Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Arap 1 NSW v Hudson [2014] NSWCATAP 30 Hearing dates: 11 June 2014 Decision date: 01 July 2014 Before: S Westgarth, Deputy President A Scahill, Senior Member Decision: 1.The appeal is upheld 2.The order below dismissing the application is set aside 3.The proceedings are remitted to the Consumer and Commercial Division of the Tribunal for rehearing. Catchwords: ADMINISTRATIVE LAW - Civil and Administrative Tribunal (NSW) - residential tenancies - whether s8(1)(f) of the RTA applies - whether tribunal has jurisdiction to hear the matter - appeal upheld Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) (the Act) Residential Tenancies Act (NSW) 2010 (the RTA) Residential Tenancies Act (NSW) 1987 (the 1987 Act) Cases Cited: Georgiardis v Hadjichristodoulou (Tenancy)[2000] NSWCTTT 36 NSW Land and Housing Corporation v Diab [2014] NSWCATAP 8 Parkroad Projects Pty Ltd v Luckey and Anor [1999] NSWSC 214 Texts Cited: - Category: Principal judgment Parties: Arap 1 (NSW) Pty Ltd (Appellant) Mr Geoffrey Hudson (Respondent) Representation: Sean Docker (Appellant) Kemp Strang (Appellant) Respondent (self-represented) File Number(s): AP 14/0017 Publication restriction: - Decision under appeal Jurisdiction: 150003 Citation: - Date of Decision: 2014-01-13 00:00:00 Before: B Howe, Member File Number(s): RT 13/66464 reasons for decision Introduction 1This appeal is from a decision of the Consumer and Commercial Division of the Tribunal made on 13 January 2014. A request for a written statement of reasons was made by the Appellant (which was the applicant landlord below) pursuant to section 62 of the Civil and Administrative Tribunal Act 2013 (NSW) (the Act). A written statement of reasons was published on 11 February 2014. Those reasons were accompanied by an order in the following terms: The application is dismissed because the Tribunal has no jurisdiction to determine the application as the tenant was the vendor on the sale of the property and the Tribunal lacks jurisdiction vide section 8(1)(f) of the Residential Tenancies Act 2010. 2The notice of appeal was filed on 28 February 2014 and the grounds of appeal were described as follows: 1. The Tribunal erred in finding that the Tribunal had no jurisdiction to determine the application. 2. The Tribunal Member erred when the Member did not allow the appellant to tender any relevant documents in support of the applicants case, including the residential tenancy agreement. 3. The Tribunal Member erred when making the finding without reference to any relevant documents. During the hearing of the appeal the second ground was not pressed and the appellant relies only upon grounds 1 and 3. 3The grounds of appeal raise a question of law, namely whether the decision below contained an error of law in determining that the Tribunal had no jurisdiction to hear the dispute between the parties by reason of section 8(1)(f) of the Residential Tenancies Act 2010 (NSW) (the RTA). The appellant contends that on a correct construction of that section it should be determined that the Tribunal has jurisdiction to determine the dispute between the parties. 4The proceedings below were commenced in 2013 in the Consumer Trader and Tenancy Tribunal and were decided this year in this Tribunal. Accordingly, the decision below constitutes an internally appealable decision and the rights of appeal are governed by section 80 of the Act - see NSW Land and Housing Corporation v Diab [2014] NSWCATAP 8. 5The proceedings below 6The appellant's application below sought the following orders: * An order that the tenancy agreement has terminated at the end of the fixed term (relying upon s84 of the RTA). * An order for possession of the premises (relying upon s187(1)(i) of the RTA). 7The application form requires the applicant to give the address of the rented premises (which was done) and to give reasons for requesting the orders sought. The reasons given were: The Applicant purchased the property from the Respondent, with settlement to occur on 7 December 2012. The terms of sale included agreement that the property would be let back to the respondent pursuant to a Residential Tenancy Agreement, for a fixed term expiring on the 7 December 2013. The parties entered into a fixed term Residential Tenancy Agreement expiring on 7 December 2013. The Applicants served a notice to terminate the tenancy agreement upon the Respondent on the 4 November 2013 which required the respondent to deliver vacant possession of the premises on 8 December 2013. The Respondent has not vacated the property and the Applicant seeks appropriate orders requiring the Respondent to vacate the property. 8The reasons below contain the following findings of fact which are relevant to this appeal: The Tribunal was of the view that the residential tenancy agreement came to existence due to an agreement for the sale of land which conferred the right of occupation (paragraph 27). 9The decision below recorded that the applicant failed to produce either the contract for the sale of land or the residential tenancy agreement (paragraph 34). It is clear that the decision below relied upon the applicant's description of the transactions between the applicant and the respondent as recorded in the application form. Legislative background 10The Tribunal has jurisdiction to make a variety of orders as set out in the RTA with respect to residential tenancy agreements. The RTA applies to residential tenancy agreements in respect of residential premises (see section 6 of the RTA). 11Section 13 of the RTA defines a residential tenancy agreement in these terms: Agreements that are residential tenancy agreements (1) A residential tenancy agreement is an agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence. (2) A residential tenancy agreement may be express or implied and may be oral or in writing, or partly oral and partly in writing. (3) An agreement may be a residential tenancy agreement for the purposes of this Act even though: (a) it does not grant a right of exclusive occupation, or (b) it grants the right to occupy residential premises together with the letting of goods or the provision of services or facilities. (4) For the purpose of determining whether an agreement is a residential tenancy agreement, it does not matter that the person granted the right of occupation is a corporation if the premises are used (or intended for use) as a residence by a natural person. 12Section 8(1) of the RTA provides that the RTA does not apply to the agreements described in subsections (a) to (j). Section 8(1)(f) refers to "an agreement for the sale of land that confers a right to occupy residential premises on a party to the agreement". Material relied upon on the appeal 13Attached to the notice of appeal was a copy of the Residential Tenancy Agreement. 14The respondent filed a reply to appeal in which the respondent submitted that the decision below was correct. The respondent also stated: The Appellant purchased the property from the Respondent, with settlement occurring on 7 December 2012. The terms of the sale included agreement that the property would be let back to the Respondent pursuant to a Residential Tenancy Agreement for a fixed term expiring on 7 December 2013. The parties entered into a fixed term Residential Tenancy Agreement expiring on 7 December 2013. 15The appellant also relied upon an affidavit of Mathew Graham, a director of the appellant, which affidavit annexed a copy of the contract for sale of land dated 19 November 2012, and a copy of the Residential Tenancy Agreement. 16In the affidavit, Mr Graham deposed that at the hearing below he intended to tender the Contract for Sale and the Residential Tenancy Agreement but that he did not get a chance before the Member raised the question of the Tribunal's jurisdiction and further that he was not equipped to deal with the jurisdiction issue. The affidavit also referred to a Call Option which the parties had entered into. That document does not appear relevant to this appeal. 17The respondent did not object to the tender of the affidavit. From the appellant's submissions and the respondent's description of the transactions between the parties as described in the reply it is clear that the Contract for the Sale of Land and the Residential Tenancy annexed to the Affidavit were the documents referred to in the application upon which the applicant intended to rely at the hearing below. The decision of the Appeal Panel 18The parties entered into the Contract for Sale of Land on 19 November 2012. Clause 41 of the contract provided: 41. Tenancy 41.1 The Vendor and the Purchaser acknowledge that the Vendor occupies the property at the contract date and will not be required to provide vacant possession at the date of completion of this contract, subject to the parties entering into the Tenancy Agreement. 41.2 Completion of this Contract is subject to and conditional upon the Vendor and the Purchaser entering into the Tenancy Agreement. 41.3 The Vendor requests to pay the first year's rental pursuant to the Tenancy Agreement in advance upon settlement of this Contract ("the Vendor's Request"). In making the Vendor's Request, the Vendor specifically acknowledges Section 33(2) of the Residential Tenancies Act 2010 No 42 which provides:- 33(2) A landlord, or landlord's agent, must not require a tenant to pay more than 2 weeks rent in advance under a residential tenancy agreement or to pay rent for a period of the tenancy before the end of the previous period for which rent has been paid. Note. A tenant may pay more than 2 weeks rent if the tenant wishes to do so. Maximum penalty: 10 penalty units. 41.4 The Vendor's Request is made voluntarily by the Vendor as an inducement to the Purchaser to enter into this Contract. The purchaser will agree to the Vendor's Request on the basis that the advanced payment of rental is made in the manner detailed in Special Condition 38 above. The Vendor represents to the Purchaser that it will not withdraw the Vendor's Request during the term of the Tenancy Agreement. The Vendor acknowledges that the Purchaser would not have entered into this Contract if not for the Vendor's Request. 19Clause 30.2 of the Contract contained the following definition of the term "Tenancy Agreement". Tenancy Agreement - means the written agreement between the Purchaser (as the Landlord) and the Vendor (as Tenant) for the occupation of the Property, entered contemporaneously with this contract. 20The Contract was completed on 7 December 2012 and the parties entered into the Residential Tenancy Agreement dated the same date. Clause 1 of that agreement provides as follows: The landlord agrees that the tenant has the right to occupy the residential premises during the tenancy. The residential premises include the additional things (if any) noted under "Residential premises". 21The Residential Tenancy Agreement contained an annexure headed "Annexure A Part 3 Special Terms". Special Terms 1, 5 and 6 provide as follows: 1. The term of this Tenancy Agreement shall be 12 months commencing on the date of settlement of the Contract. 5. This Tenancy Agreement is subject to and conditional upon:- Settlement of the Contract of Sale for the premises between the Lessor (as Purchaser) and the Tenant (as Vendor) referred to in these Special Conditions as "the Contract"; Execution of the Option Agreement between the Lessor (as Vendor) and the Tenant (as Purchaser) to which a copy of this Tenancy Agreement is attached ("the Option Agreement"). 6. The parties agree that an essential condition of this Tenancy Agreement is that the Tenant punctually observe and comply with the terms of the Option Agreement at all times during the term of this Tenancy Agreement and that a Material Breach of the Option Agreement by the Tenant shall be a breach of an essential term of this Tenancy Agreement. 22It is clear that by the Contract for Sale the parties agreed that the appellant and respondent would, on settlement of the contract, enter into the residential tenancy agreement with the vendor becoming the tenant pursuant to the residential tenancy agreement. The tenancy agreement commenced on the date of settlement in accordance with Special Term 1. This is so notwithstanding the definition of tenancy agreement in Clause 30.2 of the Contract which appears to state the tenancy agreement is entered into contemporaneously with the Contract for Sale. In fact it was entered into contemporaneously with settlement of the Contract. 23We agree with the submissions of the appellant that the Contract for Sale does not confer a right to occupy on completion. Special Condition 41 provides that the vendor does not have to provide vacant possession at completion subject to entering into the tenancy agreement. The conferral of the right to occupy from completion occurs in Clause 1 of the Residential Tenancy Agreement provided that the Residential Tenancy Agreement is entered into. 24The respondent contends that the contract for sale of land confers a right to occupy the premises. In support of that proposition the respondent contends that he would not have entered into the contract for sale of land without the assurance that he would be allowed to remain in occupation by way of a residential tenancy agreement. 25In the opinion of the appeal panel the fact that the parties may not have entered into the contract for sale of land without the provision that completion would be subject to entry into a residential tenancy agreement does not lead to the conclusion that the source of the conferral of the right to occupy is in the contract for sale. 26Prior to the introduction of the RTA the jurisdiction of the predecessor Tribunal (the Consumer Trader and Tenancy Tribunal) was regulated by the Residential Tenancies Act (NSW) 1987 (the 1987 Act). The 1987 Act contained s 6(1)(a) which provided as follows: Agreements and premises to which Act does not apply (1) This Act does not apply to a residential tenancy agreement: (a) if the tenant is a party to an agreement made in good faith for the sale or purchase of the residential premises. 27Section 6(1)(a) was considered by the Tribunal's predecessor, the Consumer Trader and Tenancy Tribunal in the case of Georgiardis v Hadjichristodoulou (Tenancy) [2000] NSWCTTT 36 (4/4/2002). In that case the respondents agreed to sell the premises to the applicant. A contract for sale was entered into and settlement occurred on 13 November 1999. It was common ground that the purpose of the sale was to give the respondents a chance to continue to live at the premises. The Tribunal said that the arrangement allowing (or permitting) the respondents to occupy the premises after the sale was completed was a residential tenancy agreement for the purposes of the Act (ie the 1987 Act). With respect to s6(1)(a) of the 1987 Act the Tribunal said that there was no contract for sale or purchase of the premises since the arrangement was entered into and settlement of the applicants purchase had occurred. The Tribunal was satisfied that the agreement between the parties was not one to which s 6(1)(a) applied. 28Section 6(1)(a) of the 1987 Act was also referred to in Parkroad Projects Pty Ltd v Luckey and Anor [1999] NSWSC 214. In that case the first defendant had occupied and owned the premises. The plaintiff and the first defendant entered into a residential tenancy agreement and a mortgage (the plaintiff as landlord / mortgagor and the first defendant as tenant / mortgagee). The plaintiff and first defendant entered into a contract for sale of land. The first defendant was the vendor and the plaintiff the purchaser. Some years later an application came before the Tribunal which determined it had jurisdiction. It was accepted between the parties that the residential tenancy agreement came into effect as such upon completion of the sale of the premises to the plaintiff. The Court held that the preferred construction is that the Act (the 1987 Act) continues to apply in cases of a vendor selling and leasing back for a long term and that s 6(1)(a) applied during the performance of the sale agreement (paragraphs 38 and 39). 29The provisions of s 6(1)(a) are expressed in language which is different from s 8(1)(f) and therefore decisions on s 6(1)(a) need to be treated with care. 30It is the opinion of the Appeal Panel that s 8(1)(f) applies only where the Contract for Sale contains a provision which confers a right to occupy residential premises on a party to the agreement. It does not apply where a right to occupy is conferred by another agreement (such as the residential tenancy agreement in this case) or where the contract for sale purports to confer a right to occupy residential premises on a third party. 31Therefore the Tribunal has jurisdiction to determine the application brought by the appellant against the respondent and, accordingly, the decision below contained an error of law in determining that the Tribunal did not have jurisdiction on the basis that the contract for sale conferred the right to occupy. 32The respondent submitted that the appellant should be held to the concession made by Mr Graham at the hearing that the Tribunal lacked jurisdiction and to the consequences of Mr Graham's failure to tender the Contract for Sale and the residential tenancy agreement. In the opinion of the appeal panel Mr Graham's concession concerning jurisdiction is not relevant to the question of whether the Tribunal in fact has jurisdiction. It is also the opinion of the appeal panel that his apparent failure to tender the Contract and residential tenancy agreement does not result in those documents being unavailable for consideration by the appeal panel. It would be inconsistent with the so called guiding principle set out in s36 of the Act (which requires the Tribunal to facilitate the just, quick and cheap resolution of the real issues in the proceedings) to disallow the appellant from tendering the contract for sale and the residential tenancy agreement to the appeal panel. 33Accordingly the appeal panel will order that the appeal be upheld and that the proceedings be remitted to the Consumer and Commercial Division for rehearing. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar ******** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 01 July 2014