In Juskey v Stanfield [2022] NSWCATAP 224, a Landlord successfully appealed to the Appeal Panel of NCAT against the Tribunal’s decision at first instance to dismiss the Landlord’s application for damages following a fire at a residential premises. The Landlord successfully demonstrated there were questions of law to be determined in the appeal. It was therefore not necessary for the Appeal Panel to consider whether the Landlord required leave (permission) to make the appeal, and the appeal was upheld on the basis that the Tribunal had failed to properly deal with issues associated with four questions of law. The Appeal Panel remitted the proceedings to be re-determined by the Tribunal.
The Landlord commenced proceedings in NCAT seeking compensation for damage to her investment property caused by a fire while the Tenant was moving out of the premises. The Landlord’s application to NCAT claimed that the Tenant was liable for the damage which was alleged to have been intentionally or negligently caused, being a claim pursuant to s 51(1)(d) of the Residential Tenancies Act (RTA) for a breach of clause 15.4 of the tenancy agreement.
At the hearing, the Landlord, then not legally represented, raised in oral submissions that it was not necessary to determine whether the damage was intentionally or negligently caused, rather that the Landlord was entitled to damages on the basis that the property was not returned as close as possible to the same state as at the commencement of the tenancy, fair wear and tear excepted. The Tribunal proceeded to determine the matter without regard to the Landlord’s original pleaded claim pursuant to s51(1)(d) RTA and without expressly informing the Landlord that it would not determine that claim, and in circumstances where throughout the remainder of the hearing, the parties both made further oral submissions relevant to the s51(1)(d) RTA claim.
The Tribunal subsequently declined the Landlord’s request to put into evidence copies of the ingoing and outgoing condition reports in respect of the property which the Landlord had not served prior to the hearing. Although the Landlord gave oral evidence of the condition of the property at the commencement of the tenancy which was not disputed by the Tenant, the Tribunal determined that it could not make any findings in respect of the condition of the property at the commencement of the tenancy and that the Landlord had not established the elements of its claim.
The Landlord lodged an appeal with the Appeal Panel of NCAT claiming that the Tribunal had erred in dealing with several questions of law related to the Tribunal not determining the s51(1)(d) claim and not exercising its discretion to allow the condition reports into evidence.
The Appeal Panel determined that the Tribunal failed in dealing with four questions of law.
Firstly, the Appeal Panel was satisfied that the Landlord had sufficiently articulated a case pursuant to s51(1)(d) RTA that required the Tribunal to determine this claim either as the Appellant’s primary claim or at least in the alternative. Not determining this claim was a constructive failure to exercise jurisdiction. Further, the Appeal Panel found that it would not have been apparent to the Landlord that the Tribunal was proceeding on the basis the s51(1)(d) RTA claim was not pressed and accordingly she was not afforded natural justice.
Secondly, it was held that the Tribunal’s refusal to allow the condition reports into evidence was an unreasonable and plainly unjust exercise of the Tribunal’s discretion sufficient to raise a question of law of the kind referred to in House v The King (1936) 55 CLR 499; [1936] HCA 40. As the Tribunal decided the Landlord was claiming pursuant to 51(3)(b) of the RTA, natural justice required that the evidence that was available and relevant to that issue, namely the condition reports, was before the Tribunal to ensure the Tribunal could exercise its jurisdiction. Further, the Landlord was not given any opportunity to make any submissions in respect of the Tribunal’s proposed exercise of its discretion to reject the tender of the condition report, and no submissions were sought from the Tenant as to whether the tender of the condition reports was opposed or whether any prejudice would arise from the reports being tendered. These circumstances led to a further error, namely that there was no evidence to substantiate the Tribunal’s findings in support of its decision to disallow the condition reports into evidence.
In our view, for the reasons set out above, there was a failure on the part of the Tribunal to afford the appellant natural justice and a constructive failure to exercise jurisdiction by not considering the appellant’s claim under s 51(1) (d) of the RT Act for a potential breach of cl 15.4 of the tenancy agreement.
Thirdly, there was a failure by the Tribunal, in refusing to allow the condition reports into evidence, to take into account all relevant considerations in determining the condition of the premises at the commencement and end of the tenancy in circumstances where the Tribunal had decided that the appellant’s claim was more properly to be considered under s 51(3)(b) rather than s 51(1)(d).
A further failure arose from the procedure of the Tribunal in calculating the quantum of damages the Landlord would have been entitled had her claim been successful. The Tribunal applied ATO depreciation guidelines to discount the amounts claimed rather than the full replacement cost of damaged items sought by the Landlord. The Appeal Panel found the parties were denied procedural fairness in circumstances where the parties were not asked for submissions on the relevance of the depreciation guidelines and where the appellant was not made aware that the Tribunal might rely on the ATO depreciation guidelines to assess her claim for damages.
Accordingly, the Landlord’s appeal was upheld and the proceedings remitted to the Tribunal to be re-determined.
