Case v Frimont

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Judgment

1. BASTEN JA: I agree with Leeming JA.
2. GLEESON JA: I agree with Leeming JA.
3. LEEMING JA: The appellant, Mr Donald Bruce Case, and the respondent, Ms Pamela Elizabeth Frimont, are nephew and aunt. In 2018, the latter became administrator of the intestate estate of the late Albert Bruce Case, who had died in 1968. He was her father, and the appellant's grandfather. The estate remains unadministered. The only asset of the estate is a large parcel of Torrens title land at Blaxlands Ridge, part of which has been occupied by the appellant for more than a decade. The primary judge gave judgment for possession against the appellant and in favour of the respondent. Although long term occupation of land in an unadministered estate can give rise to a multiplicity of legal issues, those arising on this appeal are narrowly confined to whether the primary judge erred in failing to find that the appellant had the benefit of a residential tenancy agreement.
4. I shall for concision, and intending no disrespect, refer to the parties by their given names.

Background

1. The sole registered proprietor of the land at Blaxlands Ridge was the late Albert Bruce Case. He was survived by a widow Joyce and three children, Kenneth, Robert and Pamela (another daughter Sylvia had died as a child in 1944). Kenneth obtained letters of administration in 1968.
2. In accordance with the rules governing intestate succession then prevailing (Wills, Probate and Administration Act 1898 (NSW), s 50(a)), Joyce was entitled to a one third share of the estate. Joyce died in 1986, leaving a will appointing Robert as executor and sole beneficiary of her estate. A grant of probate was obtained of Joyce's will. Joyce's estate included her right to the due administration of Albert's estate, which in due course, subject to the estate assets being realized to meet estate liabilities and costs, would result in her one third interest in the land being transmitted to Robert. Nothing turns for present purposes on any more precise identification of the position of Robert as sole next of kin of his mother's deceased estate which included her right to due administration of her husband's intestate estate, as was given in Horton v Jones (1935) 53 CLR 475 at 486-487; [1935] HCA 7. Nor is it necessary to consider how that might eventually occur (whether by partition or appointment of trustees for sale).
3. The evidence was that Albert had no creditors. It will be seen that if the land in Albert's estate was available for distribution, then, after 1986, the entitlements of Kenneth, Robert and Pamela would be two ninths, five ninths and two ninths respectively (each surviving sibling was entitled to a one third share of the two thirds to which Joyce was not entitled, and Robert would have succeeded to the entirety of his deceased mother's one third share).
4. Kenneth died in 2003. Albert's estate remained unadministered. Donald and his wife Peggy moved in around late 2010 to occupy a house built on the land to look after his uncle Robert, who died on 17 January 2011. They have lived in that house ever since. They have from time to time paid some amounts of Council rates (as to which see further below), but not since August 2018. They have never otherwise paid rent (although the payment of rates thereby discharging the owner's liability to the Council is capable of amounting to rent). In what follows I shall adopt the parties' approach and refer merely to Donald. I did not understand any point to have been taken that Donald's wife had not been joined to the litigation.
5. Pamela obtained letters of administration in March 2018, and became registered proprietor of the land in April 2018. In November 2018, her solicitor wrote to Donald advising that she had decided to sell the land so as to finalise the estate. Subsequently, she has agreed to sell the land for $1.27 million, with vacant possession.

The significance of a residential tenancy agreement

1. It is convenient at the outset to identify the significance of the narrow issue arising in this Court, namely, the existence of one or more residential tenancy agreements. As Donald correctly emphasised in submissions, such an agreement is distinct from a lease, and turns on occupation rather than exclusive possession. It need not be written or indeed formal. A residential tenancy agreement is defined in s 13 of the Residential Tenancies Act 2010 (NSW) relevantly as follows: "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."
2. It was not suggested that any of the exceptions in ss 7 or 8 was applicable. "Residential premises" is defined in s 3 to mean "any premises or part of premises (including any land occupied with the premises) used or intended to be used as a residence". Thus the fact that the 60 acre parcel of land contained two houses, only one of which was occupied by Donald, does not stand in the way of the conclusion that part of the land was "residential premises".
3. However, it is necessary in order for there to be a "residential tenancy agreement" for there to be an agreement, even though the agreement need not be in writing and may be implied.
4. The forensic goal of establishing a residential tenancy agreement in response to Pamela's claim for possession was pleaded at paragraphs 51 and 52 of the amended defence: "51. These proceedings are a claim against a tenant of the Plaintiff to recover possession of residential premises subject to a residential tenancy agreement. 52. By reason of s 119 of the Residential Tenancies Act, 2010, this Court has no jurisdiction to grant the relief sought in the statement of claim."

No error in failing to find first residential tenancy agreement

1. By late 2010, Robert Case had been occupying part of the land for many years. The circumstances by which his brother (who had been the administrator of the deceased estate for some 35 years) permitted this to occur cannot be established on the evidence. Let it be assumed, favourably to Donald, that Robert's occupation of part of the land occurred by reason of an informal agreement with Kenneth. There is a large difficulty in sustaining a residential tenancy agreement in relation to the premises after Kenneth's death, which may be passed over for present purposes, for I am also prepared to make the assumption, once again favourable to Donald, that Robert enjoyed some form of informal right to occupy. The critical question is the position in late 2010. As Mr Weller submitted, the definition of "residential tenancy agreement" does not refer to owner or lessor but refers merely to the granting by one person to another for value of "a right of occupation". Fragile as Robert's tenure may have been, s 13 does not preclude him agreeing to share occupation of the dwelling which had been occupied by him for many years, in exchange for the provision of services. In that event, Robert is taken to be a "landlord" for the purposes of the Act (bearing steadily in mind that the nomenclature of the statute does not imply that there was a lease as might be recognised at general law).
2. The primary judge addressed the first residential tenancy agreement at [31]: "There are a number of difficulties associated with a conclusion that a residential tenancy agreement came into being between Robert and the defendant when the Defendant and Peggy moved into the house. The first is that there is no certainty about what care was to be provided so that the care could be regarded as constituting 'value' for the purposes of s 13. For a lease at common law to come into existence, there must be a term identifying the rent or a mechanism for determining the rent: Whitlock v Brew (1968) 118 CLR 445 at 456 and 460. Further, the party asserting that an agreement exists, must show that there was an intention to create legal relations, even although no presumption exists that legal relations are not intended in a family arrangement: Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95; [2002] HCA 8 at [26]. In my opinion, the evidence does not show that the parties did intend to create legal relations. I note also that the claim was not put on the basis of some proprietary estoppel arising from promises by Robert in return for which care was provided."

No error in failing to find second residential tenancy agreement

1. Kenneth died in 2003. The office of administrator is personal and not transmissible, so no executor or administrator of Kenneth's estate could succeed as representative of Albert, as explained in Re Clover [1919] NZLR 103. The pleading alleges an agreement with "the estate of" Albert, but that simply cannot be. There is no such legal person. If there were any representative of Albert's deceased estate between 2003 and 2018, it was the NSW Trustee (pursuant to s 61 of the Probate and Administration Act 1898 (NSW)), but there is no suggestion of any such agreement.
2. The primary judge rejected the "second" residential tenancy agreement at [34]-[41]. None of the grounds of appeal that were pressed (grounds 8-11 were abandoned) challenged any aspect of that reasoning. The primary judge said that the principal difficulty faced by Donald was that there was no "person" who could grant a right of occupation to the premises: at [34]. The primary judge observed that until letters of administration were obtained by Pamela on 29 March 2018, the land remained registered in Albert's name. His Honour considered at [35] that there could not be an "agreement" under s 13, because there was no person to enter into that agreement with Donald. I agree.

No error in failing to find third residential tenancy agreement

1. The third residential tenancy agreement alleged by Donald turned on the payment of Council rates and charges after Pamela was appointed administrator. The primary judge found that the only evidence of this was his paying $100 on 20 August 2018, and that there was no other evidence of the amounts paid by the appellant after March 2018: at [49]. I accept Mr Weller's submission (referable to ground 15) that that finding is erroneous. The appellant tendered evidence of post office receipts, each in the amount of $100, paid on 13 April, 27 April, 14 May, 29 May, 14 June, 28 June, 13 July and 3 August 2018, referable to payments of outstanding rates. There was in fact evidence that some $900 was outstanding in March 2018, which approximately equates to the payments made by Donald later that year. However, Donald was not cross-examined to the effect that he intended to pay the outstanding amounts prior to Pamela's appointment, and it may be doubted that any uncommunicated intention as to why he was making those payments would be relevant to any issue.
2. The primary judge found that Pamela was unaware of these payments. They were relatively small, ceased some four or five months after she was appointed administrator, and there had been no subsequent payments. That finding was one which was expressly informed by her demeanour in cross-examination: "The plaintiff said that she did not know that the defendant had paid any of the rates. When confronted with documents showing that he had done so, she accepted that he had. I had the impression from the way she answered, that she was finding out for the first time by these questions that the defendant had paid some of the rates": at [44].
3. Although ground 13 challenged the finding that Pamela did not know that the appellant was paying half the rates, no basis for that challenge, which was governed by the principles stated in Fox v Percy (2003) 214 CLR 118; [2003] HCA 22 and Lee v Lee (2019) 266 CLR 129; [2019] HCA 28 at [55], was articulated in written or oral submissions. There is no basis to overturn the finding by the primary judge. Ground 14 challenged a statement by the primary judge that there was no evidence that Pamela gave copies of the rates notices after March 2018 or had asked Donald to pay them, but nothing turns on these issues in light of the finding of Pamela's lack of knowledge.

Conclusion and orders

1. The foregoing suffices to conclude that the appeal must be dismissed. There are two supplementary points.
2. The first is that the primary judge gave one further reason, in the alternative, for the termination of the first alleged residential tenancy agreement. That turned on s 81 of the Act. Indeed, Mr Weller accepted that s 81 had the effect found by the primary judge, namely, that upon letters of administration being issued to Pamela, or, on the latest, on 27 April 2018 when she became registered proprietor, the residential tenancy agreement terminated. That was on the basis of s 81(4)(a), providing: "(4) Other legal reasons for termination A residential tenancy agreement terminates if any of the following occurs - (a) a person having superior title (such as a head landlord) to that of the landlord becomes entitled to possession of the residential premises". It is not necessary to express a view as to the correctness of that aspect of his Honour's reasons or Mr Weller's concession. With respect, I doubt its correctness. The provision turns not merely upon a person having superior title but also upon that person becoming entitled to possession, and it seems clear that merely transferring ownership of property which is subject to a residential tenancy agreement to a third party does not without more bring the residential tenancy agreement to an end.
3. Secondly, the parties proceeded on the basis that there was an appeal as of right. That is not so. The right of appeal from a final judgment of the Supreme Court is qualified, in cases where there is an amount in issue not exceeding $100,000, by the requirement of leave: Supreme Court Act 1970 (NSW), s 101(2)(r). It was not established that the residential tenancy agreement for which the appellant contended was property amounting to or of the value of $100,000 or more. Accordingly, an appeal lies only by way of leave. However, there having been a full exchange of written and oral submissions, there should be a grant of leave.
4. I propose the following orders:
5. Grant leave to appeal.
6. Appeal dismissed.
7. Mr Case to pay Ms Frimont's costs of the appeal.

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