District Court New South Wales

• Medium Neutral Citation: Liang v Greene by her tutor the NSW Trustee and Guardian [2013] NSWDC 74
• Hearing dates: 27/05/2013
• Decision date: 28 May 2013
• Jurisdiction: Civil
• Before: Elkaim SC DCJ

Decision

Judgment for the plaintiff for $226,200 with costs

• Catchwords: Residential lease, fire damage, failure to mitigate damages.
• Legislation Cited: Civil Liability Act 2002
• Cases Cited: Luxton v Vines (1952) 85 CLR 352
• Category: Principal judgment
• Parties: Wenyan Liang (Plaintiff); Maryanne Greene by her tutor the NSW Trustee and Guardian (Defendant)
• Representation: M K Rollinson (Plaintiff); J E Curtin (Defendant); Phoenix Attorneys (Plaintiff); Shaw McDonald Lawyers (Defendant)
• File Number(s): 2012/00082759
• Publication restriction: No

Judgment

1 The plaintiff has sued the defendant by an Amended Statement of Claim filed on 10 July 2012. An Amended Defence was filed, without objection, in the course of the hearing.

2 The plaintiff is the owner of residential premises at XXX, Eastwood (the "premises").

3 On 31 March 2011 the plaintiff, as landlord, entered into a residential tenancy agreement with the defendant. The term of the agreement was for 12 months commencing on 9 April 2011 at a rent of $400 per week. The agreement is in a standard form. It is Annexure A to the plaintiff's affidavit affirmed on 20 October 2012.

4 On 5 May 2011 a fire occurred in the premises causing substantial damage. It was necessary for the defendant to vacate the premises. The premises have not yet been repaired nor has any other person occupied the house.

5 The dwelling was not insured due to an oversight on the plaintiff's part.

6 In this action the plaintiff seeks the costs of repair of the premises together with the rent that has been lost both under the lease and as a result of the premises still not having been repaired or occupied.

7 The defendant's response on liability is essentially twofold: firstly the plaintiff has not proved her allegations of negligence; secondly the defendant says she is entitled to rely upon Sections 56 and 57 of the Civil Liability Act 2002 (the "CLA") which provide a Good Samaritan defence.

8 In relation to damages the defendant again said the plaintiff had not proved her case and also alleged a failure to mitigate.

9 On 25 August 2011 an order for financial management was made by the Mental Health Review Tribunal appointing the NSW Trustee and Guardian as manager of the whole of the defendant's estate. The reasons behind this action are not relevant to the proceedings.

10 The plaintiff relied upon her own affidavit affirmed on 20 October 2012 together with the affidavit of Mr Peter Brooks affirmed on 6 December 2012. The latter is an expert report. Both deponents were cross-examined.

11 The plaintiff's affidavit annexes a number of documents which provide the factual matrix of her claim. They include reports from police and fire authorities as well as an assessment of damage and quotations for the repair of the damage.

12 Initially objection was taken to practically all of the annexures to the plaintiff's affidavit. In large measure I agreed with the basis for the objections and excluded large sections of the annexures. The result of my rulings was that fundamental parts of the plaintiff's claim were no longer available to her. Accordingly the plaintiff applied for an adjournment. I indicated that I thought an adjournment was appropriate, subject to the question of costs.

13 Counsel for the defendant then sought a short adjournment in order to take instructions upon the adjournment application. When she returned she said that it had not been anticipated that the plaintiff would seek an adjournment and, as the defendant wished to proceed with the case, all of the objections were withdrawn.

14 This approach seemed unusual to me as the inadmissible material all came back into consideration as evidence submitted by consent.

15 The plaintiff primarily relied on Clauses 15.4 and 16.3 of the lease. Under these clauses the defendant is liable to the plaintiff for any damage caused by her own negligence or that of a Mr Brown who was residing with her. The defendant did not dispute this proposition but rather said that negligence had not been proved.

16 The negligence asserted by the plaintiff arises from the following documents:

(a) The Fire and Rescue NSW report (Annexure B to the plaintiff's affidavit) refers to the "probable ignition factor" as "physical impairment/Candle".

(b) The police COPS report, which appears in more clear form in Exhibit 2 includes the following entries:

"In the morning of Thursday 5 May 2011, Mary-Anne GREEN and her boyfriend Michael BROWN were in the front bedroom of XXX, Eastwood. The house is rented by GREEN and she has resided there since late March 2011.

About 0650hrs GREEN and BROWN planned to share a cigarette. In the process of lighting the cigarette with a cigarette lighter the mattress on which GREEN was sitting caught alight. GREEN is unable to explain to police the exact events and how the mattress caught alight and whether it was the lighter or the cigarette that did it.

BROWN informed police that a candle was knocked over when trying to light a cigarette with if [sic] and set the bed on fire. Neither party changed their version supplied to police and fire brigade.

GREEN and BROWN have seen the mattress alight and GREEN has filled up bowls of water in an attempt to extinguish the fire without success [sic]. GREEN has assisted BROWN out of the rear of the house and collected the dog. GREEN was calling out "fire fire" whilst getting the water and assisting BROWN who is wheelchair bound. The next door neighbours heard the yelling and came outside, saw what was happening and called 000."

(c) The statutory declaration prepared by a Mr Smith, a senior legal officer at the NSW Trustee and Guardian suggests that although the defendant could not recall how the fire began she also could not remember "whether she dropped a cigarette lighter in or near the bed at the time the fire started". She also could not recall whether there was a lighted candle in the bedroom at this time.

17 The defendant accepted that the two likely causes of the fire based on the evidence were either that a cigarette lighter had been dropped onto the mattress or a candle had been inadvertently knocked over. The defendant then submitted that the principles set out in Luxton v Vines (1952) 85 CLR 352 at 358 prevented me from coming to a firm conclusion about negligence because of the two competing possibilities. The difficulty with this argument is that in my view both of the competing possibilities suggest negligence.

18 The defendant submitted that I should take into account that Mr Brown was in a wheelchair and therefore for him to knock over the candle was not necessarily negligent. I do not see how I can proceed on that basis. There was no evidence about Mr Brown other than the fact that he was in a wheelchair.

19 I also pointed out to the parties that it was my view that Section 5B of the CLA applied to the question of whether or not there had been negligence.

20 In my view an application of this section does lead to such a finding.

21 There is a clear risk of damage to property if a candle or cigarette lighter is allowed to fall onto a mattress. This is not an insignificant risk. It is well known that smoking in or near a bed is a source of house fires. Further, in my view, a reasonable person would take precautions to avoid the use of open flames in circumstances where contact with the open flame might lead to a fire.

22 In relation to Section 5B(2), I am satisfied that there is a high probability that harm would occur if care was not taken. A flame introduced to a mattress or other bed clothing gives rise to a high likelihood of harm. Any fire has a likely seriousness of harm. The burden of taking precautions to avoid the risk of harm in these circumstances is light. One simply does not smoke or have candles near a bed. I do not think that Section 5B(2)(d) is relevant.

23 In relation to causation under Section 5D the only matter that was, obliquely, advanced to defeat this issue was that if the plaintiff was reasonably removing Mr Brown from the house then she would be entitled to the Good Samaritan defence under Sections 56 and 57 so that her actions did not cause the damage. The difficulty with this argument, both in relation to causation and Sections 56 and 57, is the evidence that before the plaintiff wheeled Mr Brown outside the house she made attempts to put out the fire that failed. There was otherwise no other evidence to suggest that the fire did not cause damage to the house. The photographic and expert evidence is overwhelmingly to the effect that the claimed damage was caused by the fire.

24 As far as the Good Samaritan defence is concerned, for the reason I have already given, I think it must fail. In addition I do not think it is applicable to circumstances such as the present. It might apply, for example, to a person who causes damage while rescuing someone from a house fire, but that person is to be distinguished from a person who was negligent in starting the fire or allowing it to be started.

25 In my view, therefore, the plaintiff is entitled to judgment in her favour.

26 Turning to damages the plaintiff said the quantum should be made up of the following:

(a) The average of the three quotes annexed to the plaintiff's affidavit ($226,200)

(b) The consultation fees in Mr Brooks' reports ($7,000 - $10,000)

(c) Unpaid rent from the date of the fire to date, less the amount of a compromise of proceedings in the Consumer Trader and Tenancy Tribunal (the "CTTT").

(d) Future rent for "a short time" to allow for the repairs to be carried out.

27 The defendant submitted that:

(a) There was no evidence of the condition of the premises before the fire, in particular of the bathroom and kitchen.

(b) The above three quotes were unreasonable when compared to the quote obtained from New World Services NSW of $67,700 (Exhibit 1).

(c) The plaintiff had failed to mitigate her loss.

(d) The claim for rent should not extend beyond the term of the lease and this claim had been resolved in the CTTT.

28 The defendant is correct in submitting that there was no evidence of the state of the premises prior to the fire. It is also correct that there is a substantial difference between the quotations from the three builders and that from New World Services NSW.

29 The difficulty with the defendant's submissions is firstly that two of the three quotations plainly state that the figure suggested is in respect of fire damage. Notwithstanding that I had initially not allowed the inclusion into evidence of the quotations, the defendant later consented to the quotations being admitted and did not require any of the builders for cross-examination.

30 Further there was no additional material obtained by the defendant from New World Services NSW and the defendant did not tender any quotation suggesting a different figure. Although Mr Brooks said the three quotations were reasonable because they were all within a small band of difference he also said that they seemed appropriate having regard to his 30 years of experience.

31 The New World Services NSW quotation does have the advantage of breaking up the various costings compared to the global figure given in the other quotations. However absent a requirement for the three builders to be cross-examined I do not think that their approach can be attacked. In my view the similarity of the quotations together with the endorsement of Mr Brooks combine to establish a reasonable assessment of the plaintiff's damages.

32 I do not think the consultation fee should be allowed because the three quotations from the builders provide a total figure for the repair of the damage. In my view it would be unreasonable to impose on top of these quotations an extra fee styled as a consultation cost. The builders have said what the job would cost, presumably on the basis that if they did the work the owner would be charged accordingly.

33 In relation to the rent I think that the claim should be rejected. This is for two reasons:

(a) The proceedings in the CTTT were for the balance of the rent under the term of the lease. It is clear from paragraph 5(iii) of Mr Paterson's affidavit that a sum of $9,000 was accepted "in settlement of the plaintiff's application in relation to loss of rent". I am of the view that the $9,000 was accepted by the plaintiff in satisfaction of the claim for $14,800. There is therefore no further rent owing during the term of the lease.

(b) As far as the claim for rent from the end of the lease to date and into the future is concerned I do not think any amount should be allowed because of the plaintiff's failure to mitigate her damages.

34 The plaintiff said that the premises were originally insured but she did not receive a renewal notice. She then "forgot" to renew the insurance. In my view the plaintiff's failure to keep the premises insured can be regarded as a failure to mitigate her loss notwithstanding that the fire had not occurred when the insurance should have been renewed. Generally a failure to mitigate a loss only arises after the loss has materialised. I do not see why the same approach should not be taken in anticipation of a loss.

35 In addition I think the damages claimed by the plaintiff "could have been avoided by reasonable effort by the landlord" in taking out insurance. (Clause 36 of the lease).

36 Had the premises been insured I think I could draw an inference that the repairs would have been effected promptly and within the term of the defendant's lease. That being so the plaintiff would have been in a position to re-lease the premises from April 2012.

37 The defendant also submitted there had been a failure to mitigate because the plaintiff should have undertaken the repairs earlier. This otherwise good point was defeated by the plaintiff's oral evidence that she did not have the funds to carry out the repairs. The effect of the submission however has been achieved by my findings in respect of insurance which, had it been place, would have provided the funds at a much earlier time.

38 The result of the above is that the plaintiff is entitled to a judgement for the average of the three quotations annexed to the plaintiff's affidavit. This is $226,200.

39 I make the following orders:

(1) Judgement for the plaintiff in the sum of $226,200.

(2) The defendant is to pay the plaintiff's costs of the proceedings.

40 I will hear the parties on any claim for interest.

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Decision last updated: 28 May 2013