Stewart v Wang

[2024] NSWCATCD 70

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Stewart v Wang [2024] NSWCATCD 70

Hearing dates:

21 August 2024

Date of orders:

19 December 2024

Decision date:

19 December 2024

Jurisdiction:

Consumer and Commercial Division

Before:

B. Koch, General Member

Decision:

(1) The Tribunal directs Rental Bond Services to pay the sum of $1,160.00 to the respondent landlord, out of rental bond numbered T311746-2.

(2) The balance of the bond is to be paid to the applicant tenant.

(3) The balance of the tenant’s application is dismissed.

Catchwords:

LEASES AND TENANCIES – Default and Termination – Abandonment of Premises

LEASES AND TENANCIES – Covenants – Covenant for quiet enjoyment

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Civil and Administrative Tribunal Rules 2014 (NSW)

Residential Tenancies Act 2010 (NSW)

Residential Tenancies Regulation 2019 (NSW)

Cases Cited:

Abdel-Messih v Mao [2016] NSWCATAP 223

Abdel-Messih v Marshall [2018] NSWSC 648

Al-Basry v Maharaj [2022] NSWCATCD 9

Elsom & Taylor v Coroneos [2016] NSWCATCD 47

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

Lethorn v Wagenheim [2020] NSWCATAP 199

Rathod v Liu [2019] NSWCATAP 80

Taylor v Reilly [2021] NSWCATCD 74

Texts Cited:

Residential Tenancies, Law and Practice, NSW (8th ed, 2022, The Federation Press)

Category:

Principal judgment

Parties:

Lawrence Stewart (applicant/tenant)
Yu Wang (respondent/landlord)

Representation:

Mr Stewart in person with Mr Walters (applicant/tenant)

Ms Wang in person
(respondent/landlord)

File Number(s):

2023/00367306 (formerly RT23/50474)

Publication restriction:

Nil

REASONS FOR DECISION

1. On 10 November 2023, the applicant tenant lodged an application seeking orders in relation to his tenancy at residential premises at Greenwich, NSW (Premises).

2. The proceeding has taken a tortuous path to the final hearing listed on 21 August 2024, evidenced by the length of time that has passed since the application was lodged and the size of the Tribunal’s file.

3. At the hearing on 21 August 2024, the applicant appeared in person but was represented by Mr Walters (pursuant to leave granted by the Tribunal on 8 May 2024). Mr Walters gave evidence subject to an affirmation. The respondent landlord appeared in person and gave evidence subject to an affirmation.

4. At the start of the hearing, the Tribunal sought clarity as to two matters:

1. What in fact are the claims made and orders sought by the parties?

2. What, of the mass of material on the Tribunal’s file, the parties in fact sought to rely upon to advance their claims?

5. As distilled by the parties, there are two issues that were finally pressed at the final hearing:

1. Who is entitled to the bond of $2,000 paid by the tenant at the start of his tenancy at the Premises? The tenant asserts that he is entitled to the return of the whole of the bond. The landlord asserts that she is entitled to $1,160 on account of a break lease fee with the balance to be returned to the tenant (Bond and Break Lease Fee Claim).

2. Is the tenant is entitled to a retrospective rent reduction under s 43 of the Residential Tenancies Act 2010 NSW (“Act”) on account of “excessive noise, dust and fumes from the demolition and renovation” of apartment 4202 adjoining the Premises? The landlord denies any entitlement to such reduction (Rent Reduction Claim).

6. As regards documents, the applicant sought to rely upon:

1. An 8-page document provided by the tenant to the Tribunal and to the landlord in about May 2024. The Tribunal has marked that document “Tenant A”.

2. A folder of tabbed documents lodged with the Tribunal by the tenant on 15 March 2024 (ignoring the covering submission which has been superseded by “Tenant A”).

3. A 1-page submission provided at the hearing, comprising a colour calendar of March to October 2023. The Tribunal has marked that document “Tenant B”.

4. A 1-page submission provided at the hearing titled “Daily Compensation”. The Tribunal has marked that document “Tenant C”.

5. The documents produced pursuant to a Summons issued to RM Watson Holdings Pty Ltd (RM Watson Documents).

7. The respondent sought to rely upon:

1. A 13-page document titled “Respondent’s Reply to the Applicant’s NCAT Application … 19 June 2024” lodged with the Tribunal on 18 June 2024. The Tribunal has marked that document “Landlord A”.

2. A folder of tabbed documents lodged with the Tribunal by the landlord on 23 April 2024 (ignoring the covering submission which has been superseded by “Landlord A”).

Facts

8. Except where expressly stated, what follows are the Tribunal’s findings of fact. Some further findings will be made in the context of determining each of the Bond and Break Lease Fee Claim and the Rent Reduction Claim.

9. The tenant and the landlord signed three residential tenancy agreements in respect of the Premises. By residential tenancy agreement dated 23 June 2022, the parties agreed the tenant would lease the Premises for a fixed term of 6 months from 27 June 2022 to 26 December 2022. By residential tenancy agreement dated 15 October 2022, the parties agreed the tenant would lease the Premises for a further fixed term of 3 months from 27 December 2022 to 26 March 2023 (Second Lease). Finally, by residential tenancy agreement dated 13 March 2023, the parties agreed the tenant would lease the Premises for a further fixed term of 12 months from 27 March 2023 to 26 March 2024 (Third Lease).

10. The rent payable under the Second Lease was $450 per week. In February and March 2023, the tenant (or Mr Walters) engaged in text message correspondence with the landlord’s agent about what the rent would be following the end of the Second Lease. The landlord originally sought $650 per week. In early March 2023, the tenant/Mr Walters and the agent had the following exchange (March Text Messages):

2/3/23

TENANT: The last [2] bedroom units in that complex rented for $570 per week. We could do 580 per week for a 12 month lease with the first six months paid up front.

TENANT: If she is not willing to do a 12 month lease, then we would be happy with a six month lease at $580 per week.

AGENT: Let me try $580 for 12 months, first 6 months pay in front?

TENANT: You may not be aware, but the repairs to the waterproofing have not really commenced yet. I am expecting quite a bit of noise when they do. There is still also the potential for water coming in from next door until everything is complete.

AGENT: Ok

4/3/23

AGENT: Owner agreed

…

13/3/23

TENANT: With all the work being done in the building for the next 6 months, I doubt they would find anyone else to stay here as this is the worst building in the complex for waterproofing repairs.

11. The Tribunal notes there appears to have been further text messages between the tenant/Mr Walters and the agent in relation to the rent and term of the Third Lease but they do not bear on the issues now before the Tribunal.

12. It is also relevant that in December 2022, the tenant had become aware of works that would be undertaken in common areas and in other apartments in the apartment building (being the works to which the tenant would subsequently refer in the March Text Messages). The tenant saw a notice titled “REMEDIAL WORKS UPDATE” which relevantly provided:

Dear Residents,

Preparations for remedial works on the roof are about to commence. Here are some key points to be aware of:

December 2022

Construction of a site office in the car park

Removal of ballast (rocks) from the roof

Preparing the area for remedial works

January 2022 (sic)

Replacement of the roof membrane commences

Please note that remedial works in individual apartments will not commence until after the roof is completed and tested so that we can assess the effectiveness of this solution.

13. Also included in the tenant’s evidence is a further notice titled “REMEDIAL WORKS” dated 3 March 2023 which is in the following terms:

Beginning Monday 6th March, there will be increasing noisy work being carried out across each rooftop.

Commencing Saturday 11th March, further work to the roof membrane and waterproofing with (sic) commence.

Workmen may be on site from 7AM, no noisy drilling or similar will occur before 9AM and all noisy work will be completed by 1PM, however work men may still be on site until 3PM.

14. By no later than 4 April 2023, works had commenced in the apartment adjoining the Premises (“4202”). On that date, the tenant or Mr Walters sent messages to the landlord’s agent including photos of the door of 4202 with a sign warning “DANGER CONSTRUCTION SITE”, a notice regarding “Work Hours”. Further, the tenant sent a sound file and a message stating “The noise in the living room for the past two weeks”. The only response from the agent appears to be an extract from a document of the Strata Committee complaining about certain conduct of the tenant and Mr Walters.

15. One of the RM Watson Documents produced upon Summons was an email from Mr Gilroy, a Project Manager employed by RM Watson to persons apparently associated with the owners corporation on 28 March 2023:

There are 3 bathrooms/laundrys that RM Watson need to undertake membrane works in. This means that demolition of the entire bathroom/laundry will need to be undertaken. The owner/tenant of the units where this will take place will be highly impacted as they will not have a functioning bathroom (unless they have 2 bathrooms).

We need to inform the owners/tenants of this ASAP so that another bathroom or accommodation can be sorted. I think that they should be informed of the works and a discussion had between all 3 units / strata and myself before we book in dates to undertake these works. Unit 4202 is empty at the moment so this shouldn’t affect anyone.

I predict the process will be a 3-6 week time frame per bathroom/laundry. We can start the works in 4202 at anytime and this will give us a better timeline on how long the works will take for each unit.

16. The RM Watson Documents also clarify when precisely works were conducted in 4202. It is apparent that works were conducted within 4202 and on the balcony of that apartment between 24 March 2023 and were finalised on 6 September 2023. To the extent that “Tenant B” conflicts with the RM Watson Documents in respect of when works in 4202 were completed, I prefer the objective and detailed evidence of the RM Watson Documents. The description of those works given by RM Watson does make it plain that the tenant would have experienced a good deal of noise from the works at certain times. By way of example:

5 April – Continued with demolition of bathroom. Also partial demolition of water damaged walls and mouldy walls in other rooms commenced.

…

12 April – Continued grinding of the membrane to bathroom.

…

12 May – Plumber jackhammered and grinded concrete around the existing balcony drains.

…

15 June - Core drilled two new overflows through the balcony wall to balcony.

17. On 27th September 2023, the tenant sent an email in the following terms to the landlord’s agent (“Termination Email”):

I would like to terminate my lease ahead of time due to the excessive noise, dust and fumes from the renovation of the adjoining apartment and the waterproofing repairs that have been ongoing since December 2022.

During the renovation of 4202, they were using jackhammer like equipment generating noise in excess of 90dB, produced a lot of fine cement dust that caused irritation to my nose and throat, and when they were waterproofing, the fumes were so intense that I had to leave the apartment for the day and then could not open the doors or windows.

Because I had to keep the place locked up, this increase (sic) the damp in the bedroom and I was required to use additional moisture pots to stop the mould from spreading.

In addition to this, the noise generated as a result of the waterproofing repairs is also excessive.

As of writing this email, the noise in 4202 is continuing and the air conditioning has been disconnected.

This goes against clause 15 of the lease and in particular clause 15.3.

During the entire renovation process, I had not received any notification from yourself or the owner. The only update I received was via a notice in the lift…

I spoke with the project manager and he advised me that the real estate or owner was getting notifications every two weeks.

However, clause 49 of the lease would indicate that I be informed of any situation in which the property may be subject to a significant health and safety risk. The fine cement dust and waterproofing fume would fall into that category and yet I did not receive any notice.

In addition to this, you have not inspected the property since I convinced the lease back in June 2022.

At times, the builders, without notice, have requested access to the apartment. This access was not for any urgent repairs to 4201 as specified in clause 20 of the lease.

Given the above mentioned problems I do not expect the conditions of clause 51 and in particular, clause 51.3 to be enforced.

I would also request that the final two weeks rent be waived as way of compensation for the ongoing inconvenience and additional costs to move.

As the project is already over schedule, with no end date plus the constant excessive noise has forced me to find accommodation in a quiet location.

The termination of this lease will be beneficial to myself as the noise is affecting my mental health and the owner can now increase the rent to market value.

The last day of occupancy will be Sunday 15 October 2023 which satisfies the requirement to provide 2 weeks notice.

18. By email sent on 28 September 2023, the landlord responded to the Termination Email in the following terms:

I hope this email finds you well. I wanted to address the recent termination notice you provided, as he appears to be in breach of our lease agreement. There are several important points to consider regarding your notice:

Lack of Previous Complaints: up until this point, we have not received any complaints from you regarding noise or pollution in the building. It’s essential to communicate concerns promptly so that we can address them timely and effectively.

Prior Knowledge of Repair Work: Prior to signing the 12-month lease agreement, you were fully informed about the forthcoming repair work that was scheduled for the building. This information was disclosed to you to ensure transparency and to manage expectations.

Discounted Rent Compensation: To mitigate the inconvenience caused by the forthcoming building renovation, we offered you a discounted rental rate as an acknowledgment of the potential disruptions that might occur during this. This reduction in rent was designed to compensate for any inconvenience you might experience.

Compliance with Strata Laws: The building renovation is organised and controlled by the strata, following all relevant strata laws and regulations. Noise levels and working hours are strictly maintained within legal and acceptable limits to minimise disturbances to residents.

Right to Quiet Enjoyment: You mentioned the “right to quiet enjoyment” clause, specifically clause 15, as the basis for your claim. However it’s important to note that this clause pertains to your rights as a tenant regarding the peaceful and undisturbed use of the property by the landlord. It does not apply to noise or disruptions caused by circumstances beyond the landlords control, such as strata waterproofing repairs or renovations in adjoining apartments.

In light of the above points, your notice to terminate the lease agreement appears to be in breach of the terms and conditions you agreed to when signing the lease. We take our lease agreements seriously an expect tenants to adhere to their contractual obligations, including fulfilling the agreed upon lease term.

Therefore, we kindly request that you reconsider your termination notice and continue to honour the lease agreement as initially agreed.

…

Should you choose to proceed with the termination despite the circumstances outlined above, please be aware there may be penalties associated with the breach of the lease agreement.

19. The tenant vacated the Premises on 16 October 2023.

20. For completeness, the tenant also made reference to works in Apartment 4301, which is located directly above the Premises. However, the RM Watson Documents make it plain that those works did not commence until 26 September 2023, the day immediately prior to the Termination Email being sent. It is not irrelevant that the RM Watson Documents disclose that there was grinding of the membrane, core drilling and jackhammering on 26 and 27 September 2024.

Bond and break lease fee

21. In determining this issue, it is necessary to have regard to the relevant provisions of the Act.

22. Part 5 Division 1 (ss 80-83) contains general provisions dealing with the termination of a residential tenancy. Section 81 deals with the circumstances of termination of residential tenancies, and relevantly provides:

81 Circumstances of termination of residential tenancies

(1)   Termination only as set out in Act A residential tenancy agreement terminates only in the circumstances set out in this Act.

(2)   Termination by notice and vacant possession A residential tenancy agreement terminates if a landlord or tenant gives a termination notice in accordance with this Act and the tenant gives vacant possession of the residential premises.

(3)   Termination by order of Tribunal A residential tenancy agreement terminates if the Tribunal makes an order terminating the agreement under this Act.

(4)   Other legal reasons for termination A residential tenancy agreement terminates if any of the following occurs—

…

(d)   the tenant abandons the residential premises,

(e)   the tenant gives up possession of the residential premises with the landlord’s consent, whether or not that consent is subsequently withdrawn,

Section 98 of the RT Act makes provision for a tenant to give a termination notice on the ground that the landlord has breached the residential tenancy agreement. That section is in the following terms:

98   Breach of agreement—termination notice by tenant

(1)   A tenant may give a termination notice on the ground that the landlord has breached the residential tenancy agreement.

(2)   The termination notice must specify a termination date that is not earlier than 14 days after the day on which the notice is given.

(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.

(4)   The Tribunal may, on application by a landlord made before the termination date and within the period prescribed by the regulations, revoke a termination notice by a tenant if satisfied that the landlord has remedied the breach and that it is appropriate, in the circumstances of the case, to continue the tenancy.

Note.

The tenant may apply directly to the Tribunal on the ground of breach by the landlord for a termination order without first giving notice (see section 103).

23. Part 5 Division 4 (ss 106-107) contains provisions dealing with the abandonment of residential premises. Section 106 confers power on the Tribunal to make an order declaring that the tenant abandoned the residential premises, and relevantly provides:

106 Abandoned premises

…

(4)   In determining whether a tenant has abandoned the residential premises the Tribunal may consider (but is not limited to considering) the following—

…

(b)   any evidence that the tenant no longer resides at the premises,

24. Section 107 contains provisions dealing with the landlord’s remedies on abandonment, and in the form that applied to the tenancy agreement by reason of cl 25 of Sch 2 of the Act relevantly provided:

107 Landlord’s remedies on abandonment

(1)   The Tribunal may, on application by a landlord, order a tenant to pay compensation to the landlord for any loss (including loss of rent) caused by the abandonment of the residential premises by the tenant.

…

(3)   The compensation payable by a tenant under this section in respect of a fixed term agreement is the amount of the applicable break fee for the tenancy, if the agreement provides for the payment of a break fee.

25. The effect of s 107 is that the Tribunal has a discretion to refuse to award compensation to the landlord in appropriate cases: Abdel-Messih v Marshall [2018] NSWSC 648 at [36].

26. In Rathod v Liu [2019] NSWCATAP 80 at [60] the Appeal Panel held that, in the absence of a finding that the tenant had abandoned the premises, an order under s 107 of the Act for the payment of a break fee could not be made. That is, a finding that the tenant had abandoned the premises is a jurisdictional fact which is a condition for the exercise of the power of the Tribunal under s 107 of the Act to order a tenant to pay compensation to the landlord for any loss, including loss of rent, caused by the abandonment of the residential premises by the tenant: Lethorn v Wagenheim [2020] NSWCATAP 199 at [28].

27. The interaction between s 98 and ss 106 and 107 is considered in Anforth & Ors, Residential Tenancies, Law and Practice, NSW (8th ed, 2022, The Federation Press) at [2.98.2]

It seems therefore that the legislative scheme is that a tenant may serve a termination notice alleging breach on the landlord’s part and vacate the premises, unless within seven days of receiving the notice the landlord applies to the tribunal for an order that the breach has been remedied and the tenancy should continue.

If the tenant’s notice is invalid for any reason, including the lack of merit in the grounds alleged in the notice by the tenant, then an abandonment will occur if the tenant vacates. This issue is dealt with under s 106.

28. That is, unless there was a valid reason to terminate the tenancy, the tenancy can only be regarded as having come to an end due to abandonment: see Al-Basry v Maharaj [2022] NSWCATCD 9 at [69].

29. The landlord did not make an application to revoke the Termination Email under s 98(4) of the RT Act. The question before the Tribunal is therefore whether the Termination Email was valid under s 98 of the RT Act. If the Termination Email was valid, no question of a break lease fee arises and the whole of the bond ought be returned to the tenant. If the Termination Email is invalid, the Tribunal must consider whether to exercise its discretion under s 107 to order payment of a break fee on the basis an abandonment has occurred.

30. There is no doubt that the Termination Email specified a termination date in compliance with s 98(2) of the RT Act. Further, there is no doubt that the Termination Email was served on the landlord. The Tribunal is satisfied that the Termination Email satisfied the requirement in s 82(1)(c) of the RT Act that a termination notice set out the grounds for termination. It is at least arguable that the Termination Email fails to comply with s 82(1)(a) in that it does not specify the address of the Premises. Further, although the Termination Email is in writing, there is a question whether it is “signed by the party giving the notice” for the purposes of s 82(2). Whether that is the case or not, the Tribunal is satisfied that the present is an appropriate case to waive such defects in a notice of termination pursuant to s 113 of the RT Act. Having regard to the course of events set out above, the Tribunal is satisfied that the landlord has not suffered any disadvantage because of the lack of a signature on the Termination Email and, particularly in light of the way the parties have conducted themselves after service of that notice, this is an appropriate case to waive any defects.

31. The validity of the Termination Email therefore hinges on whether the breach alleged is proved.

32. There is an interesting question as to which party bears the burden of proving the existence or absence of the breach alleged by a notice served under s 98 in the present circumstances. It is trite law that the bond is the property of a tenant and the landlord bears the burden of proving an entitlement to any part of the bond. However, the learned authors of Residential Tenancies, Law and Practice, NSW state at [2.98.2] that “that is alleged must be proved by the tenant” and “should the tenant fail to prove that the breach occurred, but has already vacated the premises, then the tenant may be found to have abandoned the premises”.

33. Although, given the conclusions reached below, it is not strictly necessary for the Tribunal to determine the question of who bears the onus of proving whether or not the breach relied upon in the Termination Email in fact occurred on the present application, the Tribunal prefers the view expressed in Taylor v Reilly [2021] NSWCATCD 74 at [14] that “each party also has the burden of proving any affirmative defence that he or she raises to the other party’s claims” to the civil standard on the balance of probabilities. The tenant’s claim that he was entitled to terminate on account of breach pursuant to s 98 of the Act is such an affirmative defence to the landlord’s claim to a break fee.

34. The breach relied upon in the Termination was breach of clause 15 of the Third Lease providing for the tenant’s right to quiet enjoyment. Clause 15 substantially reflects the terms of s 50 of the RT Act:

(1)  A tenant is entitled to quiet enjoyment of the residential premises without interruption by the landlord or any person claiming by, through or under the landlord or having superior title (such as a head landlord) to that of the landlord.

(2)  A landlord or landlord’s agent must not interfere with, or cause or permit any interference with, the reasonable peace, comfort or privacy of the tenant in using the residential premises.

Maximum penalty—10 penalty units.

(3)  A landlord or landlord’s agent must take all reasonable steps to ensure that the landlord’s other neighbouring tenants do not interfere with the reasonable peace, comfort or privacy of the tenant in using the residential premises.

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

35. As the objective documents make plain, there can be no doubt that the tenant would have experienced a good deal of noise from the works in the adjoining unit 4202 at certain times between April and early September 2023. Given the nature of the works, the Tribunal accepts the evidence of the tenant that there would have, on occasions, been dust and fumes.

36. In “Landlord A”, the landlord submitted that, the tenant being her only tenant in the complex and the works being the subject of control by the Strata Committee and RM Watson having been engaged by the Strata Committee, there was no basis to find that there had been any breach of s 50 by her or any agent or third party for whom she was responsible. The landlord relied upon Abdel-Messih v Mao [2016] NSWCATAP 223 at [52]:

Accordingly, we do not accept that the building manager is the agent of the landlord such that any actions by the building manager could constitute a breach of the landlord’s obligation to provide quiet enjoyment to the appellant in a manner which contravened the residential tenancy agreement and/or s 50 of the RT Act

37. That submission does not take account of what the Appeal Panel stated at [57]:

The decisions of the Supreme Court in Reiss & Anor v Helson & 2 Ors [2001] NSWSC 486 and cases referred to therein do relate to circumstances where there was a failure of the landlord to deal with interference to the right of quiet enjoyment caused by third parties and where it was asserted the landlord was required to take positive action to try and prevent such interference. These cases variously concerned the actions of either an owner’s corporation or tenants or other lot owners in the strata scheme who conducted themselves in a manner that caused interference of the right to quiet enjoyment of the residential premises. In this regard, the Supreme Court in Reiss appeared to accept that a landlord may be under a duty to take positive action to ameliorate the conduct of others which impacts, at least in a physical sense, upon the use of the residential premises. However, in all cases what was required of the landlord was “to take reasonable steps” to ensure the entitlement to quiet enjoyment was not breached by third parties: see for example Reiss at [34].

38. In Abdel-Messih v Mao, the Appeal Panel accepted that the landlord in fact took reasonable steps to ensure the tenant’s quiet enjoyment was not interfered with by third parties, including the building manager. There is no evidence of such steps on the part of the landlord in the present case. The Tribunal does not accept the landlord’s submission that the matters complained of could not constitute a breach of s 50 of the Act.

39. The more apposite question is whether what in fact took place, in the context of the tenancy, was an interference with the “reasonable peace, comfort or privacy of the tenant in using the residential premises”. The Tribunal notes what was stated in Kneipp v NSW Land and Housing Corporation [2022] NSWCATCD 126 at [51]-[53]:

Quiet enjoyment is the tenant’s “reasonable peace, comfort and privacy in using the residential premises”. Three aspects of this concept are to be noted.

First, the concept does not contemplate an absolute entitlement to peace, comfort, and privacy, but a relative one, ascertained by a reasonableness standard. Mere inconvenience is not sufficient to constitute an interference, there must be a substantial interference: Southwark London Borough Council v Tanner [2001] 1 AC 1.

The concept also operates in a real-world context having regard to contemporary standards of living. In this case the tenant lives in a community of tenanted properties. It is reasonable for there to be a degree of tolerance and give and take in relation to the behaviour of neighbours in such an environment: McC v Director of Housing [2009] VCAT 2748.

40. The application of the test of reasonableness also brings into sharp focus the March Text Messages and the notices that the tenant saw prior to entering into the Third Lease on 13 March 2023. The tenant was well aware of the impending works months before entering into the Third Lease. That awareness was refreshed by the posting of notices in the immediate lead up to the signing of the Third Lease. Further, and most important, the tenant used the impending works and the inconvenience and loss of amenity they would invariably cause as a tool to bargain down the landlord in the negotiations for the rent payable during the term of the Third Lease. It is instructive to be reminded of what the tenant in fact said:

You may not be aware, but the repairs to the waterproofing have not really commenced yet. I am expecting quite a bit of noise when they do. There is still also the potential for water coming in from next door until everything is complete.

…

With all the work being done in the building for the next 6 months, I doubt they would find anyone else to stay here as this is the worst building in the complex for waterproofing repairs.

41. In the course of the hearing, Mr Walters who appeared for the tenant submitted that the reason for the rent reduction was purely on account of water ingress from 4202. That is plainly not the case having regard to a simple reading of the March Text Messages.

42. The Tribunal does not consider that the works that in fact took place constituted an interference the “reasonable peace, comfort or privacy of the tenant in using the residential premises” in the context of the Third Lease as it was negotiated between the parties. The tenant knew that the works would take place, knew they would impact the amenity of the Premises and utilised that prospect to obtain a more advantageous rate of rent. There can be no relevant interference when the tenant got what he bargained for.

43. Mr Walters submitted that being aware of the renovations “in no way prepares for the impact” and that the works were noisier than expected. That submission is difficult to accept when the only communication from the tenant to the landlord relating to the works is the (somewhat Delphic) messages sent on 4 April 2023 (at [14] above). There is no complaint or any reference to the works by the tenant in correspondence to the landlord over the subsequent five months up to the sending of the Termination Email. That fact bolsters the conclusion reached above. The Tribunal considers that the absence of such complaint is a more reliable and objective indicator of the nature and impact of the works on the tenant than the submissions made by Mr Walters at the hearing.

44. Regard should also be had to a submission previously made by the tenant in these proceedings (on 9 April 2024) which the landlord drew attention to in “Landlord A”:

When we eventually found a [National Rental Affordability Scheme] property for rent, we were unaware of the ability to request a termination of the lease due to financial hardship. Had we known, this would have been our initial option.

45. Having regard to that statement, together with the evidence of the March Text Messages, the absence of complaint between March and September 2023 and the fact that the works in 4202 had been completed prior to the Termination Email, the claim of a breach of s 50 by the landlord, as made in the Termination Email and continued on this application must, on the balance of probabilities, be seen as little more than a fig leaf for the tenant’s desire to end the Third Lease. On the balance of probabilities, the Tribunal is satisfied that there was no breach as alleged in the Termination Email.

46. For those reasons, the Tribunal is satisfied that:

1. The Termination Email was not a valid termination notice for the purposes of the Act; and

2. The tenant abandoned the Premises on 16 October 2024.

47. The same reasons found the Tribunal’s conclusion that there is no compelling reason not to exercise its discretion to order that the tenant pay the landlord the break fee under s 107 of the Act in the sum of $1,160.

Rent reduction claim

48. The tenant claims that he is entitled to a retrospective rent reduction on account of the works in 4202 and relies upon s 43(2)(a) of the Act which is in the following terms:

(2) Premises unusable The rent payable under a residential tenancy agreement abates if residential premises under a residential tenancy agreement are—

(a)  otherwise than as a result of a breach of an agreement, destroyed or become wholly or partly uninhabitable

49. The remedy where rent abates under s 43(2) is set out in s 45. By “Tenant C”, the tenant calculates what he claims to be the appropriate remedy.

50. As the tenant acknowledges in “Tenant A”, the claim is brought out of time. Rule 23 of the Civil and Administrative Tribunal Rules 2014 provides that where the enabling legislation (in this case the Act) does not specify the period in which the application is to be made, the application must be made within 28 days from the day on which the applicant became entitled to make the application. On the tenant’s own case, there was “excessive noise, dust and fumes” from the works in 4202 from at least 4 April 2023.

51. Likewise, if the application is considered as a claim for compensation occasioned by breach of s 50 on the part of the landlord pursuant to s 187 of the Act (to which the tenant refers in [34] of “Tenant A”), the application is also out of time by reason of cl 39(9) of the Residential Tenancies Regulation 2019 (NSW) read together with s 190(1) of the Act.

52. Thus unless the Tribunal extends time pursuant to s 41 of the Civil and Administrative Tribunal Act 2013 (NSW), pursuant to which any period of time specified in any enabling legislation can be extended provided it is legislation in respect of which the Tribunal has jurisdiction the application is out of time.

53. The discretion to grant an extension of time is unfettered but must be exercised judicially: Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [18].

54. Relevant considerations, set out in Jackson at [22], are:

​(1)   ​​Is there proof that strict compliance with the rules will work an injustice on the applicant?

…

​(3)   ​​It will usually be necessary to consider:

​   ​(a)   ​the length of the delay,

​   ​(b)   ​the reason(s) for the delay,

​   ​(c)   ​the applicant’s prospects of success, ie whether there is a fairly arguable case,

​   ​(d)   ​the extent of any prejudice suffered by the opponent(s).

​(4)   ​​If the explanation for the delay is less than satisfactory and/or if the opponent as a substantial case of prejudice, it may be necessary for the applicant to show substantial merit, not just that it is fairly arguable.

55. The matters set out at [1] – [6] of “Tenant A” do not provide any explanation for the delay in bringing the claim. The statement that “I did not become aware of these breaches until after the termination of the [Third Lease]” simply does not make any sense.

56. More fundamentally, having regard to the findings of fact made above, the claim does not have reasonable prospects of success.

57. The Tribunal is not satisfied, on the balance of probabilities that the Premises or any part of the Premises were “uninhabitable or unusable” for the purposes of s 43(2)(a) (having regard to the authorities summarised at [14] – [25] of Elsom & Taylor v Coroneos [2016] NSWCATCD 47). The Tribunal repeats the conclusion set out at [43] above. The state of the Premises did not, on the evidence, represent a threat to the life, limb or health of the tenants. Though the Tribunal is satisfied that noise made the Premises unpleasant to use at certain times, the Tribunal is not satisfied on the state of the evidence that noise resulted in an inability to use the entire Premises or rooms in the Premises for any extended period of time.

58. Further and in any event, prior notice of the cause of the alleged unhabitability is important in respect of the claim. In Elsom & Taylor v Coroneos, Senior Member Wilson referred to the earlier decision of Bennett v Thomas [1995] NSWRT 56 with approval at [27] – [28]:

In Bennett v Thomas [1995] NSWRT 56 (12 April 1995), the tenants moved into a house which was undergoing significant renovations. They were made fully aware of this, orally, in writing, encapsulated in the lease and by viewing the property which was undergoing renovations. The tenants moved in, complained about the renovation works, and on this basis brought proceedings in the [former] Tribunal that the house was totally or partly uninhabitable in circumstances whereby the lease was effectively frustrated and pursuant to the provisions of section 61 of the [former] Residential Tenancies Act 1987 the tenants were entitled to terminate the tenancy agreement, and sought compensation in the form of a refund of the rent and bond already paid as well as reimbursement of removalist and associated expenses.

The Member in Bennett v Thomas came to the following conclusion:

Although the premises were not fully habitable, I have regard to the fact that … the tenant was very keen to occupy the premises even though it should have been apparent to him that the house would not be ready. In particular, as I have also observed, the landlord’s agent had warned the [tenants] about the risks inherent in moving into the house but the [tenants] were eager to do so.

In those circumstances, I feel that it would be inequitable also to visit upon this landlord liability for payment of compensation to the tenant… Accordingly, I decline to make the orders sought in the tenant’s application.

59. Having regard to the March Text Messages and the finding made above, the same reasoning applies to the present case.

60. Further, as the Tribunal has already concluded, there was no breach of s 50 of the Act , such that any compensation could flow pursuant to s 187.

61. There being no reasonable prospects of success, the Tribunal declines to grant an extension of time and will otherwise dismiss the tenant’s claims.

Conclusion

62. For the above reasons, the Tribunal will make the following orders:

1. The Tribunal directs Rental Bond Services to pay the sum of $1,160.00 to the respondent landlord, out of rental bond numbered T311746-2.

2. The balance of the bond is to be paid to the applicant tenant.

1. The balance of the tenant’s application is 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: 13 May 2025