Taylor v Wise - [2011] SADC 6

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
TAYLOR v WISE
[2011] SADC 6
Judgment of Her Honour Judge McIntyre
3 February 2011
LANDLORD AND TENANT - RESIDENTIAL TENANCIES LEGISLATION - OBLIGATIONS, PROHIBITED MATTERS AND PROTECTION FOR LESSEES - INSPECTION AND REPAIR
Appeal against decision of Residential Tenancies Tribunal - whether Tribunal erred in awarding compensation to tenant for landlord's failure to keep premises in reasonable state of repair and breach of entitlement to quiet enjoyment.
Appeal dismissed insofar as landlord challenges finding of entitlement to compensation. Tribunal erred in assessing damages as a global sum for two separate and distinct breaches. Damages reassessed.
Residential Tenancies Act 1995 s41, s41(2), s68(1), referred to.
Fox v Percy (2003) 214 CLR 118; Doherty v Sulley & Suens unreported [1998] DCSA D3858; Milner v Carnival PLC [2010] 3 All ER 701, considered.

TAYLOR v WISE
[2011] SADC 6

Leigh Taylor, the landlord, appeals under section 41 of the Residential Tenancies Act 1995 against an order made by the Residential Tenancy Tribunal on 18 June 2010 in favour of Vikki Wise, the tenant. Two orders were made by the Tribunal, the landlord appeals only one. Namely the order that:
The landlord must pay to the tenant the sum of $2,000 within 14 days of the date of this order. If the landlord does not pay, this order may be enforced in the Magistrates Court.
The other order relating to refund of the tenant’s bond is not contested in these proceedings.
Tribunal Proceedings
The contested order arose out of an application by Ms Wise seeking orders and compensation on a number of grounds arising from a residential tenancy agreement between the parties. Initially this was a written periodic tenancy agreement for a period of 12 months commencing 12 August 2006. The premises were described as being at Lot 243, Little Road, Aldinga SA 5173. The rent payable was $220 per week payable fortnightly. The parties did not enter into a further written tenancy agreement at the conclusion of this agreement but the tenant continued in the premises on the same rent until 19 January 2010.
Ms Wise’s application was dated 14 January 2010 and was received by the Residential Tenancies Tribunal on 20 January 2010. In summary, Ms Wise sought orders in respect of an asserted unlawful termination of her tenancy, compensation for costs and inconvenience associated with the early termination of the tenancy, orders that the landlord comply with statutory requirements relating to fire hazard reduction and “notify tribunal of failure by landlord to comply with several rules of Residential Tenancies Act” (sic). This latter application was particularised in appendices to the application as relating, inter alia, to asserted breaches of the tenant’s entitlement to quiet enjoyment and the landlord’s obligation to repair the premises. The relief sought for those asserted breaches was not made clear in the application.
The application was the subject of three hearings. Hearings were convened on 4 February 2010, 15 March 2010 and 3 May 2010. Both parties attended all hearings.
In the decision handed down on 18 June 2010, the Tribunal dismissed Ms Wise’s application for compensation associated with the asserted early termination of the tenancy and the asserted failure to comply with statutory requirements relating to fire hazard reduction.
The Tribunal did however award Ms Wise the sum of $2,000 by way of compensation for breaches of her entitlement to quiet enjoyment and the landlord’s obligation to repair, limited to water damage, affecting the hallway ceiling and the malfunctioning bathroom toilet.
The Appeal
The notice of appeal was filed in this Court on 2 July 2010. It seeks that the decision by the Tribunal as to compensation be set aside and an order that the tenant has no entitlement to any compensation.
The appeal is brought under section 41 of the Residential Tenancies Act 1995. The powers of this Court on appeal are set out in section 41(2) of that Act. The appeal to this court is not an appeal to the District Court in its Administrative & Disciplinary decision.
The notice of appeal sets out detailed grounds of appeal in support of Mr Taylor’s contention that the Tribunal erred in fact and in law in deciding to award compensation. These can be summarised under three category headings. Mr Taylor described the first category heading as acquiescence although for the reasons that will follow it is my view that this is more properly categorised as delay. The three grounds are therefore delay, credibility and compensation. I will deal with each in turn:
Delay
Mr Taylor contends that the Tribunal erred in fact and law in deciding to award compensation because:
i.The tenant had acquiesced over a lengthy period in relation to the circumstances comprising the alleged breaches;
ii.The tenant then took no action in relation to any alleged breaches until, after the lawful expiration of the tenancy, her institution of proceedings in the Tribunal;
iii.The material before the tribunal did not support any finding that the acquiescence and delay on the part of the tenant was justified so as to be disregarded by the Tribunal.
The landlord contended that the Residential Tenancies Act 1995 is designed to deal with current or existing tenancy matters. It was conceded that there was no period of limitation in the Act but it was said that the provisions envisaged that people will act promptly and that issues will come before the Tribunal in a proper manner at an appropriate time so that matters can be mediated or otherwise resolved promptly and generally whilst the tenancy remains on foot.
In this case the landlord says that the tenant issued proceedings in the Tribunal nearly two months after she was served with the notice of termination. Her primary complaint was, he said, the issue of the termination but she also raised the failure to repair and the issue of quiet enjoyment both of which date back to the commencement of the tenancy. He said that the impression the landlords were left with during the later part of 2008 and throughout 2009 was that the tenant was satisfied in relation to the issues of quiet enjoyment and repair.
The difficulty with this submission is that Ms Wise is not in breach of any statutory time limits in making her application. She was entitled to make the claim. The only relevance of delay or apparent acquiescence by Ms Wise is to the quantum of any compensation awarded. That the Tribunal took this into account when assessing the compensation is plain from its reasons. I will however discuss the topic of compensation later in these reasons.
Credibility
The basis of the second category of matters giving rise to the appeal is set out in ground 4 of the notice of appeal as follows:
iv.The material before the Tribunal, properly and fairly assessed, did not justify the findings by the Tribunal as to credibility.
The Tribunal made the following findings in relation to credibility at page 13 of the decision:
…..The Tribunal is an informal jurisdiction and decisions are based on the balance of probabilities taking into account all the evidence and circumstances. The landlord was represented by a professional person in the form of a real estate agent, and the landlord himself is a lawyer and gave most of the evidence on his own behalf and cross-examined the tenant and witness. In these circumstances, the tenant was entitled under section 113(2)(c) to be represented by a lawyer. She chose not to do so, and. in my view, presented her evidence ably. I found that the tenant gave her evidence clearly and mostly calmly and I found her a credible witness overall notwithstanding that she may have been incorrect in a few of her perceptions or unable to support them.
Mr Taylor takes issue with this finding saying that there were a number of inconsistencies in Ms Wise’s evidence and further that because of her delay in making the complaint it was more difficult to dispute aspects of her evidence.
Findings of facts based on a trial Judge’s opinion on the credibility of witnesses may only be reversed by an appellate court in exceptional cases. There must be incontrovertible evidence that points decisively and not merely persuasively to error on the part of the trial judge in acting on their impressions of the witnesses. In an appeal by way of rehearing, a re-examination of the facts is necessary for the appellate court to determine whether there are facts incontrovertibly established which conflict with the findings. The appellate court has a duty to make all due allowances for the advantage that the trial judge enjoyed having seen and heard the witnesses give their evidence. However, the mere fact that a trial judge necessarily reached a conclusion based on the credibility of the witnesses of one party, will not inhibit the jurisdiction of an appellate court to interfere with that decision.[1]
[1] Fox v Percy (2003) 214 CLR 118
The matters pointed to by Mr Taylor in support of his proposition that the Tribunal erred in finding Ms Wise to be a credible witness were, in my view, peripheral and insubstantial. At most the matters raised suggested a degree of exaggeration or mistakes as to dates and timing and as to the effect of the legislation. For example, Mr Taylor referred to Ms Wise’s application and her assertion that “on nearly every day” of her tenancy she observed Mr Taylor drive slowly past. As he said, this cannot be accurate. However, witnesses are often accepted as witnesses of credit notwithstanding they may be inaccurate or mistaken about some matters. Indeed, the Tribunal appears to have taken into account the fact that Ms Wise may have been incorrect in reaching its conclusion as to her credibility.
Mr Taylor also suggested that Ms Wise’s assertion to the Tribunal that she did not complain of certain matters during the currency of her tenancy because she was very concerned that the tenancy might be terminated, was not credible because she knew they were happy with her tenancy, and further, that she could have asked for a fixed term tenancy before complaining.[2] This seems to me to be a somewhat tenuous basis on which to attack a witness’s credibility. There were several other matters identified by Mr Taylor in a similar vein. None of these caused me to doubt the Tribunal’s overall assessment of Ms Wise and accordingly I see no basis to disturb that conclusion. In saying this, I note that very little of the findings of the Tribunal on the issues bearing upon this appeal appear to be the subject of substantial dispute. Mr Taylor appears to concede that there was delay in repairing the water damage to the ceiling and the toilet over an extended period of time.[3] There also appears to be at least some agreement that there was an issue in relation to quiet enjoyment albeit Mr Taylor takes issue with the findings of the Tribunal as to extent of the issue. In submissions he stated that he had “always accepted technically that there may have been a breach of quiet enjoyment but that all ceased in 2008.”[4]
[2] Transcript p27
[3] District Court Transcript pp18-20
[4] District Court Transcript p41
Compensation
The notice of appeal sets out the grounds of appeal relating to compensation in paragraphs 5 to 13 as follows:
v.The application by the tenant to the Tribunal did not include any request for compensation as awarded;
vi.The tenant did not provide and the Tribunal did not seek particulars as to the basis upon which any such award might be made;
vii.The Tribunal did not notify either party in the course of or after the hearing (sic) that it had in contemplation an award of compensation as made;
viii.The landlord had no, or no sufficient, opportunity either the adduce evidence or to make submissions on the question whether any compensation should be awarded and if so as to the amount;
ix.The compensation as awarded was manifestly excessive;
x.The Tribunal may have had regard, in determining that compensation was to be awarded, and the amount of the same, to evidence which the Tribunal admitted, and in relation to which the Tribunal made findings set out in substantial detail in its Reasons, but which was irrelevant both to the tenancy and to any issue in relation to which the Tribunal had jurisdiction;
xi.The Tribunal may have had regard to material relating to locations and events which were unrelated to the tenancy;
xii.In any event, it was not open to the Tribunal to award a global sum: if any sum were properly to be awarded, the Tribunal should have awarded a separate amount referrable to the breach of the obligation to repair and to the breach of the right to quiet enjoyment and the Tribunal should have specified in sufficient detail the facts, matters and circumstances taken into account in relation to the quantum of each such award; and
xiii.The material before the Tribunal did not justify any award of compensation in the amount awarded or at all.
It can be seen that these grounds of appeal raise a number of different issues. First, it is said that the application by the tenant to the Tribunal did not include any request for compensation as awarded. This is plainly correct. The only claim for compensation related to an asserted early termination of the tenancy and Ms Wise was unsuccessful in that claim. Mr Taylor complains that this is compounded because the Tribunal did not notify either party that it had in contemplation an award of compensation of the type ultimately awarded to Ms Wise, and says further, that there was no or no sufficient opportunity to adduce evidence or to make submission on the question of compensation. I do not accept this submission.
I note the reference at page 13 of the Tribunal’s decision to Mr Taylor questioning the Tribunal’s capacity to grant compensation for the topic of quiet enjoyment. This suggests that not only was he aware of the possibility of compensation being awarded for that head of loss but also that he made submissions on that topic.
I have considered the transcript of each of the three hearings. It is unfortunate that much of the hearings appeared to be rather freeform with several people present and often speaking over the top of each other. This makes the transcript somewhat difficult to follow. What is however abundantly clear to me is that the issue of compensation for breach of the condition of quiet enjoyment and failure to repair, was raised and discussed on several occasions during the course of the three hearings. By way of example, and by no means exhaustively, I refer to the transcript of the first hearing pages 61 – 62 and pages 67 – 68, in the second hearing there was discussion at page 114 - 116 of the transcript and in the third hearing there was discussion at page 18. It is equally clear that Mr Taylor had ample opportunity to call evidence and make submissions on the topic of compensation given there were three hearings. The Tribunal was also at pains at the conclusion of the final hearing to ensure that both parties were satisfied that they had made all necessary submissions.
Grounds 10 and 11 of the notice of appeal relate to assertions that the Tribunal may have had regard to irrelevant matters in reaching its finding as to the quantum of compensation. The possibility that this might have occurred, without more, is hardly a proper ground of appeal. Mr Taylor clarified these grounds of appeal during his submissions as the matters referred to under the heading “Fire Hazard Reduction” on pages 3 to 6 inclusive of the Tribunal’s decision. The gist of his submission appeared to be that the Tribunal spent considerable time discussing that topic in its decision disproportionate to the amount of time spent on the other topics of the decision. This topic was determined in Mr Taylor’s favour by the Tribunal. His criticism of the amount of time spent discussing that topic in the reasons is in my view unwarranted, particularly in view of the amount of time spent in evidence on that topic during the course of the hearings, but more particularly does not of itself give rise to a suggestion that the Tribunal in some manner used this evidence to reach its findings on the topic of compensation. I see no basis for this submission having carefully considered the reasons for the Tribunal. I reject those two grounds of appeal.
The remaining grounds of appeal, grounds 9, 12 and 13, relate to the quantum of damages. I consider that there is some force to the proposition that the Tribunal ought not to have awarded a global sum without specifying the quantum referable to each breach.
The Tribunal referred to the decision of His Honour Judge Lunn in Doherty v Sulley & Suens[5] in support of the approach of awarding a global sum that took into account all of the variables and relevant circumstances. That decision however related to only one breach of the tenancy agreement – a failure to provide an air conditioner in working order. The reference to a “global sum” was a response to what was described as an error in the approach of the Tribunal in assessing damages on a daily basis varying according to fluctuations in the recorded maximum temperature and further, in failing to make deductions for savings on electricity. I do not consider that decision supports the approach taken in this matter. Whilst it is proper to award a global sum in relation to each breach, it is not in my view appropriate to award one global amount covering, in effect, two breaches. The amount awarded seems on the face of it to be somewhat excessive for the type of loss identified although, this is not entirely clear given the global figure assigned. The Tribunal should have assessed a separate figure for the failure to keep the premises in a reasonable state of repair and the interruption to Ms Wise’s entitlement to quiet enjoyment.
[5] Unreported [1998] DCSA D3858
Accordingly I consider that the order for compensation of $2000 should be set aside. During the course of the hearing the parties requested that, in such circumstances, I should assess the compensation payable and make further orders. This task is somewhat difficult because the Tribunal did not make many findings related to the quantum of compensation however, bearing in mind the parties’ request, I will do the best I can with the material before me.
Assessment of compensation
Failure to keep the premises in a reasonable state of repair
The Tribunal found that there was a failure to keep the premises in a reasonable state of repair contrary to s.68(1) of the Act in two respects - the bathroom toilet and the hall ceiling. A third ground relating to the water system was rejected.
The findings of the Tribunal in relation to the bathroom toilet were as follows:
·The toilet did not function properly at any stage of the tenancy.
·The need for repair of the toilet was noted on the first inspection sheet.
·There was a working toilet in the en suite and one person in the household.
·Any inconvenience was “relatively modest”.
The Tribunal’s findings in relation to the passage ceiling were as follows:
·The ceiling had been damaged by water in the past and roughly repaired.
·The affected area was about 2.5 metres.
·The presence of the damage was noted on the initial inspection report.
·The damage was exacerbated following a leak from the hot water system in November 2007.
·The repair was finalised in about July/August 2008.
·Appropriate rectification was required and was significantly and unreasonably delayed.
·The area was unsightly and the tenant had some concerns about the safety aspect.

Accordingly it appears that the damage to the ceiling remained unrepaired for a period of about two years and the malfunctioning toilet was never repaired. The Tribunal correctly noted that the prior notice of these matters to the tenant did not obviate the landlord’s obligation to repair.[6] The Tribunal further considered that Ms Wise had not pursued the issue of the repairs “vigorously and effectively”[7] and further appeared to consider that any compensation should be discounted for that reason.
[6] Section 68(1)
[7] Reasons page 12
To summarise, Ms Wise rented a property with two toilets only one of which worked properly. On the other hand there was no evidence that Ms Wise particularly wanted a property with two toilets. Likewise there appears to have been no evidence of any major inconvenience associated with the malfunctioning toilet. The ceiling was not repaired for a period of some two years. The problem was mostly a cosmetic or aesthetic issue. Although there was some evidence, accepted by the Tribunal, that Ms Wise had safety concerns these cannot have been major in view of the finding that she did not pursue the issue of repairs vigorously. The Tribunal also took into account Ms Wise’s delay in bringing her application for compensation as a relevant factor in reducing her entitlement to compensation. This was, in my view, an appropriate approach to the issue of delay.
Very little evidence appears to have been given on the topic of discomfort, inconvenience or distress suffered by Ms Wise as a result of the landlord’s failure to repair the toilet or of the delay in repairing the passage ceiling and, such evidence as there was, suggests only minor inconvenience. In those circumstances only nominal compensation can be awarded for this breach of the tenancy agreement.[8] Taking all of these matters into account I award Ms Wise the sum of $300 for breach of the landlord’s obligation to repair.
[8] Doherty v. Sulley & Suens see above;
Quiet enjoyment
A tenant’s entitlement to quiet enjoyment is imported into a residential tenancy agreement by section 65(1) of the Act which provides as follows:
(1) It is a term of a residential tenancy agreement that—
(a)the tenant is entitled to quiet enjoyment of the premises without interruption by the landlord or a person claiming under the landlord or with superior title to the landlord's title; and
(b)the landlord will not cause or permit an interference with the reasonable peace, comfort or privacy of the tenant in the tenant's use of the premises; and
(c) the landlord will take reasonable steps to prevent other tenants of the landlord in occupation of adjacent premises from causing or permitting interference with the reasonable peace, comfort or privacy of the tenant in the tenant's use of the premises.
The Tribunal concluded:
In my assessment, Mr Taylor had regularly disregarded the tenant’s right to quiet enjoyment over significant periods in the tenancy. Although he generally had some reasons he could cite as to why he was at the property or approaching the tenant to talk during the tenancy, I find that his behaviour was not compliant with section 65 of the Act over a considerable period of the tenancy. I accepted and preferred the evidence of the tenant that she had asked the landlord on many occasions not to come to discuss something without notice.[9]
[9] Tribunal decision p10
Ms Wise worked from home and sought a quiet place to live and work. From early in the tenancy until a time in 2008 Mr Taylor regularly approached Ms Wise at the premises without notice. On most of those occasions Ms Wise requested Mr Taylor to call in advance to make arrangements to discuss something rather than arrive unannounced. In 2008 an altercation took place in which Ms Wise informed Mr Taylor of her wishes in strong terms and he ceased to approach her without notice apart from shortly prior to the termination of the tenancy when there were apparently a few occasions where this occurred. Accordingly the breach took place over an extended period of time. Balanced against this is the fact that Ms Wise did not take adequate steps to mitigate her loss. In particular she did not issue this application until after the tenancy had concluded. The Tribunal said, in my view correctly, that this should reflect in some reduction of the amount of compensation payable.
The purpose of compensation is to put a person in the position they would have been in had the breach not occurred so far as money can achieve this. It is always difficult to put a monetary value on such losses. Part of the task involves the comparison of expectations with reality.[10] In this case Ms Wise sought a quiet rural property where she could live and study with minimal distraction. The reality was that for a period of about 18 months to two years Mr Taylor did not accede to her request to give prior notice when he wished to discuss issues with her but rather approached her informally when he was in the vicinity. These interruptions to her privacy caused Ms Wise disruption in her studies together with a degree of frustration and distress. Unfortunately the evidence does not provide much detail as to the extent of the disruption and the distress. Again it appears to me appropriate to take a conservative approach to the award. In all of the circumstances I award $840 for this head of loss.
[10] Milner v. Carnival PLC [2010] 3 All ER 701
Orders
Vary paragraph one of the order of the Residential Tenancies Tribunal dated 18 June 2010 by changing the amount payable by the landlord to the tenant from $2,000 to $1,140.