Varricchio v Wentzel

Case [2016] SASC 86

SUPREME COURT OF SOUTH AUSTRALIA

(Appeals to a Single Judge: Civil)

VARRICCHIO v WENTZEL

[2016] SASC 86

Judgment of The Honourable Justice Doyle

16 June 2016

ADMINISTRATIVE LAW - ADMINISTRATIVE TRIBUNALS

LANDLORD AND TENANT - RIGHTS AND LIABILITIES APART FROM COVENANT - OTHER MATTERS

The applicant landlords and the respondent tenants entered into an agreement to rent the applicants’ property. Complaining of mould and water damage, the respondents vacated the property and brought a claim in the South Australian Civil and Administrative Tribunal seeking compensation for a breach of the applicants’ obligation to repair. The claim was dismissed. The respondents sought an internal review, which was successful. They were awarded $9,200 as compensation.

The applicants sought permission to appeal from the internal review. The applicants appealed on the grounds that the Member erred in finding that the applicants breached their obligation to repair by not ensuring that the property was in a tenantable condition at the commencement of the tenancy and by not responding reasonably upon being notified of the tenants’ concerns as to water damage and mould. They also complained that the Executive Senior Member erred in assessing that the respondents were entitled to $9,200 in compensation.

Held (per Doyle J), dismissing the appeal:

1.       Leave to appeal against the finding that the applicants breached their obligation to repair is granted, but leave to appeal the assessment of compensation is refused.

2.       The appeal is dismissed. The Member did not err in concluding that the applicants breached their obligation to repair.

Residential Tenancies Act 1995 (SA) s 68, s 68(1), s 68(1a), s 68(2); South Australian Civil and Administrative Tribunal Act 2013 (SA) s 70, s 71(1), s 71(2), s 68(2)(a), referred to.
Knueppel v Zarpas [2004] SADC 162, discussed.
Pix v South Australian Housing Trust [2016] SASCFC 57; Jackson v Lepp Investments Pty Ltd [2016] SASC 62; Reliance Permanent Building Society v Harwood-Stamper [1944] Ch 362; Gration v C Gillan Investments Pty Ltd [2005] QCA 184; Northern Sandblasting Pty Ltd v Harris (1997) 188 CLR 313; Jones v Bartlett (2000) 205 CLR 166, considered.

VARRICCHIO v WENTZEL
[2016] SASC 86

Magistrates Appeal.

DOYLE J:

  1. The applicant landlords (Mr and Mrs Varricchio) own a property at 82A Fourth Avenue, St Peters. The respondents (Mr Wentzel and Ms Marks) entered into an agreement to rent the applicants’ property commencing on 15 August 2014. Complaining of mould and water damage to the property, the respondents vacated the property in September 2014 and brought a claim in the South Australian Civil and Administrative Tribunal (SACAT) seeking compensation for a breach of the applicants’ obligation to repair under s 68 of the Residential Tenancies Act 1995 (SA).

  2. The claim was heard by Member Georgiadis and dismissed. The respondents sought an internal review of that decision under s 70 of the South Australian Civil and Administrative Tribunal Act 2013 (SA). The internal review was heard by Executive Senior Member Stevens. It was successful, resulting in the earlier decision…

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Varricchio v Wentzel [2016] SASC 86
Case
[2016] SASC 86
Decision Date

CaseChat Overview and Summary

In the matter of Varricchio v Wentzel, the applicants, the landlords, sought to appeal a decision of the Residential Tenancies Authority regarding a dispute with their tenants, the respondents. The respondents had raised concerns about the condition of the property, particularly the presence of mould, and the impact on their health, particularly that of their infant son. The applicants challenged the findings of breach of the Residential Tenancies Act and the assessment of compensation. The legal issues before the court were whether the applicants breached the Act, and if so, the extent of the compensation owed to the respondents.

The court considered the evidence and submissions from both parties, and examined the statutory provisions and relevant case law. The court found that the applicants had breached the Act by failing to ensure that the property was in a habitable condition at the commencement of the tenancy. The court also found that the respondents had suffered health issues as a result of the mould, and that the applicants were liable for compensation. However, the court declined to grant leave to appeal on the issue of the assessment of compensation, finding that the proposed challenge did not raise any matter of sufficient merit or importance.

The court granted leave to appeal against the finding of breach by the applicants of s 68(1) of the Residential Tenancies Act, but dismissed the appeal. The court also dismissed the application for leave to appeal from the assessment of compensation payable by the applicants. The court made orders accordingly.

Orders

Orders of the court

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Background

Background to the litigation

Before addressing the application and appeal, it is appropriate to outline the factual and procedural background.Factual background Prior to the tenancy the subject of these proceedings, the applicants had managed the property through a property manager. By the commencement of the respondents’ tenancy the appellants had taken over the management of the property. However, the property manager carried out the final inspection at the conclusion of the tenancy prior to the respondents’ tenancy. The respondents were shown through the property in mid July 2014. Both Mr Varricchio and the current tenants were present. The inspection was a short one, so as not to inconvenience unduly the current tenants. While the respondents noticed some evidence of water damage in the back area of the house (on the walls and ceiling of the sunroom) it did not appear to them at the time to be significant. Some of the more significant patches of water damage or mould were obscured by the furniture and possessions of the tenants. The respondents agreed to enter into a lease. Mr Varricchio was going overseas, but gave the respondents the keys to the property on 11 August 2014 and gave them permission to start moving their belongings in prior to the lease commencing on 15 August 2014. The respondents had a further “walk through” of the property when collecting the keys on 11 August 2014. They noticed some additional staining or water damage in the laundry, which was adjacent to the sunroom. Again, Mr Varricchio was present. Upon either the initial inspection, or the subsequent walk through, but in any event prior to the tenancy commencing, the respondents had a conversation with Mr Varricchio about the staining. Mr Varricchio indicated that he was aware there had been an issue with a leak but that he had, or would soon, attend to this. There was no suggestion the issue was one of any concern or significance. The respondents moved in, and the lease commenced, on 15 August 2014. Soon after moving in, the respondents became concerned by what appeared to them to be mould growth in the discoloured areas of the wall and ceiling of the sunroom, and an associated odour. They discovered an additional area of mould behind a piece of furniture that had been left behind in the sunroom. They became concerned about the impact of the mould upon the air quality and their health, particularly that of their infant son. Indeed, their son had begun to experience some respiratory symptoms, which they attributed to the mould they had observed. Mr Varricchio was overseas until 26 August 2014. Shortly after his return, on 28 August 2014, the respondents verbally notified the appellants of their concerns about the moisture and mould problems at the property, and the potential health implications. On the same day, but without the knowledge of the applicants, the respondents organised for the Housing Improvement Branch (HIB) to inspect the property. The inspector orally confirmed the substandard nature of the premises, including as a result of the presence of mould (which he described as unhealthy). He identified various other concerns about the state of the premises.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

Having reviewed the matters sought to be raised by the applicants in their challenge to the assessment of compensation, I do not think that the proposed challenge raises any matter of sufficient merit or importance to warrant leave to appeal being granted on this issue. Accordingly, I decline leave to appeal on this issue.Conclusion For the reasons set out, I make the following orders:1. I grant leave to appeal against the finding of breach by the applicants of s 68(1) of the Residential Tenancies Act, but dismiss the appeal.2. I dismiss the application for leave to appeal from the assessment of compensation payable by the applicants.

Ratio Decidendi

Legal Principle Established

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