Croydon Park Apartments Pty Ltd v Wei

Supreme Court of NSW|2016-12-07|Before: Rothman J

Solicitors: Gadens Lawyers (Plaintiff) Seniors Rights Service (Defendant) File Number(s): 2016/254626 Decision under appeal Court or tribunal: NSW Civil & Administrative Tribunal (Appeal Panel) Citation: Wei v Croydon Park Apartments Pty Ltd [2016] NSWCATAP 175 Date of Decision: 28 July 2016 Before: Patten PM; Titterton SM File Number(s): AP 16/11656

Judgment

HIS HONOUR: The plaintiff (Croydon Park Apartments Pty Ltd ACN 166243330) seeks leave to appeal a decision of an Appeal Panel (the "Appeal Panel") of the NSW Civil & Administrative Tribunal ("NCAT") and seeks that the orders and decision of the Appeal Panel be set aside. Further, the plaintiff seeks the reinstatement of the NCAT order made at first instance. The question is said to turn on the construction of the Retirement Villages Act 1999 ("the Act") and whether service of an ordinary notice can terminate a periodic tenancy governed by the Act if followed by a suit for termination and possession.

Facts

On 14 May 2015, the plaintiff, being the landlord for the premises at 12/1 Fabos Place, Croydon Park, gave the defendant notice. On 16 May 2015, the defendant (tenant) replied informing the plaintiff that she, the tenant, would not give vacant possession.
A second notice was sent by the plaintiff (landlord) on 18 August 2015, indicating that the landlord intended to seek an order from NCAT, terminating the tenant's residence contract.
On 20 August 2015, the plaintiff sought an order for possession from NCAT and cited, as a reason for the order for possession, a breach by the defendant of the parties' agreement. Reliance was also placed upon s 134 of the Act.
On 18 February 2016, NCAT made orders for termination of the tenant's occupancy and for the plaintiff to have and obtain possession of the premises. On 28 July 2016, the Appeal Panel of NCAT quashed those orders.

The Appeal Panel Decision

The Appeal Panel allowed the appeal against the orders made at first instance, quashed orders one and two of the orders made by NCAT at first instance and, in lieu, ordered that the proceedings in NCAT be dismissed. No order issued as to the costs of the appeal.
The Appeal Panel remarked that the facts were uncontentious and summarised the foregoing, together with the following facts: 1. The defendant commenced occupation of the unit in the retirement village on 21 June 2006. The occupation was purportedly under a residential tenancy agreement with a fixed term expiring on 21 January 2007; 2. On 22 January 2007, after the conclusion of the fixed term, the defendant continued in occupancy of the premises under a continuing agreement, by reason of the further operation the provisions of the Act; 3. On 14 November 2013, the plaintiff acquired all of the land from the former operator of the retirement village and in February 2014, the plaintiff decided to convert the land holding into a strata scheme; 4. On 5 March 2014, time expired for the residents of the retirement village to accept an offer to convert their continuing agreements into new leases with fixed terms in consideration of the payment of an amount of $5,000; 5. On 6 March 2014, the defendant elected not to accept such an offer (although it is not clear that the non-acceptance of an offer was an election) to convert her continuing agreement into a new lease; 6. In May 2015, the applicant determined to sell residential units within the strata scheme; 7. On 14 May 2015, the plaintiff served a Notice to Vacate upon the defendant purportedly under the provisions of the agreement; 8. On 16 May 2015, the defendant, as earlier stated, notified the plaintiff in writing that she declined to give vacant possession of the unit in which she resided; 9. On 25 May 2015, the plaintiff lodged a plan of strata subdivision affecting the unit; 10. On 10 July 2015, the subdivision plan was registered as Strata Plan 91299; 11. On 18 August 2015, the plaintiff served a Notice of Intention to Seek Termination on the defendant, purportedly pursuant to s 131(1) of the Act.
The Appeal Panel then recited a number of the provisions of the Act and extracted a number of terms of the Tenancy Agreement. The Tenancy Agreement contained certain standard terms and conditions. The decision of the Appeal Panel and also the recited terms of a Notice of Intention to Seek Termination were served, it was said, purportedly under the provisions of s 131 of the Act.
The Appeal Panel confirmed the correctness of the finding of the decision at first instance that the Notice of 18 August 2015, being the Notice purportedly under s 131 of the Act complied with all formal requirements of s 131 of the Act. That finding is not in issue in these proceedings.
The Appeal Panel then took the view that the Notice seemed "to assume a pre-existing breach of the terms of the Tenancy Agreement and this hypothesis was accepted by the Tribunal below". The Appeal Panel also remarked that there was an inherent assumption in the decision of NCAT at first instance that the defendant's occupancy and all rights could not be terminated except under the provisions of ss 132, 133, 134, 135, 136 and 136A of the Act.
The Appeal Panel commented that if a resident contract could only be determined pursuant to the foregoing provisions of the Act, then it would be an odd result if that protection could be rendered otiose so easily by the device of serving a Notice to Vacate, which was then breached.
The Appeal Panel described the first instance decision as one which allowed for the device to be successful. The Appeal Panel also summarised the plaintiff's submission as one in which the Act "does not interfere with the contractual relationships between the parties which, notwithstanding the Act, is capable of being terminated" under the Residential Tenancy Act 2010 ("Tenancy Act").
Further, the plaintiff's submissions before the Appeal Panel were that, as the Notice was issued pursuant to the contractual terms, it was valid and enforceable and a failure to provide vacant possession was a breach of the contract.
The Appeal Panel also summarised the plaintiff's submissions to the effect that s 199 of the Act does not apply to the tenancy, because the termination rights created by the terms of the contract are ancillary to the rights and obligations set out in the Act.
Ultimately, referring to an extract from the Minister's Second Reading Speech, the Appeal Panel were unpersuaded by the plaintiff's submissions. In addition, the Appeal Panel determined that "where a Residential Tenancy Agreement relates to premises within a retirement village, it constitutes a residence contract within the Act, unless it falls within the exclusionary provisions of para (sic) (c) or (d) of the definition of resident right. There is no suggestion that such exclusion applied in this case."
The Appeal Panel concluded that Pt 9 of the Act left no room for the application of inconsistent contractual rights, reinforced by s 199 of the Act. The Appeal Panel concluded that a Notice to Vacate, purporting to terminate a contract, was invalid, unless given in accordance with Pt 9 of the Act.
Over and above the foregoing, the Appeal Panel, relying on cl 31 of the Tenancy Agreement, did not allow the giving of notice in the manner suggested and concluded that, under the Tenancy Agreement, a residence contract was not terminated simply by a Notice to Vacate.
The Appeal Panel allowed the appeal and issued the orders to which earlier reference has been made.

Appeal rights

The plaintiff's Summons seeks leave to appeal, presumably under the terms of s 83 of the Civil and Administrative Tribunal Act 2013 ("NCAT Act"), which provides: "83 APPEALS AGAINST APPEALABLE DECISIONS (1) A party to an external or internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings. (2) A person on whom a civil penalty has been imposed by the Tribunal in proceedings in exercise of its enforcement or general jurisdiction may appeal to the appropriate appeal court for the appeal on a question of law against any decision made by the Tribunal in the proceedings. (3) The court hearing the appeal may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) the following: (a) an order affirming, varying or setting aside the decision of the Tribunal, (b) an order remitting the case to be heard and decided again by the Tribunal (either with or without the hearing of further evidence) in accordance with the directions of the court. (4) Without limiting subsection (3), the appropriate appeal court for an appeal against a civil penalty may substitute its own decision for the decision of the Tribunal that is under appeal. (5) Subject to any interlocutory order made by the court hearing the appeal, an appeal under this section does not affect the operation of the appealable decision of the Tribunal under appeal or prevent the taking of action to implement the decision."
The fact, if it be a fact, that the appeal raises a question of law does not, in and of itself, grant a right of appeal. Rather, it grants a right to seek leave of the Court to appeal. As a consequence, the terms of s 83(1) of the NCAT Act presupposes that something other than, or more than, simply raising of a question of law is to be considered on the grant of leave.
Nevertheless, the provision is one for the grant of leave, not the grant of special leave. The terms are technical terms, which have a different meaning.
Special leave ordinarily requires that the matter raised be of such importance that an appeal should lie, while leave, simpliciter, requires no public importance.
The defendant opposes the grant of leave. If leave be granted, the defendant opposes the appeal. Further, the defendant has filed a Notice of Contention, the terms of which do not need reciting. That Notice asserts the invalidity of the Notice to Terminate the Lease in the absence of a decision of and orders by NCAT under Pt 9 of the Act and submits that s 199 of the Act prohibits the plaintiff from contracting out of the Act.

Legislative Provisions

It is necessary to recite or summarise some legislative provisions. The Act, by s 4, defines a 'residence contract' as "a contract that gives rise to a residence right". The term "residence right" is defined in the following terms: "'residence right' of a person means the person's right to occupy residential premises in a retirement village, being a right arising from a contract: (a) under which the person purchased the residential premises, or (b) under which the person purchased shares entitling the person to occupy the residential premises, or (c) in the form of a lease, licence, arrangement or agreement of any kind, other than a residential tenancy agreement in the form prescribed under the Residential Tenancies Act 2010 : (i) that is entered into under Division 5 of Part 10, or (ii) that contains a term to the effect that this Act does not apply to the residential premises the subject of the agreement, or (d) in the form of any other contract of a kind prescribed by the regulations, or any other right of a kind prescribed by the regulations."
As can be seen from the foregoing a "residence right" is a right to occupy residential premises, inter alia, in the form of the lease etc. "other than a residential tenancy agreement in the form prescribed under the" Tenancy Act that is entered into under Div 5 of Pt 10 or that contains a term to the effect that the Act does not apply to the residential premises.
Part 9 of the Act deals with the termination of a residence contract the relevant definitions for which have been recited or summarised above.
Section 139 of the act is in the following terms: "139 OPERATOR NOT TO RECOVER POSSESSION OF PREMISES EXCEPT BY ORDER (1) A person must not (whether acting on his or her own behalf or on behalf of another): (a) enter, or attempt to enter, residential premises within a retirement village, or (b) remove, or attempt to remove, a resident from residential premises within a retirement village, or (c) take any other action that is intended, or is likely, to cause a resident to vacate residential premises within a retirement village, for the purpose of recovering possession of the residential premises otherwise than in accordance with this or any other Act or law. Maximum penalty: 200 penalty units. (3) A court before which proceedings for an offence under this section are brought may (in addition to any other penalty) order the person who committed the offence or any person on whose behalf that person acted to pay to the person entitled (or formerly entitled) to occupy the premises concerned such compensation as it thinks fit."
It is not submitted that the Residential Agreement was an agreement under Div 5 of Pt 10 of the Act. Nor do the terms of the Residential Agreement exclude the operation of the Act. As a consequence the Act governs the terms of the Residential Agreement.
If there were any inconsistency between the terms of the Act and the terms of the Tenancy Act, the Act is a specific provision that, in its terms, would override, in relation to the residential arrangements in a retirement village, the general provisions promulgated by the Tenancy Act. Moreover, the provisions of s 8(1)(b) of the Tenancy Act provide, expressly, that the Tenancy Act does not apply to "residence contracts within the meaning of the" Act.
There is no inconsistency between the operation of the Act and the Tenancy Act, relevant to the issues in this matter.

Submissions of the Plaintiff and Consideration

Essentially, the plaintiff contends that there is a complicated relationship between the operation of the Tenancy Act and the Act. That contention is unfounded.
In circumstances where, as here, there is no exclusion of the terms of the Act under an agreement between the landlord and the tenant, and the residential agreement is not one made under Div 5 of Pt 10 of the Act, the rights of each of the parties are governed by the terms of the Act and not by the terms of the Tenancy Act.
Moreover, as a consequence, none of the provisions of the Tenancy Act relevantly apply to the residential agreement between the plaintiff and the defendant. The only legislation that relevantly governs the provisions of that agreement is the provisions of the Act.
As a consequence reliance upon the provisions of the Tenancy Act to show a breach or sufficient breach of the agreement is misconceived.
Further s 134 of the Act permits an order terminating a residence contract where, it is submitted, there has been a breach of a periodic, residential tenancy agreement. Section 134 of the act is in the following terms: "134 TERMINATION ON GROUNDS OF BREACH OF VILLAGE CONTRACT OR RULES (1) The operator of a retirement village may apply to the Tribunal for an order terminating the residence contract of a resident of the village who breaches any village contract between the resident and the operator or breaches a village rule. (2) A resident of a retirement village may apply to the Tribunal for an order terminating his or her residence contract if the operator breaches any village contract between the resident and the operator or breaches a village rule. (3) The Tribunal may, on application made under this section, make an order terminating the residence contract, but only if it is satisfied that: (a) the breach, in the circumstances of the case, is such as to justify termination of the contract, or (b) persistent breaches by the resident or operator concerned are, in the circumstances of the case, such as to justify termination of the contract. (4) If the Tribunal makes an order terminating a residence contract under this section, the Tribunal must fix in the order a date by which the resident must vacate the residential premises concerned. (5) If the Tribunal forms the opinion, in the course of proceedings under this section, that a village rule is unjust, unconscionable, harsh or oppressive, it may make an order: (a) setting aside the rule, or (b) modifying the operation of the rule, either in its application to the operator or to a resident (or to some or all of the residents) of the retirement village concerned."
First, s 134 only grants a right to apply to NCAT for an order terminating the residence contract in relation to a resident "who breaches any village contract". A "village contract" is defined to include a residence contract, which includes the residential agreement between the parties in these proceedings.
Where an application has been made under the terms of s 134 of the Act, NCAT is given a discretion as to whether an order terminating the residence contract will be made, and, relevantly, may only do so in circumstances that "justify termination of the contract".
Thus, s 134 of the Act permits NCAT to issue an order terminating a residence contract, but does not require such an order.
The Residential Agreement between the parties includes a clause, cl 31, Termination of Agreement, in the following terms: "31 The tenant agrees to return all keys and operating devices when the agreement terminates and give vacant possession of the premises to the landlord or the landlord's agent as soon as possible providing at the same time a forwarding address. 32 Following the proper service of the termination notice the parties agree (i) the termination notice shall continue for the benefit of the landlord. (ii) any breach, claim or demand for compensation by either party shall not be affected by such notice of termination."
The breach to which the plaintiff refers and upon which the plaintiff relies is the breach by the defendant in not providing vacant possession when proper notice was given. However, the terms of cl 31 of the Residential Agreement requires vacant possession and all keys and operating devices to be returned only when "the Agreement terminates". The Agreement does not terminate until an order is made by NCAT: see ss 129, 130, 131, 134 and 139 of the Act.
In particular s 139 of the Act prohibits the recovery of possession of residential premises otherwise than in accordance with the Act. It is an offence to act in that manner, for which a penalty is prescribed.
It is not a breach of the Residential Agreement as executed between the parties for vacant position not to have been given as and when required by the landlord (plaintiff). It is unnecessary to determine whether, following an order of NCAT for possession, it would be a breach of the Residential Agreement not to provide vacant possession.
Even if it were, there would need to be a valid and enforceable order of NCAT. The breach to which the plaintiff points is one that precedes the application to NCAT.
At least some of the issues arising in these proceedings were determined as a matter of principle by the Court of Appeal in Boele v Rinbac Pty Ltd (2014) 88 NSWLR 381; [2014] NSWCCA 451. In those proceedings it was not an issue that the residential agreement was a "residence contract" and, therefore, a "village contract". That is not the situation in these proceedings.
Nevertheless the circumstances that gave rise to the proceedings in Boele, supra, are significantly different from the circumstances in those proceedings. In Boele, supra, the breach was an antecedent breach of the Residential Agreement. In its reasons for judgment, the Court of Appeal made clear that the power to terminate a contract is conferred on NCAT, not the landlord or the tenant and the exercise of that power is discretionary.
The Court of Appeal suggested that the Act established a two-stage process. Without any disrespect, I would prefer to refer to it as a three stage process. First, a party must apply to the tribunal and then the two-stage process, described by the Court of Appeal, starts to operate.

Conclusion

The Court, as presently constituted, is prepared to accept (although there is some doubt) that the question raised by the plaintiff in this appeal is a question of law. The doubt arises from the proposition that the submissions proffered and the grounds raised seem, rather, to raise a mixed question of fact and law. Nevertheless, accepting that a question of law has been raised, the issue that the Court must first determine is whether leave to appeal should be granted.
The submissions of the plaintiff on the interaction of the Act and the Tenancy Act are untenable. The uncontested facts give rise to only one conclusion, namely, that the Residential Agreement is a residence contract and governed by the terms of the Act; not by the terms of the Tenancy Act. Further, the alleged "breach" upon which the plaintiff relies is a breach that would render the terms of Pt 9 of the Act inoperable.
The breach upon which the landlord must rely in order to seek and to obtain an order of NCAT is an antecedent breach to the residence contract. Since, under the terms of the Residential Agreement, vacant possession was required to be given only on the termination of the residency and, under the Act, residency was terminated only after an order of the tribunal, there existed no antecedent breach.
The proposition of the plaintiff is untenable and leave to appeal should be refused.
The Court makes the following order: 1. Leave to appeal refused; 2. The plaintiff pay the defendant's costs of and incidental to the proceedings in this Court.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 31 January 2018

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