Cai v Zhou [2025] NSWCATCD 216;

1. The respondent's evidence and submissions included the following.
2. The agreement was an occupation agreement under the Boarding Houses Act 2012, and not a residential tenancy agreement.
3. The applicant breached the agreement by not providing the air conditioning that had been advertised as part of the room, and also the premises were not in a reasonable state of repair. The respondent gave notice via WeChat on 9 July 2025 that she would vacate, and emails were sent on 13 and 17 July 2025. On 23 July 2025, the respondent confirmed her vacating date would be 27 July 2025, and rent would be withheld from 21 July 2025 onwards.

1. My findings and conclusions are as follows.
2. An agreement under which a person boards or lodges with another person is not a residential tenancy agreement (section 8, Residential Tenancies Act 2010).
3. 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" (Pupuke v Stratford [2016] NSWCATAP 7 at [23], approving the test set out in Pryor v Costa & Maroulis (Tenancy) [2005] NSWCTT 555). This test was also approved by the Appeal Panel in Shapkin v The University of Sydney [2023] NSWCATAP 2 ("Shapkin"), an appeal from which was dismissed.
4. In Shapkin, the Appeal Panel explained that physical presence was not required (at [81]-[82]):

"[81] ...a requirement for a physical presence would inappropriately limit what is meant by the stipulation that the owner "remain in possession and retain his quality as master of the house". It is the legal right to possession, not the physical fact of exclusive "possession" or occupation, that is decisive: Swan v Uecker (2016) 50 VR 74 at [36] (Croft J quoting McHugh J in Western Australia v Ward (2002) 213 CLR 1 at [502] - [504]).

[82] Here, whilst the University did not have a physical presence at the Residence, the terms of the Residence Agreement, including the combination of the University's right to enter the Residence at any time, to select the room to which Mr Shapkin was allocated, to move him to a different room or an entirely different residence, to install CCTV cameras, to require him to notify the University of any absences and to restrict certain types of social activities, together with the provision of cleaning and other services, were consistent with the University remaining in possession and retaining its quality as "master of the house"."

1. I am satisfied that the agreement between the applicant and respondent in the present case is consistent with a boarder/lodger arrangement in accordance with the guidance set out in Shapkin. Specifically, the following written additions to the agreement indicate the applicant remained in possession and retained their quality as "master of the house", and indicate the parties intended an arrangement other than a residential tenancy agreement:

(1) The respondent was prohibited from using any cooking appliances in the room, including a kettle.

(2) The respondent was not permitted to eat in her room, other than "dry snacks".

(3) The respondent was not permitted to bring any non-residents/"strangers" to the property.

(4) The respondent was not permitted to light candles or incense.

(5) The respondent had to lock her window before leaving the premises.

(6) The respondent was not permitted to wear shoes in the house.

1. All of these are inconsistent with what one would expect under a residential tenancy agreement.
2. I am satisfied the premises are "boarding premises" within the meaning of section 4 of the Boarding House Act. As the premises provide beds, for a fee or reward, for use by five or more residents, and do not fall within any of the exclusions in section 5(3), it is a "general boarding house" and a "registrable boarding house".
3. Pursuant to section 32 of the Boarding Houses Act, on application by the proprietor of the boarding house, for resolution of an occupancy principles dispute, the Tribunal may make an order for the payment of any amount of money (including an order for the refund or repayment of some or all of an amount paid as a security deposit).
4. Whilst the parties' cases were not directed specifically to that section, I am satisfied that the relevant evidence had been provided and it is in the interests of justice and the Tribunal's guiding principle (to facilitate the just, quick and cheap resolution of the real issues in dispute) for the Tribunal to decide the matter without putting the parties to the cost and delay of a further hearing.
5. The parties' obligations in respect of an occupancy agreement under the Boarding Houses Act are as set out in their written agreement so long as not inconsistent with the occupancy principles set out in the Boarding Houses Act (section 31). The parties' obligations are not governed by the Residential Tenancies Act.
6. Pursuant to the occupancy principles, a security deposit (bond) cannot exceed the amount of two weeks occupancy fee. Under the agreement signed by the parties, a break fee was payable if the tenant ended the tenancy agreement before the end of the fixed term, but not if the tenant ended the agreement for a permitted reason which included breach of the agreement by the "landlord" (clause 51). In my view, that clause permitted the respondent to terminate the agreement in the present case, when the applicant breached the agreement by removing the air-conditioning that had expressly been included with the premises. I am not satisfied provision of a portable heater is effectively the same thing. In the circumstances, I am not satisfied that the obligation under the agreement between the parties for the tenant to pay a break fee arises.
7. The respondent is however obliged to pay the occupation fee until she vacated the premises on 27 July 2025. I am satisfied that one week was owing and the respondent is therefore obliged to pay the sum of $400 to the applicant. I am satisfied that amount should be paid from the bond held with the Rental Bond Board to the applicant, and the balance should be paid to the respondent.
8. I am not satisfied any amount is owing for the respondent not giving the required period of notice (if that is what occurred). The 14 day notice referred to in the agreement between the parties, for a "tenant" to end a fixed term agreement, does not permit of a termination date being a date before the end of the fixed term, and so does not cover the situation in this case. Instead, the respondent was leaving during the fixed term because of the applicant's breach, and the terms of the written agreement do not provide for notice to be given in those circumstances. (Whilst the Residential Tenancies Act 2010 might, that is not relevant here).

(1) The Rental Bond Board is to pay the applicant, Wenjuan Cai, the sum of $400 from rental bond number P613103-X.

(2) The balance of the bond is to be paid to the respondent, Jing Zhou.

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.