Szalay v Ellis

[2024] NSWCATCD 63

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Szalay v Ellis [2024] NSWCATCD 63

Hearing dates:

25 September 2024

Date of orders:

02 December 2024

Decision date:

02 December 2024

Jurisdiction:

Consumer and Commercial Division

Before:

P Gardner, General Member

Decision:

1 Within 28 days of these orders, the respondent is to pay the applicant $3089.29.

Catchwords:

LEASES AND TENANCIES - Residential Tenancies Act 2010 (NSW) – obligations of tenant and landlord – obligation to repair – proceedings in relation to compensation and excessive rent – accord and satisfaction

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Civil Liability Act 2002 (NSW)

Residential Tenancies Act 2010 (NSW)

Residential Tenancies Regulation 2019 (NSW)

Cases Cited:

Alexander v Cambridge Credit Pty Ltd (1987) 9 NSWLR 310

Baltic Shipping Co v Dillon [1993] HCA 4

Bannister v Cheung [2014] NSWCATCD 105

Bhandari v Laming [2015] NSWCATAP 224

Cannone v McNair [2020] NSWCATAP 122

Compass Housing Services Co Limited t/as Home in Place v Gower [2023] NSWCATAP 24

El-Mir & 1 Or v Risk [2005] NSWCA 215

Fitzgerald v Penn (1954) 91 CLR 268

Hadley v Baxendale [1854] 9 Ex 341

Kork v Merheb [2021] NSWCATAP 349

Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15

Moore v Scenic Tours Pty Ltd [2002] HCA 17

Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 77 ALJR 768

Torpey v Stewart [2021] NSWCATAP 248

Worrall v Commissioner for Housing for the Australian Capital Territory [2002] FCAFC 127

Texts Cited:

Nil

Category:

Principal judgment

Parties:

C Szalay (Applicant)
J Ellis (Respondent)
A Ellis (Respondent)

Representation:

Ms Szalay, in person (Applicant)
Mr and Ms Ellis, in person (Respondents)

File Number(s):

2024/00241396

Publication restriction:

Nil

REASONS FOR DECISION

Background and Claim

1. This is a claim by a tenant for compensation and other orders, associated with a residential tenancy for a premises in Katoomba. On 11-Oct-2023, the applicant (tenant) entered into a written residential tenancy agreement with the respondents (landlord), which required her to pay rent of $490 per week and a bond of $1960 (RTA). At the time of the hearing, the tenancy was ongoing.

2. By application lodged on 01-Jul-2024, the tenant seeks orders as set out on page 1 of her documentary evidence, which can be summarised as follows:

1. Orders for repairs, pursuant to s 65 of the Residential Tenancies Act 2010 (NSW) (RT Act);

2. Orders that the rent is excessive, pursuant to s 44(1)(b) of the RT Act; and

3. Orders for compensation of $9250, pursuant to s 187(1)(d) of the RT Act.

3. During the hearing, the tenant noted that she anticipated moving within a relatively short period of time after the hearing. While she did not withdraw the request for orders for repairs, it was not pressed and no specific argument in favour of repairs was advanced. Because no argument in relation to repairs was advanced during the hearing, this part of the application is dismissed.

Evidence and Hearing

4. This application was heard by the Tribunal on 25-Sep-2024. During the hearing, each party appeared in person and gave sworn evidence. The Tribunal also heard evidence from Ms McKay (the tenant’s mother) and Ms Howarth (the landlord’s managing agent). Each party was given an opportunity to ask questions of the other party.

5. The tenant’s documentary evidence includes:

1. Written submissions, which set out the orders sought and provide an overview of the grounds for the same;

2. A copy of the RTA;

3. Submissions, including with reference to case law;

4. A statutory declaration from Ms McKay, dated 29-Aug-2024;

5. Mould Inspection and Report dated 19-Sep-2024 produced by Electrodry Carpet Dry Cleaning (Electrodry Report);

6. Chronology/Index;

7. Email correspondence between the parties;

8. Email correspondence between the tenant and the landlord’s agent;

9. Photographs, including of belongings affected by mould;

10. Research undertaken by the tenant in relation to mould, including humidity;

11. Letters from support workers for the tenant, and from medical professionals;

12. Details of property relating to the economic loss claim; and

13. Articles written by the landlords for online publications.

6. The landlord’s documentary evidence is comprised of written submissions in reply and annexures, including:

1. Email correspondence between the parties;

2. Chronology;

3. Photographs;

4. Tax invoices for repairs and works performed at the property;

5. Notice of termination issued pursuant to s 84 of the RT Act;

6. Routine inspection reports;

7. Ingoing condition report; and

8. Statement from managing agent.

Tenant’s Position

Excessive Rent Claim

7. As set out on pages 1 – 3 of her documentary evidence, the applicant seeks orders that the rent is excessive as a result of:

1. Complete withdrawal of use of the master bedroom;

2. A 75% reduction in use of the living room; and

3. A 25% reduction in use of the study (sunroom).

8. The loss of use of the master bedroom and living room is said to have occurred from 16-Apr-2024 and the loss of use of the study is said to have occurred from 16-May-2024.

Compensation Claim

9. The basis for the tenant’s claim for compensation is set out on pages 5 – 6 of her documentary evidence. The $9250 claimed is in connection with allegations that the landlord has breached ss 50, 52 and/or 63 of the RT Act. The amount claimed is comprised of:

1. $5000, for distress, disappointment and inconvenience;

2. $850, for damage to belongings;

3. $3182.50, for lost income; and

4. $223.86, for fuel costs.

Landlord’s Position

Excessive Rent Claim

10. The landlord’s reply to the tenant’s claim that the rent is excessive is set out on pages 28 – 32, but by way of brief summary, the landlords submit that:

1. The premises is not materially affected by mould, and has been professionally treated for mould;

2. The tenant’s evidence does not establish that it was necessary to rearrange her belongings;

3. The reduction in amenity claimed is not supported by the evidence provided;

4. The tenant has agreed to, and had the benefit of, a $30 per week reduction in rent from 18-Jan-2024 due to inconvenience from roof leaks;

5. The landlord has undertaken reasonable steps to address repairs and maintenance concerns raised by the tenant;

6. The allegations that 3 spaces in the property were substantially unusable are inconsistent with the routine inspection conducted by the agent;

7. The rent is consistent with the age and condition of the (approximately 80 year old) home;

8. The tenant’s evidence does not establish excessive damp, relative to comparable average humidity in the suburb;

9. The tenant has failed to take reasonable steps to mitigate losses;

10. The medical evidence, provided by a Doctor from Victoria, cannot be given significant weight given the Doctor did not attend the property or consult with the tenant in person.

Compensation Claim

11. The landlord’s arguments in reply to the tenant’s compensation claim are set out on pages 32 – 43. There is some overlap with the responses to the excessive rent claim. This is understandable given the subject matter of each part of the complaint is similar. The landlord additionally raises a number of other issues including:

1. Storm damage is outside of the control of the landlords;

2. The Tribunal is precluded from making orders in respect of inconvenience, distress and disappointment, by operation of the Civil Liability Act 2002 (NSW) (CLA);

3. The conduct engaged in by the landlords, agent and contractors does not amount to a breach of s 50 of the RT Act;

4. Contrary to the tenant’s position, works to the property were performed by appropriately qualified persons;

5. Delays to performance of repairs and maintenance (in particular to the roof) were due to limited availability of qualified trades;

6. The tenant’s disabilities were not known to the landlord and are not, in any event, relevant to the determination of liability; and

7. The claim for loss of income lacks details about the availability of additional work, and about the reasons why it was necessary for the tenant to refuse work in circumstances where she ordinarily works from home.

Issues for Determination

12. The issues for determination in these proceedings are:

1. What effect, if any, does the agreed reduction in rent have on the tenant’s claim?

2. In relation to the claim for compensation, what obligations does the tenant argue the landlord has breached?

3. Has the tenant established a breach by the landlord of those obligations?

4. Can the Tribunal make orders to compensate for a “non-economic” loss, such as distress, disappointment and anxiety?

5. What does the tenant need to establish in order for the Tribunal to make an order that the landlord pay her compensation?

6. Has the tenant met those conditions?

7. Has the tenant established an entitlement to a reduction in rent on the basis set out in s 44(1)(b) of the RT Act?

8. What orders should be made?

13. The balance of these reasons deals with each issue in turn.

What effect, if any, does the agreed reduction in rent have on the tenant’s claim?

14. I am satisfied that the tenant requested, and the landlord granted, a reduction in rent of $30 per week in consideration of issues to do with roof leaks and ingress of possums into the property from 18-Jan-2024.

15. In my view, this operates as a bar to the tenant obtaining compensation for breach of s 63 or excessive rent orders in connection with the same maintenance issues. This agreement between the parties was “accord and satisfaction” (see: El-Mir & 1 Or v Risk [2005] NSWCA 215). There’s nothing before me that suggests the landlord agreed to the rent reduction on an ex gratia basis.

16. This does not preclude the balance of the tenant’s claim from proceeding, including the claim for breach of s 50 relating to rectification works. In my view, the agreement reached by the parties on 18-Jan-2024 cannot extinguish a cause of action which did not exist until such time as the works to repair/replace the roof progressed further.

In relation to the claim for compensation, what obligations does the tenant argue the landlord has breached?

17. Through her documents, and during the hearing, the tenant has alleged breaches of ss 50, 52 and 63 of the RT Act.

18. Section 50 of the RT Act provides that:

(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.

(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.

19. The scope of this right has been considered in Kork v Merheb [2021] NSWCATAP 349 the Appeal Panel described the meaning of ‘quiet enjoyment’, citing Yeldham J in Martins Camera Corner Pty Ltd v Hotel Mayfair Ltd [1976] 2 NSWLR 15 at 23 as follows:

“I take the relevant law in relation to the covenant for quiet enjoyment to be correctly set out in Halsbury’s Laws of England, 3rd ed., vol. 23, pp. 605, 606, pars. 1298, 1299 in these terms: “The covenant for quiet enjoyment operates according to its terms to secure the tenant, not merely in the possession, but in the enjoyment of the premises for all usual purposes; and where the ordinary and lawful enjoyment of the demised premises is substantially interfered with by the acts or omissions of the landlord or those lawfully claiming under him, the covenant is broken, although neither the title to, nor the possession of the land may be otherwise affected...”“

20. The scope of this right is not unlimited. S 50 uses the term “reasonable”, and in Martins Camera Corner Pty Ltd, Yeldham J uses the phrase “substantially interfered”. Minor inconvenience will not amount to a breach of s 50 of the RT Act.

21. Section 52 provides that:

(1) A landlord must provide the residential premises in a reasonable state of cleanliness and fit for habitation by the tenant.

(1A) Without limiting the circumstances in which residential premises are not fit for habitation, residential premises are not fit for habitation unless the residential premises—

(a) are structurally sound, and

(b) have adequate natural light or artificial lighting in each room of the premises other than a room that is intended to be used only for the purposes of storage or a garage, and

(c) have adequate ventilation, and

(d) are supplied with electricity or gas and have an adequate number of electricity outlet sockets or gas outlet sockets for the supply of lighting and heating to, and use of appliances in, the premises, and

(e) have adequate plumbing and drainage, and

(f) are connected to a water supply service or infrastructure that supplies water (including, but not limited to, a water bore or water tank) that is able to supply to the premises hot and cold water for drinking and ablution and cleaning activities, and

(g) contain bathroom facilities, including toilet and washing facilities, that allow privacy for the user.

(1B) For the purposes of subsection (1A)(a), residential premises are structurally sound only if the floors, ceilings, walls, supporting structures (including foundations), doors, windows, roof, stairs, balconies, balustrades and railings—

(a) are in a reasonable state of repair, and

(b) with respect to the floors, ceilings, walls and supporting structures--are not subject to significant dampness, and

(c) with respect to the roof, ceilings and windows--do not allow water penetration into the premises, and

(d) are not liable to collapse because they are rotted or otherwise defective.

(1C) The Secretary may exempt any specified premises or any specified class of premises from the operation of all or any part of this section. An exemption may be unconditional or subject to conditions.

(2) A landlord must not interfere with the supply of gas, electricity, water, telecommunications services or other services to the residential premises unless the interference is necessary to avoid danger to any person or to enable maintenance or repairs to be carried out.

(3) A landlord must comply with the landlord’s statutory obligations relating to the health or safety of the residential premises.

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

22. The expression “fit for habitation” is not defined in the RTA but as noted by the Tribunal in Bannister v Cheung [2014] NSWCATCD 105 at [20] the test of whether residential premises are fit for habitation is a difficult one to establish and should not be lightly found.

23. In Bhandari v Laming [2015] NSWCATAP 224 at [37], the Appeal Panel held that the obligation in s 52 is to be assessed based on the condition of the property at commencement of the tenancy, holding: “If premises become unfit for habitation, the tenant’s remedies for breach will lie under one of the other provisions in the RTA, depending on the circumstances.”

24. Section 63 of the RT Act provides that:

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

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

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

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

Has the tenant established a breach by the landlord of any of the obligations referred to above?

25. Yes. Having heard and considered the available evidence, I find that the landlord has breached s 63 of the RT Act by:

1. Failing to remedy damp and/or roof leaks for the period from 09-Nov-2023 to 18-May-2024; and

2. Failing to address mould in the premises from 26-Apr-2024 to 02-Aug-2024.

26. In relation to the damp and roof, the fact of damage to the roof through a storm is not in dispute. I accept that this is not the landlords fault, but the obligation remains on the landlord to comply with s 63 of the RT Act. In determining the period of time the roof was damaged and there were associated problems with damp, I have determined that this should be from the date of the storm until the 18-May-2024 repairs. I am not satisfied on the material before me that those repairs were ineffective.

27. In relation to mould, taking into account the email correspondence between the parties, the tenant’s photographic evidence and the report from Electrodry, I am satisfied that the premises was affected by mould for a period of time and I consider it more likely than not that the proximate cause of the mould was the damage to the roof which has resulted in damp and water ingress. In determining the period of time this breach occurred for, the first identifiable photographic evidence I could locate of the mould in the file is on 26-Apr-2024, although I accept that on 26-Apr-2024, the mould problem was not severe and appears limited to one surface. In reaching this conclusion, I have given significant weight to the inspection report provided by the landlords of 23-Jul-2024, which includes notations as to the absence of mould and contemporaneous photographs which appear consistent with those notations. The overall impression from the photographs is that while the premises may have had some isolated mould in different locations at this time, it was not a broad issue which inhibited general use of the home as at 26-Apr-2024. On the basis of other supplied evidence, it is clear that the position changed over the following months. I do not accept that the there is sufficient evidence to establish that this was a problem prior to 26-Apr-2024 and I note that in the tenant’s own photographic evidence (see Tab 11) it appears that problems with mould became more significant several months later. There is insufficient evidence before me to establish that that the second attendance by Electrodry to address mould on 02-Aug-2024 was ineffective.

28. I have considered the landlord’s argument that the delay in repairing the roof was attributable to difficult weather conditions across the Blue Mountains and limited availability of trades. I accept that this was a particular challenge for the landlords, but it does not relieve them of the obligation pursuant to s 63 of the RT Act.

29. I am satisfied that the tenant has established a breach of s 50 in relation to:

1. the smoke alarm failures on 11-Dec-2024, 18-Apr-2024, 01-Jun-2024, 05-June-2024, 14-Jun-2024.

2. The interruptions from repairs and works to address the issues described at [25].

30. The tenancy is relatively short and the landlord’s evidence does not, in my view, adequately respond to the tenant’s claims about the smoke alarms. One failure of a smoke alarm may be expected and excusable, but this number is highly irregular and I accept that it has caused interruptions and inconvenience to the tenant.

31. In relation to interruptions from repairs and works to address the issues described at [25], a similar issue was considered in by the Full Bench of the Federal Court of Australia in Worrall v Commissioner for Housing for the Australian Capital Territory [2002] FCAFC 127, where the Court held, in relation to substantially similar legislative provisions in the ACT, that it is open to a Tribunal to concludes that a landlord may have breached the obligation in relation to quiet enjoyment by performing repairs and works, even if those repairs and works are necessary, reasonable and required by another statutory obligation.

30. Here, I consider that some of the repairs and works requested by the tenant and performed by the landlord (including: dripping tap, repairs to window latches and curtain rods) did not disturb the tenant’s “reasonable peace, comfort or privacy”. I also accept the landlord’s submissions that there is insufficient evidence to show that any of the repairs or works performed were done in a manner that was improper or ineffective. However, considered cumulatively, I accept the tenant’s argument that the repairs and works performed by tradespeople in connection with the breaches identified at [25], as well as the communications required of the tenant to facilitate the same amount to a breach of the tenant’s reasonable peace, comfort and privacy.

31. In relation to s 52, adopting the approach taken by the Appeal Panel in Bhandari, I am not satisfied that the tenant has established a breach of this obligation with reference to the available evidence relating to the condition of the property at the commencement of the tenancy. The fact that some minor repairs or works may have been required at this time is not sufficient to establish that the premises was not fit for habitation. It does not appear to be in dispute that issues with the roof and mould likely arose as a result of a storm which occurred after the start of the tenancy.

Can the Tribunal make orders to compensate for a “non-economic” loss, such as distress, disappointment and anxiety?

34. Yes. An applicant may seek to recover damages for losses of this kind as the RTA is contract for enjoyment pleasure and relaxation and therefore falls under the exception to the general rule that damages for distress and disappointment are not recoverable (see: Baltic Shipping Co v Dillon [1993] HCA 4). Distress, disappointment and anxiety do not constitute a personal injury for the purposes of the Civil Liability Act 2002 (NSW) (CLA) and s 16 of the CLA does not apply (see: Moore v Scenic Tours Pty Ltd [2002] HCA 17).

35. This position has been discussed in detail by the Appeal Panel in Torpey v Stewart [2021] NSWCATAP 248 at [24], and in Compass Housing Services Co Limited t/as Home in Place v Gower [2023] NSWCATAP 24 at [30] – [32].

What does the tenant need to establish in order for the Tribunal to make an order that the landlord pay her compensation?

36. The Tribunal’s power to make orders for compensation is set out in section 187(1)(d) of the RT Act. A party seeking compensation must establish, on the balance of probabilities, that that the other party has breached the RTA. In this case, the tenant must:

1. show that the breach is a cause of the loss claimed (Fitzgerald v Penn (1954) 91 CLR 268 at 273; Alexander v Cambridge Credit Pty Ltd (1987) 9 NSWLR 310 at 361);

2. show that the loss is a reasonably foreseeable consequence of the respondent’s breach (Hadley v Baxendale [1854] 9 Ex 341); and

3. provide evidence to support the total amount being claimed with as much precision as the subject matter reasonably permits (Placer (Granny Smith) Pty Ltd v Thiess Contractors Pty Ltd [2003] HCA 10; (2003) 77 ALJR 768, Hayne J at [37]).

37. Establishing a loss requires a comparison. In relation to claims for economic loss (e.g. damaged belongings), the comparison requires the applicant to provide evidence about the condition of belongings prior to any allegation of damage caused or contributed to by the respondent. This issue has been considered by the Tribunal in the context of a claim about mould and damage to belongings (including photographic equipment) in Cannone v McNair [2020] NSWCATAP 122, where the Appeal Panel held:

“[39] In our view there were fundamental gaps in the tenants’ proof that any breach of the landlord’s obligations caused the relevant mould on the photographic equipment and the degree of damage that was caused, if damage was caused. On those matters the tenants bore the onus or burden of proof. It was necessary, to discharge that burden, to show the condition of the photographic equipment at a clear point before discovery of the mould, and preferably prior to the start of the tenancy, and compare that with the condition of the equipment after discovery of the mould. That was not done. What the tenants established, and the primary member referred to, was the cost of repairing or replacing the equipment in its current state, without any basis for attributing that entire cost to conduct of the landlord.

[40] It was also the tenants’ burden to demonstrate that mould in two rooms different from where the photographic equipment was stored could, on the balance of probabilities, have caused the mould on the equipment inside the storage containers in another room, which the tenants accepted was the sunniest room. They gave evidence that is why they stored the equipment there.

[41] It was also the tenants’ burden to demonstrate that mould which was first noticed in the premises on 17 April 2019 would spread between rooms and inside the containers so rapidly as to cause the level of damage that was visible on and inside the photographic equipment.

[42] The foregoing would have needed to be established even if, as the primary member appears to have found (without detailed reasoning referring to the evidence relied upon) at [60]-[62], the evidence established that the landlord’s initial inactivity (eg, in respect of cleaning the gutters and dealing appropriately with exhaust fans), caused the growth of the mould where it was noticed on 17 April 2019 and in the May report.

[43] The foregoing would also have needed to be established even if the landlord had done everything properly to prevent the growth of mould but the mould grew simply because of the location and environs of the premises, a matter not canvassed in the primary reasons, or it appears by the parties, in those terms. Whether the landlord could be liable for damage by mould to a tenant’s goods in those circumstances is not an issue that arises in this case. We do not seek to resolve that question, merely noting that it may depend upon the scope of the landlord’s obligation under RTA s 52(1) to provide the premises “fit for habitation” and whether, in this context, that obligation is a continuing obligation”

Has the tenant met those conditions?

38. It’s convenient to address this question in four parts, in relation to each limb of the tenant’s claim for compensation.

Distress, disappointment and inconvenience

39. The tenant claims $5,000, and has provided detailed written submissions setting out aspects of her distress, inconvenience, anxiety and disappointment arising from the landlord’s breaches of s 50 of the RT Act.

40. It’s convenient to address the breaches in terms of those arising from smoke alarm malfunctions, and those arising from interruptions and inconvenience associated with repairs and works.

41. In relation to smoke alarms, taking into account the number of occasions on which the smoke alarms malfunctioned but also the limited evidence about the extent to which this has caused any ongoing distress or anxiety (this issue is given limited prominence in email correspondence between the parties, for example) I will allow compensation of $250 in connection with this part of the claim.

42. In relation to interruptions arising from repairs and works, in her written submissions the tenant estimates that, on average, one attendance per week was required from tradespeople during the tenancy. I accept the tenant’s submission, which is consistent with the supplied documentary evidence, that those attendances required a significant amount of correspondence with the agency to facilitate access and to otherwise attempt to progress the repairs. This is an inconvenience. However, I also accept the landlord’s submission that there is insufficient evidence to establish that the tenant couldn’t work. I do not accept that the tenant’s estimates of the time she has lost to each attendance by a tradesperson. While I accept that the tenant is a person living with multiple disabilities, the attendances span a significant amount of time and obviously encompass works of varying complexity and effort. I do not accept that each attendance presented the same level of imposition or inconvenience for the tenant.

43. Doing the best I can on the available evidence, I will allow compensation of $1950 for this part of the claim for non-economic loss. I have arrived at this amount by taking the tenant’s estimate as to the average amount of visits per week by trades (1), multiplying it by the number of weeks during which a breach of s 50 has been established (39 weeks, see: [26]) and multiplying that figure by $50 for each occasion. I have chosen this figure because I consider it reflects that while I consider the inconvenience goes beyond what is reasonable (in the terms set out in s 50(2) of the RT Act), the relative inconvenience from each individual attendance by trades, along with the ancillary communications and other work required of the tenant, is relatively low.

44. In reaching this conclusion, I have considered the landlord’s arguments about mitigation, but I am not satisfied that the landlord has established a failure by the tenant to take reasonable steps to mitigate her losses in relation to this part of the claim. The arguments advanced by the landlord in relation to mitigation largely relate to dealing with mould in the premises, or refusing to accept an offer to break the lease. I do not accept that a refusal to accept an offer to break the lease, even without penalty, amounts to a failure to take reasonable steps. I note that the tenant cavils with this description, and submits that she did accept the offer. She had not done so at the time of the hearing. The offer was conditional on her moving out. She cannot accept an offer of this kind without some form of consideration, or performance of her part of the bargain.

Damage to belongings

45. At Tab 11 of her documentary evidence, the tenant sets out a list of belongings which are affected by mould, with cross-referencing to show evidence she relies on, as well as details about how compensation has been calculated.

46. I have considered the claims relating to the Mirror, Antique Gentleman’s Wardrobe, Vintage boxes/fruit crates, Deer Hide, Antique Secretaire and Ottoman. I am required to apply the principles set out in Cannone (above). Those principles require that in order to make a finding that the damage to the tenant’s arose from the landlord’s breach of s 63, I have to be satisfied that there is sufficient evidence to establish their condition prior to the damage from mould.

47. While I understand the reasons why people do not have clear photographs of ordinary household belongings at arbitrary points in time, this is necessary evidence for me to make the findings (and the orders) the tenant seeks. In relation to each of the belongings I have referred to, there is insufficient evidence to establish the condition of those belongings prior to the premises becoming affected by mould. Accordingly, these parts of the claim must be dismissed.

48. In relation to the claim for plants. I have already found that the premises was affected by mould and that there has been a breach of s 63 of the RT Act. I accept, on balance, that:

1. The tenant owned the plants, which have been described in this part of the claim;

2. Those plants were not dead prior to being moved outside;

3. The advice from Electrodry, in order to treat the mould, was to move the plants outside during the treatment; and

4. The tenant would not have moved the plants outside.

49. Accordingly, I will allow the tenant compensation in the amount claimed ($150).

Lost income

50. On the material before me, I am not satisfied that the tenant has established her claim for loss of income. She has not provided adequate evidence does not establish that:

1. The tenant was unable to work from home on the dates and for the times she has claimed; and

2. Work was available to her for on those same dates and times.

51. Accordingly, this part of her claim is dismissed.

Fuel costs

52. On the material before me, this part of the claim is dismissed because it relates to losses or costs incurred by the tenant’s mother, who is not party to the proceedings. There is no evidence that the tenant herself incurred the claimed losses.

Has the tenant established an entitlement to a reduction in rent on the basis set out in s 44(1)(b) of the RT Act?

53. S 44(1)(b) of the RT Act provides that:

“[on application of a tenant the Tribunal may make] an order that rent payable under an existing or proposed residential tenancy agreement is excessive, having regard to the reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises and that, from a specified day, the rent for residential premises must not exceed a specified amount.”

54. In making such orders, the Tribunal may have regard to the factors set out in s 44(5) of the RT Act which, relevantly, include “the state of repair of the residential premises” and must not make an order which has an effect for a period of more than 12 months.

55. The tenant has the burden of proof in establishing that there has been a reduction or withdrawal by the landlord of any goods, services or facilities provided with the residential premises.

56. Applications for orders under s 44(1)(b) must be made before the end of the tenancy and for completeness this part of the application is in time.

57. In her written submissions, the tenant explains that she seeks a rent reduction of:

1. $69/week for 100% loss of the master bedroom from 16-Apr-2024 to the date of the submissions;

2. $51.75/week for 75% loss of the living from 16-Apr-2024 to the date of the submissions; and

3. $11.50/week for 25% loss of the study from 16-May-2024 to the date of the submissions.

58. The amounts are based on an apportionment of the rent to functional spaces, as described on page 3. The claim is that all three spaces referred to above were either not capable of use, or were less useful, due to mould.

59. I have already referred to the landlord’s routine inspection report of 23-Jul-2024. This is consistent with the tenant’s account that she was, at that time, not using the master bedroom out of concern about mould. It also shows that there is a large number of other belongings in plastic tubs in the lounge room. This is, in my view, consistent with the tenant’s account that she had to move belongings from the bedroom to the living room. However, at that time, the supplied evidence does not establish that there was mould in that room or the living room or study. The tenant has the burden of proof in this regard, and the material she has provided isn’t sufficiently compelling for me to outweigh the report of 23-Jul-2024. As set out above, damp and water leaks from the roof cannot form part of this consideration, but the tenant has not expressed her claim pursuant to s 44(1)(b) in those terms. Her concern is about mould.

60. The position is, in my view, materially different from 19-Jun-2024, being the date of the Electrodry Report. This report records that he study, bedroom and sunroom area are affected by mould. On its own, the Electrodry Report would not be persuasive enough of this fact because the mould is difficult to observe from the photographs and the report itself goes into little detail about how they’ve arrived at their conclusions about mould. However, because it is consistent with the tenant’s own account and with her photographic evidence, I am satisfied that from this date the areas described in the report were affected by mould.

61. Having considered the evidence carefully, I am satisfied that there is sufficient evidence to show:

1. In relation to the main bedroom, that it was affected by mould from 19-Jun-2024, and that the tenant was not using that room except to store a mattress which would not fit elsewhere;

2. In relation to the living room, that it was being used in part for storage of belongings that would otherwise be in the bedroom, were it not for issues with mould; and

3. The study was affected by mould.

62. For the period from 19-Jun-202, being the date of the inspection referred to in the Electrodry Report, to 02-Aug-2024, I am satisfied that the tenant has established a reduction or withdrawal of goods, services of facilities within the meaning given in s 44(1)(b), the issues with mould being a matter capable of consideration by the Tribunal as set out in s 44(5)(d). I accept the tenant’s calculation that she has completely lost use of the main bedroom and has lost approximately 25% of the use of the study. Her assessment that she has lost 75% use of the living room during that time is, in my view, excessive and I consider that she has lost at most 50% use of that space. I also accept the tenant’s submissions as to how she has apportioned the rent payable to different functional spaces in the home. This is a fair and reasonable approach in my view.

63. Having made those findings, I consider that the rent was excessive for the period from 19-Jun-2024 to 02-Aug-2024 and ought not to exceed $345 per week. This is the reduced rent payable of $460 per week, less 100% of the rent apportioned to the main bedroom ($69/wk), 25% of the rent apportioned to the study ($11.50/wk) and 50% of the rent apportioned to the living room ($34.50/wk).

64. This means that the tenant has overpaid the rent for a period of 45 days in the amount of $739.29.

What orders should be made?

65. I will order that the landlord pay the tenant compensation of $3,089.29. This amount is comprised of:

1. $250, for breach of quiet enjoyment arising from smoke alarms;

2. $1950, for breach of quiet enjoyment arising from regular attendance by trades;

3. $150, for replacement of plants damaged as a result of breach of s 63; and

4. $739.29, being the liquidated amount equal to the difference between the agreed rent and the rent I have found ought to be payable pursuant to 44(1)(b).

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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: 05 May 2025