Khanna v Baweja & Anor

WHITE JA: This is an application for leave to appeal from orders of the District Court made on 1 September 2017 (Taylor SC DCJ) and 2 February 2018 (Cowdroy ADCJ). The dispositive orders were those of Cowdroy ADCJ of 2 February 2018 refusing the applicant leave to file a notice of motion and draft Amended Statement of Claim, and summarily dismissing the applicant’s proceeding.

The first respondent to the application entered into a residential tenancy agreement with the applicant’s wife for her to occupy a residential property in Dairy Road, Glenwood. The second respondent was the first respondent’s managing agent and named as such on the residential tenancy agreement.

The summons for leave to appeal also challenges earlier orders made by Taylor SC DCJ on 1 September 2017 by which his Honour struck out the applicant’s existing pleadings including his amended statement of claim filed on 15 June 2017 and further ordered:

The summons for leave to appeal was filed on 26 September 2018. It was well out of time.

I would not grant an extension of time to appeal from the orders made by Taylor SC DCJ of 1 September 2017. There has been no explanation for that delay. The orders were interlocutory and not dispositive. The applicant was given the right to seek leave to replead and the respondents’ application for summary dismissal was not acceded to, although the respondents were given leave to renew the application if the applicant did not obtain leave to file a further amended statement of claim by 31 October 2017.

The dispositive orders were those of Cowdroy ADCJ on 2 February 2018. The applicant adduced evidence as to his ill health to explain the delay between 2 February and 26 September 2018 in the filing of the summons for leave to appeal.

A notice of intention to appeal from the orders of Cowdroy ADCJ had been filed on 1 March 2018. The respondents do not point to any prejudice if an extension of time were given.

The respondents submit that the Court should not accept that the applicant was unable to prepare his appeal documents in the period between February and May 2018. They asserted that during that time the applicant appeared in person in other unrelated proceedings in which he cross-examined witnesses. The respondent sought to rely on a reported decision of the District Court (Khanna v Gunesekara & Ors [2018] NSWDC 133).

Assuming, [1] without deciding, that the judgment can be used as evidence of the existence of a fact that was not in issue in the proceeding in which the judgment was given (Evidence Act 1995 (NSW), s 91(1)) it suffices to note that the judgment records that the applicant did not appear on 23 February, but did appear on 13 April and 18 and 21 May 2018 in the District Court. The judge noted that the applicant suffered from coronary heart disease and other health conditions and was awaiting heart surgery. The judge said that the applicant ultimately made focused and cogent submissions on matters at issue and also represented his wife in the proceedings.

In the absence of any relevant prejudice, and having regard to the evidence of the applicant’s ill health, as well as the evidence relied upon by the respondent showing the applicant’s need to attend to other legal business, and given the significance of the summary dismissal of his proceeding, time for the filing of the summons for leave to appeal from the orders of Cowdroy ADCJ of 2 February 2018 should be extended.

The applicant and his wife occupied premises in Dairy Court, Glenwood from 2010. In 2013 the first respondent bought the property. On 8 March 2015 the relevant residential tenancy agreement for the property was signed between the applicant’s wife as tenant and the first respondent as landlord. On 10 March 2016 the first respondent gave notice of a rent increase. On 13 April 2016 the applicant and his wife commenced proceedings in the New South Wales Civil and Administrative Tribunal (“the Tribunal”) challenging the rent increase and seeking an order under s 187(1)(h) of the Residential Tenancies Act 2010 (NSW) requiring the first respondent to comply with the Act or regulations. The application asserted that the landlord had not kept the property in repair and foreshadowed a claim for compensation for injury alleged to have been sustained by the applicant and his wife in January and March 2015. The primary judge recorded that the applicant’s essential claims were that the dwelling had never been approved for occupation or final occupation by the council, and that the property was not fit for occupation because of defects in the building, such as mould, moisture, leaks and an uneven driveway.

On 21 July 2016 the applicant and his wife made a further application to the Tribunal including an application for compensation of $15,000 on unspecified grounds. On 7 October 2016 the first respondent made an application in the Tribunal seeking an order terminating the residential tenancy agreement and giving the first respondent possession of the premises.

On 1 February 2017 other ancillary applications were made in the Tribunal.

The Tribunal rejected the applicant’s contention that the raising of rent was excessive. It rejected the applicant’s contention that the landlord was required to pay compensation and it upheld the landlord’s claim for possession (Khanna v Baweja; Baweja v Khanna [2017] NSWCATCD 8).

The Tribunal also refused a belated application by the applicant and his wife to amend their claims to recover all of the rent paid under the residential tenancy agreement. The claim was described (at [79]) as:

The Tribunal considered, but substantially dismissed, the applicant’s complaints concerning the fitness of a premises for residential habitation (paras [111]-[146]).

On 17 May 2017 an Appeal Panel confirmed the orders of the Tribunal (Khanna v Baweja [2017] NSWCATAP 107). The Appeal Panel said (at [39]-[40]):

The amended statement of claim struck out by Taylor SC DCJ and the proposed further amended statement of claim considered by Cowdroy ADCJ on 2 February 2018 included allegations that the registered proprietor had concealed his middle name and the address of the residential premises in the residential tenancy agreement. This was alleged to give rise to “identification fraud”. This complaint was rejected by Taylor SC DCJ (at [7], [13], but was repeated in the proposed further amended statement of claim for which leave was sought before Cowdroy ADCJ. That claim was manifestly untenable.

A claim to the same effect had been advanced in the Tribunal in support of an argument that it was not established that the first respondent was the registered proprietor, hence was not the landlord under the residential tenancy agreement entered into by the applicant’s wife, and therefore neither he nor his managing agent could terminate the agreement (at [57]). The Tribunal pointed to the inherent contradiction in the applicant’s position because he sought compensation from the first respondent because he was the landlord. The Tribunal also rightly observed that if the first respondent were not the registered proprietor it would not follow that he could not be the landlord (at [58]). But the Tribunal found the evidence clearly established that the first respondent was the registered proprietor (at [59]-[60]).

The proposed amended statement of claim also alleged that the property was rented by the respondent when there was no “certificate of approval” for the property. The statement of claim pleaded that the building permit clearly stated that “the building shall not be used or occupied until approved by council by obtaining certificate of approval”. The building had been erected in 1995.

The statement of claim did not clearly plead what certificate of approval was required that was not given. But it alleged that the building was uninhabitable. The latter contention was rejected by the Tribunal and was contrary to the fact that the applicant and his wife had inhabited the building for years before there was an attempted rent increase.

The applicant alleged that the first respondent was required to return the rent that had been paid during his and his wife’s occupation of the property, apparently because it was unlawful for the first respondent to have let the property in the absence of the relevant “approval certificate” and the effect of that illegality was that the tenant and the applicant could recover the rent that they had paid even though they had had the benefit of occupying the property at a reasonable rent.

This contention was not determined by Taylor SC DCJ. It was rejected by Cowdroy ADCJ on the ground that an identical claim had been made in the Tribunal. The Tribunal at first instance had found:

However, this was said in relation to a specific issue as to whether or not the landlord had breached a provision of the residential tenancy agreement in relation to the dimensions of the garage door and the gradient of the driveway (Tribunal’s reasons [146]). The conclusion was not essential to the determination of the applicant’s claim in the Tribunal for compensation for breach of the residential tenancy agreement. It does not appear to me that the Tribunal at first instance determined the wider claim made in the proposed statement of claim filed in the District Court. Indeed it appears from the reasons of the Appeal Panel that it had not. Although the same claim, or at least a claim to similar effect, was sought to be raised before the Appeal Panel, the Appeal Panel refused leave to appeal. It is arguable that the orders of the Tribunal created no issue estoppel precluding the raising of the claim in the District Court. Any claim of an Anshun estoppel (Port of Melbourne Authority v Anshun Pty Ltd (1981) 147 CLR 589; [1981] HCA 54) would raise a question of fact as to why the claim was not propounded in due time in the Tribunal which was not explained on the application for summary dismissal. It is arguable that the ground upon which this part of the claim was summarily dismissed by Cowdroy ADCJ was erroneous.

Nonetheless, the claim that the applicant and his wife were entitled to return of the rent paid for occupation of the premises because an “approval certificate” was not obtained, is plainly untenable.

In oral submission the applicant contended that the certificate required that was never given was a certificate of approval by the Council required under a condition of a building permit issued in May 1995 that “the building shall not be used or occupied until approved by Council.”

As noted above, the first respondent purchased the property in 2013 and the applicant and his wife commenced occupation in 2010.

During the period of their occupation of the premises s 109M of the Environmental Planning and Assessment Act 1979 (NSW) provided:

The applicant did not plead that the building in question was a “new building” within the meaning of s 109H. The evidence before the Tribunal was that it was built in 1995. This was three years before s 109M commenced operation. Even if the building were a “new building” as defined, the restriction against occupancy of the building did not apply to occupation or use after 12 months from the date on which the building was first occupied or used (s 109M(2)(c)). The applicant’s occupation of the building was plainly after that expiration of 12 months.

Even if s 109M (or some other section that has not been identified) precluded the letting of the building to the applicant and his wife, the applicant did not identify any arguable basis for saying that that would entitle the applicant to the return of the rent paid without allowance for a reasonable occupation fee for the occupation of the premises. The applicant did not plead or attempt to show that there was any statutory provision which rendered an agreement for occupation illegal. There was no failure of consideration for the rent paid because the applicant and his wife had the benefit of years of accommodation in the building. At most, the applicant could complain of a breach of cl 13.2 of the tenancy agreement, which was a warranty that there was no legal impediment to the applicant’s occupation of the premises. Even if he had mounted such a complaint, and even if he could establish that some legal impediment existed, it would still not justify a refund of rent paid.

The further amended statement of claim which the applicant sought leave to file did not plead any cause of action which made any sense, nor did it plead facts that might give a claim for relief. It named Powerlist Pty Ltd trading as Response Real Estate (Baulkham Hills) as the second defendant. So far as the allegations can be understood they were that:

Other allegations were made as variations on the above themes.

Most of the allegations in the proposed pleading had been determined against the applicant and his wife in the Tribunal, giving rise to an issue estoppel. The Tribunal’s decision was final (subject to appeal), and bound the parties in respect of findings of fact and law that were legally indispensable to that decision. To the extent new claims were raised in the District Court or findings in the Tribunal were not essential to its decision, the proposed statement of claim was incoherent. It did not plead material facts that suggested any viable cause of action.

It is not reasonably arguable that the applicant’s claim in the District Court was not properly summarily dismissed.

To obtain leave to appeal the applicant would need to show that there was an issue of principle, a question of public importance, or a reasonably clear injustice going beyond something that was merely arguable (PPK Willoughby Pty Ltd v Baird [2019] NSWCA 48 (at [6]). The present application raises no issue of principle, nor a question of public importance. The applicant’s contention that there was reasonably clear injustice does not even rise to the level of arguability. The merits of his claims, such as they were, were addressed in the Tribunal and on internal appeal by the Appeal Panel. New formulations of his claims, so far as they can be understood, are unmeritorious as well as futile.

For these reasons I propose the following orders:

McCallum JA: I agree with the orders proposed by White JA, for the reasons his Honour has stated.