Commissioner for Fair Trading v Voulon & Ors [2005] WASC 229

Supreme Court of WA|2005-10-27|Before: Mr P, Hasluck J

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : COMMISSIONER FOR FAIR TRADING -v- VOULON & ORS [2005] WASC 229

BILTRAD GLOBAL INVESTMENT CORPORATION PTY LTD (ACN 009 270 900)

PERPETUAL CAPITAL INVESTMENTS PTY LTD (ACN 009 186 412)

Injunction - Interlocutory injunction - Alleged misrepresentations concerning residential premises - Whether occupants of subject premises are tenants or lodgers - Meaning of residential tenancy agreement under Residential Tenancies Act 1987 (WA) - Court's discretion to grant interlocutory injunctions - Serious question to be tried

Plaintiff : Department of Consumer & Employment Protection

Allan v Liverpool Overseers [1874] LR 9 QB 180

American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396

Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board (No 1) (1982) 57 ALJR 425

Bullock v Federated Furnishing Trades Society of Australia (No 1) [1985] FCA 19; (1985) 5 FCR 464

Commissioner for Fair Trading v Holz [2005] WASC 202

Commonwealth v Bogle, Boreham & Clark [1953] HCA 10; (1953) 89 CLR 229

Facchini v Bryson (1952) 1 TLR 1386

Garden Cottage Foods Ltd v Milk Marketing Board [1984] AC 130

Glev Pty Ltd & Glev Franchises Pty Ltd v Kentucky Fried Chicken Pty Ltd [1994] FCA 916; (1994) ATPR 41-299

Noblett & Mansfield v Manley [1952] SASR 155

NWL Ltd v Woods [1979] 1 WLR 1294

Street v Mountford [1985] 2 AC 809

Bradley Baylis (1881) 8 QBD 195

Cayne v Global Natural Resources plc [1984] 1 All ER 225

Hornsby Building Information Centre Pty Ltd v Sydney Building Information Centre [1978] HCA 11; (1978) 140 CLR 216

ICI Australia Operations Pty Ltd v Trade Practices Commission [1992] FCA 474; (1992) 38 FCR 248

Jabuna Pty Ltd v Hartley, unreported; Fed C of A; Library No 177; 18 April 1994

Lewis v Bell (1985) 1 NSWLR 731

Noble v Centacare [2003] ACTSC 12

Regents Pty Ltd v Subaru (Australia) Pty Ltd (1998) 84 FCR 218

1 The plaintiff in these proceedings, the Commissioner for Fair Trading, seeks relief by way of interim injunctions pursuant to provisions of the Fair Trading Act 1987 (WA) ("FTA 1987") in respect of certain alleged infringements of the Residential Tenancies Act 1987 (WA) ("RTA 1987"). The central issue is whether occupants of residential premises owned and operated by the defendants are tenants as distinct from lodgers.

2 The plaintiff submits that the occupants are tenants and deserving of the protection afforded by the RTA 1987. The defendants submit that they are lodgers with the result that the relevant provisions of the RTA 1987 do not apply.

3 The defendants generally arrange for occupants of the premises to sign a document described as a "lodging accommodation licence" which refers to the proprietor of the subject premises as the "licensor" and to the occupant as a "lodger". The defendants say that weight should be given to these descriptive terms.

4 The plaintiff submits that as a matter of law, the form that an agreement takes is not determinative of the nature of the legal interests of the parties to that agreement. The substance of an agreement, reflecting the intention of the contracting parties, overrides the form that the agreement takes. The relationship between the parties is determined by the law and not by the label they chose to put upon it: Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209 at 214.

5 The plaintiff's application for an interim injunction is supported by the affidavit of Alyson Josephine Szigligeti sworn 28 June 2005, being an affidavit sworn by a Conciliation Officer employed by the Department of Consumer and Employment Protection. The application is supported further by the affidavit of Saskia Alexandria Robic sworn 21 June 2005 and the affidavit of Erik Lee Wolfven sworn 22 June 2005. The two latter deponents are persons who have been occupants of premises and who signed the standard form "lodging licence" prepared and presented to them by or on behalf of the relevant defendant.

6 The defendants rely upon the affidavits of the first defendant, Rolf Gerard Voulon sworn 9 and 19 August 2005. The first defendant says in his affidavit that by virtue of his sole directorship of the defendant companies he is authorised to swear the affidavit on their behalf. He acknowledges at par 9 of his first affidavit that a bond is not charged on lodgers entering into agreements for lodging accommodation provided by the defendants.

7 The first defendant acknowledges also, at par 70 of his first affidavit, that as to the Wolfven accommodation he did not lodge any moneys with the Bond Administrator referred to in the RTA 1987. This was done in the belief that the subject licence agreement was not subject to the provisions of the Act in that s 5(d) of the Act exempts agreements where the tenant is a lodger.

8 The first defendant says further that he maintains a working knowledge of the legislation relating to the defendants' business of providing lodging accommodation as he is a good citizen who conducts his business with a view of making a livelihood in compliance with the relevant law and regulations.

9 I will return to the relevant statutory provisions in due course. However, it will be useful now to look at the circumstances giving rise to the central issue mentioned earlier.

10 Alyson Szigligeti provides evidence in her affidavit that the first defendant is a director of each of the defendant companies and that the defendant companies own residential premises at 190 Grosvenor Road, North Perth and 12 Florence Street, West Perth (second defendant); Units 1, 2 and 3 at 49 Florence Street, West Perth (third defendant); Units 1 and 2 at 21 Hopkinson Way, Wilson, Unit 7 and 8 at 11 Colin Grove, West Perth, 19 Eureka Road, Wilson (fourth defendant) and Unit 5, 214 Carr Place, Leederville and 4 Holford Way, Wilson (fifth defendant).

11 She referred to complaints received from members of the public since the year 2000 with respect to occupation of various residential premises owned and/or operated by the defendants. Reference is made also to court proceedings arising out of these complaints including prosecutions commenced by the Department in respect of various alleged breaches of the RTA 1987 and the FTA 1987. It is said further that the Department and its predecessor sent letters to the first defendant about concerns they held as to the business practises of the first defendant.

12 I pause here to say that I understood this evidence to be confined to the question of whether the first defendant was aware of the relevant legislation and that various issues encompassed by the central issue had arisen concerning the manner in which he administered the premises in question. It should not be thought that this evidence was received as evidence of a propensity to infringe the statutory provisions.

13 The nature of the Department's concerns can be illustrated by reference to a letter dated 18 April 2002 from the Department to the first defendant referring to previous exchanges concerning a claim by Ms Roh in respect of her accommodation at 190 Grosvenor Road, North Perth. According to the Department's letter, Ms Roh claimed that the first defendant did not return her bond money when she vacated the subject premises. She believed that she was a tenant, and her residency was subject to the provisions of the RTA 1987. It is clear from the letter that in the Department's view the subject agreement amounted to a tenancy with the result that bond money should have been lodged in accordance with the RTA 1987 and rent receipts provided. It is said that the issue of whether Ms Roh was a tenant, boarder or lodger is not dependent on the word "lodger" used throughout the contract, but on the characteristics of the residency, and the obligations of the resident.

14 For present purposes, it is not necessary to traverse the entirety of the matters referred to in the affidavits of Saskia Robic and Erik Wolfven. It will become apparent from later discussion that I am of the view that it is not appropriate in respect of an application for interim relief to resolve contested issues of fact upon the basis of affidavit evidence.

15 In essence, Saskia Robic asserts that she signed an agreement in relation to prospective occupation of premises at 49 Florence Street, West Perth and paid to the first defendant a sum of $500. The first defendant informed her at the time that although the agreement referred to a "furniture deposit fee" it was the same as a bond. She signed another agreement on 18 September 2004 in relation to prospective occupation of premises at 8/11 Colin Grove, West Perth. When she asked what would happen to her bond in relation to the first property, the first defendant said he would simply transfer it across so that it applied to the second property.

16 She said that she had a key to the front door of the second property and a separate key for the door to the bedroom she occupied. Her intention was that she would have possession of a bedroom at the premises as described in the second agreement to the exclusion of all other persons including the owner of the second property or any representative of that entity. During the period of her occupancy none of the defendants nor any representative on their behalf such as a caretaker resided at the second property. Neither the first defendant nor any representative of any of the defendants entered her bedroom without first providing her with some kind of notice.

17 Saskia Robic went on to say that she worked for the first defendant in assisting him to manage the various residential premises controlled by the defendants. The layout of all the premises was very similar to the property she occupied, namely, there were a number of bedrooms each occupied by a distinct tenant and common areas to the premises, such as a kitchen, bathroom and laundry shared by the tenants. Part of her working responsibilities involved providing tenants with a notice of inspection of bedrooms that they occupied. Notice was provided either in writing or via SMS to her mobile phone, usually 7 days in advance of inspection.

18 She said further that at no time during the material period did any defendant or any person acting on their behalf provide her with the following documents in relation to the security bonds, namely, a receipt specifying the date of payment, a copy of a record of payment of the relevant security bond to the prescribed financial institution or bond administrator. She went on to describe the acrimonious circumstances that brought her accommodation to an end. By letter dated 18 January 2005 she requested that the first defendant return to her her bond of $500 and a desk. She said that neither the first defendant nor any other person has refunded her bond or any part of it to her. No opportunity has been provided to her to collect her desk. She referred to certain legal proceedings that were then initiated.

19 Erik Wolfven described the circumstances whereby he signed an agreement on 30 July 2001 to occupy a bedroom and common areas at 190 Grosvenor Road, North Perth. He lived in room 1 at the property from 30 June 2001 to 10 March 2004. He said that during the material period he had exclusive possession of his room and had a key to that bedroom that no other tenant had. The tenants had their own key to their respective bedrooms and all tenants had a common key to the front door to the property. The tenants shared the bathroom, toilet, kitchen and laundry at the property. He did his own preparation of meals, laundry and cleaning of his bedroom, as did the other tenants.

20 Erik Wolfven said further that at no time during the material period did the first defendant or any agent or representative of any of the defendants reside at the property or have any involvement in the running of the property. The only times he saw the first defendant at the property was when he was attending to such matters as inspecting and carrying out repairs to it. He went on to refer to the signing of a second agreement and the first defendant's assertion that he would roll over the bond previously paid so that it applied to the second agreement. He described the acrimonious circumstances in which his accommodation came to an end.

21 The first defendant in his affidavit acknowledged that Saskia Robic and Erik Wolfven had been provided with accommodation at the premises referred to in their affidavits but asserted that, in each case, they were lodgers and the subject premises were occupied upon the basis set out in the operative lodging accommodation licence or lodging licence.

22 I note in passing that the descriptive term is given as "lodging license [sic]". However, to avoid confusion, and for the sake of conformity with grammatical usage and the usage in the decided cases, I will continue to use the correct spelling, namely, "licence".

23 As to both tenants, the first defendant touched on matters which might suggest that the evidence presented in their affidavits was coloured by the various differences of opinion and general state of acrimony that arose between the parties. Again, I do not consider that it is necessary for present purposes to resolve the differences of opinion as to matters of detail. I will look principally at matters bearing upon the central issues.

24 The first defendant exhibited to his affidavit copies of the first Robic agreement in respect of 1/49 Florence Street, West Perth (described as a lodging accommodation licence or lodging licence) and the second Robic agreement in respect of 8/11 Colin Grove, West Perth (described also as a lodging accommodation licence or lodging licence). It will be convenient for present purposes to use these documents as a point of reference in resolving the central issue.

25 The first defendant said that he watched Saskia Robic read and initial every page of the lodging agreement and believed that this signified that she had read and fully understood the terms of the same. He said that he never advised her that the furniture deposit fee listed under cl 6 as "moneys required prior to taking the room" was a bond. He advised her that a bond is not charged on lodgers entering into lodging agreements.

26 The first defendant said that under the first and second Agreements Ms Robic lodged at the respective properties with other lodgers, sharing use of the common areas such as the kitchen, laundry bathroom and passage ways. Under cl 6 she did not have exclusive use of or possession of her room and the licensor at all times had complete control over the respective properties and the room in which she lodged. He said that he checked the security of the premises on a regular basis by walking through the properties and checking windows, doors, fences and gates. He referred to entering her room to lock windows and of advising her that he had done this.

27 The first defendant said that generally on behalf of the relevant defendant company for a particular property, he would conduct property inspections of the lodgers' bedrooms, often without giving any notice. The giving of notice of property inspections was not provided for under the lodging agreement. He said that as an ongoing policy the defendants continuously amended their lodging agreements to reflect the current situations on the properties.

28 In responding to the affidavit of Alyson Szigligeti the first defendant said that as to the complaints made by lodgers the majority of the complaints are unjustified. He referred to various facts and matters in support of that contention. He went on to say that over a period of 20 years the defendants have had some 1200 to 1500 lodgers enter into lodging agreements on their properties. Lodgers stay, in some case, for up to 5 years although the majority of lodgers stay from 3 to 6 months. Most are travellers or students on short to mid-term stays. The majority of complaints have been settled and most have been settled in the relevant defendant's favour.

29 The first defendant said that the lodging agreements have evolved over the years and the current lodging agreement is completely different to those which have been issued in the past. Exhibited to his affidavit (as RGV 11) was a draft copy of the new lodging accommodation licence to be used in the immediate future. He said that he had met with legal representatives of the Department to try and resolve any issues about the new lodging agreement but the Department was not interested in this.

30 I pause to say that the concepts underlying the current or RGV 11 lodging licence are essentially similar to the earlier or Robic lodging agreements in that the subject matter of the transaction is said to be occupancy rights to a furnished room as a lodger but without conferring exclusive possession in respect of the same. However, the current agreement includes a recital in which it is said explicitly that the licence is not subject to the provisions of the RTA 1987 due to s 5 of that Act exempting agreements that grant occupancy rights to residential premises where the tenant is a lodger.

31 The current agreement includes reference in cl 2.3 to a lodging fee (rather than to the payment of rent) and there is reference in cl 2.6 to a performance bond. It is said also that the licensor has a right of access to the room. It is quite apparent, however, having regard to what is said in the recital, that the central issue I mentioned earlier remains a live issue in that the first defendant, and thus the defendant companies, contend that the subject rights do not amount to a tenancy within the meaning of the RTA 1987.

32 The first defendant in his second affidavit addressed the balance of convenience. He said that if he and the other defendants were enjoined in the manner proposed then the first defendant's businesses would be practically impossible to operate and would be at substantial risk of failing financially. The agreement documents currently used by the defendants are worded in a fashion intended to make it as clear as possible that the agreement being made is a lodging agreement and not a tenancy. If the proposed orders were made then the defendants would need to instantly re-document all existing lodging agreements. Further the defendants would need to prepare documents for all existing lodging agreements presently in existence containing what the defendants estimate might be the requisite wording of an injunction to the effect of that which is sought by the plaintiff. He would need also to arrange the drafting and printing of new agreement documentation for new business.

33 The first defendant went on to say that he seriously doubted whether the first defendant's business would be able to survive the expense and disruption which these eventualities would entail. There would be a strong possibility that as a result of lodgers' unhappiness and uncertainty at being called upon to re-sign agreements or to leave their lodgings, together with the trouble and expense of drafting and printing new agreement documentation, the first defendant's businesses would collapse.

34 The first defendant said further that orders of the kind proposed would introduce a risk that many lodgers would stop paying their lodging fees, especially if the Court ruling became the subject of media publicity. There was a risk that lodgers would abandon their obligations to pay for and care for their accommodation while at the same asserting the defendants were prevented from terminating occupancies.

35 It is against this background, that I come to the relevant statutory provisions.

36 Section 5(1) of the RTA 1987 states that the Act applies to any residential tenancy agreement. Section 3 defines a residential tenancy agreement as being any agreement, whether express or implied, under which any person for valuable consideration grants to any other person a right to occupy, whether exclusively or otherwise, any residential premises, or part of residential premises, for the purpose of residence. Residential premises are defined by s 3 as "premises that constitute or are intended to constitute a place of residence".

37 Importantly, s 5(2)(d) of the RTA 1987 provides that the Act does not apply where the occupant is a boarder or a lodger. The terms "boarder" and "lodger" are not defined in the Act.

38 I pause here to observe that the definition of "residential tenancy agreement", which refers to granting to any other person a right to occupy "whether exclusively or otherwise" any residential premises appears to effect a significant change to the position at common law. The conventional position at common law is reflected in the reasoning of the High Court in Radaich v Smith (supra) where it was held that in determining whether an instrument creates a lease as opposed to a licence, the decisive factor in favour of a lease is whether the right which the instrument confers is one to the exclusive possession of the premises for a term. However, it is clear that the definition of "residential tenancy agreement" has been framed in a manner which departs from the common law so that exclusive possession cannot be regarded as the crucial test. I will return to this aspect of the matter later.

39 The Act contains in Pt IV various provisions concerning the rights and obligations of owner and tenant. By s 27(1) a person shall not require or receive from a tenant or prospective tenant any monetary consideration for or in relation to entering into, renewing, extending or continuing a residential tenancy agreement other than rent and a security bond.

40 By s 3 a "security bond" means an amount payable by a tenant as security for the performance of his obligations under a residential tenancy agreement. By s 29(4) a person who receives a security bond paid in relation to a residential tenancy agreement shall forthwith give or cause to be given to the person paying the bond a receipt specifying the date on which the bond was received, the name of the person paying the bond, the amount paid and the premises in respect of which it was paid.

41 Section 82 of the Act provides that no person shall enter into any agreement or arrangement with intent either directly or indirectly to defeat, evade or prevent the operation of the Act.

42 Section 12(1)(l) of the FTA 1987 provides that a person shall not, in trade or commerce, in connection with the supply of goods or services make a false or misleading representation concerning the existence, exclusion or effect of any condition, warranty, guarantee, right or remedy.

43 By s 12(2) a person shall not, in trade or commerce, in connection with the disposal of an interest in land or in connection with the promotion by any means of the disposal of an interest in land make a false or misleading representation concerning the nature of the interest in land, the price payable for the land, the location of the land, the characteristics of the land, the use to which the land is capable of being put or may lawfully be put or the existence or availability of facilities associated with the land.

44 Section 74 of the FTA 1987 provides that the Supreme Court may grant an injunction where it is satisfied that a person has engaged or is proposing to engage in conduct that constitutes or would constitute a contravention of the Act. The power of the Court to grant an injunction may be exercised whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind and whether or not there is any imminent danger of substantial damage to any person.

45 By s 75 an injunction may be granted in respect of a contravention of a provision of any other legislation (such as the RTA 1987) administered by the Commissioner for Fair Trading. By s 76 an injunction may be granted whether or not there is an imminent danger of substantial damage to any person.

46 The plaintiff's claim against the defendants is that they have engaged, and continue to engage, in conduct in breach of s 27(1), s 29(4) and s 82(2) of the RTA 1987 and s 12(1)(l) and s 12(2)(b) of the FTA 1987. Counsel for the plaintiff submitted that the conduct alleged against the defendants is serious, prevalent, and significantly impinges upon consumer's rights.

47 The plaintiff submitted that s 74 and s 75 of the FTA 1987 when read in conjunction with s 76(5) of the Act give the plaintiff's standing to bring an application for an interim injunction. Section 74(1) is relied upon with respect to the defendants' alleged breaches of the FTA 1987. Section 75(1)(b) is relied upon with respect to the defendants' breaches of the RTA 1987.

48 Accordingly, it will be useful to look at the principles bearing upon the grant of injunction relief in circumstances of this kind.

49 The statutory power to grant an injunction is similar to that which exists as part of the Court's equitable jurisdiction. To obtain interim injunctions, the plaintiff should establish that there is a serious issue to be tried and that the balance of convenience favours that party: Australian Coarse Grain Pool Pty Ltd v Barley Marketing Board (No 1) (1982) 57 ALJR 425.

50 The likely success of the plaintiff at trial is a relevant factor to both the question as to whether there is a serious question to be tried and whether the balance of convenience favours granting the injunction: Bullock v Federated Furnishing Trades Society of Australia (No 1) [1985] FCA 19; (1985) 5 FCR 464 at 472. It has been said that where the application involves an element of public interest, the Court will be more ready to grant relief than where the application involves individual interests: Glev Pty Ltd & Glev Franchises Pty Ltd v Kentucky Fried Chicken Pty Ltd [1994] FCA 916; (1994) ATPR 41-299.

51 If common law damages will be an adequate remedy and the defendants will be able to pay them, an interlocutory injunction should not normally be granted: American Cyanamid Co v Ethicon Ltd [1975] UKHL 1; [1975] AC 396 at 408. If an order is sought in order to preserve the status quo, it is important to understand that the status quo is the state of affairs existing before the last change; that is, during the period immediately preceding the motion for interlocutory injunction: Garden Cottage Foods Ltd v Milk Marketing Board [1984] AC 130 at 140. The degree of likelihood that the plaintiff will succeed is a significant factor when the practical impact of the grant of interlocutory injunction is that the litigation is effectively determined: NWL Ltd v Woods [1979] 1 WLR 1294 at 1315.

52 In Commissioner for Fair Trading v Holz [2005] WASC 202 Le Miere J summarised the position under the FTA 1987 in this way at par 15:

"... The court has a very wide discretion in relation to the grant of interlocutory injunctions. That discretion must, however, be exercised in accordance with equitable principles. The court must be satisfied that there is a serious question to be tried. If there is a serious question to be tried then the court must consider the balance of convenience. Once the court is satisfied that there is a serious question to be tried, the strength or weakness of the plaintiff's case may become a relevant factor touching on the balance of convenience or the exercise of the discretion."

53 Let me turn now to the decided cases bearing upon the nature of tenancies and licence agreements.

54 I mentioned earlier that the High Court in Radaich v Smith (supra) treated exclusive possession as the crucial test of a tenancy at common law. However, in that case, the High Court quoted Lord Denning in Facchini v Bryson (1952) 1 TLR 1386 wherein his Lordship stated that in all the cases where an occupier has been held to be a licensee, there had been something in the circumstances such as a family arrangement, an act of friendship or generosity or such like to negative any intention to create a tenancy.

55 In the case of Torrisi v Oliver [1951] VicLawRp 54; [1951] VLR 380 the defendants occupied two rooms, one of which had no door, in the plaintiff's premises, and they shared the use of the kitchen and other conveniences in common with the occupants of other portions of the premises. The plaintiff did not reside on the premises but employed a manageress to live there and manage the premises and maintain those parts used in common by the occupants. Coppel AJ held that the defendants were not lodgers but tenants.

56 Coppel AJ at 385 doubted whether any guiding principle could be discovered from the cases more specific than this: that a tenancy of a room or rooms in a dwelling house will be shown to exist where the occupier has not only the sole right to occupy the room or rooms but has a right to exclude the landlord therefrom. This is sometimes expressed by saying that if the landlord retains control of the rooms in question, the occupier is a lodger and not a tenant.

57 Commonwealth v Bogle, Boreham & Clark [1953] HCA 10; (1953) 89 CLR 229 concerned the provision of a number of hostels by the Commonwealth Government for the accommodation of immigrant families with furniture, furnishings, fittings and equipment being at all times the property of the Commonwealth. Fullagar J noted at 257 that it was not contended that the residents of the hostels were tenants. He went on to say that having regard to the purpose of the hostels, to the character of the services and facilities provided, to the inclusive nature of the charge made, and to the fact that master keys of all the rooms were retained by officers of the Department, it seems clear that they were not tenants but lodgers.

58 In Noblett & Mansfield v Manley [1952] SASR 155 premises were let to "A", a pensioner, on a weekly tenancy. At "A's" request his daughter and son-in-law came to live with him on the premises for the purpose of looking after him. "A" continued to pay the rent. His daughter and son-in-law made no payment to him, but in return for their accommodation looked after him and provided meals for him. On "A's" death the daughter and son-in-law claimed to be entitled to continue in occupation of the premises pursuant to provisions of the applicable tenancy legislation. Mayo J held that the daughter and son-in-law were lodgers and were therefore not entitled to continue in occupation.

59 His Honour said at 158 that the primary and usual meaning of "lodger" is one who resides as an inmate in another person's house, paying a certain sum periodically for the accommodation, or one who occupies an hired room in another person's house. A boarder is one who has his food, or food and lodging, at the house of another for compensation; one who lives in a boarding house or with a family as one of its members, at a fixed rate; one who has food at another's table, or meals and lodgings in his house, for pay, or compensation of any kind. In ordinary circumstances with both lodger and boarder, legal possession remains in the person who provides room or rooms, or meals. He retains possession and control over rooms and means of ingress and egress but grants licence to guests who pay, or give consideration for the privilege.

60 In Street v Mountford [1985] 2 AC 809 the landlord granted the appellant the right to occupy a furnished room under a written agreement which stated that the appellant had the right to occupy the room at a certain licence fee and that the "personal licence" was not assignable and that the appellant accepted that the licence did not and was not intended to give him a tenancy protected under the Rent Act. The appellant had exclusive possession of the room.

61 The House of Lords held that the test whether an occupancy of residential accommodation was a tenancy or licence was whether, on the true construction of the agreement, the occupier had been granted exclusive possession of the accommodation for a fixed or periodic term at a stated rent, and unless special circumstances existed which negatived the presumption of tenancy. A tenancy arose whenever there was a grant of exclusive possession for a fixed or periodic term at a stated rent.

62 Lord Templeman observed at 292 that there was no doubt that the traditional distinction between a tenancy and a licence of land lay in the grant of land for a term at a rent with exclusive possession. He went on to say at 293 that in the case of residential accommodation there is no difficulty in deciding whether the grant confers exclusive possession. An occupier of residential accommodation at a rent for a term is either a lodger or a tenant. The occupier is a lodger if the landlord provides attendance or services which require the landlord or his servants to exercise unrestricted access to and use of the premises. A lodger is entitled to live in the premises but cannot call the place his own.

63 Lord Templeman cited with approval observations by Blackburne J in Allan v Liverpool Overseers [1874] LR 9 QB 180 at 191 that a lodger in a house, although he has the exclusive use of rooms in the house, in the sense that nobody else is to be there, and though his goods are stowed there, yet he is not in exclusive occupation in that sense, because the landlord is there for the purpose of being able, as landlords commonly do in the case of lodgings, to have his own servants to look after the house and the furniture, and has retained to himself the occupation, though he has agreed to give the exclusive enjoyment of the occupation to the lodger.

64 Lord Templeman said further that if on the other hand residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor services, the grant is a tenancy; any express reservation to the landlord of limited rights to enter and view the state of the premises and to repair and maintain the premises only serves to emphasise the fact that the grantee is entitled to exclusive possession and is a tenant.

65 In Radaich v Smith (supra) Windeyer J observed at 22 that the fundamental right which a tenant has that distinguishes his possession from that of a licensee is an interest in land as distinct from a personal permission to enter the land and use it for some stipulated purpose or purposes. The presence of an interest will be determined by seeing whether the grantee was given a legal right of exclusive possession of the land for a term or from year to year or for a life or lives. If he was, he is a tenant. A reservation to the landlord either by contract or statute, of a limited right of entry, as for example to view or repair, is, of course, not inconsistent with the grant of exclusive possession.

66 The plaintiff submitted that the substance of an agreement overrides the form or name given to the agreement. The fact that the Robic agreements and the current occupancy agreement are described as lodging licences is therefore not determinative of the nature of the legal interests of the parties to that agreement, or decisive of the central issue. Moreover, proper weight must be given to the statutory definition of a residential tenancy agreement which embraces any agreement granting a right to occupy, "whether exclusively or otherwise", any residential premises or part of residential premises "for the purpose of residents". The plaintiff submitted that the lodging agreements under notice in the present case fall within the definition of "residential tenancy agreement" and are thus covered by the RTA 1987.

67 Counsel for the plaintiff submitted that the Robic and Wolfven Agreements have various significant features that point to such a conclusion, namely, none of the defendants (or their representatives) reside at any of the premises, the agreements do not provide for the provision of meals or services of a kind which might be expected under a lodging arrangement, there is evidence giving rise to a serious issue to be tried that the occupants would have exclusive possession of the bedroom they occupied, the furniture deposit fee referred to in the Robic agreement is clearly a bond (as is the "performance bond" in the current lodging agreement), the so-called lodging fee is clearly in the nature of rent and suggests that an attempt is being made to avoid the provisions of the RTA 1987.

68 The plaintiff submitted that the presence of complaints and related legal proceedings gave rise to a serious issue to be tried that the first defendant (as he himself acknowledged) was familiar with the subject legislation. This and other evidence indicated that the defendants had consciously embarked upon a persistent course of conduct which amounted to non-compliance with the requirements of the RTA 1987 in respect of the matters relied on particularly by the plaintiff and which was aimed at by-passing the requirements of the legislation.

69 As to the balance of convenience, it was said that there would be minimal prejudice to the defendants in granting the interim relief sought. The proposed orders would not prevent the defendants from carrying on the business of letting out premises for residential habitation. What was sought effectively was that the defendants comply with their legal obligations and refrain from contravening the provisions of the RTA 1987 and FTA 1987 referred to earlier. It was said that the public needs the protection afforded by the proposed orders.

70 The plaintiff acknowledged that the orders were in part mandatory in that they require the defendants to provide receipts to tenants with respect to security bonds paid to the defendants and payment of those bonds to the bond administrator as defined in Sch 1 to the RTA 1987 so as to ensure that the requirements of s 29(4)(b) in that Schedule of the RTA 1987 were complied with. It was said that the mandatory orders sought were unlikely to cause inconvenience to the defendants in any material way. Conversely, they would afford tenants a measure of security in ensuring that their bond moneys were properly preserved and lawfully distributed at the end of their tenancy.

71 For all of these reasons it was submitted that the balance of convenience strongly favoured the granting of interim injunctions in terms of the proposed orders, that is, in terms of the notice of motion for interim injunctions dated 30 June 2005 in which the orders sought are described with particularity.

72 The defendants submitted that there was no serious issue to be tried in that the subject agreements and the actions of the defendants complained of did not infringe the statutory provisions relied upon by the plaintiff. It was said that the subject agreements clearly did not confer exclusive possession and proper weight should be given to the express agreement between the parties that the arrangements made between them amounted to licensing arrangements. Properly interpreted, the subject occupancy agreements were not intended to and did not confer an interest in the subject land.

73 The defendants submitted that in accordance with the express provisions of the subject agreements and the evidence before the Court it was allowable, and indeed the practice, for the first defendant on behalf of the owners of the premises in question to enter the rooms of the occupants and shared common areas at will without the need to notify the lodgers.

74 The first defendant also retained the keys to all rooms. The purposes of such access ranged from the provision of mediation services to checking of security of the premises and provision of repairs.

75 These facts and matters were said to be all indicia that there was no exclusive possession. Further, having regard to the decided cases, the bare fact of occupation, even sole occupation of a room, will not make the person a tenant.

76 It was said the defendants' lodging agreements were not in form or substance residential tenancy agreements in circumstances where the occupant was a lodger, and consequently the RTA 1987 did not apply and there were no contraventions committed by the defendants of the relevant Acts, or likely to be committed.

77 As to the balance of convenience, the defendants relied upon the facts and matters referred to in the first defendant's affidavit sworn 19 August 2005. It was said further that there would be minimal prejudice to the plaintiff if interim injunctive relief was not granted. Conversely, the granting of the interim injunctions would be heavily prejudicial to the business of the defendants and would severely limit if not eliminate the income-producing capability of the defendants. The defendants have operated their business for about 20 years and an interim injunction, if granted, would have the effect of depriving the defendants of their income. It was said further that the event of the matter proceeding to trial damages would be an adequate remedy.

78 In the course of earlier discussion I noted that the traditional distinction between a tenancy and a licence of land lay in the grant of land for a term at a rent with exclusive possession. However, I noted also that proper weight must be given to the statutory definition of "residential tenancy agreement" which means any agreement, whether express or implied, under which any person for valuable consideration grants to any other person a right to occupy, whether exclusively or otherwise, any residential premises, or part of residential premises, for the purpose of residence. It is clear from the definition that as a consequence of statutory reform an agreement can be characterised as a residential tenancy agreement notwithstanding that the rights conferred upon the occupant do not include exclusive possession.

79 Thus, in the circumstances of the present case, it does not necessarily follow that Saskia Robic or an occupant of any part of the subject premises pursuant to the current accommodation agreement is not to be regarded as a party to a residential tenancy agreement simply because the subject agreements do not confer rights of exclusive possession and the proprietor of the premises is at liberty to enter the subject premises using keys retained for that purpose. Moreover, it is apparent from the reasoning of the High Court in Radaich v Smith (supra) that descriptive terms such as "lodging accommodation licence" or "lodging licence" cannot be treated as determinative of the relationship between the parties. Their relationship is determined by the law and not by the label they choose to put upon it.

80 However, it must be kept in mind, as I noted in earlier discussion, that by s 5(2)(d) of the RTA 1987 the Act does not apply to any residential tenancy agreement where the tenant is a boarder or lodger.

81 The decided cases indicate that an occupier of residential accommodation at a rent for a term is either a lodger or a tenant. The occupier is a lodger if the landlord provides attendance or services which require the landlord or his servants to exercise unrestricted access to and use of the premises. In other words, a lodger is entitled to live in the premises but cannot call the place his own. He resides essentially as an inmate in another person's house.

82 When I apply this reasoning to the circumstances of the present case, I consider, as to the Robic and Wolfven agreements and the current agreement, that occupants pursuant to those agreements should be characterised as tenants. The agreements in question allow for the occupant in question to lead essentially an independent existence and that appears to be how the various premises were conducted. It is true that provision is made for the proprietor to enter each part of the premises but the services supposedly provided as an adjunct to the right of entry, such as inspection for the purpose of security or repair, or in relation to the mediation of disputes, are not of the domestic kind usually associated with a boarding house or the provision of services to lodgers. There is no provision of meals or housekeeping services of a kind which might be expected under a lodging arrangement.

83 When I draw together these various considerations I am unable to conclude that occupants of the subject premises pursuant to the former accommodation agreements or under the new accommodation agreement can be characterised as persons residing as an inmate in another person's house.

84 I am satisfied on the basis of the evidence relied upon by the plaintiff that there is a serious issue to be tried of the kind contended for by the plaintiff; that is, that the subject agreements should properly be characterised as residential tenancy agreements and are covered by the provisions of the RTA 1987. I am satisfied also that the requirements of the RTA 1987 and the FTA 1987 have not been complied with in the various respects identified by the plaintiff in the presentation of its case. This lack of compliance is due to the first defendant's stance, namely, that the RTA 1987 does not apply to the subject agreements.

85 Further, for the reasons given by the plaintiff, I consider that the balance of convenience weighs in favour of the grant of restraining orders. The plaintiff is seeking to enforce remedial legislation enacted with a view to protecting the public interest. The orders sought will not preclude the defendants from letting out their premises and carrying on their business, although it will be necessary for them to make adjustments to the accommodation agreements and the manner in which they conduct the businesses. I am not persuaded that this will give rise to prohibitive expense or cause the businesses to fail, for the first defendant himself has said that he is in a habit of revising his accommodation agreements from time to time and responding to changed circumstances.

86 For the reasons I have given I will make orders in the terms proposed by the plaintiff in its summons dated 30 June 2005. I will hear from the parties as to whether any adjustments or further orders are required including orders as to costs or otherwise.

"Against the First Defendant

1. The First Defendant, whether personally, by his servants or agents or otherwise be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, representing to any current, former or prospective occupant ('Occupant') of residential premises of the nature described in 'Annexure A' ('Premises') whether orally or in writing or by conduct that the Occupant is, was or will be a boarder, lodger or licensee of the Premises or anything other than a tenant.

2. The First Defendant, whether personally, by his servants or agents or otherwise, be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, making a claim or demand or bringing any court action against any Occupant of any Premises for payment of money by way of penalty for the late payment of rent or occupancy fee however so described with respect to that Occupant's occupation of the Premises.

3. The First Defendant, whether personally, by his servants or agents or otherwise, be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, entering into a written agreement with any Occupant of any Premises with respect to that Occupant's occupation of those Premises, which agreement is expressed in such a way as to purport to be an agreement other than a 'residential tenancy agreement' for the purposes of, and subject to, the provisions of the Residential Tenancies Act 1987 (WA) ('the RTA').

4. The First Defendant, whether personally, by his servants or agents or otherwise, be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant, making any representation to any Occupant of any Premises whether orally or in writing or by conduct, that that Occupant's interest in, or occupation of, those Premises can be terminated in circumstances other than in accordance with the provisions of Part V of the RTA.

5. The First Defendant, whether personally, by his servants or agents or otherwise, be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, terminating a residential tenancy agreement in circumstances other than in accordance with the provisions of Part V of the RTA.

6. The First Defendant, whether personally, by his servants or agents or otherwise, be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, making any representation to any Occupant of any Premises whether orally or in writing or by conduct, that that Defendant or some other person may recover or seek to recover possession of the Premises from the Occupant in a manner that is a manner other than that provided for by s80 of the RTA.

7. The First Defendant, whether personally, by his servants or agents or otherwise, be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, recovering or seeking to recover possession of Premises from the Occupant in a manner that is a manner other than that provided for by s80 of the RTA.

8. The First Defendant, whether personally, by his servants or agents or otherwise, be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, making any representation to any Occupant of any Premises whether orally or in writing or by conduct, that that Defendant or any other person may, at the end of the Occupant's tenancy, retain and not remit to the Occupant any security bond monies however so described in circumstances other than where the Occupant has caused damage to the Premises.

9. The First Defendant, whether personally, by his servants or agents or otherwise, be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, making any representation to any Occupant of any Premises whether orally or in writing or by conduct, that that Defendant or any other person may retain the Occupant's personal property in satisfaction of, or as security in relation to, any actual or purported claim any of the Defendants have against the Occupant.

10. The First Defendant, whether personally, by his servants or agents or otherwise, be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, retaining an Occupant's personal property in satisfaction of, or as security in relation to, any actual or purported claim any of the Defendants have against the Occupant.

11. The First Defendant, whether personally, by his servants or agents or otherwise, be required until judgment or further order to:

i. Forthwith upon receipt of a security bond however so described from an Occupant of Premises, give or cause to be given to that Occupant a receipt in accordance with the requirements of s29(4)(a) of the RTA; and

ii. pay to the Bond Administrator any security bond however so described received from an Occupant of Premises in accordance with the requirements of s29(4)(b) and Schedule 1 of the RTA.

Against the Corporate Defendants:

12. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise be restrained until judgment or further order from representing to any Occupant of any Premises whether orally or in writing or by conduct that the Occupant is, was or will be (as the case may be) a boarder, lodger or licensee of the Premises or anything other than a tenant.

13. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise be restrained until judgment or further order from making a claim or demand or bringing any court action against any Occupant of any Premises for payment of money by way of penalty for the late payment of rent or occupation fee however so described with respect to that Occupant's occupation of the Premises.

14. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise be restrained until judgment or further order from entering into a written agreement with any Occupant of any Premises, with respect to that person's occupation of those Premises, which agreement is expressed in such a way as to purport to be an agreement other than a 'residential tenancy agreement' for the purposes of, and subject to, the provisions of the RTA.

15. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise be restrained until judgment or further order from making any representation to any Occupant of any Premises whether orally or in writing or by conduct, that the Occupant's interest in, or occupancy of, those Premises can be terminated in circumstances other than in accordance with the provisions of Part V of the RTA.

16. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise be restrained until judgment or further order from terminating a 'residential tenancy agreement' in circumstances other than in accordance with the provisions of Part V of the RTA.

17. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise be restrained until judgment or further order from making any representation to any Occupant of any Premises whether orally or in writing or by conduct, that that Defendant or some other person may recover or seek to recover possession of the Premises from the Occupant in a manner that is a manner other than that provided for by s80 of the RTA.

18. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise be restrained until judgment or further order from recovering or seeking to recover possession of Premises from an Occupant in a manner that is a manner other than that provided for by s80 of the RTA.

19. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise, be restrained until judgment or further order from making any representation to any Occupant of any Premises whether orally or in writing or by conduct, that that Defendant may, at the end of the Occupant's tenancy, retain and not remit to the Occupant any security bond monies however so described in circumstances other than where the Occupant has caused damage to the Premises.

20. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise be restrained until judgment or further order from making any representation to any Occupant of any Premises whether orally or in writing or by conduct, that that Defendant may retain the Occupant's personal property in satisfaction of, or as security in relation to, any actual or purported claim any of the Defendants have against the Occupant.

21. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise, be restrained until judgment or further order from retaining an Occupant's personal property in satisfaction of, or as security in relation to, any actual or purported claim any of the Defendants have against the Occupant.

22. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise, be restrained until judgment or further order to:

i. Forthwith upon receipt of a security bond however so described from an Occupant of Premises, give or cause to be given to that Occupant a receipt in accordance with the requirements of s29(4)(a) of the RTA; and

ii. pay to the Bond Administrator any security bond however so described received from an Occupant of Premises in accordance with the requirements of s29(4)(b) and Schedule 1 of the RTA.

23. The parties have liberty to apply on 5 working days' notice to dissolve or vary these orders.

Annexure A

Premises owned by any Defendant in any capacity whatsoever including, but not limited to, a house, apartment, townhouse, unit, flat or other similar dwelling situated in Western Australia capable of being let to a third party or third parties individually or jointly for a fee or any other consideration for the purposes of residential accommodation."

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

CITATION : COMMISSIONER FOR FAIR TRADING -v- VOULON & ORS [2005] WASC 229 (S)

BILTRAD GLOBAL INVESTMENT CORPORATION PTY LTD (ACN 009 270 900)

PERPETUAL CAPITAL INVESTMENTS PTY LTD (ACN 009 186 412)

Injunction - Application by unrepresented litigant to vary or discharge interim injunction - Obligation to acknowledge requirements of Residential Tenancies Act 1987(WA) - Breach of orders may constitute contempt of court - Allegation of deprivation of income and livelihood and irreversible prejudice - Variation allowed

Application for in person litigant to represent corporate defendants - Request for leave to file proposed statement of defence on behalf of corporate defendants by in person defendant refused - No person other than a certificated legal practitioner shall engage in legal practice - Body corporate may not carry on any proceedings other than by a solicitor - Body corporate may not enter an appearance in an action or defend it otherwise than by a solicitor - No new principles

Rules of the Supreme Court 1971 (WA), O 4 r 3(2), O 12 r 1(2), O 10, O 20 r 13

Application by first defendant to represent corporate defendants refused

Plaintiff : Department of Consumer & Employment Protection

Commissioner for Fair Trading v Voulon & Ors [2005] WASC 229

Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178; (2000) 22 WAR 372

Schagen v The Queen (1993) 8 WAR 410

1 HASLUCK J: An application has been made in these proceedings to vary certain restraining orders made previously and for related orders. Accordingly, I must begin by looking at the background to the application.

2 The plaintiff, the Commissioner for Fair Trading, sought relief by way of interim injunctions pursuant to provisions of the Fair Trading Act 1987 (WA) in respect of certain alleged infringements of the Residential Tenancies Act 1987 (WA). The central issue was whether the occupants of residential premises owned and operated by the defendants were tenants as distinct from lodgers.

3 The plaintiff contended that the occupants were tenants and deserving of the protection afforded by the Residential Tenancies Act. The defendants submitted that they were lodgers with the result that the relevant provisions of the Act did not apply. The first defendant acknowledged that he was the spokesman for and the person principally involved in the management of the corporate defendant.

4 On 27 October 2005 I delivered a written judgment in favour of the plaintiff to which was annexed the various restraining orders made on that occasion: Commissioner for Fair Trading v Voulon & Ors [2005] WASC 229.

5 I held that there was a serious issue to be tried of the kind contended for by the plaintiff; that is, that the agreements being utilised by the first defendant to evidence the arrangements made with occupants of the subject premises should properly be characterised as residential tenancy agreements to which the provisions of the Residential Tenancies Act applied. I was satisfied also that the requirements of the Residential Tenancies Act and the Fair Trading Act had not been complied with in various respects identified by the plaintiff in the presentation of its case. This lack of compliance was due essentially to the first defendant's stance, namely, that the Residential Tenancies Act did not apply to the subject agreement.

6 Further, I was of the view that the balance of convenience weighed in favour of the grant of restraining orders. The plaintiff was seeking to enforce remedial legislation enacted with a view to protecting the public interest. The orders sought did not preclude the defendants from letting out their premises and carrying on their business, although it would be necessary for them to make adjustments to the accommodation agreements in the manner in which they conducted the businesses. I was not persuaded that this would give rise to prohibitive expense or cause the businesses to fail, for the first defendant himself had said that he was in the habit of revising his accommodation agreements from time to time and responding to changed circumstances.

7 The restraining orders dated 27 October 2005 were lengthy and amounted to 25 paragraphs in all. I pause to note, as these orders are important for present purposes, that orders 2 and 13 read as follows:

"2. The First Defendant, whether personally, by his servants or agents or otherwise be restrained until judgment or further order from directly, or being involved in the conduct of the Second to Fifth Defendant in, representing to any current, former or prospective occupant ('Occupant') of residential premises of the nature described in 'Annexure A' ('Premises') whether orally or in writing or by conduct that the Occupant is, was or will be a boarder, lodger or licensee of the Premises or anything other than a tenant.

13. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise be restrained until judgment or further order from representing to any Occupant of any Premises whether orally or in writing or by conduct that the Occupant is, was or will be (as the case may be) a boarder, lodger or licensee of the Premises or anything other than a tenant.

...

Annexure A

Premises owned by any Defendant in any capacity whatsoever including, but not limited to, a house, apartment, townhouse, unit, flat or other similar dwelling situated in Western Australia capable of being let to a third party or third parties individually or jointly for a fee or any other consideration for the purposes of residential accommodation."

8 The defendants are now required to file a statement of defence pursuant to the Rules of the Supreme Court 1971 (WA) and related programming orders so that the matter can proceed to trial. It seems that this has given rise to a decision by the first defendant to dispense with the services of his former legal advisers, Corser & Corser, and to raise the matters that are now before me, namely, an application for leave to file a statement of defence on behalf of the corporate defendants and directions that the first defendant be at liberty to represent those defendants. Further, the first defendant has brought on an application to vary or discharge the 27 October 2005 restraining orders previously made. These applications are supported by an affidavit of the first defendant sworn 27 April 2006 and a further affidavit by the first defendant sworn 4 May 2006.

9 I digress briefly to note that at the hearing before me a legal practitioner from Corser & Corser appeared to confirm that although the law firm in question had not formally withdrawn as solicitors for the corporate defendants both she and the firm were presently without instructions. She sought an order pursuant to O 8 r 7 of the Rules allowing for withdrawal. The first defendant confirmed, as spokesman for himself and the corporate defendants, that the instructions of the law firm had been terminated and he had no objection to the proposed withdrawal. Counsel for the plaintiff did not object. In these circumstances, I was prepared to make the order sought.

10 This brings me to the first defendant's application to represent the corporate defendants and for leave to file a defence for the second to fifth defendants.

11 The first defendant says in his affidavit sworn 4 May 2006 that by virtue of his sole directorship of the second to fifth defendants he is authorised to swear the affidavit on their behalf and, by implication, that he is authorised to apply to lodge a defence for those defendants.

12 The first defendant says further in his affidavit that by letter dated 27 April 2006 to the Acting Principal Registrar he sought leave to file the proposed defence. He was then advised that he was required to file a formal application seeking leave to file a defence. I note in passing that the proposed statement of defence simply admits certain of the allegations in the statement of claim but then says in par 4 and par 5 that in relation to pars 7 to 181 of the statement of claim the first to fifth defendants deny each and every allegation and deny that the plaintiff is entitled to the relief sought or to any relief whatsoever. The proposed statement of defence makes no attempt to deal with the particulars of the claim being advanced against the defendants or to set up a positive line of defence or any reason in law as to why the claim cannot be made out. This is contrary to O 20 r 13 which requires that every pleading must contain the necessary particulars of any defence. The general rule is that a party is entitled to a statement of the opponent's case sufficiently clear to allow him or her a fair opportunity to meet it: Dare v Pulham [1982] HCA 70; (1982) 148 CLR 658 at 664.

13 It will be useful at this point if I refer also to the first defendant's affidavit of 27 April 2006. This affidavit purported to be directed principally to the application to vary the restraining orders previously made but the contents of it arguably had a bearing upon the other issues before me.

14 The first defendant said in his 27 April affidavit that the application to vary is made pursuant to par 23 of the 27 October interim order (in fact par 24) which allow to the parties the liberty to apply to dissolve the various orders; pursuant to s 76(7) of the Fair Trading Act; pursuant to the Court's inherent jurisdiction to vary or discharge a provisional or interlocutory order.

15 The first defendant went on to say that he was presently 43 years of age and left school at 15 years of age. Since January 1998 his primary source of income has been derived from managing or operating businesses that provide boarding or lodging accommodation services to individuals, such businesses being conducted either in his own name or through his various corporate entitles including the second to fifth defendants. He said that the agreements used in respect of the accommodation services were tailored to suit the specific requirements of the first to fifth defendants including the particular dwellings and the particular circumstances of each individual occupant or occupants of those dwellings. He said that he wished to continue to manage or operate those businesses through his corporate entities and to commence a new business, namely, offering holiday accommodation services to individuals. He exhibited to his affidavit certain "precedent or pro forma agreements" that he wished to use upon the basis that such agreements are exempt pursuant to s 5(2)(d) and s 5(2)(e) of the Residential Tenancies Act.

16 I pause here to remind myself of certain statutory provisions that were dealt with at greater length in my earlier judgment. In summary, s 5(1) of the Residential Tenancies Act states that the Act applies to any residential tenancy agreement. Section 3 defines a residential tenancy agreement as being any agreement, whether express or implied, under which any person for valuable consideration grants to any other person a right to occupy, whether exclusively or otherwise, any residential premises, or part of residential premises, for the purpose of residence. Residential premises are defined as "premises that constitute or are intended to constitute a place of residence".

17 Section 5(2)(d) of the Act provides that the Act does not apply where the occupant is a boarder or a lodger. Section 5(2)(e) provides that the Act does not apply to any residential tenancy agreement where the agreement is bona fide entered into for the purpose of conferring on a person a right to occupy premises for a holiday. The Act contains various provisions concerning the rights and obligations of owner and tenant which are clearly designed to protect the position of consumers seeking to obtain accommodation.

18 The first defendant went on to say in his 27 April affidavit that the interim restraining orders, as presently framed, preclude him and each of his entities from carrying on lawful business activities, namely, boarding accommodation, lodging accommodation and holiday accommodation. He is conscious that if the defendants breach the interim orders in any material way that such conduct could constitute a contempt of court. The restraining orders are expressed to continue until judgment in these proceedings and, unless the orders are varied, he will be deprived of his usual income and livelihood and suffer irreversible prejudice, as it seems that the action may not be brought to trial until some time in 2007 or possibly later.

19 The first defendant said that he is presently relying on the support of family and friends to get by on a day-to-day basis. He instructed his former solicitors to cease acting on his behalf, and on behalf of the corporate defendants, as he could no longer afford to pay legal fees being incurred to defend the proceedings. He referred also to the plaintiff not being required to provide the usual undertaking as to damages as a pre-condition to the grant or continuation of the injunction.

20 The defendant referred also to communications with the Commissioner for Fair Trading prior to the commencement of proceedings which, on his account, were aimed at resolving the matters in issue. It is said that both then and later he failed to receive any satisfactory response. In the period 10 November 2005 to 1 March 2006 he has sent approximately 20 emails to the plaintiff's legal representative in an attempt to resolve all outstanding issues in the proceedings. This has not produced a satisfactory response. It is for these reasons that an order is sought in terms of the first defendant's minute of proposed final order dated 27 April 2006 which was submitted to me at the hearing.

21 I will not traverse the first defendant's minute of proposed final order in its entirety. However, in essence, orders are sought that the first to fifth defendants shall have leave to negotiate or contract with any prospective third party or parties in accordance with proposed agreements annexed to the proposed orders. The thrust of the documents is outwardly to acknowledge an obligation to comply with the provisions of the Residential Tenancies Act but with that compliance being arguably structured so as to bring to account the exemptions allowed for in respect of boarding accommodation, lodging accommodation and holiday accommodation.

22 Before turning to the precise effect of the prohibition in the Rules of the Supreme Court against a company being represented otherwise than by a solicitor, it will be useful to view the relevant provisions in a context established by the previously decided cases and by legislation bearing upon the matter in question. My reasoning in that regard is set out in full in the judgment I delivered in Eastern Metropolitan Regional Council v Four Seasons Construction Pty Ltd [2000] WASC 178; (2000) 22 WAR 372. Accordingly, I will simply summarise the main points made in the course of the discussion in that case.

23 A corporation in the common law sense is simply a legal device by which rights and duties are attributed to a fictional entity equated for many purposes to a natural person. Corporations law now allows for a company to be incorporated on the application of only one person and to exist as a single shareholder company, if that is desired. Nonetheless, the overriding concept is that a company is a distinct entity and its rights and liabilities must be viewed separately from the individuals involved in its operations.

24 Section 123 of the Legal Practice Act 2003 (WA) provides that no person other than a certificated legal practitioner shall engage in legal practice. Nonetheless, this provision is not to be construed as preventing a party from appearing or defending in person or appearing before a court if that appearance is authorised by law. The effect of s 5 of the Interpretation Act 1984 (WA) is that the term "person" is to be construed as including a company.

25 Order 4 rule 3(2) of the Rules of the Supreme Court provides that a body corporate may not begin or carry on any proceedings otherwise than by a solicitor. That must be read in close conjunction with O 12 r 1(2) which provides that a body corporate may not enter an appearance in an action or defend it otherwise than by a solicitor. The need for consistency suggests the notion of defending an action refers essentially to taking a step in the proceedings or carrying on the action.

26 It was held in the Four Seasons' case (supra) that in the light of O 12 r 1(2), and notwithstanding the inherent jurisdiction of the Supreme Court to regulate its proceedings, the sole shareholder and former director who sought to represent the subject company in that case was not at liberty to take a step in the action on behalf of the respondent company. To allow him to file and rely upon his affidavits would be to allow him to "defend" the proceedings and his application to do so should be refused. The Court does not have power to dispense with the explicit requirements of the Rules with the result that, even in exceptional circumstances, an individual is not at liberty to take a step in the action on behalf of a company.

27 However, the Court can, pursuant to its inherent power to regulate its own proceedings, permit a person other than a duly qualified legal practitioner to address the Court or actively participate in proceedings, in rare and exceptional cases. See also Schagen v The Queen (1993) 8 WAR 410. It was pursuant to this latter power that at the hearing before me I allowed the first defendant to speak not only on his own behalf as a defendant seeking to vary the restraining orders but also for the limited purpose of seeking to explain to me the current situation of the corporate defendants and to confirm that the instructions given to their former legal advisers had been terminated.

28 I consider that I am bound to apply the ruling in the Four Seasons' case (supra) to the situation before me. I cannot and therefore will not grant leave to the first defendant to represent the corporate defendants or to take any step in the proceedings on their behalf including the filing of the proposed statement of defence. Further, and in any event, I consider that any supposed discretionary power to grant leave ought not to be exercised in favour of allowing leave because it has not been demonstrated as a matter of evidence that the corporate defendants cannot obtain legal representation. The rationale for the prohibition is that otherwise it might be open to unqualified persons to appear for a company and render the company liable to large impositions for costs without proper authority or regard for the position of the corporate entity as contrasted with the position of the individual who seeks to obtain, directly or indirectly, a personal benefit by purporting to speak on behalf of the company. I am of the view also that the proposed statement of defence is not in a satisfactory form and for that additional reason leave should not be allowed to the first defendant to file and serve such a document on behalf of the corporate defendants.

29 It follows from this ruling that I cannot give consideration to that part of the first defendant's 27 April affidavit in which it is suggested that the corporate defendants wish to vary the 27 October restraining orders and may be subject to prejudice if the orders are not varied. If those defendants wish to pursue an application to dissolve or vary the orders it will be necessary for them to be represented by a solicitor. However, it follows from earlier discussion that I am at liberty to consider the first defendant's application to vary the restraining orders upon the basis that he is an unrepresented litigant with an entitlement to appear before the Court on his own behalf.

30 The application to vary the orders was opposed by counsel for the plaintiff. In essence, it was put to me that the evidence sought to be relied upon was insufficient to warrant an extensive variation of the kind proposed. The Court was being asked to approve adjustments to the first defendant's mode of doing business which was in the nature of an advisory opinion about the proposed new agreements. This was inappropriate in circumstances where there was no justiciable dispute before the Court as to the bona fides of the first defendant and other issues as to the suitability of the proposed agreements and how they would be applied to particular occupants of premises. The restraining orders, like statutory provisions, could not be said to interfere with lawful activities so long as the first defendant and the corporate defendants simply complied with the requirements of the orders and of the provisions of the Residential Tenancies Act.

31 However, in an endeavour to clarify the nature of the obligations, counsel for the plaintiff indicated that the plaintiff would agree to par 2 and par 13 of the orders being varied to read as follows:

"2. The First Defendant, whether personally, by his servants or agents or otherwise be permanently restrained from directly, or being involved in the conduct of any of the Second to Fifth Defendants in, representing to any current, former or prospective occupant ('Occupant') of residential premises of the nature described in 'Annexure A' ('Premises') in connection with a current, past or prospective residential tenancy agreement of the nature described in 'Annexure B' ('Residential Tenancy Agreement'), whether orally or in writing or by conduct that the Occupant has, had or will have an interest in the Premises other than an interest under a Residential Tenancy Agreement.

13. The Second to Fifth Defendants and each of them, whether by their directors, servants, agents or otherwise, in connection with a Residential Tenancy Agreement, be permanently restrained from representing to any current, former or prospective Occupant whether orally, or in writing or by conduct that the Occupant has, had or will have an interest in the Premises other than an interest under a Residential Tenancy Agreement.

Annexure A

Premises owned by any Defendant in any capacity whatsoever including, but not limited to, a house, apartment, townhouse, unit, flat or other similar dwelling situated in Western Australia capable of being let to a third party or third parties individually or jointly for a fee or any other consideration for the purposes of residential accommodation.

Annexure B

A residential tenancy agreement being any agreement, whether express or implied, under which any person for valuable consideration grants to any other person a right to occupy, whether exclusively or otherwise, any Premises, or part of any Premises, for the purpose of residence but does not include a right of occupancy under or of a nature set out in s5(2) of the Residential Tenancies Act 1987."

32 I am not persuaded that the 27 October restraining orders previously made should be varied in the manner contended for by the first defendant. The proposed variation orders represent a fundamental departure from the justiciable issues that were under consideration at the time of the former hearing and which were dealt with at length in my previous judgment. I am persuaded by what has been put to me by counsel for the plaintiff that the orders proposed by the first defendant open up entirely new issues which would mean that the orders cease to reflect the interim relief that was thought to be appropriate. Accordingly, the first defendant's application to vary will be dismissed.

33 However, for the sake of clarification and bearing in mind that this proposal comes from the plaintiff, I am minded to approve a variation of the kind proposed in the plaintiff's minute mentioned earlier, save that, to be consistent with the relief previously granted, I consider that the defendants should not be "permanently restrained" but simply restrained until judgment, and the language of the proposed orders must be adjusted accordingly.

34 I will hear from the parties as to this aspect of the matter, and as to whether any further orders or directions are required. I will also give consideration to the question whether any further time should be allowed for the filing of statements of defence by the defendants.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (179 paragraphs)

Commissioner for Fair Trading v Voulon & Ors [2005] WASC 229 (27 October 2005)

Parties

Legislation Cited (3)

Cases Cited (11)