Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Pupuke v Stratford [2016] NSWCATAP 7 Hearing dates: 11 August 2015 Date of orders: 07 January 2016 Decision date: 07 January 2016 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member S Thode, Senior Member Decision: (1) Appeal allowed. (2) The matter is remitted to the Consumer and Commercial Division of the Tribunal for the purpose of determining what, if any, amount of the bond of $960 was paid by the appellants to the respondent and/or should be repaid to the appellants, such determination to be in accordance with these reasons and according to law. (3) For the purpose of the previous order, the Tribunal may be constituted by the same or a different member. Catchwords: Residential Tenancies Act- jurisdiction of the Tribunal to hear claim in respect of sub- tenancy Meaning of borders and lodgers. Validity of residential tenancy agreement with sub-tenant in absence of proof of consent of landlord to sub-let. Legislation Cited: Boarding Houses Act, 2012 Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules, 2014 Residential Tenancies Act, 1987 Residential Tenancies Act 2010 Cases Cited: Collins v Urban [2014] NSWCATAP 17 Nichols, Darren (Sub-tenant) v Weller, Anthony (Head tenant) [1997] NSWRT 212 Pryor v Costa & Maroulis (Tenancy) [2005] NSWCTT 555 Radaich v Smith [1959] HCA 45 Walker v Purvesi Pty Ltd RTT 86/1986 (11 May 1987) Texts Cited: Nil Category: Principal judgment Parties: Travilla Pupuke and Mosa Vaimalu (appellants) Sarah Stratford (respondent) Representation: Ms Hammond(appellant) No appearance (respondent) File Number(s): AP 15/27305 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 12 March 2015 Before: W Sponza, General Member File Number(s): RT 15/10186 reasons for decision Introduction 1. On 24 February 2015 the appellants commenced proceedings RT 15/10186 in the Consumer and Commercial Division of the Tribunal against the respondent seeking orders for return of a rental bond which they asserted had been paid to the respondent pursuant to a residential tenancy agreement to which the Residential Tenancies Act, 2010 (RT Act) applies. 2. The appellants asserted that they had a written residential tenancy agreement pursuant to which they occupied residential premises at Colyton. That document was entitled "Share Accommodation Agreement Bond Confirmation" and was dated 1 October 2014 (Agreement). It was signed by the appellants and by the respondent and recorded an agreement to pay $960.00 for "3 weeks RENT for BOND Required and Received by Cash ($960.00)". In the application, the appellants sought return of the bond less an amount of $50 which they said should be allowed in respect of damage which they admitted they caused to a wall of the residential premises. 3. The application was listed before the Tribunal for conciliation and hearing on 12 March 2015. On that date the application was dismissed because the Tribunal determined it had no jurisdiction to hear the application. On 1 April 2015 the Tribunal published written reasons (Decision). 4. The appellants appeal the Decision. A Notice of Appeal was filed on 14 April 2015. The Appeal 1. The appeal had been listed for call over on 11 June 2015. At that time directions had been made by the Appeal Panel for the filing and service of submissions and any material to be relied upon by the parties in the appeal. 2. The appeal was listed for hearing on 11 August 2015. At that time the appellants were represented by Ms Hammond. The respondent did not appear. 3. An issue arose at the hearing of the appeal as to whether or not the respondent had been served with notice of the hearing. After receiving evidence from one of the appellants, Ms Pupuke, and hearing submissions, the Appeal Panel determined the respondent had been served and decided to continue hearing the appeal. Oral reasons were given during the hearing on the issue of service. 4. At the hearing of the appeal the appellants relied upon the Notice of Appeal, a bundle of documents and written submissions which they had provided pursuant to the directions of the Appeal Panel. The appellants also made oral submissions. Grounds of Appeal and submissions 1. The only ground of appeal was that the Tribunal was in error in concluding it had no jurisdiction to hear the claim for return of the bond. Consequently, the appellants said that the order of the Tribunal dismissing the proceedings should be set aside and an order made remitting the matter back to the Tribunal for hearing. 2. The submissions of the appellant can be summarised as follows: 1. a prerequisite of their application was for the Tribunal to be satisfied that it had jurisdiction. 2. clause 3 of Schedule 4 of the Civil and Administrative Tribunal Act, 2013 (NCAT Act) confers jurisdiction on the Tribunal to determine proceedings to which the RP Act applies. 3. the RT Act applies to residential tenancy agreements as defined by section 13 of the RT Act and that section 175 of the RT Act allows a tenant under such an agreement to make an application for the return of a rental bond paid to a landlord. In this regard the appellants submitted that a tenant includes a sub-tenant in the case of a subletting: see s3 of the RT Act. 1. The appellant submitted that there was evidence before the Tribunal in the form of the Agreement that there was a written residential tenancy agreement and that by reason of s10 of the RT Act the appellants were therefore tenants for the purpose of that Act. In this regard the Agreement recorded the critical features of its terms, namely: 1. the property to be leased including the rooms to be occupied by the tenant; 2. the parties to the agreement; 3. the commencement date of the agreement; and 4. the rent to be paid for the property 1. The appellant also submitted that the nature of this agreement was a residential tenancy agreement and that the relationship between the respondent and the appellants was one of landlord and tenant within the meaning of the RT Act and not a relationship of boarder or a lodger as found by the Tribunal at [6] of the Decision. In this regard the appellants referred the Appeal Panel to various authorities including Walker v Purvesi Pty Ltd (RTT 86/1986 (11 May 1987), Radaich v Smith [1959] HCA 45, Pryor v Costa & Maroulis (Tenancy) [2005] NSWCTT 555 and Nichols, Darren (Sub-tenant) v Weller, Anthony (Head tenant) [1997] NSWRT 212. 2. Relying on these authorities, the appellants said that: 1. the Tribunal should have concluded that the Agreement constituted a residential tenancy agreement within the meaning of the RT Act; 2. the Tribunal was in error in concluding that the failure of the appellants to produce evidence of consent to sub-let the premises from the owner/landlord to the respondent and the provisions of s74 of the RT Act meant that the appellants could not be subtenants of the respondent. Consideration 1. The Notice of Appeal was filed by the appellants on 14 April 2015. This is within 14 days of the date the Tribunal provided written reasons of the Decision. Accordingly, the appeal was lodged in time: see Rule 25(4)(b) of the Civil and Administrative Tribunal Rules, 2014 which requires an internal appeal in residential proceedings to be filed "within 14 days from the day on which the appellant was notified of the decision or given reasons for the decision (whichever is the later)". 2. The grounds of appeal assert the Tribunal was in error in concluding that it had no jurisdiction. This raises a question of law for which leave is not required: see s80(2)(b) of the NCAT Act. 3. There are two issues to be resolved in this appeal. Firstly, whether or not the Agreement constituted a residential tenancy agreement within the meaning of the RT Act and whether the appellants were tenants or borders and lodgers. Secondly, whether the failure of the appellants to adduce evidence that the landlord of the respondent consented to a subletting meant that there was no jurisdiction of the Tribunal to determine the appellants' application in connection with return of the bond. 4. Section 13 of the RT Act defines a residential tenancy agreement in the following terms: 13 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. Note. See section 8 for agreements that are not covered by this Act. Section 7 sets out premises not covered by this Act. 1. Section 3 of the RT Act defines residential premises as follows: residential premises means any premises or part of premises (including any land occupied with the premises) used or intended to be used as a residence. 1. However, s8(c) of the RT Act provides that the Act does not apply to "an agreement under which a person boards or lodges with another person". 2. The expression "a person who boards or lodges with another person" is not defined in the RT Act. However, the expression has been considered in a number of cases in tribunals that were the predecessor to this Tribunal. In Pryor at [32]- [34] the Tribunal, in considering the meaning of this expression under the earlier Residential Tenancies Act, 1987 said: 32. The term lodger is not defined in the 1987 Act and its meaning is to be derived from case law. While many would be sympathetic to the view of Member Hopkins in Johnson v Lismore Woman's & Children's Refuge Inc (RT 00/42507 26 February 2001) that the common law concept of lodgers is outmoded being out of place in contemporary society and in need of legislative review, it is necessary to examine the common law definitions to ascertain if in this case the Applicant was a lodger. 33. In Ellis v City Woman's Hostel (RTT 97/022789, 15 June 1998) Member Hopkins brought together the decisions to that time to articulate the fundamental elements of what makes an occupier of premises a lodger by stating: ".. I am of the view that a "lodger" … is a person who has been granted the right, for value, to occupy … premises … for the purpose of their use as a residence, … in circumstances where the owner remains in possession and occupation (either personally or by his servant), and retains the character of master of the house and with the owner exercising control and dominion over the whole." By so viewing a lodger, Member Hopkins was following the previous decision of Chairperson Rustin in Walker v Puvesi (RTT 86/6) who stated, after examining the relevant cases spanning over a century, that in order for an occupier to be seen as a lodger, the distinguishing factor is the nature of the owner's occupation: … the owner … must remain in possession and retain his quality as master of the house, reserving to himself the general control and dominion over the whole, although he may have agreed to give to the other exclusive enjoyment of the occupation of part. 34. In summary, the occupier must have been granted, in consideration for value, the right to occupy premises, part of which may be exclusive, while the owner still retains, personally or by a servant, power to reprove all occupants who do not submit to the owner's will with regard to any matter touching upon the premises. The owner must remain the constant, conspicuous and prevailing authority over the premises on all matters. 1. Since those cases were decided, the Boarding Houses Act, 2012 (BH Act) has been introduced. That legislation defines boarding premises as follows: boarding premises means premises (or a complex of premises) that: (a) are wholly or partly a boarding house, rooming or common lodgings house, hostel or let in lodgings, and (b) provide boarders or lodgers with a principal place of residence, and (c) may have shared facilities (such as a communal living room, bathroom, kitchen or laundry) or services that are provided to boarders or lodgers by or on behalf of the proprietor, or both, and (d) have rooms (some or all of which may have private kitchen and bathroom facilities) that accommodate one or more boarders or lodgers. 1. The BH Act applies to occupancy agreements but occupancy agreements do not include residential tenancy agreements under the RT Act: see s27 of the BH Act. 2. However, in our view the provisions of the BH Act do not alter the test set out in Pryor, namely for an occupant to be a boarder or lodger the owner "must remain in possession and retain his quality as master of the house, reserving to himself the general control and dominion over the whole, although he may have agreed to give to the other exclusive enjoyment of the occupation of part". 3. Consequently, it is necessary for the Appeal Panel to consider whether or not the Agreement constitutes a residential tenancy agreement within the meaning of the RT Act or whether it merely grants to the appellants a right to occupy the premises as boarders or lodgers. 4. In our view, the Agreement does constitute a residential tenancy agreement within the meaning of the RT Act and not "an agreement under which a person boards or lodges with another person". The features of the agreement that lead us to this conclusion are: 1. the respondent is described as the "Head Tenant"; 2. the appellants are described as the "Share House Tenants"; 3. the amounts payable by the appellants are described as "rent"; 4. the agreement refers to the premises as the "Home"; 5. the appellants are required to keep the premises "clean and tidy" and to return the premises to the state in which they were received upon vacation. 6. there are no provisions reserving to the respondent rights of control which would apply if the appellants rights were limited to those as a boarder or lodger; and 7. a "bond" of three weeks rent is payable, such a bond being impermissible if the appellants were boarders to which the BH Act applies: see Schedule 1 – Occupancy Principles cl (8)(a) of the BH Act. 1. Further, because the Agreement is in writing and the respondent is the head tenant, we are satisfied that the appellants are also tenants within the meaning of the RT Act as the residential tenancy agreement satisfies the requirements of s10 of the RT Act which provides: A person who occupies residential premises that are subject to a written residential tenancy agreement, is not named as a tenant in the agreement and who occupies the premises together with a named tenant is a tenant for the purposes of this Act only if: ….. (b) the person is a sub-tenant of a tenant under a written residential tenancy agreement with that tenant. 1. The Tribunal concluded it had no jurisdiction because the appellants had failed to adduce evidence of the landlord's consent to the respondent sub-letting the premises. Consequently, the appellants were boarders and not sub- tenants. At [6] the Tribunal said: the applicant is presented no evidence to the Tribunal that the landlord had given consent to the sub-letting in accordance with section 74. The conclusion the Tribunal draws is that the applicants are boarders and not sub-tenants. The applicant's did not produce a document titled Consent to Sub-let signed by the landlord or the landlord's agent. Before a tenant may sublet, the tenant needs such consent as any such sub-letting may breach the conditions of the original tenancy with regard to the number of occupants permitted. 1. Section 74 of the RT Act provides: 74 Transfer of tenancy or sub-letting by tenant (1) A tenant may transfer the tenancy under a residential tenancy agreement to another person or sub-let the premises to another person, if the landlord gives written consent to the transfer or sub-letting. ………… (3) This section is a term of every residential tenancy agreement. 1. Section 74 does not by its terms render invalid any sub-letting by a tenant in contravention of the residential tenancy agreement where consent has not been obtained, nor does any other section of the RT Act do so. Rather, a breach of this condition may render the tenant under the head lease liable to have their residential tenancy agreement terminated for breach. However, there is still a residential tenancy agreement between the tenant and the sub-tenant and for the purpose of resolving any disputes in relation to the sub-tenancy, the sub- tenant is a "tenant" within the meaning of the RT Act if they have a "written residential tenancy agreement with the tenant" as required by s10 of the RT Act. 2. Consequently, in our opinion that the Tribunal had jurisdiction to determine a dispute brought by a tenant in connection with a residential tenancy agreement and was in error in concluding to the contrary. 3. Further, in the present case, there was some evidence before the Tribunal that the respondent leased the property from the owner. In this regard the appellants documents at page 40 of the bundle record the respondent making reference to the respondent: 1. Saying the "landlord had inspected the property"; and 2. referring to the respondents "lease agreement". 1. By reason of section 74, prima facie the respondent had a right to sub-let the premises to the appellants. However, in the present case, the Tribunal appears to have inferred that no such consent existed because the tenant to the sub-letting arrangement failed to call evidence to prove consent. 2. In our view there was no reason to draw such an inference. In this regard it seems clear that the landlord's agent was aware, at least, that the appellants were occupying the premises. The appellants provide evidence of a conversation with the respondent (at page 41 of the bundle) in which the respondent said: Agent came thru to talk about my lease and viewed room and since I had previously mentioned to him that you guys assured me it was gonna be done before u leave he told me to get it done asap! So I did. 1. It follows from what we have said that the appeal should be allowed. Orders 1. The substance of the appellants' application before the Tribunal was that they should be entitled to repayment of the bond, less an amount of $50 which they say was attributable to damage which they admit they caused to the wall of the residential premises. However there appears to be no finding of the Tribunal in the Decision that the bond was in fact paid. In this regard the evidence submitted on appeal (bundle page 31) shows payments of $1800 annotated as "withdrawal Rental Bond + 2wks rent" on bank statements however this amount does not total the $1600 as shown on the Agreement as the amounts initially payable for two weeks rent in advance and the bond. Further, while it seems clear from the submissions that the full amount of the bond, namely $960.00 should not be paid to the appellants, no evidence was provided to the Appeal Panel by the appellants to justify a deduction of only $50. These issues will need to be determined by the Tribunal on the basis of proper evidence. 2. It may be at the rehearing that the respondent appears and wishes to adduce evidence of these and other matters which might entitle her to retain the whole of the bond. In these circumstances the matter should be remitted for the purpose of determining what, if any amount of the bond was paid and/or should be repaid by the respondent to the appellants. 3. Accordingly, the Appeal Panel makes the following orders: 1. Appeal allowed. 2. The matter is remitted to the Consumer and Commercial Division of the Tribunal for the purpose of determining what, if any, amount of the bond of $960 was paid by the appellants to the respondent and/or should be repaid to the appellants, such determination to be in accordance with these reasons and according to law. 3. For the purpose of the previous order, the Tribunal may be constituted by the same or a different member. ********** 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: 07 January 2016