Makowska v St George Community Housing Ltd

1. [1]

   BASTEN J: The plaintiff, Zofia Makowska, is a tenant of premises operated by the defendant, St George Community Housing Ltd, pursuant to an arrangement with the owner, the Land and Housing Corporation, under s 13A of the Housing Act 2001 (NSW). It is common ground that the defendant is the landlord under a lease which falls within the Residential Tenancies Act 2010 (NSW).

2. [2]

   Although there has been no physical intrusion on the unit occupied by the plaintiff, on 29 May 2019 she commenced proceedings in the Civil and Administrative Tribunal (the Tribunal) in its Consumer and Commercial Division, seeking compensation for breach of the landlord’s obligation to provide quiet enjoyment of the premises. The interference with her enjoyment was said to result from a failure to repair drains in the common area which resulted in stormwater blocking convenient access to the car park and causing deterioration of the lawn in a recreational area, which she helped to maintain and enjoyed.

3. [3]

   By a decision handed down on 13 February 2020, the Tribunal upheld her claim in part and exercised a power under s 44 of the Residential Tenancies Act to reduce her rent for a period of 12 months, from 1 April 2019 to 31 March 2020. Otherwise, the claim for compensation was dismissed.

4. [4]

   On 26 February 2020 the plaintiff filed a notice of appeal from the decision of the Tribunal to the Appeal Panel, pursuant to s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (Tribunal Act). The appeal was available as of right on any question of law, or with leave of the Appeal Panel on any other ground: s 80(2)(b).

5. [5]

   On 29 July 2020 the Appeal Panel delivered its decision, dismissing the appeal with respect to one ground which raised an error of law and otherwise refusing leave to appeal. [1] On 2 October 2020 the plaintiff filed a summons seeking judicial review of that decision.

A preliminary procedural issue

1. [6]

   Pursuant to s 83 of the Tribunal Act, a party to an appeal to the Appeal Panel may, with leave of this Court, appeal to this Court on a question of law. Pursuant to the Uniform Civil Procedure Rules 2005 (NSW), r 50.3(1), the appeal must be filed within 28 days after the material date (being the date of the decision of the Appeal Panel) or within such further time as this Court may allow.

2. [7]

   The plaintiff did not seek leave to appeal under s 83, either within time, or at all. Rather, on 2 October 2020 a little over two months after the date of the Appeal Panel decision, she commenced proceedings in the supervisory jurisdiction of the Court under s 69 of the Supreme Court Act 1970 (NSW).

3. [8]

   Before the plaintiff would be able to appeal, she would need to obtain an extension of time within which to file an application for leave to appeal, and would need to obtain leave. Unless there is a full explanation of why the path provided by the statutory appeal was not followed, and a clear indication that a substantial miscarriage of justice would occur if relief were not available in the supervisory jurisdiction, the proper course is to refuse any potentially available relief on discretionary grounds. The importance of the leave requirement is accentuated when an attempt is made to challenge a decision where no issue of legal principle is engaged and where the amount in dispute is insufficient to justify the costs involved.

4. [9]

   In resisting that conclusion, the plaintiff submitted that the defendant should not be allowed to rely on the statutory power to “refuse to conduct a judicial review of a decision of the Tribunal if …an appeal to a court could be … lodged against the decision.” [2] In fact, the statutory power reflects a general law principle of long-standing, [3] which it neither expands nor constrains. Further, the second decision referred to below, which the plaintiff expressly addressed in her oral submissions, was a case in which s 34(1) was discussed. The first case applied general law principles.

5. [10]

   The two decisions, neither of which was directly on point, may be briefly addressed. The first, Ackroyd v Whitehouse (Director of National Parks & Wildlife Service), [4] involved an application for judicial review of a decision by the Director peremptorily to cancel the applicant’s licence, which permitted him to trap and sell fauna. There had been a denial of procedural fairness. The Director submitted that relief should be refused on the basis that the applicant could have appealed to the Minister and would have had an opportunity to present his case to the Minister and, if unsuccessful, to seek review at that stage. This Court rejected that contention, holding that the existence of an appeal to the Minister did not deprive the applicant of his entitlement to procedural fairness from the Director. He was entitled to seek judicial review to enforce that procedural right. That case, it may be seen, is significantly different from the present case, the plaintiff not having been denied procedural fairness at any stage.

6. [11]

   Secondly, the plaintiff relied on the reasoning of Beech-Jones J in Allen v TriCare (Hastings) Pty Ltd. [5] The defendant in that case, being the owner of a residential park, sought to terminate its agreements with residents so that it could redevelop the park. Its application was approved by the Tribunal. However, the plaintiffs, seeking to challenge that decision, did not avail themselves of the internal appeal to the Appeal Panel, but rather commenced proceedings immediately in this Court seeking judicial review of the Tribunal decision at first instance. Beech-Jones J noted that there was “[a]t the outset a significant question … as to whether [the] proceedings should be dismissed because the plaintiffs did not pursue an internal appeal to an appeal panel of NCAT.” [6] The process involved in that case engaged the terms of s 34 of the Tribunal Act, which expressly empowers a court to refuse to conduct a judicial review if satisfied that there is adequate provision for an internal review by an appeal panel. Having decided that the Tribunal decision had been infected by jurisdictional error, Beech-Jones J nevertheless gave careful consideration to the explanation why the internal appeal process had not been availed of and only concluded “with some reluctance” that the matter should not be dismissed on discretionary grounds. [7]

7. [12]

   Again, the case is not in all respects the same as the present case, in that the present plaintiff has availed herself of the internal appeal to the Appeal Panel: rather, she has invoked the procedure by way of judicial review in place of the statutory right of appeal from the appeal panel, either of which processes would bring the matter before this Court. By doing so, she avoids compliance with the time limit and with the obligation to obtain leave before the matter could proceed in this Court. In Allen, although the failure to obtain internal review was not adequately explained, the judge determined that “[t]he delay involved in [refusing relief] would be likely to be disadvantageous to both parties.” [8] As noted, that conclusion was reached on the basis of a finding of jurisdictional error on the part of the Tribunal.

8. [13]

   More broadly, where this Court has the benefit of decisions at first instance and on an internal appeal, it is appropriate to ask:

9. [14]

   In this case no explanation has been given for the failure to seek an extension of time within which to appeal, except to refer to her status as an unrepresented litigant. [9] On the other hand, it is not known whether that the defendant would have opposed an extension of time, or done so successfully. It is also not clear that leave to appeal would have been granted had time been extended; but that application would probably have turned on an assessment of the merits of the case. Whether the Court should be satisfied that a miscarriage of justice would result from dismissal of this proceeding on a discretionary basis turns on a similar assessment. Accordingly, it is necessary in any event to identify the nature of the case sought to be run by the plaintiff.

Claim before the Tribunal

1. [15]

   In her application to the Tribunal, the plaintiff sought relief under paragraphs (a), (b), (d), (e) and (f) of s 187(1) of the Residential Tenancies Act. Relevantly for present purposes, there was an order for payment of compensation under par (d). The reasons for the orders sought were expressed in the following terms:

2. [16]

   The Tribunal member distinguished between two claims, one being the flooding of the pathway to the car park and the second being the damage to the lawn constituting a common recreational area. He identified the former as causing “inconvenience to access to the car park and is the loss of quiet enjoyment.” The second claim he identified as a “reduction or withdrawal of the facility” constituted by the recreational area.

3. [17]

   Although it is not entirely clear that the plaintiff intended to draw that distinction, it does not appear that she took objection to it before the Appeal Panel, nor in this Court. Indeed, noting that the Tribunal used two headings in its reasons, “Breach of Quiet Enjoyment”, commencing at par 19, and “Reduction or withdrawal of good[s], services or facilities”, commencing at par 26, she stated that the former “would ordinarily be referenced to non-economic losses” and the latter “would ordinarily be referenced to s 44 of the [Residential Tenancies Act] … because the former is the language of the common law and the latter is the statutory language of s 44 of the [Residential Tenancies Act].” [10]

4. [18]

   Accepting that such a distinction was available, she nevertheless referred this Court to the terms of her original lease, in the form of an agreement with the Department of Housing executed on 31 September 1989. Section 2 provided for the tenant to “peaceably possess and enjoy the premises during the tenancy” and provided that “rent shall abate if the dwelling becomes uninhabitable by accident, fire, flood or tempest.” By contrast, clause 3 imposed obligations on the tenant including the following:

5. [19]

   There appears to have been no consideration given to the relevance of this document, or its operation since the commencement of the Residential Tenancies Act. It may be noted that a statutory right to quiet enjoyment now arises under s 50 of the Residential Tenancies Act, which provides:

6. [20]

   The plaintiff (and the Tribunal) accepted that the common law principles with respect to what constitutes a breach of the right of quiet enjoyment still apply. There was no issue raised as to whether this section was to be construed by reference to case-law dealing with what Lord Hoffmann once described as “the bleak laissez-faire of the common law” with respect to tenants’ rights. [11]

7. [21]

   With respect to the second matter, it was accepted by the plaintiff (and the Tribunal) that the presence of the lawns and gardens constituted “goods, services or facilities provided with the residential premises” which could be reduced or withdrawn, thus entitling the Tribunal to award a reduction of the rent payable, pursuant to s 44(3) of the Residential Tenancies Act. There was no discussion of how cl 3(o) of the 1989 agreement might apply.

8. [22]

   The Tribunal made factual findings in relation to both aspects of the plaintiff’s claim. These will, so far as relevant to the present proceeding, be noted below.

Appeal to Appeal Panel: ground 1

1. [23]

   Ground 1 in the notice of appeal to the Appeal Panel read:

2. [24]

   The Tribunal identified the claim for compensation as a claim for non-economic loss. In its reasons, [12] the Tribunal observed that, as defined in s 3 of the Civil Liability Act 2002 (NSW), a claim for non-economic loss includes a claim for pain and suffering and loss of amenities of life. The member held that the plaintiff’s claim fell within this definition and therefore engaged s 16(1) of the Civil Liability Act, which precludes recovery of damages for non-economic loss unless the injury suffered is at least 15% of a most extreme case. The member was, understandably, not satisfied that the plaintiff had suffered such a loss.

3. [25]

   The Appeal Panel correctly accepted that the claim for compensation for loss of quiet enjoyment of the premises, and for inconvenience, did not constitute a claim for personal injury damages and did not fall within the definition of non-economic loss in s 3 of the Civil Liability Act. The Appeal Panel concluded:

4. [26]

   If the conclusion that the error was immaterial was unimpeachable, then so far as the plaintiff had an appeal as of right to the Appeal Panel, it was correctly dismissed. However, the plaintiff challenged the ruling as to immateriality in terms which will be addressed below.

Appeal to Appeal Panel: other grounds

1. [27]

   In other respects, the grounds of the internal appeal, although some were expressed as involving errors of law, were held by the Appeal Panel to turn on factual findings and to require leave. The grounds (other than ground 1) relied on before the Appeal Panel, were as follows:

2. [28]

   In short, the plaintiff accepted before the Appeal Panel that the Tribunal had not been satisfied that there was a breach of the right of quiet enjoyment. The Appeal Panel dealt with that question in the following terms:

Application for judicial review

1. [29]

   The plaintiff’s summons for judicial review contained one ground stated as follows:

2. [30]

   The correct understanding of the “irrelevant consideration” ground of judicial review is that the tribunal has taken into account a consideration which is forbidden or prohibited by law. No such consideration was identified by the plaintiff in her submissions. Rather, she stated in her written submissions: [14]

3. [31]

   It is true that an error of law may be found if the ultimate decision of the Tribunal were unsupported by any evidence logically probative of the underlying facts. It may also be accepted that such a decision may be characterised as manifestly unreasonable. There is, however, a clear distinction between those grounds and stating that the Tribunal took into account a matter which it was prohibited from considering. However, what the plaintiff appeared to be saying was that the finding that the legal error was immaterial was wrong, because it contributed to the refusal (as the plaintiff contended) to award her compensation for the breach of the right to quiet enjoyment of the lawn. (Whether the Tribunal made such a finding will be addressed below.)

4. [32]

   Further, care must be taken in treating a negative finding, namely that there was no breach of a right of quiet enjoyment, as capable of challenge on the basis that there was no evidence to support it. The plaintiff bore the burden of establishing breach of the right by the defendant. [15] If she failed to satisfy that burden, she cannot rely on a no evidence ground.

5. [33]

   The reasoning of the plaintiff in support of such a claim relied upon what was said to be a finding of the Tribunal, contrary to the assumption which appeared to underlie the proceedings before the Appeal Panel, namely that the Tribunal had found a breach of the right of quiet enjoyment. This reasoning cannot be supported.

6. [34]

   This was not, on any view, a case in which it could be said there was “no evidence” to support a particular finding. The Tribunal had set out the evidence and the claims made by the plaintiff in the following terms:

7. [35]

   The defendant called evidence before the Tribunal as to the work which had been done to resolve the stormwater problem, which apparently involved the repair of a damaged grate to a stormwater pit at the end of the parking lot. With respect to the damage to the lawn, the defendant acknowledged that the grass was not in good condition, but was advised that overhanging trees needed to be trimmed before there was any point in laying new turf.

8. [36]

   The Tribunal understood that a claim had been made for breach of the right of quiet enjoyment based on the fact that the applicant was required to use an alternative route to the car park during heavy rain. The Tribunal concluded in that regard, after considering the evidence:

9. [37]

   The Tribunal then considered a second claim, namely loss of a “facility”, being access to and use of the lawn as a recreational area. Although it had not been clearly pleaded, the Tribunal treated that aspect of the claim as a claim for a reduction in rent pursuant to s 44 of the Residential Tenancies Act on the basis that there had been a “reduction or withdrawal by the landlord of … facilities provided with the residential premises”: s 44(1)(b). A rent reduction for a period was allowed by application of that provision. The Tribunal made the following findings:

10. [38]

    The Tribunal allowed and calculated a reduction of rent under s 44. It then concluded:

11. [39]

    On one reading, the reasoning in these paragraphs was subsequent to, and did not involve, the right of quiet enjoyment under the lease. Rather, it was a grant of relief under the statute, where a particular facility, being a common area within the curtilage of the residential building, namely the lawn, was not available for enjoyment. However, it is necessary to address three matters which point to a different reading.

12. [40]

    The first arose from the reference by the Tribunal at [33] to the judgment of Hill J in Hawkesbury Nominees Pty Ltd v Battik Pty Ltd, [16] which dealt with the test for breach of a covenant for quiet enjoyment. Either the Tribunal was dealing with quiet enjoyment in this section, or this passage was irrelevant in considering relief under s 44 for reduction of a facility and the reference to Hawkesbury Nominees was misplaced in the reasons. There may have been a third possibility, not articulated by the Tribunal, that the same test was to be applied in dealing with the reduction or withdrawal of a facility.

13. [41]

    The second matter was the language used at [34], where the Tribunal expressed its finding that the flooding and overhanging trees “have substantially interfered with the tenant in enjoying the lawn area.” The plaintiff submitted that this language reflected the test for breach of the right to quiet enjoyment and constituted a finding by the Tribunal as to such a breach with respect to the lawn. However, at least by inference, it is equally plausible that the Tribunal was simply applying the same test.

14. [42]

    The third matter was the application, at [27]-[28], of s 16 of the Civil Liability Act. Unless the Tribunal was addressing a breach of quiet enjoyment, discussion of damages as opposed to reduction of rent would have been irrelevant. However, the discussion occurred by reference to the Appeal Panel decision in Roberts v NSW Aboriginal Housing Office, [17] a case where there was no claim for breach of the right to quiet enjoyment, but only for reduction of rent. [18] Nevertheless, the Tribunal did not refuse a reduction of rent.

15. [43]

    Each of these considerations carries weight; together they may suggest a level of confusion on the part of the Tribunal and certainly a lack of clarity in the reasons. Nevertheless, reading the Tribunal’s reasons as a whole, the better view is that there was no finding of a breach of the right to quiet enjoyment. Rather, there would have been good reason to refuse relief under s 44, unless the conduct of the respondent was sufficiently serious in its effects to warrant the description of a reduction or withdrawal of a facility, language which does not necessarily involve loss of quiet enjoyment of the premises. The Tribunal adopted a test of substantial interference in achieving that degree of satisfaction, a test which was not challenged before the Appeal Panel as legally erroneous.

16. [44]

    Three further points should be made in this regard. First, the Appeal Panel identified the first issue raised by the plaintiff in the following terms: [19]

17. [45]

    Secondly, it is clear from the terms of grounds 2 and 3 before the Appeal Panel, set out at [27] above, that they were limited to the use of the pathway to the car park. Only grounds 5 and 7 dealt with the deterioration of the lawn, and there was, understandably, no challenge to the proposition that they raised questions of fact. [20]

18. [46]

    Thirdly, it is of course possible that conduct of a landlord may constitute a breach of the tenant’s right to quiet enjoyment and a reduction or withdrawal of facilities. However, in the present case, where the only loss is non-economic loss, such as inconvenience or loss of amenity, it would be inappropriate to award damages by way of compensation and provide a reduction of rent. [21] Accordingly, had there been a legal error in failing to provide compensation for breach of quiet enjoyment with respect to the deterioration of the lawn, no further relief would have been appropriate and, accordingly, as a discretionary matter, relief by way of judicial review would have been refused.

19. [47]

    As the grounds of appeal to the Appeal Panel (other than ground 1) raised factual issues, the Appeal Panel found there was no error of law and no basis for granting leave to challenge the factual findings. The plaintiff did not submit that, apart from the alleged inconsistency in the findings of the Tribunal, there was any error of law on the part of the Appeal Panel in its approach to the issues.

Conclusions

1. [48]

   It is arguable that there was a degree of confusion arising from the reasons of the Tribunal which supported an appeal to the Appeal Panel. However, there was no presentable error of law on the part of the Appeal Panel in dealing with the grounds raised before it. Had there been an application for leave to appeal under s 83 of the Tribunal Act, it would likely have failed. The amount at stake would also have counted against a grant of leave. It is open to the Court to dismiss the present summons on the basis that, as a matter of discretion, no relief should be provided, the plaintiff having failed, for no justifiable reason, to challenge the decision of the Appeal Panel by way of a timely application for leave to appeal.

2. [49]

   However, the foregoing reasoning also demonstrates that there was no error of law on the face of the record, where the record includes the reasons of the Appeal Panel, nor was there any arguable case of jurisdictional error. Accordingly, on that basis, the summons should be dismissed without considering discretionary refusal of relief. The orders of the Court are:

   1. (1)

      Dismiss the summons filed by the plaintiff on 2 October 2020.

   2. (2)

      Order that the plaintiff pay the costs of the first defendant in this Court.