Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Abdel-Messih v Azzi [2017] NSWCATAP 86 Hearing dates: 16 January 2016 Date of orders: 26 April 2017 Decision date: 26 April 2017 Jurisdiction: Appeal Panel Before: G Curtin SC, Senior Member T Simon, Senior Member Decision: 1. Appeal dismissed. Catchwords: RESIDENTIAL TENANCY LAW – subletting – termination for breach – non-occupation by the tenant – discretion to terminate APPEAL – Civil and Administrative Tribunal (NSW) – Consumer and Commercial Division – error of law – no evidence – wrong finding of fact – Legislation Cited: Civil and Administrative Tribunal Act 2013 No 2 (NSW) Residential Tenancies Act 1987 (NSW) Residential Tenancies Act 2010 (NSW) Cases Cited: Brennan v Consumer, Trader & Tenancy Tribunal & Anor [2010] NSWSC 1240 Calin v The Greater Union Organisation Pty Ltd (1991) 173 CLR 33; HCA 23 Dayeian v Davidson (2010) 74 NSWLR 512; NSWCA 42 Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; HCA 61 Independent Timber Importers v Mercantile Mutual Insurance [2002] NSWCA 304 Re Galaxy Media Pty Ltd (Rec/Mgrs apptd) (in liq) [2001] NSWSC 917 SAB v SEM & Ors [2013] NSWSC 253 Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359; HCA 21 Sportsvision Australia Pty Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103; NSWSC 221 The Australian Gas Light Company v Valuer-General (1940) 40 SR (NSW) 126 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; HCA 52 Wesiak v D & R Constructions (Aust) Pty Ltd [2016] NSWCA 353 Category: Principal judgment Parties: Bishoy Abdel-Messih (Appellant) Tony Azzi (Respondent) Representation: Appellant in person J Foong, agent (Respondent) File Number(s): AP 16/51813 Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Date of Decision: 23 November 2016 Before: J Smith, Tribunal Member File Number(s): RT 16/42884 Reasons for decision Introduction 1. This is an appeal from a decision of the Tribunal made on 23 November 2016 granting the respondent's (landlord's) application for a termination order in relation to a residential tenancy agreement (the "Agreement") made between the parties on 17 June 2016. 2. The termination order was sought because the respondent alleged, and the Tribunal found, that the appellant had breached the Agreement by sub-letting the whole of the residential premises without the respondent's permission. 3. For the reasons that follow we are of the opinion that the appellant's submissions ought to be rejected and his appeal should be dismissed. Background Factual Background 1. The appellant and the respondent entered into the Agreement on 17 June 2016. It related to an unfurnished three-bedroom apartment, numbered 20, in an apartment building located in the central business district of Sydney. The term of the agreement was for 12 months commencing on 18 June 2016. The apartment had a balcony area. 2. The Agreement contained the following relevant terms: 32. The landlord and tenant agree that: 32.1 the tenant may, with the landlord's written permission … sublet the residential premises, and 32.2 the landlord may refuse permission (whether or not it is reasonable to do so) to the … subletting the whole of the residential premises, … … 56. The tenant agrees: 56.1 to observe all relevant … strata by-laws … relating to health, safety, noise and other housing standards with respect to the residential premises. … 1. The apartment building in which the premises were situated was governed by certain strata by-laws. There was no dispute between the parties that those by-laws fell within cl 56.1 of the Agreement (set out above). 2. Amended By-law 35 provided that the owner or occupier "must not" permit the number of persons who slept overnight in the premises to exceed a number equalling two times the number of bedrooms. In this case that number was six. The by-law continued by stating that a bedroom did not include a balcony area. 3. Commencing on 26 June 2016, eight days after the commencement of the term of the Agreement, the appellant began entering into written residential tenancy sub-leases in relation to the apartment with various persons. 4. Each sub-lease was for a period of three months, and included a box titled "Premises: (a) location" in which was entered a description of what was sub-let. 5. On the appellant's case, the chronology of sub-tenants with whom he had entered into sub-leases (without any disrespect we shall refer to them solely by their surnames), the "Premises: (a) location" specified for each sub-tenant and the period in which they were in physical occupation was as follows: 1. Cho for "BEDROOM 1 At UNIT 20 …" for the period 26 June – 29 July 2016; 2. de Lima for "BEDROOM 3 At UNIT 20 …" for the period 1 July – 22 August 2016; 3. Ibuki and You for "BEDROOM 2 At UNIT 20 …"; for the period 10 July – 18 July 2016; 4. Nunes for "UNIT 20" (no bedroom or other room was specified) for the period 10 July to at least 18 August 2016; 5. Lawrence and Galldin for "BEDROOM 2 AT UNIT 20" for the period 14 August until at least 18 August 2016; 6. Wu for "UNIT 20 …" (no bedroom or other room was specified) for the period 18 August 2016 onwards; and 7. Ponist and Nova for "BEDROOM 1 OF UNIT 20 …" for the period 21 August 2016 onwards. 1. Thus, in 2016: 1. from 26 June – 17 July 2016, Cho, de Lima, Ibuki, You and Nunes were in physical occupation of the premises (we use the word "premises" neutrally in this paragraph) pursuant to individual sub-leases regarding bedrooms 1, 3, 2 and "UNIT 20" respectively; 2. from 18 - 29 July 2016, Cho, de Lima and Nunes were in physical occupation of the premises regarding bedrooms 1, 3 and "UNIT 20" respectively, Ibuki and You having "abandoned" the premises on 18 July (according to the appellant); 3. from 29 July – 13 August 2016, de Lima and Nunes were in physical occupation of the premises regarding bedrooms 3 and "UNIT 20" respectively, Cho having "abandoned" the premises on 29 July (according to the appellant); 4. from 14 – 18 August 2016, de Lima, Nunes, Lawrence and Galldin were in physical occupation of the premises regarding bedrooms 3, "UNIT 20" and 2 (Lawrence and Galldin) respectively; and 5. from 18 - 22 August 2016, de Lima, Nunes, Lawrence, Galldin and Wu were in physical occupation of the premises regarding bedrooms 3, "UNIT 20", 2 and "UNIT 20" respectively. 1. The sub-leases all contained the same printed terms. Several of those printed terms are relevant. In the sub-leases the appellant was the "landlord" and the sub-tenants the "tenant(s)". 2. Clause 23 of each sub-lease (also found in the Agreement) provided: 23. The landlord agrees that the landlord … during the currency of the agreement, may only enter the residential premises in the following circumstances: 23.1 in an emergency (including entry for the purpose of carrying out urgent repairs), 23.2 if the NSW Civil and Administrative Tribunal so orders, 23.3 if there is good reason for the landlord to believe the premises are abandoned, 23.4 if there is good reason for serious concern about the health of the tenant or any other person on the residential premises and a reasonable attempt has been made to obtain consent to the entry, 23.5 to inspect the premises, if the tenant is given at least 7 days written notice (no more than 4 inspections are allowed in any period of 12 months), 23.6 to carry out, or assess the need for, necessary repairs, if the tenant is given at least 2 days notice each time, 23.7 to carry out, or assess the need for, work relating to statutory health and safety obligations relating to the residential premises, if the tenant is given at least 2 days notice each time, 23.8 to show the premises to prospective tenants on a reasonable number of occasions if the tenant is given reasonable notice on each occasion (this is only allowed during the last 14 days of the agreement), 23.9 to value the property, if the tenant is given 7 days notice (not more than one valuation is allowed in any period of 12 months), 23.10 if the tenant agrees. 1. Clause 46.4 of each sub-lease (not replicated in the Agreement) provided: 46.4 The bedroom agreed upon is the only space that is privately yours. Do not trespass unto other's rooms/balconies/bathrooms etc or place anything. It would otherwise be trespass and/or you will be held liable for taking possession and liable for rent of that premise. 1. Clause 46.11 of each sub-lease (not replicated in the Agreement) provided: 46.11 When the number of residents is less than the maximum number of occupants, the landlord shall take possession of the unoccupied premise. 1. Various disputes arose between the appellant and respondent, and between the appellant and some of the sub-tenants, from time to time. 2. One of those disputes was between the appellant and one of his sub-tenants, Cho. The appellant (as applicant) commenced proceedings in the Tribunal (numbered RT 16/33563) against Cho seeking orders that Cho pay him a break lease fee and certain compensation. 3. In those proceedings, the appellant was the landlord, and Cho the tenant. The Tribunal said: The evidence before the Tribunal supports a finding that on 21 July 2016 the tenant changed the locks to the premises. A copy of the new keys was not given to the landlord. The tenant changed the locks back to the original locks on 29 July 2016. The Tribunal finds that the tenant has breached the terms of the tenancy agreement by not giving to the landlord a copy of the keys within seven days of changing the locks. The landlord was without access to the property for eight days. The landlord states that he was prevented from showing the vacant room in the premises to prospective new tenants during this eight day period. It should be noted that the landlord runs a for profit business of sub-letting properties with his landlord's consent. There were two other tenants residing at the premises at the time that the tenant breached. The landlord has given evidence that he presumed that the tenant had given a key of the new lock to the other existing tenants. The residential tenancy agreement provides that if the landlord wishes to access the premises for the purpose of showing the premises to prospective tenants, the landlord may do so provided that the landlord gives to the tenant reasonable notice on each occasion … … There is no evidence that the landlord gave notice to the tenant in accordance with Clause 23 and that access was denied. The landlord has no right to enter the premises without the tenant's consent to show the premises to prospective tenants before 14 days of the end of the agreement. 1. In about mid-2016, the respondent became of the view that the appellant had sub-let the whole of the premises. He did not consent, and had not consented, to that occurring. Sub-letting the whole of the premises without the respondent's consent was a breach of cl 32 of the Agreement. 2. Accordingly, on 18 July 2016, the respondent issued a termination notice (the "first termination notice") as defined in s 80 of the Residential Tenancies Act 2010 (NSW) (the "RTA") based upon that alleged breach. Ultimately no relief was pursued to conclusion in relation to that notice. 3. The respondent issued a further termination notice (the "second termination notice") dated 15 August 2016 based upon the same breach, that is, that the appellant had sub-let the whole of the premises without the respondent's consent. It is this termination notice which was relied upon by the respondent before the Tribunal in these proceedings and to which this appeal relates. 4. The second termination notice, and the parties' rights and obligations arising therefrom, are governed by the provisions of the RTA. 5. The central provision of the RTA so far as concerns this case is s 87, and particularly s 87(4) and (5). Section 87 provides: 87 Breach of agreement (1) A landlord may give a termination notice on the ground that the tenant has breached the residential tenancy agreement. (2) The termination notice must specify a termination date that is not earlier than 14 days after the day on which the notice is given. (3) The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement. (4) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that: (a) the tenant has breached the residential tenancy agreement, and (b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement, and (c) the termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice. (5) In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the breach, (b) any previous breaches, (c) any steps taken by the tenant to remedy the breach, (d) any steps taken by the landlord about the breach, (e) the previous history of the tenancy. (6) The Tribunal may refuse to make a termination order if it is satisfied that the tenant has remedied the breach. Procedural Background 1. Relying upon the second termination notice, the respondent commenced proceedings (RT 16/42884) seeking a termination order (the "Application"). The respondent succeeded. This appeal is from the decision of the Tribunal in those proceedings. 2. In response to the Application the appellant filed his own application, which he referred to as his cross-application. It was allocated the Tribunal file number RT 16/49406. Although the terminology is not correct (there is no such thing as a cross-application in the Tribunal), we shall refer to those proceedings as the Cross-application for ease of reference. 3. The Cross-application sought a declaration that the second termination notice was not given in accordance with the RTA, an order that the appellant may sub-let the premises, an order as to compensation, an order declaring that the termination notice had no effect because it was a retaliatory notice and certain orders in relation to keys and security devices. 4. The Application and the Cross-application were heard concurrently by the Tribunal, with evidence in each being treated as evidence in the other. A single judgment was given. In short, the Application succeeded and the Cross-application failed. 5. The appellant appealed the decision on the Application. He says, although it is far from clear from his documents that he also intended to appeal the decision on the Cross-application. 6. But there had also been earlier proceedings (RT 16/33965) brought by the appellant against the respondent concerning some similar issues. Those proceedings were determined by the Tribunal on 22 September 2016. 7. In those earlier proceedings, the appellant sought a number of orders which are not presently relevant, but also sought an order that the second termination notice was "retaliatory" within the meaning of that expression in s 115 of the RTA. If the Tribunal was satisfied that the second termination notice was retaliatory, s 115 of the RTA authorised the Tribunal to declare that the termination notice was of no effect, or the Tribunal could refuse to make a termination order based upon that notice. 8. In those proceedings, the Tribunal was not satisfied that the second termination notice was retaliatory and found against the appellant on that point. 9. The appellant appealed from that decision of the Tribunal (AP 16/43780). That appeal was heard on 9 and 21 November 2016 by a differently constituted Appeal Panel to the present one, and was determined on 13 March 2017. Relevantly for present purposes, that appeal had been heard but not yet determined at the time the appeal in the present matter was heard. 10. The assertion in the earlier proceedings (and the appeal therefrom) that the second terminations notice was retaliatory, when that notice was relied upon in the present proceedings (and appeal) as the basis for a termination order, gave rise to the potential for conflicting decisions, orders, or both, of differently constituted Appeal Panels. 11. After examining the Tribunal's files in relation to all the proceedings and appeals therefrom mentioned above, and hearing submissions from the parties, we were satisfied that we could hear and decide this appeal (being an appeal solely from RT 16/42884) on the two limited issues arising in it (set out immediately below) because they were not issues raised in the other appeal and there was no possibility of conflicting decisions (as distinct from orders). 12. The two issues arising on this appeal are: 1. did the appellant sub-let the whole of the premises on or before the second notice of termination; and 2. if so, should the Tribunal make a termination order pursuant to s 87(4) of the RTA. 1. To avoid the possibility of any conflict between any orders which may be made by us, and any orders which (at that time) may in future have been made by the Appeal Panel in AP 16/43780, we informed the parties that we would deliver a decision in this appeal, but defer the making of orders pending delivery of the decision in the other appeal and after hearing further from the parties as to the appropriate orders to be made in light of both decisions. 2. As events transpired, a decision has since been delivered in the other appeal on 13 March 2017 – Abdel-Messih v Azzi [2017] NSWCATAP 56. That appeal was dismissed. We are of the opinion that this appeal be dismissed. Therefore, no issue, finding or order in that appeal conflicts, or could conflict, with any issue, finding or order in the present appeal and, accordingly, there is no necessity for hearing from the parties after delivery of this decision as originally envisaged. Questions of Law and Other Grounds 1. Section 80 of the Civil and Administrative Tribunal Act 2013 No 2 (NSW) (the "NCAT Act") provides: 80 Making of internal appeals (1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made. (2) Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance--with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance--as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. (3) The Appeal Panel may: (a) decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and (b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances. 1. The decision appealed from was made in the Consumer and Commercial Division of the Tribunal. When considering an application for leave to appeal from the Consumer and Commercial Division the Appeal Panel is required to be satisfied of the matters set out in cl 12 of Schedule 4 to the NCAT Act before leave can be granted. Clause 12(1) provides: Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. As is well known, s 80(2)(b) differentiates between questions of law and grounds other than questions of law. This differentiation is significant for prospective appellants for at least two reasons, namely: 1. an appellant has a right to appeal on a question of law, but requires leave to appeal on any other ground; and 2. where the appeal is limited to a question of law the appeal does not involve the rehearing of factual questions, [1] but if leave is granted to appeal on "any other ground", there may be a rehearing of factual questions. The Reasons of the Tribunal 1. The Tribunal said that the fundamental issue for determination was whether the second notice of termination was given in accordance with the RTA. If the notice of termination was validly served the second issue was whether, pursuant to the provisions of s 87(4) of the RTA, the breach, in the circumstances of the case, was sufficient to justify termination of the Agreement. 2. The Tribunal said that it was not disputed that the second notice of termination was served on the appellant on 15 August 2016 and accordingly the appellant was given the required period of notice. 3. The respondent alleged that the appellant had sub-let the whole of the premises without permission. The appellant said that he had not sub-let the whole of the premises, but only part of the premises. Further, the appellant stated he had sub-let part of the premises with the respondent's consent and that in any event, he retained the right of occupancy of the premises at all times. 4. The Tribunal did not accept that the appellant was ever a resident of the subject premises. By "resident" it appears the Tribunal meant physically living at the premises. The Tribunal said: The (appellant) did not dispute that his permanent place of residence was in another building some 300 m away on Liverpool Street. However he stated that he stayed at the residential premises 'from time to time'. He acknowledged that such stays were a sleep over and that the premises were never a permanent residence for him. The tenant declined to give evidence about where he slept when he stayed in the residential premises and was unable to give any date upon which he stayed in the premises. 1. The Tribunal found that at no time did the appellant have an access swipe card (enabling access to the building in which the apartment was located). It said the appellant claimed to have chosen not to have an access swipe card to avoid paying the deposit. The Tribunal found it was more likely than not that the appellant had no need for an access swipe card because he never resided there. The Tribunal said that residing at the premises must necessarily encompass something more than an occasional sleep-over. The Tribunal found that the appellant never moved into the premises, did not keep his close personal effects in the premises and at best, on his own evidence, stayed there overnight on a few unspecified occasions. 2. The Tribunal noted that the premises comprised a three-bedroom apartment and that the by-laws for the strata scheme (referring to Amended By-law 35) provided that a balcony did not constitute a bedroom. 3. The Tribunal said that it had to examine the circumstances as they applied as at the date of service of the notice of termination. The Tribunal found that as at that date, 15 August 2016, the appellant had entered into a residential tenancy agreement in respect of bedroom 1 with Cho, bedroom 2 with Ibuki and You, and bedroom 3 with de Lima. 4. The Tribunal found that, as at the date of service of the second notice of termination, the whole of the available occupancy of the premises had been granted by the tenant to his sub-tenants. The Tribunal said that the appellant claimed to have retained a "residential interest" in the premises even though his permanent residence was elsewhere. The Tribunal found that, as at the date of service of the second notice of termination, there was no part of the residential premises that could be occupied by the appellant if he had chosen to exercise his "residential interest". 5. The Tribunal found that as at the date of service of the second notice of termination the appellant had breached the residential tenancy agreement by sub-letting the whole of the residential premises without the consent of the respondent. 6. The Tribunal said that the next question was whether that breach, in the circumstances of the case, was sufficient to justify termination of the Agreement. The Tribunal said that in considering that issue it had regard to the matters raised in s 87(5) of the RTA and the appellant's submissions. 7. The Tribunal found that the nature of the breach was a serious one, and that sub-letting the whole of the residential premises without consent potentially exposed the landlord to risks beyond those he voluntarily accepted under the Agreement. The Tribunal said that the landlord had no direct control over the subtenants and was dependent on the appellant to keep the respondent informed of their names. 8. The Tribunal found that the arrangement under which the appellant never lived at the premises, whilst sub-tenants came and went on a regular basis, was characteristic of the occupancy of the premises from the commencement of the tenancy. The Tribunal found that, rather than "previous breaches" as referred to in s 87(5) of the RTA, it was clear that there was a continuing breach by which the appellant deliberately went about ensuring that the premises were fully let to others. 9. The Tribunal found that, although there was an attempt at mediation to remedy the problems caused by the sub-tenants, that was not an attempt to remedy the breach, but to change one set of sub-tenants for another to try to avoid the problems that were being experienced. 10. The Tribunal found that, on becoming aware of the breach, the respondent, warned the appellant of the breach and advised him that if it was not remedied a notice of termination would be served. The Tribunal found that the appellant took no action to remedy the breach at that time or since. 11. Accordingly, the Tribunal was satisfied that the circumstances of the case justified the termination of the Agreement and made an order to that effect. The Appeal The Appellant's Submissions 1. As we have said earlier, the first issue in the Tribunal with which we are concerned was whether the appellant had breached the lease by sub-letting the whole of the premises. It was common ground between the parties that the appellant had not sought permission to sub-let the whole of the premises, and it was common ground that, if he had sub-let the whole of the premises, that was a breach of the Agreement. The second issue was whether, if there was a finding of breach as alleged, that breach justified termination of the Agreement. 2. As to the first issue, the appellant submitted: [2] 1. The Tribunal erred in finding that as at 15 August 2016 the appellant had entered into residential tenancy agreements in respect of bedroom 1 with Cho, bedroom 2 with Ibuki and You, and bedroom 3 with de Lima. 2. The Tribunal ought to have found that as at the time of service of the notice of termination the occupants of the premises were the appellant, and Lawrence, Galldrin, Nunes and de Lima. 3. The Tribunal ought to have found that the appellant had a vested residential or possessory interest in the premises, namely bedroom 1, at the time of the termination notice, or, alternatively, a possessory interest even if that was limited to the couch. 4. The Tribunal ought to have found that there was no breach of strata By-law 35. 5. There was no effect on the respondent's reversionary interest. 1. As to the second issue the appellant submitted: 1. The nature of the breach (sub-letting the whole of the premises) was not a serious one (as found by the Tribunal). 2. The respondent prevented the appellant from remedying the breach by not ensuring the appellant received a swipe key to the premises free of charge. 3. The appellant always ensured any sub-tenant completed the respondent's agent's application and providing supporting documents, with each successful sub-tenant being approved by the respondent. 4. The Tribunal's finding that the arrangement under which the appellant never lived at the premises whilst sub-tenants came and went on a regular basis was characteristic of the occupancy of the residential premises from the commencement of the tenancy was incorrect. 5. The Tribunal's finding that it was clear that there was a continuing breach by which the appellant deliberately went about ensuring that the premises were fully let to others was incorrect. 6. The finding that the attempted mediation to remedy the problems caused by the sub-tenants was not an attempt to remedy the breach but to change one set of sub-tenants for another was an incorrect finding. 7. The Tribunal had failed to take into account that a new sub-tenant, Shaabanifar, had moved into the premises on 18 November 2016 (five days before the hearing before the Tribunal). 1. In oral submissions, the appellant submitted that the questions whether he resided at the premises, and whether he retained a possessory interest in parts of the premises, were questions of law. 2. The appellant also sought leave pursuant to s 80(2)(b) of the NCAT Act to appeal on two grounds not being questions of law, they being: 1. that the finding of the Tribunal that he had sub-let the whole of the premises was against the weight of evidence; and 2. the finding by the Tribunal that the breach was, in the circumstances of the case, sufficient to justify termination of the Agreement, was not fair or equitable. 1. The appellant also sought leave to tender additional evidence that was not tendered to the Tribunal below. That evidence was described by the appellant as: an extension of the email attachments containing the sub-tenants' applications. The email correspondence was available to the Tribunal to review at time (sic) of decision, but was not considered either. 1. This description is not wholly accurate. The material includes what purports to be copies of partly redacted text messages and phone call logs between the appellant and various sub-tenants, a photograph, and emails between the appellant and the respondent's agent (which were additional to the emails tendered to the Tribunal, rather than being "extensions of email attachments"). 2. The appellant explained that this evidence was not available at the hearing before the Tribunal because some of it was simply: extensions of email attachments and some referenced events that occurred after the procedural lodging dates. The Respondent's Submissions 1. Without any disrespect, the respondent's submissions were to the effect that the Tribunal below had not fallen into error. Questions of Law and Other Grounds in this Appeal 1. The first issue in this appeal was whether the appellant sub-let the whole of the premises on or before the second notice of termination. 2. The appellant's submissions that the Tribunal erred in making this finding are submissions that the Tribunal erred in law (a question of law) in that the primary facts were incapable of justifying the ultimate fact, or that the finding on the ultimate fact was not rationally open on the whole of the evidence. These are questions of law. [3] 3. In the alternative, the appellant seeks leave to appeal from this finding on the basis that the finding of the Tribunal that he had sub-let the whole of the premises was against the weight of evidence. 4. The second issue in this appeal was that if the appellant did sub-let the whole of the premises, should the Tribunal have made a termination order pursuant to s 87(4) of the RTA. 5. We can discern no question of law in the appellant's complaints regarding the second issue. 6. In the alternative, the appellant seeks leave to appeal on the ground that the finding by the Tribunal that the breach was sufficient to justify termination of the Agreement, was not fair or equitable. Consideration First Issue – Sub-Letting the Whole Premises 1. The Tribunal found that the appellant had sub-let the whole of the premises. This was the ultimate fact in issue between the parties. 2. The appellant submits that that the Tribunal erred in making this finding because the primary facts were incapable of justifying the ultimate fact, or that the finding on the ultimate fact was not rationally open on the whole of the evidence. 3. We do not accept this submission. 4. The Tribunal misstated that, as at 15 August 2016, the appellant had entered into (meaning were current at that date) a residential tenancy agreement in respect of bedroom 1 with Cho, bedroom 2 with Ibuki and You, and bedroom 3 with de Lima. Rather, the evidence was that the appellant had entered into residential tenancy agreements (that were current on that date) with de Lima, Nunes, Lawrence and Galldin. 5. However, whilst understanding that the Tribunal may have referred to the incorrect tenants, that does not affect the substance of the finding. Nor do we think the Tribunal's reasons, taken as a whole, are limited to an ultimate finding of fact that the whole of the premises were sub-let on 15 August 2016 (and no other time), nor that 15 August 2016 was the only date to be considered in relation to any breach of the Agreement. 6. First, there is no requirement in the RTA for the breach relied upon to be in existence on the day the termination notice is issued. 7. Second, termination of a contract by an innocent party may be justified by proof of circumstances existing prior to such termination but of which the party terminating the contract was unaware until subsequently. [4] Thus, the respondent was entitled to rely upon any earlier breach of the term prohibiting sub-letting of the whole of the premises without permission. 8. Third, so much is made clear by the Tribunal's reference to the respondent becoming aware of the appellant's breach, and then (subsequently) issuing the termination notice, that the appellant was never a resident of the premises, that he never had an access swipe card, never moved into the premises, never kept personal belongings there and that there was a "continuing breach" (impliedly from the commencement of the Agreement) by which the appellant ensured that the premises were fully let to others. 9. In our view a proper reading of the Tribunal's reasons is that the Tribunal found that the appellant had sub-let the whole of the premises at times earlier than the 15 August 2016, in addition to 15 August 2016. 10. Even if we are wrong on that interpretation of the Tribunal's reasons, the error of fact identified did not affect the Tribunal's decision in a relevant way. In our opinion the decision would have been the same regardless of that error given the evidence of the sub-leases, and their proper construction. 11. The evidence before the Tribunal was that: 1. from 26 June – 17 July 2016, Cho, de Lima, Ibuki, You and Nunes were in physical occupation of the premises pursuant to individual sub-tenancy agreements regarding bedrooms 1, 3, 2 and "UNIT 20" respectively; 2. from 18 - 29 July 2016, Cho, de Lima and Nunes were in physical occupation of the premises regarding bedrooms 1, 3 and "UNIT 20" respectively; 3. from 29 July – 13 August 2016, de Lima and Nunes were in physical occupation of the premises regarding bedrooms 3 and "UNIT 20" respectively; and 4. from 14 – 18 August 2016, de Lima, Nunes, Lawrence and Galldin were in physical occupation of the premises regarding bedrooms 3, "UNIT 20" and 2 (Lawrence and Galldin) respectively. 1. Ordinarily a lease encompasses the notion of exclusive possession, but that is not so in relation to residential tenancy agreements. In Dayeian v Davidson (2010) 74 NSWLR 512; NSWCA 42 the Court of Appeal considered, amongst other issues, s 3 of the Residential Tenancies Act 1987 (NSW) (the "1987 Act"), the precursor to the RTA. Campbell JA, with whom Basten and Macfarlan JJA agreed, said at [52] – [53]: [52] The definition of "residential tenancy agreement", in s 3 of the Tenancies Act is: … any 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: (a) whether or not the right is a right of exclusive occupation, (b) whether the agreement is express or implied, and (c) whether the agreement is oral or in writing, or partly oral and partly in writing, and includes such an agreement granting the right to occupy residential premises together with the letting of goods. [53] Because this definition expressly recognises that a right of exclusive occupation is not a necessary characteristic of a residential tenancy agreement, the scope of "residential tenancy agreement" within the meaning of the Tenancies Act is wider than that of leases, concerning which the giving of a right to exclusive possession is an essential characteristic: Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 390; Radaich v Smith (1959) 101 CLR 209 at 216 217 220 and 222; Lewis v Bell (1985) 1 NSWLR 731at 735. 1. Section 3 of the 1987 Act is in substantially similar terms to those used in s 13 of the RTA. Section 13(1) – (3) provides: 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. 1. Thus, exclusive possession is not an essential characteristic of a residential tenancy agreement under the RTA, and thus is not an essential characteristic of the sub-leases in this case, at least between the sub-lessees themselves. 2. As is obvious, each sub-tenant had access to parts of the premises such as the kitchen and bathroom without the right to exclude other sub-tenants, and access to and use of the facilities in those areas were part of the consideration given in exchange for rent. 3. An attempt was made by the appellant to grant exclusive possession of nominated bedrooms to Cho, de Lima, Ibuki, You, Lawrence and Galldin via the terms of the respective sub-leases. Not so with Nunes and, later, Wu. 4. Nunes, and later Wu, sub-leased "Unit 20" i.e. the whole of the premises. They clearly could not exclude other sub-tenants from those common areas of the apartment such as the kitchen and bathroom, nor the bedrooms specified in the sub-leases with Cho, de Lima, Ibuki, You, Lawrence and Galldin. 5. Thus, as between sub-tenants, and upon the proper construction of the sub-leases, no exclusive possession was granted except for the bedrooms specified in the sub-leases with Cho, de Lima, Ibuki, You, Lawrence and Galldin. 6. But the situation is different between the sub-tenants and the appellant. A contractual right may be qualified in ways to suit the parties and with which they agree. That is, a right to possession may be qualified by being exclusive against some persons or class of persons, and not as against others. 7. In this case, the position was that the sub-tenants had the right to exclude all persons other than other sub-tenants from the premises, and relevantly, the appellant. This is borne out by the terms of the sub-leases. 8. Each sub-lease contained cl 23 which expressly prevented the appellant accessing the premises unless one of ten sub-clauses applied, the last being the agreement of the sub-tenant(s). The appellant did not suggest that any of those sub-clauses applied in this case. 9. From 26 June – 17 July 2016, all three bedrooms were sub-let, and "Unit 20" had been sub-let to Nunes. The appellant did not have a "vested residential or possessory interest" in the premises at that time (as he submitted) because the net effect of the sub-leases in operation at that time was that every bedroom was sub-let, together with the totality of the common areas of the apartment. 10. The appellant submitted, in the alternative, that he had a "possessory interest even if that was limited to the couch". This submission is not to the point. The question is whether the whole of the premises were sub-let, and a couch is not a part of the premises which was let, or sub-let. 11. If the appellant had only sub-let part of the premises (to one or more sub-tenants) there would remain a part of the premises to which he was entitled to have access vis-à-vis the sub-tenants. Yet cl 23 of each sub-lease prevented the appellant from accessing the sub-let premises unless one of ten defined circumstances occurred. 12. This term excluded the appellant from the areas sub-let. It is inconsistent with the appellant's case that part of the premises had not been sub-let because there was no area of the apartment from which he was not excluded by the express terms of the sub-leases and the net result from the aggregation of the areas specified in the sub-leases. 13. Clause 23, and its effect as we have described, was referred to, apparently without the appellant's dissent in any way, in the Tribunal's reasons in the application he brought against Cho. 14. Further, on the face of the sub-lease with Nunes (and later with Wu), the appellant had sub-let the entire premises because the sub-lease specified "Unit 20" as the premises sub-let. 15. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165; HCA 52, Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ said (footnotes omitted) at [47]: The importance which, for a very long time, the common law has assigned to the act of signing is not limited to contractual documents. Wilton v Farnworth was not a contract case. The passage from the judgment of Latham CJ quoted above is preceded by a general statement that, where a man signs a document knowing that it is a legal document relating to an interest in property, he is in general bound by the act of signature. Legal instruments of various kinds take their efficacy from signature or execution. Such instruments are often signed by people who have not read and understood all their terms, but who are nevertheless committed to those terms by the act of signature or execution. It is that commitment which enables third parties to assume the legal efficacy of the instrument. To undermine that assumption would cause serious mischief. 1. The sub-leases are legal documents relating to an interest in land, a fact known to the appellant. The appellant signed each sub-lease. That commitment enabled third parties, including the respondent, to assume the legal efficacy of those sub-leases. In terms, the appellant had sub-let the entire premises to Nunes (and later to Wu). The appellant is bound by his signature to the terms of those sub-leases. 2. When this was raised with the appellant during argument the appellant submitted there had been an oral variation to Nunes's sub-lease, restricting the area leased to the "balcony" (presumably with access to the common areas such as the kitchen and bathroom). 3. The appellant conceded that this oral variation had not been the subject of evidence before the Tribunal, and was only mentioned in submissions on the appeal. Accordingly, it not being evidence before the Tribunal, and the respondent having no opportunity to investigate that assertion and prepare any defence to it, we have paid no regard to that submission. 4. Ultimately, the first issue in this case is to be resolved by reference to the sub-leases, and whether, on their proper constructions, they amounted, alone or in combination, to a sub-letting of the whole of the premises. 5. The finding that the appellant did sub-let the whole of the premises is further supported by the findings of the Tribunal that the appellant never resided at the apartment, his permanent place of residence was elsewhere, he did not have, and chose not to have, an access swipe card. He had never moved into the premises nor did he keep his close personal effects in the premises. 6. Although those facts cannot be used as an aid in construing the terms of the sub-leases, they are available as an aid to identify the subject matter of those contracts. That is, they are admissible to identify the things with which those sub-leases deal. [5] The evidence referred to aided the Tribunal in finding that the sub-leases, in combination, dealt with the whole of the premises. 7. Accordingly, we find no error of law in the Tribunal's reasons on this issue. We are not persuaded that the primary facts were incapable of justifying the ultimate fact, or that the finding on the ultimate fact was not rationally open on the whole of the evidence. 8. The appellant also sought leave to appeal on another ground, that being that the finding he had sub-let the whole of the premises was against the weight of evidence. 9. We have set out the terms of cl 12 of Schedule 4 to the NCAT Act, which apply to this application for leave to appeal on any other ground, earlier in these reasons. 10. In our opinion, and for the reasons we have already given, we are not satisfied that the conditions of cl 12 have been met. We are not satisfied that the appellant may have suffered a substantial (or any) miscarriage of justice because the decision was against the weight of evidence. The evidence did not preponderate so strongly against the conclusion found by the Tribunal that it could be said that the conclusion was not one that a reasonable tribunal could reach [see Calin v The Greater Union Organisation Pty Ltd (1991) 173 CLR 33 at 41-42; HCA 23]. 11. Satisfaction of cl 12 is necessary, but not sufficient, for the granting of leave to appeal on any other ground. Even where cl 12 is satisfied, the Appeal Panel must still consider whether it should exercise its discretion to grant leave under s 80(2)(b) of the NCAT Act - Collins v Urban [2014] NSWCATAP 17 at [81]. The relevant considerations applying to the exercise of that discretion were set out in Collins at [84]. 12. In our opinion none of those considerations apply in this case. There is no issue of principle or question of public importance. There is, for the reasons given earlier, no injustice which is reasonably clear, nor is there an error that is plain and readily apparent which is central to the Tribunal's decision. 13. As for the new evidence the appellant sought to tender, that evidence was, as the appellant stated in his Notice of Appeal, "available to the Tribunal" at the time of the hearing. Accordingly, it does not fall within cl 12(1)(c) as the evidence was reasonably available at the time the proceedings under appeal were being dealt with. 14. Further, we do not regard that evidence as significant. It relates to the question of approval by the respondent of various sub-tenants on the basis (as understood by the respondent) that the appellant was sub-leasing only part of the premises. But permission to sub-let part of the premises is irrelevant to the issue whether the appellant sub-let the whole of the premises, and he accepted that he had never sought consent to do so (because, he says, he did not sub-let the whole of the premises). Thus, approval of sub-tenants when the respondent thought only part of the premises was being sub-let is irrelevant to the first issue in this case. 15. The appellant also submitted that the Tribunal ought to have found that there was no breach of strata By-law 35. The Tribunal referred to that by-law in its reasons, but did not make a finding as to whether that by-law had been breached. Whether it was breached or not is irrelevant to the ultimate fact whether the appellant had sub-let the whole of the premises. 16. Finally, the appellant submitted that there was no effect on the respondent's reversionary interest. Whether this is so is, again, not to the point. The appellant either sub-let the whole of the premises (which would be a breach of the Agreement) or he did not. Sub-letting the whole of the premises without affecting the respondent's reversionary interest did not convert the breach into something else. Second Issue – Termination 1. The second issue is whether the breach, as found, was, in the circumstances of the case, sufficient to justify termination of the agreement. This ground was only faintly pressed by the appellant. 2. We can discern no question of law in the appellant's Notice of Appeal or written or oral submissions on this issue. 3. The appellant sought leave to appeal in relation to this issue, saying that the finding that the breach was sufficient to justify termination of the agreement was not fair or equitable. 4. We are not satisfied that the conditions of cl 12 of Schedule 4 to the NCAT Act have been met as we are not satisfied that the appellant may have suffered a substantial (or any) miscarriage of justice because the decision was not fair or equitable. There was no assertion that there had been a denial of procedural fairness (see Collins at [77]) nor did the appellant identify any other matter said have resulted in an unfair or inequitable decision, and nor do we discern any. 5. Further, even if cl 12 were satisfied, we are not persuaded that we ought to exercise the discretion to grant leave (per Collins at [84]). 6. In our view the second issue does not raise any issue of principle, nor does it raise any questions of public importance or matters of administration or policy which might have general application. The appellant did not submit otherwise. 7. Nor do we perceive any injustice which is reasonably clear, any error that is plain and readily apparent, any factual error unreasonably arrived at and clearly mistaken, nor do we perceive that the Tribunal went about the fact-finding process in such an unorthodox manner, or in such a way that it was likely to produce an unfair result. 8. The Tribunal said that the "nature of the breach is a serious one." The nature of the breach is one of the permissible factors the Tribunal was permitted to consider [s 87(5)(a) of the RTA]. This was a normative assessment on which minds might differ. [6] No error of the relevant kind is apparent nor was identified by the appellant. 9. The appellant submitted that the breach was not a serious one and cited in support Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26. The appellant presumably relies upon Diplock LJ's judgment concerning intermediate terms, and whether a breach of a such a term would give rise to a right to terminate the contract will depend upon whether the breach is of such seriousness as to deprive the innocent party of substantially the whole benefit it was intended he should obtain from the contract. This statement was approved by the plurality in Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115; HCA 61 at [49] – [52]. 10. The submission is misconceived. This was not a case at common law as to whether the respondent was entitled to terminate the Agreement, but a case concerning the Tribunal's exercise of a statutory power expressed in s 87(4) of the RTA. The normative evaluation that the breach was "serious" is not the same questions as whether a breach of an intermediate term is sufficiently serious as to justify termination at common law. 11. The Tribunal provided three reasons for the finding the breach was serious: first, the breach exposed the respondent to risks he had not accepted under the RTA; second, the respondent had no control over the sub-tenants; and third, the respondent was unable to vet the sub-tenants. 12. The appellant did not address the first two reasons. That is, no submissions were advanced as to why those two reasons were, in any way, erroneous (or not fair and equitable), or why taking them into account was, in any way, erroneous (or not fair and equitable). 13. As to the third reason, the appellant submitted that he always ensured sub-tenants completed the respondent's agent's application forms and provided supporting documents. Each sub-tenant was, he says, consequently approved. 14. So much can be accepted for the purpose of argument. However, the respondent's approval was given on the basis that there was no sub-letting of the whole of the premises, and the appellant accepted he had never sought the respondent's consent for that to occur. Sub-letting the whole of the premises without the respondent's consent is serious for the reasons given by the Tribunal. Further, the seriousness of the breach can be seen by reason of the fact that the RTA provides that a landlord may withhold consent whether or not it is reasonable to do so. [7] 15. The appellant then submits that the Tribunal's finding that the arrangement (the appellant not living at the premises, and sub-tenants coming and going on a regular basis) was characteristic of the occupancy of the premises from the commencement of the tenancy was false. By false the appellant means incorrect. 16. This finding was made in the context of s 87(5)(b) of the RTA, namely the permissible consideration of previous breaches. In substance, the Tribunal found that the appellant had sub-let the whole of the premises on occasions earlier than 15 August 2016, and had deliberately set about attempting to do so from time to time. 17. No error of the relevant kind is apparent nor was identified by the appellant. Rather, it seems to us, both findings were correct. As is clear from the evidence, and as was noted in the Tribunal's reasons on the appellant's application against Cho, the appellant ran a for-profit business of sub-letting the premises. He entered into the sub-leases detailed earlier in these reasons, and as sub-tenants left he sought to replace them. 18. The appellant next submits that the Tribunal's finding that the attempt at mediation was to change one set of sub-tenants for another, and not an attempt to remedy the breach was false (meaning incorrect). 19. No oral or written submissions were advanced in support of this challenge to this factual finding, and no relevant error is discernible to us. 20. The appellant also submitted that he was prevented from remedying the breach because the respondent did not ensure the appellant was provided with an access swipe card for free. How the provision of such a card would have remedied the sub-letting of the whole of the premises was not made clear. Given he had sub-let the whole of the premises, the only discernible way for that breach to be remedied would be to have convinced one or more sub-tenants to surrender or vary their sub-leases such that part of the premises was not sub-let. There was no evidence that the appellant ever attempted to do so, and no evidence establishing how lack of possession of an access swipe card prevented him from doing so. 21. The appellant then submits that the Tribunal failed to take into account that a new sub-tenant, Shaabanifar, had moved into the premises on 18 November 2016 (five days before the hearing before the Tribunal) with a sub-lease being for a term of four months. 22. The Tribunal did not refer to this fact expressly in its reasons. Assuming, in the appellant's favour, that he made a submission to the Tribunal on that point, that fact was not a mandatory consideration the Tribunal was required to consider pursuant to s 87(5). That is, the Tribunal could consider it, but was not required to do so. If the Tribunal did consider it, it was not required to rule in the appellant's favour because of it. 23. We do not see how that fact, as distinct from the fact other sub-leases were in existence and might be affected by a termination order, was of any significance as between the appellant and respondent. 24. It is not apparent to us, nor was it explained by the appellant, how this fact (whether taken into consideration by the Tribunal or not) affected the Tribunal's finding in a relevant way. That is, vis-à-vis the appellant and the termination of the Agreement, we do not perceive, nor did the appellant explain, how this fact, whether considered by the Tribunal or not, gave rise to any reasonably clear injustice, any plain and readily apparent error, a clearly mistaken or an unreasonably arrived at factual error. 25. Neither is it apparent to us, nor explained by the appellant, how this fact, whether considered by the Tribunal or not, demonstrated that the Tribunal went about the fact-finding process in such an unorthodox manner, or in such a way, that it was likely to produce an unfair result. 26. Further, the Application had been commenced well before the appellant entered into the sub-lease with Shaabanifar. Indeed, that sub-lease was entered into only five days before the hearing of the Application. It could scarcely be the case that a tenant (such as the appellant) could frustrate a landlord's application for a termination order by entering into a further sub-lease agreement. Conclusion 1. For the reasons given above we are of the opinion that the appeal should be dismissed. ********** Endnotes 1. SAB v SEM & Ors [2013] NSWSC 253 at [5]. 2. In Updated Appellant's Submissions handed up at the hearing of the Appeal, some of which were expanded upon in oral submissions. 3. Wesiak v D & R Constructions (Aust) Pty Ltd [2016] NSWCA 353 per McDougall J, with whom Beazley P and Simpson JA agreed, at [62] and [73]; The Australian Gas Light Company v Valuer-General (1940) 40 SR (NSW) 126 at 138. 4. Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359; HCA 21 5. Sportsvision Australia Pty Ltd v Tallglen Pty Ltd (1998) 44 NSWLR 103 at 114 - 115, Re Galaxy Media Pty Ltd (Rec/Mgrs apptd) (in liq) [2001] NSWSC 917 at [74], Independent Timber Importers v Mercantile Mutual Insurance [2002] NSWCA 304 at [17] per Gzell J, with whom Sheller and Giles JJA agreed. 6. Cf Brennan v Consumer, Trader & Tenancy Tribunal & Anor [2010] NSWSC 1240 at [57] regarding s 64(2)(b)(ii) of the 1987 Act – this holding remained undisturbed on appeal in Brennan v New South Wales Land and Housing Corporation. 7. Section 75(1). 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: 26 April 2017