Asuzu v NSW Land and Housing Corporation

BACKGROUND

1. The tenancy commenced in November 2017. The tenant lived in the property with his wife. The tenant applied for, and was granted, a rent subsidy. Rent was calculated by the landlord at a subsided amount under the provisions of the Housing Act 2001 (NSW), and relevantly was less than $60 pw. On 1 October 2018, the landlord wrote to the tenant notifying the tenant of a rent subsidy eligibility review and gave the tenant an opportunity to provide relevant household income evidence. On 22 October 2018 the landlord wrote to the tenant stating that the landlord had not received the information sought, and that if such information was not provided by 9 November 2018, market rent would be charged from 12 November 2018.
2. On 9 November 2018 the landlord gave written notice to the tenant that information had not been received from the tenant to calculate household income, and the rent subsidy was cancelled. The letter stated that market rent of $345 would be charged from 12 November 2018. The rent amount was subsequently varied on the basis of information provided by the tenant but relevantly remained at either $355 pw or $348.75 pw.
3. The tenant unsuccessfully appealed the decision to cease the rent subsidy to the Housing Appeals Committee ('HAC') under the provisions of the Housing Act 2001 (NSW).
4. The landlord commenced proceedings in the Tribunal to terminate the tenancy. The tenant commenced his own proceedings in the Tribunal to seek an order that the rent subsidy be reinstated and rent accordingly reduced. Both applications were heard before the Tribunal on 2 August 2019. The tenant appeared at the Tribunal hearing on 2 August 2019.
5. The Tribunal terminated the tenancy under s 87 of the RT Act for non-payment of rent. The Tribunal made a finding that the tenant had frequently failed to pay rent under s 89 (5) of the RT Act. The Tribunal also made a money order for rent arrears in an amount of $11,912.71. The Tribunal suspended the date of vacant possession to 16 August 2019 and made an order for payment of an occupation fee.
6. The Tribunal also considered together with the landlord's application to terminate the tenancy the application by the tenant to set aside the rent increase of the landlord. The Tribunal dismissed the tenant's application on the basis that the Tribunal had no jurisdiction under the RT Act to re-consider the rent subsidy issue.
7. At the hearing before the Tribunal Member on 2 August 2019, the documentary evidence of the landlord included a Notice of Termination and a rent ledger. The rent ledger showed that the tenant had made no payments of rent during the period from 26 January 2019 to 22 June 2019.
8. The Tribunal Member gave written reasons for the orders made. In essence, the Tribunal was satisfied that the Notice to Terminate was a valid notice and had been validly served; the tenant had substantial rent arrears and had not provided a satisfactory explanation for the breach or what would be done to rectify the breach; there had been frequent failure to pay rent; and the Tribunal should exercise its discretion to terminate the tenancy, having considered the circumstances of the tenant; and the circumstances of the landlord.
9. The tenant filed an appeal against the decision of the Tribunal with the Appeal Panel on 12 August 2019.
10. The Appeal Panel made interlocutory orders on 22 August 2019 staying the orders for termination and possession subject to the tenant paying rent of $200 pw and paying a lump sum amount of $13,000. The tenant has not complied with those orders.

JURISDICTION-INTERNAL APPEALS

1. Under s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act) a party may appeal to the Appeal Panel in an internal appeal from an error of law as a matter of right.
2. In respect of errors other than errors of law, the appellant must satisfy the Appeal Panel that leave to appeal should be granted under Sch 4, cl 12 of the NCAT Act on the basis that a "substantial miscarriage of justice" had occurred as: (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).
3. The principles regarding whether leave to appeal should be granted under Sch 4, cl 12 of the NCAT Act were set out by the Appeal Panel in Collins v Urban [2014] NSWCATAP 17 at [76]-[84].
4. Under r 25(4) of the Civil and Administrative Rules 2014 (NSW) (the NCAT Rules) the time period to file an internal appeal in the circumstances of this matter is 14 days from the date the appellant was notified of the decision or given reasons for the decision (whichever is the later).
5. The appeal in this matter has been filed within the limitation period under r 25(4) (c) of the NCAT Rules.

GROUNDS OF APPEAL

1. The tenant's grounds of appeal identify 6 grounds. However, in substance, there are 2 grounds of appeal. The remaining grounds overlap and repeat the 2 substantive grounds of appeal, and do not require separate consideration. The tenant's appeal is focused on the decision of the Tribunal to terminate the tenancy.
2. The first ground is that the Tribunal had no jurisdiction to make the orders sought. Such a ground involves a purported error of law, and no leave to appeal is required.
3. The second ground is that the decision was unfair and against the weight of evidence. That is a ground that requires leave to be granted.
4. In respect of the first ground, the tenant's argument was that the Tribunal had no jurisdiction to terminate the tenancy in circumstances where the tenant did not accept the withdrawal of the rent subsidy and the condition of the premises was poor.
5. This ground of appeal is not established. The Tribunal clearly has jurisdiction under the RT Act to make orders for termination of residential tenancy agreements (see ss 81 (3); 82; 87; 89 (5) and 119 of the RT Act).
6. In respect of the tenant's dispute about the decision of the landlord to cease to apply the rent subsidy, s 154A of the RT Act states: 154A Termination notice for non-payment of amount payable on variation or cancellation of rent rebate If a tenant owes a landlord under a social housing tenancy agreement a debt arising under section 57 of the Housing Act 2001 or otherwise as a consequence of the variation or cancellation of a rent rebate, sections 87, 88 and 89 apply as if the amount owed were rent and the failure to pay were a breach of the agreement.
7. Arguably, s 154A of the RT Act does not apply to the facts of this matter as the rent subsidy cancellation did not involve any retrospective period. However, it is unnecessary for us to form any concluded view on the operation of s 154A of the RT Act. There was no evidence before the Tribunal to establish any "collateral challenge" to the decision to cancel the rent subsidy. At the hearing on 2 August 2019, the Member was provided with a rent ledger, and was entitled to accept the rent ledger as evidence of the rent arrears amount at the date of the hearing.
8. On the second ground of appeal, the tenant has failed to establish that leave to appeal should be granted. The reasons of the Member dated 2 August 2019 clearly show that she considered the evidence and submission of both parties thoroughly and explain why the Member was satisfied that the tenancy should be terminated for non-payment of rent.
9. As the Member found, the evidence contained in the landlord's rent ledger clearly established that the tenant had not paid any rent for a considerable period of time and was 239 days in rent arrears. The amount of rent arrears is a significant factor in the exercise of discretion as to whether or not a termination order should be made by the Tribunal in a social housing tenancy matter involving breach of the residential tenancy agreement by reason of non-payment of rent : Kelly v NSW Land and Housing Corporation [2018] NSWCATAP 154 at [50]-[51].
10. The tenant submitted that the Tribunal had not adequately considered his evidence regarding the condition of the premises, and that by reason of the condition of the premises the rent subsidy should not have been withdrawn and the rent was excessive. We are satisfied from the reasons of the Member that this issue was considered.
11. In any event, the key issue that the Tribunal had to consider in the landlord's application was whether the tenant had breached his obligations under the residential tenancy agreement by failing to pay rent. The tenant's complaints about the condition of the premises do not provide a justification for the tenant not paying any rent over a very significant period of time; nor does his dissatisfaction with the landlord's decision to cancel the rent subsidy. Any lack of financial capacity of the tenant to pay market rent after the cancellation of the rent subsidy does not excuse the failure to pay any rent for a period of approximately 6 months commencing from January 2019.
12. The tenant has not established the second ground of appeal.
13. The tenant did not raise in the appeal the decision of the District Court in NSW Land and Housing Corporation v Quinn (No 2) NSWDC 161 ('Quinn'), or the issue of whether or not the Tribunal had jurisdiction to consider a "collateral challenge" to the administrative decision of the landlord under the Housing Act 2001 (NSW) to cancel the rent subsidy on the basis that the cancellation of the rent subsidy was an "incident or element" of the determination of the amount of rent arrears; was solely caused by the administrative act of the landlord; and affect the tenant's private rights: Quinn at [52]. The landlord also did not raise the issue of "collateral challenge" in its written submissions.
14. As the issue was not raised and argued before us, we will not give any detailed exposition as to whether or not the principle in Quinn gives the Tribunal jurisdiction to consider administrative decisions of the landlord under the Housing Act 2001 (NSW) in the context of determination of the matters to which it has jurisdiction under the RT Act (and if so, the extent to which such decisions can be considered): see also Dyldam Developments Pty Ltd v The Owners Strata Plan No 85305 [2019] NSWCATAP 229 at [109]-[117].
15. The tenant did raise the issue of jurisdiction, but in the context that the Tribunal had "no jurisdiction" to make the termination order under the RT Act, which is clearly wrong. The submissions of the tenant were that he could not afford to pay market rent for the property and would not have entered into the residential tenancy agreement if it involved paying market rent, rather than subsidised rent. Such a submission was not a collateral challenge within the principles referred to in Quinn.
16. Further, the cancellation of the rent subsidy in this matter was not retrospective, and the tenant's failure to pay any rent at all for a considerable period of time after cancellation of the rent subsidy was a significant factor relevant to the termination of the tenancy, irrespective of the tenant's assertion that the rent subsidy should not have been cancelled.
17. The facts of this matter are very different to the facts of Quinn, where the tenancy had been terminated, and there was a subsequent dispute in the District Court about calculation of the debt owed to the landlord for rent arrears and notice of debt issued by the landlord under s 57 (4) of the Housing Act 2001 (NSW). In Quinn, cancellation of the rent subsidy was both retrospective and prospective; the purported debt was in excess of $221,000; the debt involved amounts that pre-dated the enactment of the Housing Act 2001 (NSW); and the provisions of s 154A of the RT Act were not considered.
18. Considering that while the appeal has been on foot the orders for termination and possession were suspended, we are satisfied that order 4 of the Tribunal dated 2 August 2019 should be substituted or varied under s 81 of the NCAT Act to enable the tenant to have a further period of time to vacate the property.
19. We raised this with the parties and heard submissions. The tenant sought a further 90 days to move out. The tenant said he had suffered from depression; he had previously been practicing as a Barrister but was not currently practicing; his wife works 3 days per week and is "on call" regarding work; and he has a 16 year old son who resides with his former partner at different residential premises. The tenant also stated that he had experienced discrimination in the past due to his African heritage and faced "institutional racism".
20. The landlord at first submitted that a further 28 days was appropriate, but subsequently altered its position to seeking an order for immediate possession, including an extension of the period to apply for a warrant under s 121 of the RT Act.
21. Having considered the circumstances of the matter; including the personal circumstances of the tenant and the amount of rent arrears; we are satisfied that a further extension of the period in which vacant possession is suspended is appropriate and the tenant should be given until the end of November 2019 to vacate the property.

ORDERS 1. Leave to appeal is refused. 2. The appeal is dismissed. 3. Stay orders of the Appeal Panel dated 22 August 2019 are lifted immediately. 4. Order 4 of the Tribunal dated 2 August 2019 is varied to state as follows: "The order for possession is suspended until 30 November 2019".

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 November 2019