 16 June 2021 as contended for by the tenant because the pervasive presence of sewerage water and residue in the carpets rendered the premises uninhabitable. As a consequence the landlord must repay the tenant all the rent she paid during this period, which was $3,771.43.

4. The tenant’s claim for compensation for damage and loss caused by the sewerage flood to her furniture and other possessions has been dismissed. There is no way in which this sewerage flood resulted from any breach by the landlord of his obligations to the tenant under the residential tenancy agreement. The tenant must therefore bear her own risk in relation to that event and its aftermath.

5. The landlord’s claim for the cost of rubbish removal from the premises in the amount of $506.00 has been allowed. As already stated, the damage to the tenant’s furniture and other possessions caused by the sewerage flood did not result from any breach of the residential tenancy agreement by the landlord. She bore the risk in relation to that damage, including the responsibility of disposing of those damaged goods. The landlord’s other claims on the bond have been dismissed.

6. The amount owed by the tenant to the landlord ($506.00) has been offset from the amount owed by the landlord to the tenant ($3771.43) with the result that the final order will be that the landlord pay the tenant $3265.43. Rental Bond Services has been directed to pay the tenant the whole of her rental bond. The application has otherwise been dismissed.

Procedural History

7. The application was first listed before the Tribunal for Conciliation and Hearing by telephone on 9 June 2021 in accordance with the Tribunal’s COVID-19 pandemic revised hearing procedure (Coronavirus (COVID 19) Temporary Changes to NCAT Operations procedure (18 March 2020 and as subsequently updated). The applicant and respondent both attended that listing of the application. In accordance with the Tribunal’s usual procedure where both parties are present in person at the first listing of an application, the Tribunal, differently constituted, attempted to assist the parties to resolve the dispute cooperatively in conciliation. Those efforts were not successful. As a consequence, the matter was adjourned to be set down for a Special Fixture hearing.

8. In the directions issued at the conclusion of that hearing is the following notation:

10. It is noted the tenant will allow access to the landlord for further work to be done on the property to clean up after the leak. The tenant will require at least 24 hours’ notice of any access to the property.

Evidence and hearing

9. Prior to the first listing of the original application, both parties had filed and served documentary evidence and submissions. At the first listing of the application further directions were given for the filing and service of documentary evidence, with which both parties complied. The tenant’s bundles were marked Exhibits A1 and A2. The landlord’s bundles were marked Exhibits R1 and R2.

10. Ms Shik attended the hearing by telephone and gave oral evidence under a solemn promise to tell the truth. Ms Melody Wu, a Property Manager in the employ of the landlord’s Managing Agent attended by telephone on behalf of the landlord. She also gave evidence under a solemn promise to tell the truth. The parties had the opportunity to present their respective cases, to ask each other questions, and to make final submissions to the Tribunal.

Material facts

11. This dispute arises from a residential tenancy agreement that was made on 2 March 2021 in respect of a two bedroom apartment situated in a Strata Plan in Narwee. The term of the agreement was 12 months which was expressed to commence on 4 March 2021 and end on 3 March 2022. The rent payable under the agreement was $400.00 per week. The agreement required the tenant to provide the landlord with a rental bond equivalent to 4 weeks rent at the start of the tenancy, which she did. This rental bond has been deposited with Rental Bond Services and remains frozen pending the outcome of these proceedings.

12. Neither party has submitted a complete copy of the residential tenancy agreement into evidence. However, both have conducted their cases on the basis that it was a standard form agreement, and that also appears from the fragments of it that are in evidence. The agreement thus contained in clause 51 (or equivalent) standard form break fee provisions.

13. The tenant lived at the premises with her two children, aged 13 and 15 years.

14. On 12 April 2021 at approximately 5:00pm the tenant noticed black water overflowing from the floor waste outlets in the bathroom and laundry. The flooding continued for approximately two hours until 7:00pm when a plumber turned off the building water supply. The black water spread throughout the apartment saturating the carpets in the living room, hallway and bedroom 1. The flooding was so extensive that it flowed out the front door of the premises into the stairwell of the common property. Neighbouring apartments 2, 3 and 4 experienced the same problem.

15. There is no direct evidence of the cause of the flood. However, in an email the tenant sent her Property Manager on 13 April 2021 the following explanation appears:

… According to the neighbour who talked to the plumber, there was a big pile of grease that blocked the main stem inside the pipe.

16. The tenant attempted to reach the landlord’s agent to report the incident but its office had, by that time, closed for the day. She left a voicemail message describing what had happened and requesting a call back. She then attempted to reach the plumber listed in the residential tenancy agreement for emergency repairs, but he refused to attend because no work order authorising his attendance was in place. She and the occupant of apartment 4, Mr Ashraf el Gawly, then arranged for another plumber to attend the incident on an emergency basis.

17. The tenant has submitted a signed statement by Mr Gawly which attests the facts set out in paragraphs 14 and 16 and 19 below. She has also submitted a statement form Mr MD Chowdhury, the occupant of unit 2 which attests to the facts set out at paragraphs 14 and 16.

18. At about 5:30pm a Property Manager working with the landlord’s agent, Ms Melody Wu, responded to the tenant’s call by text message, directing her to “please send pictures and videos” to two email addresses. The tenant did so later that day.

19. The emergency plumber attended and had fixed the blockage that caused the flood by about 7:00pm. However, the tenant’s apartment was saturated in sewer water and residue and she was obliged to spend several hours that night trying to clean and remove it as best she could. The tenant contends that the carpets were wet, filthy and stank of sewer despite her effort to clean them.

20. In the course of the evening the tenant and Ms Wu exchanged further text messages which included the following:

Tenant

Melody

Another big problem is the carpet as the water goes onto the carpet in the living room, the hall way to the main bathroom and bedroom

…

Really bad smell

…

You better send someone to inspect tomorrow

…

Property Manager

…

Please keep updating. It is a bit complicated. We will have to call the building manager, owner and other parties if need.

Tenant

…

I worry about the carpet. It will give an offensive odour soon

Property Manager

We have to wait for this problem solved (sic) then send someone to clean the carpet. If we send them now maybe water will come up again if it has not been fixed.

21. The following day, the Strata Manager for the Strata Scheme arranged for the common property to be cleaned. The strata scheme’s cleaner inspected the carpets in the tenant’s apartment without performing any work on them and advised the tenant that they were contaminated through to the underlay and had to be taken up and disposed of due to the health risk they now presented. The tenant has submitted into evidence a “report” dated 9 June 2021 prepared by Mr Matt Fielding representing a business trading as Matt’s Carpet Cleaning who was the contractor who carried out cleaning of the common areas on behalf of the Owners Corporation. In that report he states:

OPERATOR’S REPORT – I attended that above building back on the 13 April 2021 due to a sewer overflow from a internal floor waste. On inspection if was noted it was grey water that had gone throughout the foyer tiles, stairs going down to the garage area and also in unit 1. Was engaged to carry out the clean up of the common areas only from strata. With tiles we hot water stream clean off all grey water contamination, then apply a anti microbial treatment to remove all bad bacterial that can cause serious illnesses. As for any carpeted area the only way to guarantee 100% removal of any type of sewer contamination is removal/scrap carpets as the bad bacteria can lay dormant in carpet/underlay and smooth edge.

22. Having received this advice the tenant contacted Ms Wu during the afternoon of 13 April 2021 to ascertain what would be done about cleaning of the apartment and disposal of the carpets. Ms Wu asked the tenant to provide further information about the incident by email to her, without committing to any course of action concerning cleaning or carpet replacement. The tenant emailed Ms Wu a further account of the flood and images of it later that day. She also requested the replacement of the carpet and thorough cleaning of the apartment setting out what had been said to her by the Strata Scheme’s cleaner. That email includes the following statements:

Today I can smell the offensive odour came out from the carpet.

I don’t want my children suffer from breathing. And also my big cupboard was rippled by the water. The mould will develop and also something worse will happen as the black water carried disease and contamination in the carpet. According to the professional advise who came today to sanitize the hall way, it would be great and highly recommended to change the carpet for health purposes. Even you do a proper cleaning, it will not guaranteed the contamination from the black water will do away.

I wish to call the department of trading if there is no proper action taken in place (sic).

23. On 14 April 2021 the landlord’s agent arranged for a cleaning contractor to attend the premises to clean the carpet. When this was communicated to the tenant she protested stating that the carpets had to be removed. However, the agent insisted that the tenant permit cleaning, but stated that if cleaning didn’t work they would seek approval from the landlord to replace the carpets. The tenant contends that the landlord’s cleaner arrived on site at approximately 2:15pm, stayed less than 10minutes, performing vacuuming only, then left.

24. On 15 April 2021 the tenant emailed the landlord’s Managing Agent to complain about the quality of the cleaning carried out by the landlord’s cleaning contractor. In particular she complained that sewerage water remained underneath the cupboards and washing machine and that the carpets remained wet and foul smelling. The tenant later attended the office of the landlord’s agent with a support person to complain about the condition of the premises and the quality of the cleaning contractor’s work. She met with the Principal of that agency, Mr Shi, and a Property Manager. In that meeting, and in a related email to the tenant, the landlord’s Property Manager disputed the tenant’s claim that the cleaning contractor had failed to perform the necessary cleaning and the amount of time the cleaner had spent on site. Nevertheless, it was agreed that the cleaning contractor would return the premises to carry out further cleaning work on 16 April 2021, which she did.

25. The tenant has submitted into evidence a statement made by Thelly Warddany, who is the support person who accompanied her to meet with the landlord’s Managing Agent on 15 April 2021. In that statement Ms Warddany gives an account of the condition of the premises when she met the tenant at the property:

3.    When I came and entered inside her place … it was very smelly and humid. I didn’t want to stay too long because of the bad smell.

4.   I said to Lydiawati, “This place is really bad. It is really humid”.

5.   Before walking on the carpet, Lydiawati gave me sandals to wear, as the carpet was still wet.

26. Prior to the landlord’s cleaning contractor returning to undertake further cleaning on 16 April 2021 the tenant moved her furnishings onto the balcony and into a corner of the living room. After the cleaning contractor’s second attendance the tenant remained dissatisfied with the condition of the premises and the dampness and odour in the carpets. However, she contends that she decided to wait for some time to see if the carpets would dry and the odour disappear before complaining again. She contends her furniture and household goods remained stacked on the balcony and in a corner of the living room while she waited.

27. The tenant contends that by 22 April 2021 the carpet remained damp and foul smelling, so she emailed the landlord’s agent again to complain. In that email she states:

I still can sense the odour in the carpet. All clothes from the cupboard also got affected by the damp. I have removed all the contents from my pantries, so there is no room for us to sit freely, as I have to dry the pantries (sic) cabinet bottom. My dining table is also full of stuff, as I am thinking the carpet will be changed soon. So, I won’t do double job as it is very difficult and tiring.

Would you tell me what’s going on next?

…

28. The landlord’s agent did not respond to the tenant’s email of 22 April 2021. On 29 April 2021 the tenant telephoned her Property Manager to again complain about the damp and foul smelling carpet, and to request its replacement. The Property Manager asked the tenant to put her information and her request in an email to her. The Property Manager did not commit to doing anything else in relation to the condition of the carpet.

29. Shortly after 22 April 2021 the tenant contends that she started to notice mould growing on her furniture and other household items. On 28 April 2021 Ms Cony Lee, a friend of the tenant visited her at the premises. The tenant has submitted into evidence a statement made by Ms Lee, which gives an account of the condition of the premises on that date. It relevantly states:

3.   When I came inside, I said to Lydiawati, “There are so many moulds. This place is smelly.”

4.   When I saw the condition of the carpet, I said to Lydiawati, “This carpet should be changed. You need to move out as soon as possible”.

5.   I offered Lydiawati to stay at my home, but she decided to stay there, as she thinks that the landlord will change the carpet.

30. On 30 April 2021 the tenant lodged a complaint about the situation with NSW Fair Trading.

31. On or about 6 May 2021 the tenant complained again to the landlord’s agent about the condition of the premises and the mould growth, attaching photographs depicting mould. A Property Manager responded to this email on 10 May 2021 stating:

Hi Lydia

We will send the cleaner again to check the cleaning, and advise the owner to change the carpet. We hope the owner is willing to change the carpet.

Please open the window to lower the humidity indoor, or turn on the exhaust fan.

There will be rain in the coming days. Please keep the property dry.

Thank you so much for maintaining the property.

32. On 11 May 2021 the tenant emailed her Property Manager again attaching photographs of mouldy clothing. In that email she states:

Please check these photos of mouldy jackets. Basically the mould is growing everywhere. This is very bad for the health. I wish to terminate the contract.

33. On 12 May 2021 the Property Manager replied to this email stating:

Hi Lydiawatishik

Sorry to hear that.

Please advise us your move out date, and the key needs to return to our office.

As you are in the fixed term, there will be a break fee, but the owner will offer you a discount for the break fee.

Additionally, please clarify the area that is damaged by the black mould. We will negotiate with strata.

34. On 13 May 2021 the landlord’s cleaner attended the premises for the third time to inspect the mould apparently with a view to providing the landlord’s agent with a quotation for mould cleaning.

35. Also on 13 May 2021, one of the tenant’s daughter moved out to live with another family member due to respiratory distress which the tenant contends was caused by mould. In support of this contention the tenant has submitted into evidence a copy of a medical certificate issued by her daughter’s doctor, Dr Any Hsu, dated 21 May 2021, which states:

… I have been reviewing Miss Emily Gray for shortness of breath for several months now. She was started on Ventollin and has been responsive to this, suggesting she could have asthma or hypersensitive airways. Conditions in her current residence such as carpet and mould can exacerbate her breathing difficulties”.

36. On 14 May 2021 the tenant filed the current proceedings.

37. On 17 May 2021 the tenant consulted her doctor because she was feeling unwell. The tenant contends that her doctor recommended that she move out of the property. In support of these contentions the tenant has submitted into evidence a medical certificate written by Dr Kiro Ristevski dated 22 May 2021 which states:

Ms Lydiawati Shik

Is receiving medical treatment.

She informed me that she has been exposed to mold in her place of current residence.

In my medical opinion, prolong exposure to mould could potentially lead to medical problems.

38. On 17 May 2021 the tenant’s Property Manager sent the tenant an email in which she stated: “although you applied for Tribunal, we still organise the mould cleaning job for you. There is no conflict, and we try our best to do the job”.

39. On 18 May 2021 the tenant made email enquiries of three carpet cleaning contractors. Her inquiry took the following form:

Hi, I would like to inquire what is the normal procedure when almost the entire carpet has been flooded by blackwater that came out of the drain holes of the bathroom and laundry of my unit property at Narwee, of which I am a tenant. Would you be able to send advise and recommendation to my email, for me to provide to my agent, thank you.

40. Later on 18 May 2021, Mr Mark Stachnik representing a business trading as Drymaster Carpet Cleaning replied to this enquiry stating:

Hi Lydiawati

I would recommend the carpet and underlay be removed from the premises.

I would then clean + deodorise + dry the concrete floor before new carpet is laid

I would not recommend restoration or cleaning of the carpet.

….

Incorporated into Mr Stachnik’s email were two information sheets about the impact of black water on carpet. The tenant relies upon the following passages of those information sheets in particular:

… Finally there is black water damage, or Category 3, which is highly contaminated and can lead to illness, disease and infection

…

Dangers of Black water

… black water is known to contain bacteria and viruses that lead to countless diseases and infections. Most commonly, black water leads to hepatitis, cryptosporidiosis, gastroenteritis, giardiasis, leptpspirosis and wound infections if you have a cut or scrape.

There’s also campylobacteriosis, which is one of the most common diarrheal illnesses in the country. It’s a relatively common infection that comes from ingesting or inhaling black water or contaminated water. If the infection spreads to the bloodstream, it can become life threatening quickly.”

…

3/ Please be advised that if carpet underlay and floor are left to dry naturally without the use of drying equipment this may lead to mould and other health issues.

…

5/ Sewage category 3. Water – known as “black water” and is unsanitary. When premises has been affected by sewerage overflow we do not attempt carpet restoration. The carpet and underlay must be removed from the premises and disposed and the flooring treated and deodorised. Australian Standards does not allow restoration of sewage affected items.

41. On 19 May 2021 Mr Shaden Watson representing a business trading as Carpet Right responded to the tenant’s enquiry stating: “unfortunately that carpet would not be salvageable. Once the underlay gets wet, you cannot extract it and it would need to be replaced”. Also on 19 May 2021 the tenant received a response to her enquiry from “Claire” representing a business trading as Butler Carpet Cleaning which relevantly states:

If the black water contains human waste, we would recommend the carpets be replaced.

If there is no human waste, we would recommend initial extraction of any excess water. It is important to dry the carpets as quickly as possible so that the risk of mould is reduced.

When the carpet is completely dry, it should be cleaned, sanitised and deodorised.

42. Also on 18 May 2021 the landlord’s cleaner contacted the tenant by text message to attempt to arrange a time to attend the premises to carry out mould cleaning. Shortly afterwards the landlord’s Property Manager also contacted the tenant by email requesting that she provide access to the premises for the landlord’s cleaning contractor. In response, on 19 May 2021, the tenant refused access stating:

The time to clean is already passed. The carpet should have been changed in 24 hours after the black water flooded the carpet. Even your own cleaner who has come many times to clean in the past agreed and said to me that the carpet must be changed. I have obtained written evidence from professional cleaners to support this matter. As I said I want all my furniture compensated and will go to Tribunal.

43. The tenant contends that she stayed with her sister most of the time from 14 May 2021 due to sickness being caused by the damp and mouldy conditions in the apartment, and that after 10 June 2021 she and her son lived with her sister without ever returning to stay at the premises. The tenant contends that her daughter did not live at the property from 13 May 2021 because of her respiratory distress that was being caused by the damp and mould.

44. On 16 June 2021 the tenant sent an email to two of the landlord’s agent’s Property Managers, which had a subject line “Termination of the contract”. The body of the email stated:

Hi Jingwen and Melody

I have now moved out of the property. The keys will be returned today which mean I terminated the contract. This will allow access to the property as Tribunal request.

45. The tenant returned the keys to the premises to the landlord’s agent later on 16 June 2021. On that date rent was paid up to and including 16 June 2021.

46. It is not in dispute that on the date she vacated the premises the tenant left 6 items of water damaged furniture and sundry other items on the balcony and in a corner of the living room.

47. The tenant contends that she had to discard a large number of furnishings and personal items due to water damage and mould contamination. She claims compensation from the landlord in relation to 19 of these items, the details of which are set out in a table at page 50 of her bundle. In that table the tenant has estimated both the original and new replacement cost of each item. She has discounted the value of some items, but not all, to take account of their age. The total amount claimed is $7420.00. No receipts for the original purpose or direct evidence of the replacement cost of any item has been submitted.

48. On 22 June 2021 the landlord’s Property Manager attended the premises to carry out an end-of-tenancy final inspection. This was the first time a representative of the landlord attended the premises since the flood on 12 April 2021 (other than the cleaning contractor). The landlord contends that the carpet was noted to be clean and dry at that time.

49. At the end of the inspection the Property Manager complained to the tenant about the furniture left on the premises and asked her to remove it. After several exchanges in which the tenant refused to accept the responsibility for removing these items the Property Manager arranged for a contractor to do so as rubbish at a cost of $506.00. The landlord claims this cost in compensation from the tenant. The Property Manager also complained about the state of cleanliness of the build-in robe in bedroom 2 and the shower screens in the bathroom. Photographs of the alleged uncleanliness have been submitted into evidence, but nothing probative is depicted in them (that is, no uncleanliness is apparent). The landlord claims a cleaning fee of $220.00 in compensation. The contractor’s invoice that supports this claim itemises the following work: “cleaning fee including clean screens, steam carpet and clean balcony”.

50. The landlord also sought to claim both two week’s rent (being $800.00) in lieu of notice (it’s not clear why two weeks, unless it was accepted that the notice was given pursuant to section 98 on the ground of the landlord’s breach of the agreement) and a break fee equivalent to 3 weeks’ rent (being $1200.00) based on clause 51 of the agreement, the tenancy having ended at a time when more than 25% but less than 50% of the fixed term had lapsed.

51. Thus, the total amount of the landlord’s claim against the tenant is $2,726.00, which significantly exceeds the rental bond of $1600.00. The landlord has filed no related application seeking compensation over and above the bond. Any recovery from the tenant is therefore limited by the amount of the bond.

Contentions of the parties

52. The tenant contends that the residential tenancy agreement was frustrated by the sewer flood because it rendered the premises uninhabitable. On this basis, she asks the Tribunal to abate the whole of the rent payable for the premises from the date of the flood, being 12 April 2021, to the date she returned possession, which was 16 June 2021. The tenant also contends that the landlord breached his obligation to maintain the premises in a reasonable state of repair by taking up the carpets and underlay and treating the floor for sewer contamination immediately following the flooding event. She contends that his failure to do so exposed her possessions to prolonged damp and consequent mould contamination. She asks the Tribunal to order the landlord to compensate her for the damage and loss that she suffered as a result of this breach.

53. The landlord contends that he was not responsible for the sewer flood and that the tenant must bear her own risk in relation the damage to her possessions that resulted from that event. He denies that the premises were rendered uninhabitable by the flood, and contends that he acted diligently to deal with the impact of the flood on the premises after it had occurred, including by cleaning the carpets. He contends that the tenant obstructed access to the premises for further cleaning to occur after 14 May 2021 and therefore, in effect, any damage or loss contended for by the tenant after that date, was the result of her own conduct, not his. He submits that the tenancy was of 12 weeks duration, and that the compensation the tenant claims ($8,000.00) is disproportionate to the rent he received ($4800.00) and would result in unfairness to him if awarded by the Tribunal. He contends that the tenant terminated the agreement for an impermissible reason and is therefore liable to pay him rent in lieu of notice and a break fee. He also contends that the tenant failed to remove all rubbish and clean the premises before moving out. He applies for compensation for the costs he incurred in attending to these matters.

54. In her reply to the landlord, the tenant contends that she did not allow access to the premises for further cleaning after 14 May 2021 because she had lodged an application with NCAT seeking among other things, termination of the residential tenancy agreement. She contends that she did not want further disruption until she moved out. She also contends that further cleaning by that date would have been futile because her possessions had already been water and mould damaged.

Consideration

55. In order to determine the outcome of this application the Tribunal must pose and answer the following questions:

1. Was the residential tenancy agreement frustrated by the sewer flood that occurred on 12 April 2021?

2. If it was, did the tenant terminate the residential tenancy agreement in accordance with law on that basis?

3. If it was, should rent be abated for the period the tenant remained in occupation of the premises after the event?

4. If the answers to (a) and (b) is “no” is the landlord entitled to rent in lieu of notice and/or a break fee in relation to the early termination of the fixed term agreement?

5. Did the landlord breach his obligation to maintain the premises in a reasonable state of repair by failing to immediately remove the carpets and treat the floor for sewage contamination?

6. If so, did the tenant suffer compensable loss as a result of this breach?

7. If the answer to (e) is “yes” does the tenant’s refusal to provide access to the landlord’s cleaning contractor after 14 May 2021 disentitle her to compensation?

8. Did the tenant breach the residential tenancy agreement by failing to remove all rubbish and leave the premises reasonably clean on the date she returned possession?

9. If the answer to (h) is “yes”, is the landlord entitled to be compensated for any loss he suffered as a result of the tenant’s breach?

56. Section 45(1) of the RT Act provides that the Tribunal may on application by a landlord or tenant make an order determining the amount of the rent payable if the rent is abated under section 43(2). The Tribunal may order that from a specified day the rent for the residential premises must not exceed a specified amount and the landlord must repay to the tenant any rent paid by the tenant since the specified day that is in excess of the specified amount: section 45(2).

57. Section 43(2) provides that the rent payable under a residential tenancy agreement abates if the residential premises under a residential tenancy agreement are, relevantly: (a) otherwise than as a result of a breach of the residential tenancy agreement … or become wholly or partly uninhabitable.

58. A residential premises is fit for habitation if it is able to be used and dwelt in by a tenant with safety and reasonable comfort having regard to contemporary standards: Menashi v Ly [1997] NSWRT 162. The test for un-inhabitability is a difficult one to satisfy and un-inhabitability will not be found lightly: De Soleil v Palmhide P/L [2010] CTTT 464.

59. There can be no doubt in this case that the premises became uninhabitable as a result of the sewer flood that occurred on 12 April 2021 and remained so due to the landlord’s failure to remove the sewer water saturated carpets and treat the underfloor up to the 16 June 2021. In this respect I find that the premises was flooded by extensive sewer water for a period of approximately two hours on 12 April 2021. The sewer water flowed through an extensive area of the apartment and over the carpets saturating both the pile and underlay and penetrated to the upper floor surface beneath. It also flowed under fixtures and fittings. The carpets remained wet or damp with sewerage water for several weeks, and even after they dried they remained contaminated to the underfloor.

60. As a matter of common sense water containing raw sewage is a dangerous health risk having the potential to cause disease. If there is any doubt about that the evidence filed by the tenant from the three carpet cleaners she contacted on 18 May 2021 is sufficient to dispel it. Sewage water is also seriously malodorous and unsightly, as is wet and damp carpet.

61. The premises could therefore not be dwelt in with safety and reasonable comfort because of the sewage contamination, even when the relatively stringent test for un-inhabitability is applied.

62. The carpet cleaning commissioned by the landlord did not have the effect of restoring the premises to habitable condition. At best, this cleaning only treated the surface pile of the carpet. It did not have any impact on the sewage contamination of the weave, underlay and under floor. Nor did it have any impact of the malodour of the wet carpet. The persistence of this damp and odour is established to my satisfaction on the basis of tenant’s oral and written evidence and the other witness evidence she relies on.

63. It remains unclear to me at the end of the hearing whether the landlord disputes the tenant’s account of the damp and odour. In any event, to put the issue beyond doubt, I reject any suggestion to the contrary. Apart from the cleaning contractor who has not provided any statement, no representative of the landlord attended the premises before 22 June 2021. The landlord is therefore not capable of contradicting the tenant’s account of the condition of the carpet before that date in respect of damp and odour.

64. The landlord’s contention that the carpets were “clean and dry” when the final inspection was carried out on 22 June 2021 can be given little weight. This was 71 days after the flood. It is not surprising that the carpets were dry by this time. The reference to the carpets as being “clean” can only reasonably be understood to refer to the pile, which had been repeatedly vacuumed. No cleaning capable of penetrating to the weave, underlay or subfloor had been carried out. It is therefore obvious that the carpets would continue to harbour dry sewage water residue.

65. The tenant remained in some degree of occupation of the premises until 16 June 2021 in the expectation that the landlord would replace the carpets and treat the sewage contamination beneath them. That was ultimately a futile hope but it was not an unreasonable expectation for her to have. She was encouraged at least twice by her Property Managers that the landlord would do so if his cleaning contractor’s work proved insufficient to deal with the contamination. She was also warned by a Property Manager on 12 May 2021 that if she moved out she would incur a break fee penalty. On 14 May 2021 the tenant lodged this application with the Tribunal, at that time also seeking an order terminating the tenancy, which the landlord resisted. The tenant’s reluctance to act more decisively to terminate the tenancy before 16 June 2021 without a Tribunal order for her protection is therefore understandable.

66. The tenant’s refusal to permit further cleaning of the premises after 18 May 2021 was reasonable given the extensive advice she had received by that date that the carpets required replacement due to their contamination. The landlord has submitted no evidence that is capable of establishing that sewer contaminated carpet is capable of being salvaged by cleaning. His insistence on further cleaning was entirely unreasonable. Even if the tenant had allowed the landlord’s cleaning contractor access to perform further cleaning of the premises it would have made no difference to the position. The premises was uninhabitable because its carpets were extensively contaminated by sewer water residue through to the subfloor. No amount of surface cleaning could remedy that contamination.

67. I find that of the 3 authorised occupants of the premises, the tenant’s daughter moved out to live with a relative on 13 May 2021 due to respiratory distress caused by the damp and mould developing in the premises, and that the tenant and her son frequently slept elsewhere from 14 May 2021 and did not stay overnight at the premises at all from 10 June 2021. The tenant and her daughter were made sick by the damp and mould in the premises.

68. I also find that the tenant’s use of the premises was subject to serious disruption from 12 April 2021. Cupboards had to be cleared of their contents for cleaning and remained stacked on open surfaces, and furniture was stacked on the balcony and piled into one area of the living room.

69. Against this background the tenant’s mere possession of the premises is not inconsistent with a finding that it was uninhabitable.

70. The sewer flood was not caused by any act or inaction by the landlord in breach of his obligation to the tenant. It was a supervening or intervening event for which neither party was responsible that frustrated the residential tenancy agreement. It is thus a circumstance that falls within the scope of section 43(2)(a) of the RT Act, which enlivens the Tribunal to make an order abating the rent under section 45.

71. For the reasons set out above I am satisfied that the sewer flood and its aftermath had such a severe impact on the tenant’s peace, comfort and amenity of the premises that she lost all value of possession in return for the rent she paid. The rent for the premises ought thus to abate in its entirety from 12 April 2021 to 16 June 2021. As the tenant had paid all rent owing for this period, the appropriate form of order is to require the landlord to repay her this rent.

72. Section 109 of the RT Act deals with termination of a residential tenancy agreement in circumstances in where the agreement is frustrated, that is, relevantly, where premises become wholly or partly uninhabitable otherwise than as a result of a breach of the agreement. Either the landlord or a tenant may give the other party a termination notice in these circumstances: section 109(2). The termination notice may end the residential tenancy agreement on the date that the notice is given: section 109(3). The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement: section 109(4).

56. The requirements for a termination notice are set out in section 82 of the RT Act. A termination notice must set out the following matters: (a) the residential premises concerned, (b) the date on which the residential tenancy agreement is terminated and by which vacant possession of the premises will be given, and (in this case) (c) the ground for the notice: section 82(2). A termination notice must be in writing and it must be signed by the party giving the notice.

57. The email sent by the tenant to the landlord’s agent on 16 June 2021 does not satisfy each of these requirements. It does not state the address of the premises or the ground for termination. Nevertheless, the Tribunal is able to look at more than one document to constitute a termination notice (Kenny v Killalea [2015] NSWCATAP 66 at [35]) and section 113 of the RT Act provides, relevantly, that the Tribunal may make a termination or any other order even though there is a defect in the termination notice or its manner of service if it thinks it is appropriate to do so in the circumstances of the case and it is satisfied that the person to whom the notice was given has not suffered any disadvantage because of the defect in the notice or that any disadvantage has been overcome by the order and any associated order.

58. In this case there can be no doubt as to the ground upon which the tenant issued the termination notice: she did so because she considered the sewer flood had rendered the premises uninhabitable. That is clear from all of the surrounding emails the tenant sent the landlord’s property managers between 11 May 2021 and 16 June 2021 and when her email advising of her wish to terminate the agreement dated 11 May 2021 is read together with her email terminating the agreement dated 16 June 2021. Nor could there have been any doubt in the mind of the landlord’s property managers as to the premises in question. The landlord therefore suffered no disadvantage as a result of these defects. He may dispute the grounds upon which the notice was given, but that is a different issue. I am thus free to make any other order despite the defects in the termination notice, including an order dismissing the landlord’s claim for a break fee, if I think it is appropriate in the circumstances that I do so, which I do.

59. Having so determined, I am satisfied that the tenancy ended for a permissible reason. That is, by the tenant issuing the landlord with a termination notice under section 109 of the RT Act on the ground that the premises had been made un-inhabitable by the sewer flood and her giving up possession of the premises in accordance with that notice: section 81(2) of the RT Act.

60. I note that the landlord raised no dispute in relation to the termination notice by application made under section 111 of the RT Act within the time period permitted by Rule 23(3)(b) of the Civil and Administrative Tribunal Rules 2014, being within 28 days of becoming entitled to make such an application, or at all. The termination notice thus remains un-impugned.

61. A break fee is a landlord’s remedy upon the abandonment of premises by a tenant during the period of a fixed term agreement: section 107 of the RT Act. It has no application where a residential tenancy agreement is terminated for a permissible reason in accordance with law, as it was in this case.

62. As the termination notice was given on the ground that agreement was frustrated because the premises had become wholly uninhabitable section 109 permits the tenant to move out without any notice period. The landlord’s claim for rent in lieu of notice must therefore also be dismissed. I also note in this respect that the landlord’s claim for a break fee and rent in lieu of notice are not both maintainable in any event as they would compensate the landlord twice for the same wrong.

63. Even if I were to be wrong in the conclusions I have reached above, section 107(1) of the RT Act confers discretion on the Tribunal as to whether it will order the payment of a break fee in circumstances where premises are found to have been abandoned. It is not bound to do so: Abdel Messih v Marshall [2018] NSWCS 648 at [35]. It would have been contrary to the interests of justice in this case to exercise that discretion in the landlord’s favour. The tenant was subjected to a terrible ordeal by the sewer flood and the landlord’s subsequent failure to take proper action to remove the sewer contamination from the apartment. Even if she had abandoned the premises at law (which I do not find) her conduct was understandable and justifiable. The landlord’s prolonged failure to deal appropriately with the aftermath of the sewer flood was entirely unjustifiable and ought properly to have operated to disentitle him to a break fee.

64. I turn now to the tenant’s compensation claim. In order for her to succeed in this claim she must prove that the landlord breached an obligation to her under the residential tenancy agreement which resulted in her suffering compensable loss. Neither a landlord nor a tenant are strictly liable for any change in the condition of premises in the course of a tenancy, or for every event that impacts on the tenancy, nor does a landlord or tenant indemnify the other against any loss suffered in the context of the tenancy.

65. As I have already found above, the sewer flood was not caused or permitted by any act or failure to act by the landlord. It was a supervening or intervening event. The tenant bore her own risk in relation to such events, and it was open to her to obtain contents insurance against such a risk. Whether she did so or not was entirely a matter for her. The landlord was not liable to indemnify the tenant for any loss she might suffer from such an event, and nor was he responsible to otherwise insure her against any such loss. Any damage to the tenant’s furniture and other possessions resulting from the sewer flood is therefore not compensable by the landlord.

66. I accept that the landlord’s failure to deal appropriately with the aftermath of the flooding event by removing the carpets and underlay and decontaminating the premises did at some point within, say, a week of the event come to constitute a breach of his obligation to maintain the premises in a reasonable state of repair. In this respect it is clear that the landlord was on notice of the sewage contamination from 12 April 2021 and given the seriousness of the health risk it posed a landlord acting with reasonable diligence would have removed the carpets and underlay and decontaminated the premises by that time. However, it would be necessary for the tenant to prove that it was this breach that caused the damage and loss she contends for and not the flood event per se.

67. On the evidence before me I am satisfied that the damage to the tenant’s furniture is primarily water damage, that later grew mould. Exposure to water occurred during the flood event itself and continued as a result of it sitting on wet carpet after that time. Even if I were to allow that the landlord ought to have acted to remove and replace the carpet etc within 7 days, the water damage would already have occurred by that time – that is, its cause was the flood, not the breach of the landlord’s obligation to maintain premises in a reasonable state of repair.

68. It may be arguable that some mould damage to the tenant’s furniture and other possessions is referrable to the landlords breach; that is, it might be contended that the persistent damp conditions that prevailed because the wet carpets remained in situ gave rise to the mould, rather than the flooding event itself. However, as it is contended by the tenant that her furniture was water damaged by the flood, it would have remained damp even if the carpets had been removed, and could also have resulted in mould growth. I am thus not satisfied that it is possible to isolate any particular damage and loss contended for by the tenant from the flood itself. It was that event that caused this loss and the landlord is therefore not liable for the loss because the flood was beyond his control.

69. I now turn to the landlord’s claim for compensation for rubbish removal and cleaning. The claim for cleaning must be dismissed. There is no satisfactory evidence that the bathroom screens, the interior of any wardrobe, or the balcony (apart from rubbish) was left unclean. The cleaning invoice also itemises carpet cleaning. There is no maintainable case that the tenant would be responsible for the cost of cleaning carpets that had been saturated with sewer water. It is plain that these carpets require removal and replacement. If the landlord wishes to clean these contaminated assets he must do so at his own expense.

70. I have found that the damage to the tenant’s furniture and possessions was the result of the sewer flood which the landlord neither caused nor permitted. It was an event in relation to which the law requires the tenant to bear her own risk. It follows from this that the landlord is not responsible for the cost of disposing of rubbish in the form of the tenant’s water damaged and contaminated possessions. That is the tenant’s responsibility. I will therefore allow the landlord $506.00 for the cost he incurred in disposing of the tenants discarded furniture and other items.

Conclusion

88. The amount that I have found owing by the tenant to the landlord ($506.00) must be offset against the amount I have found owing by the landlord to the tenant ($3,771.43.). The Tribunal’s final orders will therefore be that the landlord must pay the tenant the sum of 3,265.43 immediately. Rental Bond Services will be directed to pay the tenant the whole of her rental bond. The application is otherwise dismissed.

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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: 12 November 2021