Dayeian v Davidson [2010] NSWCA 42 | Case summary

Dayeian v Davidson [2010] NSWCA 42 | Case summary | Zoe

[14]

Nature of the Case 3 The Applicant for leave to appeal in the present case is the executrix of the estate of the late Greg Koumashian ("the Deceased"), who died in 2006. The Deceased owned a home unit in Marrickville. He entered into a written Tenancy Agreement in June 1993 with the Respondent, leasing the unit for a six-month term. When that term expired the Respondent stayed in the unit under a holding over clause in that Tenancy Agreement without entering into another written agreement. 4 In July 2007 the executrix served the Respondent with a Notice to Quit. The Respondent did not vacate. The executrix then commenced proceedings in the Consumer, Trader and Tenancy Tribunal ("the Tribunal") seeking orders for the Residential Tenancy Agreement to be terminated, and possession vacated. 5 One of the grounds on which the Respondent resisted those orders was by contending that he and the Deceased had entered a residential tenancy agreement on 3 December 1998 that entitled the Respondent to stay in the premises either for his life, or as long as he wished. Alternatively, the Respondent contended that he and the Deceased had varied their existing residential tenancy agreement on 3 December 1998 so that the tenancy was one either for the life of the Respondent or as long as the Respondent wished. 6 The Tribunal, in a decision given on 20 November 2008, did not accept that there was any such agreement, and made an order for possession: Estate of Greg Koumashian v Davidson [2008] NSWCTTT 1403. (Both in the Tribunal and in the District Court one party was identified as the Estate of Greg Koumashian. That was erroneous; the correct party was the executrix of the estate. During the hearing of this appeal it was agreed that the nomenclature in this Court should be corrected. Though leave was granted during the hearing to amend the name of the Appellant, no order effecting the correction has been made, so I propose that it should be made in the orders by which this application is disposed of. As well, the documentation in this matter vacillates between naming the Respondent as Mr "Davison" and Mr "Davidson". Within the judgment I have used the name "Davidson" in accordance with the Respondent's own statutory declaration.) 7 The Respondent appealed against the orders of the Tribunal to the District Court of New South Wales. The right of appeal that he exercised was pursuant to section 67(1) Consumer, Trader and Tenancy Tribunal Act 2001 ("the CTTT Act"), which at the relevant time provided: "If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the District Court against the decision." 8 That version of section 67(1) came into operation on 1 September 2008, when Schedule 5 of the Courts and Crimes Legislation Amendment Act 2008 commenced. It replaced the former section 67(1) under which such an appeal lay to the Supreme Court. 9 Her Honour Judge Balla heard the appeal. In her judgment her Honour found that the Tribunal had erred in law, in a way that amounted to jurisdictional error. The evidence in the Tribunal had included three different accounts from the Respondent of a conversation between the Deceased and the Respondent on 3 December 1998. Her Honour held that the failure of the Tribunal to make a finding as to the precise terms of the conversation amounted to jurisdictional error. Her Honour declined to determine some other matters that had been submitted to her. She remitted the matter to the Tribunal, to be re-heard. 10 The matter now before the Court is an application by the executrix for leave to appeal from the decision of her Honour Judge Balla. It has been listed on the basis that if leave is granted the appeal will be heard concurrently with the application for leave. 11 If leave to appeal is granted, the appeal to this Court from the District Court will, pursuant to section 75A(5) Supreme Court Act 1970, be by way of rehearing. The rehearing will be of the matter that was brought before the District Court pursuant to section 67(1) CTTT Act.

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Jurisdiction and Powers of the Tribunal 12 Section 71 Residential Tenancies Act 1987 ("the Tenancies Act") prohibits a landlord from bringing any proceedings in the Supreme Court, the District Court, or the Local Court to obtain recovery of possession of residential premises that are subject to a residential tenancy agreement. That has the effect that the Tribunal is the only forum in which such proceedings may be brought. 13 Section 58 Tenancies Act enables a landlord to give notice of termination of a residential tenancy agreement without specifying any ground for the termination, subject to two provisos. The first is that the section shall not specify a day earlier than 60 days after the day on which the notice is given as the day on which vacant possession is to be delivered up. The second is that the power to give such a notice is not available concerning "a residential tenancy agreement that creates a tenancy for a fixed term during the currency of the term": section 58(3). While section 60 confers on (inter alia) a landlord power to give notice of termination of a residential tenancy agreement that creates a tenancy for a fixed term during the currency of the term, such a notice cannot specify a time for giving up possession that is earlier than the day that the term of the Residential Tenancy Agreement ends. 14 It has at all times been common ground between the parties that a tenancy agreement entitling a tenant to occupy premises for his life is a "tenancy for a fixed term" within the meaning of the Tenancies Act. Thus, if there was an agreement between the Deceased and the Respondent for the Respondent to have a tenancy of the premises for the Respondent's life, or if there was an agreement for the Respondent to have a tenancy of the premises for his life or as long as he chose, whichever was lesser, and such a term counted as a "fixed term" within the meaning of the Tenancies Act, the executrix would not have been entitled to serve a Notice to Quit in July 2007. 15 Section 64(1) Tenancies Act provides: "If: (a) a landlord or a tenant gives notice of termination of a residential tenancy agreement under this Part, and (b) the tenant fails to deliver up vacant possession of the residential premises on the day specified, the landlord may, not later than 30 days after that day, apply to the Tribunal for an order terminating the agreement and an order for possession of the premises." 16 Concerning a notice of termination given under section 58, section 64(2) of the Tenancies Act provides: "The Tribunal, on application by a landlord under this section, is to make an order terminating the agreement if it is satisfied: … (c) … (i) that the tenant has seriously or persistently breached the agreement, or (ii) that, having considered the circumstances of the case, it is appropriate to do so." 17 There was no contention in the present case that the Respondent had breached the tenancy agreement, let alone breached it seriously or persistently. 18 There was no dispute in the present case about the form of the Notice to Quit, about its service, or that (if it were indeed a Notice under section 58) it gave the requisite 60 days. In the Tribunal, the Respondent resisted the making of an order for possession on two grounds. The first was that mentioned earlier, that section 58(3) of the Tenancy Act prevented a 60 day no ground notice of termination taking effect during the currency of the fixed term of a residential tenancy agreement, and that the Respondent occupied the premises under a fixed term tenancy for his life. The second was that in the circumstances of the case the making of an order for possession was not justified. 19 The CTTT Act contains the following relevant provisions: "21(1) The Tribunal has such jurisdiction to decide matters, and such powers to make orders and otherwise exercise any function in connection with any such decisions, as is conferred on it by this or any other Act. … 28(1) The Tribunal may, subject to this Act, determine its own procedure. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of procedural fairness. (3) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. … (5) The Tribunal: … (b) is to ensure, as far as practicable, that all relevant material is disclosed to the Tribunal so as to enable it to determine all of the relevant facts in issue in any proceedings, …" 20 Section 49(1) and (2) require the Tribunal to give notice of its decision, and provides facility for a party to request a statement of the Tribunal's reasons. Section 49(3) provides: "The statement may be brief but must: (a) set out the decision and the reasons for it, and (b) set out the findings on any material question of fact, and (c) refer to the evidence or any other material on which the findings of fact were based."

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Evidence in the Tribunal 21 In 1998 the Respondent had helped the police to expose a drug syndicate that was operating from another unit in the building in which he lived. On 13 November 1998, the Respondent was the victim of an assault and robbery, as a result of which he received injuries of sufficient severity to result in him obtaining victims' compensation. He was of the view that his assault was prompted by the assistance he had provided to the police. 22 The Respondent and the Deceased met by chance when they were both shopping at the Woolworths supermarket in Marrickville on 3 December 1998. They then had the conversation that the Respondent contends gave rise to a fixed term tenancy agreement. Because the Deceased had died by the time of the hearing, the only evidence about the conversation came from the Respondent. He gave three different accounts of the conversation. The first was in a statutory declaration made on 5 November 2007. According to it, the Deceased had said: "… at your age your taking a big risk, and I congratulate you on standing up to protect the property, mine and other owners and that for my part (Greg Koumashian) you can stay at unit 41 for as long as you live or wish to stay. For as I am of Armenian descent and my word is my honour and bond and my gesture is my way of saying a big thank you for your effort of concern to protect a person's property". 23 The second was in an affidavit sworn on 23 July 2008. Its version of the conversation was: DAVIDSON: "Hi Greg." DECEASED: "Hi, how is it going?" DAVIDSON: "I'm a bit worse for wear as you can see." DECEASED: "You have been doing a bloody good job, please keep it up." DAVIDSON: "I will try to mate, no need to worry about that, they are not going to push me around, no worries about that." DECEASED: "As far as I am concerned you can stay at the unit for the rest of your life. I am of Armenian descent and we are known to keep our word. My word is my honour." DAVIDSON: "Cripes thanks very much." DECEASED: "You still have to pay your rent." DAVIDSON: "Of course." 24 The third version was in a diary entry that the Respondent made on 3 December 1998 (the same day as the conversation in question). It said: "meet Greg (owner of unit) told him of the police raid. He said look you can stay as long as you want." 25 The Tribunal found: "In March of 2000, notice was given of a proposal to increase rent to $175.00 from 18 May 2000. A further notice of proposed increase dated 16 th May 2001 set a new rental rate of $185.00 effective from 25 July 2001. The rent increases were accepted by Mr Davidson without any dispute."

[24]

The Tribunal's Reasons for Decision 27 The written reasons of the Tribunal were delivered on 20 November 2008. They began by saying, "[i]n general the facts in this matter are not in dispute". 28 The reasons set out verbatim the three versions of the conversation that were in evidence. They said that the affidavit version was "a slightly different version" to that in the statutory declaration. The reasons noted that there was authority that a fixed term may exist for the duration of a person's life. The reasons recorded submissions of the executrix: "Counsel for the Applicant submits that no new agreement and no varied agreement was created for the following reasons: (a) The use of the words 'honour' and 'bond' in the versions of the conversation which are relied upon demonstrate that Mr Koumashian was undertaking a moral obligation but not a legal obligation. (b) The definition of 'residential tenancy agreement' contained within section 3 of the Residential Tenancies Act implies an agreement that creates legal obligations. (c) Any new or varied agreement must contain the elements of an offer, an unconditional acceptance, an agreement as to consideration and an intention to create a legal and binding relationship . Kear v Itaoui (2007) NSW CTTT 459 (9 August 2007); [Beckhouse] v Sallaway and Ors (2006) NSW CTTT 74. The [Applicant] submits that even if there was a promise by Mr Koumashian to grant a new lease there was no consideration for that promise and therefore no agreement for value as required in the definition of a residential tenancy agreement. He submits that an acceptance of an obligation to pay rent is a consideration on the tenant's side supporting a tenancy agreement however where there is an existing agreement under which the tenant is obliged to pay rent and no additional rent is payable under the putative new agreement then there is no consideration. In Wigan v Edwards (1973) 1 ALR 497 at 512 Mason J pointed out: 'The general rule is that a promise to perform an existing duty is no consideration, at least when the promise is made by a party to a pre-existing contract, when it is made to the promisee under the contract, and it is [to do] no more than the [promisor] is bound to do under that contract'. The Tribunal in [Beckhouse] at page 13 (paragraph 31) dealt with the issue in the following manner: 'There was no consideration for this promise by the tenants. The tenants were already contractually bound to pay rent under the existing lease until it was terminated. If the landlords did not terminate the existing lease until May 2006 then the tenants were bound to pay rent until this time (unless they exercise their right to terminate the existing lease at an earlier time). The payment of rent due and payable under the existing lease cannot be good consideration at law for entering a second lease'. It is further contended that any consideration cannot be past consideration (see Wigan v Edwards (supra)) . The Applicant submits that the Respondent understood the alleged statement made by Mr Koumashian was a reward for his efforts in relation to the drug activities which were the subject of the conversation at the time." 29 Next, the reasons turned to the submissions of the Respondent: "Mr Eastman of Counsel for the Respondent suggests that consideration may arise through an undertaking on the part of the tenant to continue his efforts against those involved in the drug offences at [address]. He submits that the conversation referred to envisaged that Mr Davidson would provide further assistance for Mr Koumashian by continuing his vigilance. Apart from these inferences there is no reference to consideration contained in the conversations and further the issue of rent or a method of increasing the rent was not even discussed. Section 45(4) in the Residential Tenancies Act provides that rent under a fixed term tenancy may not be increased during the term unless a mechanism for such increase is provided for in the agreement itself. Clearly there was no conversation at the supermarket relating to any mechanism for an agreed increase in rent." 30 In my view, it is clear enough that this passage, from "[a]part from these inferences" to the end, is the Tribunal's response to the submissions of the Respondent. That part of the passage contains propositions one cannot believe that counsel for the Respondent would have put. 31 The conclusion of the Tribunal's reasons concerning the significance of the conversation of 3 December 1998 was: "The Respondent tenant bears the onus of establishing that a new or varied agreement came into existence as a result of the conversation which occurred in about December 1998. When the three versions of the conversation are reviewed, allowing for the variations which may arise over time, it has not been established on balance that there was an agreement to allow Mr Davidson to remain in the property for the term of his life. The diary entry for the 3 December 1998 clearly notes the expression 'stay as long as you want' which is inconsistent with the grant of a fixed term. The statutory declaration of the 5 November 2007 describes the period as 'for as long as you live or wish to stay'. This version does not provide the certainty which would be required to create a new legal relationship. In [Beckhouse] v Sallaway and Ors (supra) the Tribunal was required to consider a claim by the tenants that at an inspection in August 2005 the landlords allegedly promised that the tenants could remain in the premises until May of 2006, thereby creating a new tenancy agreement. After observing that a new lease required the formalities of contract be satisfied including consideration flowing both ways, an intention to create new legal relations and certainty in fundamental terms, Member Anforth observed that a promise not to terminate an existing lease until May 2006 was not explicitly an offer of a new lease. Applying the principles referred to in the [Beckhouse] case it is clear that the tenant has not established either a grant of a new tenancy agreement or the variation of an existing tenancy agreement for a fixed term, namely, the life of the tenant. This conclusion is further reinforced when one has regard to the conduct of the parties after December 1998. There is no evidence that Mr Davidson made any attempt to formalise a new or varied agreement and his actions in paying increases of rent when they were requested is inconsistent with his alleged entitlement to remain as a tenant for life with no express provisions for the rent to be varied during such term." 32 The Tribunal then went on to consider, pursuant to section 64(2) Tenancies Act, whether it was appropriate to make an order terminating the agreement. It took into account matters relating to the personal situation of the Respondent, such as his age, medical condition and income. The Tribunal concluded that it was appropriate to make an order for possession, but that it should be in terms that required the tenant to deliver up possession on or before 30 April 2009. An occupation fee at a daily rate equivalent to $185 per week (the current rent of the premises) was fixed, in the light of knowledge that this was almost $85 less than a current market rent.

[25]

The District Court Proceedings 33 The grounds on which the District Court was asked to set aside the decision of the Tribunal were stated in an Amended Notice of Appeal filed 20 July 2009. They were: "1. The CTTT on 25 June 2008 erred in law by failing to make findings on essential matters, and secondly, the findings which the CTTT did make disclose errors of law and a constructive failure to exercise jurisdiction. 2. In particular, the CTTT erred in law: 2.1 when it failed to decide what were the terms of the oral residential tenancy agreement entered into on 3 December 1998 between Greg Koumashian and the Appellant for the Premises; and/or 2.2 further or in the alternative, when it failed to decide that it was a term of the oral fixed term residential tenancy agreement for the Premises that the Appellant could reside at the Premises until the first to occur of the following events: (a) the death of the Appellant; or (b) the Appellant voluntarily vacating the Premises; 2.3 further or in the alternative, when it decided that there was no evidence that on 3 December 1998 Greg Koumashian and the Appellant entered into an oral fixed term residential tenancy agreement for the Premises without addressing material before it which, on its face, contradicted that conclusion; and 2.4 further or in the alternative, when it decided that the words used on 3 December 1998 by the landlord, Greg Koumashian as to the term during which the Appellant could reside at the Premises being: "for as long as you live or wish to stay" were insufficiently certain to constitute the grant of tenancy for life; 2.5 further, in deciding that agreements between a landlord and a tenant on 9 March 2000 and 16 May 2001 to increase the rent payable meant that there was no prior oral fixed term residential tenancy agreement in existence." 34 Those grounds are not expressed in terms that readily mesh with the terms of section 67 of the CTTT Act. As Basten JA said in HIA Insurance Service Pty Ltd v Kostas [2009] NSWCA 292 at [86], with the agreement of Spigelman CJ and Allsop P, concerning a right of appeal cast in such terms: "… it is not sufficient to identify some legal error attending the judgment or order of the Tribunal; rather it is necessary to identify a decision by the Tribunal on a question of law, that decision constituting the subject matter of the appeal." 35 In the words of Basten JA in HIA Insurance v Kostas, at [104], the grounds of appeal in the District Court in the present case did not pay heed to: "… the common exhortation in the case law that an appellant identify with a degree of precision the decision with respect to a matter of law which is sought to be challenged on the appeal: see, eg, Kalokerinos [ v HIA Insurance Services Pty Ltd [2004] NSWCA 312] at [58]; Scicluna v New South Wales Land and Housing Corporation [2008] NSWCA 277; 72 NSWLR 674 at [3]; see also McNamara v Consumer Trader and Tenancy Tribunal [2005] HCA 55; 221 CLR 646 at [18] and [20]." 36 While section 67(8) provides, "[a] reference in this section to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal", it is still necessary for the Tribunal to decide a question with respect to a matter relating to the jurisdiction of the Tribunal before the right of appeal, as extended by section 67(8), is attracted. As Spigelman CJ said in HIA Insurance v Kostas, at [6], section 67(8) extends the subject matter of the appeal to include a fact-finding exercise with respect to jurisdictional facts. It has not been suggested that section 67(8) was relevant to the appeal to the District Court. 37 In HIA Insurance Service v Kostas at [130] Basten JA said: "With respect to matters as to which the Tribunal's reasons were silent, it will be necessary for an appellant to demonstrate that there was such an issue in dispute. Once that has been demonstrated, a further question arises, namely whether the Tribunal did in fact resolve the dispute, whether it treated the disputed matter as irrelevant or whether it simply overlooked the issue. If the Tribunal overlooked the issue, there may have been a failure to accord procedural fairness or a constructive failure to exercise jurisdiction: see eg, The King v War Pensions Entitlement Appeal Tribunal; Ex parte Bott [1933] HCA 30; 50 CLR 228 at 242-3 (Rich, Dixon and McTiernan JJ); Dranichnikov v Minister for Immigration and Multicultural Affairs (2003) 77 ALJR 1088 at [24] (Gummow and Callinan JJ) and [81]-[88] (Kirby J). Such error may invalidate the decision, but may not constitute a decision of the Tribunal. To find an implied decision in such circumstances is to subvert the statutory limits of the appeal …" 38 Indeed, the bringing of an appeal under section 67(1) is inconsistent with alleging jurisdictional error in the proceedings below, (unless a jurisdictional question was raised before the Tribunal and decided by it (67(8)), which was not the case here). An appeal under section 67(1) proceeds on the basis that there has been a decision of the Tribunal with respect to a matter of law, and that the appellant contends that that decision is wrong. In contrast, an applicant for judicial review on the basis of jurisdictional error alleges that there has been a purported decision, that in the eyes of the law is not a valid decision because a legal requirement for exercise of the Tribunal's jurisdiction has been breached. When the appeal under section 67(1) lay to the Supreme Court, it was open to a litigant dissatisfied with a decision of the Tribunal to bring proceedings under section 67(1) and in the alternative seeking relief in the nature of prerogative relief, eg Bahadori v Permanent Mortgages Pty Ltd [2008] NSWCA 150; (2008) 72 NSWLR 44. Now that appeals under section 67(1) lie only to the District Court, which has no jurisdiction to make orders in the nature of prerogative relief, it will be necessary for a person dissatisfied with a decision of the Tribunal to analyse carefully the reasons for dissatisfaction, as those reasons will affect the choice of the appropriate forum in which to challenge the decision. 39 Mr Barnett, counsel for the Appellant, tells us that in the District Court he took the view that: "If … there was a failure to find a fact which was required to be found, that probably was an error of law and on that basis the appeal rights under s 67 were enlivened but at no stage did I submit her Honour could simply stop at this finding and ignore anything else. I said the error of law would have to be material to affect the outcome of the proceedings …"

[26]

Mr Knoll, counsel for the Respondent, did not take issue with that statement. 40 The judge's reasons for judgment did not free themselves from the erroneous view of the extent of the right of appeal that the Respondent had propounded. The judge said, immediately before she quoted section 67(1), "[a]ny appeal is confined to an error of law." The substance of her reasoning for allowing the appeal appeared under two headings, one of which was "Failure to Exercise Jurisdiction", the other of which was "Other Errors of Law". The entire judgment was premised on an assumption that an error of law that is a jurisdictional error falls within the scope of section 67(1). 41 At the start of the section headed "Failure to Exercise Jurisdiction", the judge identified the principle she was applying, and the submission she was considering in light of that principle: "If an Administrative Tribunal falls into an error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or, at least in some circumstances, to make an erroneous finding or to reach a mistaken conclusion, and the Tribunal's exercise or purported exercise of power is thereby affected, it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the Tribunal. (see Craig v South Australia (1995) 184 CLR 163 at 179, per Brennan, Deane, Toohey, Gaudron and McHugh JJ) In this case Counsel for the Appellant submitted that the Tribunal's failure to make a finding as to the content of the conversation on 3 December 1998 was such jurisdictional error." 42 She accepted that submission, holding: "… a failure to make a finding about the words spoken on 3 December 1998 … is a threshold issue which must be determined before a Tribunal or a Court can go on to consider whether those words mean that the parties entered into a new agreement for a fixed term tenancy. The relevant principle is set out in the judgment of Rothman J in Morton v Sydney Ferries Corporation [2009] NSWSC 341 at para 53: 'It is the function of every tribunal, from which an appeal lies or which is subject to prerogative relief, to issue reasons for decision and to disclose in those reasons the path by which the tribunal has reached its conclusions". Accordingly I am satisfied that this means that the Tribunal failed to complete its jurisdictional task as laid out in section 28 of the Act."

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Tribunal's Erroneous Decision with Respect to a Matter of Law? 49 The failure of the parties in the District Court to appreciate the limits of the appeal under section 67(1), and to identify the "question with respect to a matter of law" that it was contended the Tribunal had decided wrongly, creates a little difficulty for this application for leave to appeal. In substance, what the Tribunal decided was that the Respondent had not discharged his onus of establishing that a new or varied agreement came into existence in the conversation of 3 December 1998, under which the Respondent was entitled to stay in the premises for life. While the Tribunal identified some of the elements that needed to exist before a valid contract could exist (obviously a matter of law), it is not contended that it stated those elements wrongly. 50 On a reasonable reading of the Tribunal's reasons, it is clear enough that it took into account all three versions of the conversation. It set out all three versions explicitly, and in the conclusion of its reasoning, that I have set out at para [31] above, expressly stated "[w]hen the three versions of the conversation are reviewed…". While the Tribunal said in the passage quoted at [29] above "the issue of rent or a method of increasing the rent was not even discussed", and rent was adverted to in the last two lines of the affidavit version of the conversation, the statement of the Tribunal that "the issue of rent … was not even discussed" is at worst a factual error, concerning which no appeal lies. 51 I do not accept that it was not legally possible for the Tribunal to decide whether there was a residential tenancy agreement for a fixed term entered on 3 December 1998 without making a finding about the precise words that were spoken. It would have been open to the Tribunal to hold that, whichever of the versions was correct, no residential tenancy agreement for a fixed term was entered. It seems to me that that is in substance what the Tribunal has done. 52 The definition of "residential tenancy agreement", in section 3 of the Tenancies Act is: "… any agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence: (a) whether or not the right is a right of exclusive occupation, (b) whether the agreement is express or implied, and (c) whether the agreement is oral or in writing, or partly oral and partly in writing, and includes such an agreement granting the right to occupy residential premises together with the letting of goods." 53 Because this definition expressly recognises that a right of exclusive occupation is not a necessary characteristic of a residential tenancy agreement, the scope of "residential tenancy agreement" within the meaning of the Tenancies Act is wider than that of leases, concerning which the giving of a right to exclusive possession is an essential characteristic: Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 390; Radaich v Smith (1959) 101 CLR 209 at 216, 217, 220, 222; Lewis v Bell (1985) 1 NSWLR 731 at 735. The definition also recognises that a residential tenancy agreement can be oral. (There was no occasion in the present appeal to consider how that possibility interacts with the requirement in section 9 of the Tenancies Act for certain residential tenancy agreements to be in a prescribed standard form.) Even so, a necessary requirement of a "residential tenancy agreement" is that it be an "agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence". In my view, it was well open to the Tribunal to characterise each of the versions of the conversation as in substance a promise by the Deceased not to terminate the existing periodical tenancy agreement during the Respondent's life or whatever shorter time he wished to stay. That characterisation is open on all three versions of the conversation. If that characterisation is given to it, it does not satisfy the definition of "residential tenancy agreement". In my view, in the paragraph of its reasons referring to Beckhouse the Tribunal was in substance so characterising it. Even if engaging in that process of characterisation of the evidence is deciding a "question with respect to a matter of law" (something that, in light of the history of the proceedings, I shall assume without deciding), in my view it is not erroneous. 54 An agreement under which the rights of a periodical tenant are varied to entitle the tenant to a longer term are capable of being a "residential tenancy agreement", within the meaning of the Act. What the agreement "grants" is the additional rights of occupancy, beyond those that the tenant already has. However, before the conversations that the Respondent relies on could be a "residential tenancy agreement" they must not only involve a promise by the Deceased, but also must satisfy the requirements for being a valid contract. They do not do so.

[31]

Consideration? 55 A valid contract would require there to be a promise or action by the Respondent that amounted to consideration for the Deceased's promise. Even if the affidavit version of the conversation is treated as a promise by the Respondent to pay the rent, that promise is, in my view, not a promise to do anything more than he was already obliged to do. Because the Respondent was free to end the tenancy at any time, he was not promising to pay rent for any particular time. A promise to do something for as long as the promisor wants to, does not provide consideration: Placer Development Ltd v The Commonwealth (1969) 121 CLR 353; Biotechnology Australia Pty Ltd v Pace (1988) 15 NSWLR 130 at 151. 56 Mr Knoll argued that there was a basis for concluding that there was consideration separately to the payment of rent. Two alternative considerations were propounded. One of them was the Respondent continuing his efforts to stem drug dealing in the building. The case for there being such a consideration could arise only from the affidavit version of the conversation. Quite apart from problems arising from imprecision about the content of the promise, and intention to enter legal relations, even on the Respondent's version he did not promise to "keep it up", but merely said that he would "try to". 57 The second suggested consideration arose from part of the statutory declaration that I have not previously quoted. Immediately after the end of the quotation set out at para [22] above, it continued: "Note that Greg had appointed me on a yearly basis to represent him (by proxy) to the body corporate executive committee of owners knowing that I have a sense of responsibility. I also believe that Greg appreciate the fact that I paid my rent 10 (ten) weeks in advance. In hindsight, I believe that Greg in his statement to me of a permanent rental stay offer was actual due to my efforts not only to standing up to the drug ring but also to the time and effort I and some others in gathering evidence to put before the NSW Police Department and also the Federal Police and the then NSW Premier Bob Carr." 58 There is nothing in that passage that suggests that the Respondent agreed to act as the Deceased's proxy in return for the Deceased granting him a tenancy of a different term to that which he already had. Indeed, the passage is quite consistent with the appointment and acting as proxy not having been mentioned at all in the conversation on 3 December 1998. The statutory declaration set out, beginning with the word "quote" and ending with the phrase "end of quote", the content of the conversation, as I have recorded it at para [22] above. That does not include anything about acting as proxy. Neither the affidavit version, nor the diary version, contains any mention of acting as proxy. The Tribunal would not have been bound to regard the portion of the statutory declaration set out at para [57] above as establishing consideration for any agreement that otherwise existed. 59 Even though the submissions made on behalf of the executrix in the Tribunal contended at some length that there was no consideration flowing from the Respondent, because a promise to perform an existing duty to pay rent was no consideration, the Tribunal did not say at any stage that it accepted that submission. Indeed, the Tribunal made no finding about whether there was, or was not, consideration. While Mr Knoll contended before us that a promise to pay rent for a different period to that during which the Respondent had previously promised to pay rent would be a good consideration, and I have dealt with that submission, it is important, given the limited nature of the appeal under section 67, that that submission does not engage with the reasons that the Tribunal actually gave. If other elements of an agreement of the type that the Respondent contended for were not present, there was no need for the Tribunal to consider whether there was consideration. Its failure to reach any conclusion, or any particular conclusion, concerning consideration, is not a basis for deciding that it has made an erroneous decision with respect to a matter of law.

[32]

Uncertainty of the Term? 60 Mr Knoll submits that the Tribunal's statement that the period referred to in the statutory declaration, "as long as you live or wish to stay" "does not provide the certainty which would be required to create a new relationship" is erroneous in law. He referred us to Borambil Pty Ltd v O'Carroll [1972] 2 NSWLR 302 and Greco v Swinburne Ltd [1991] 1 VR 304. The first of those cases held that a lease for life was a lease for a fixed term within the meaning of the Landlord and Tenant (Amendment) Act 1948, while the second held that a lease of premises for the lifetime of the survivor of the two lessors was not void for uncertainty. Those cases do not deal with a lease expressed to be "for as long as you live or wish to stay". While there might be room for argument about whether a lease for such a term was valid (Prudential Assurance Co Ltd v London Residuary Body [1992] 2 AC 386 at 394-5; Bradbrook Croft & Hay, Commercial Tenancy Law, 3rd ed 2009, para [1.5]; Butt, Land Law, 6th ed 2010, para [15 07], [15 38.1]), the fact that a lease is a demise and creates an interest in land influences what is capable of being a valid lease. A knowledgeable draftsman could create a valid lease by providing that the term was the lifetime of the lessee, but that the lease was defeasible if the tenant gave a certain type of notice. However, it is not necessary to consider whether the language of the parties can be twisted to fit that mould for the purpose of deciding whether the alleged agreement is void for uncertainty. That is because a "residential tenancy agreement" need not be a lease, and can be a merely contractual right of occupation: Cohen-Hallaleh v Cyril Rosenbaum Synagogue [2003] NSWSC 395 at [15]. A contract entitling someone to occupy land "for as long as you live or wish to stay" seems to me to be sufficiently certain to be contractually valid, if the other requirements for a contract are met. 61 However that conclusion does not mean that the Tribunal has made an erroneous decision with respect to a matter of law. That is because I doubt that the sentence of the Tribunal's reasons in question is talking about contractual uncertainty at all. There had been no submission made to the Tribunal that any agreement that had been arrived at would be legally inefficacious because it was void for uncertainty. In the context of the submissions made, I do not read the sentence in question as doing more than alluding to the imprecision of the term, on the version of the conversation set out in the statutory declaration, as part of a reason why the conversation did not amount to a new contract or a variation of the existing contract. As an element in whether there was an intention to enter contractual relations (which was squarely in contest in the submissions made to the Tribunal), that was a factor legitimately open to the Tribunal. 62 The imprecision of the term was also a factor legitimately open to the Tribunal in deciding whether there had been an agreement for a fixed term. For the agreement to be an agreement for a fixed term, the landlord must agree that the tenant is entitled to the premises for the fixed term, and the tenant must agree to take the premises for that fixed term. It is common ground that an agreement to let the premises for the life of the Respondent would be an agreement for a fixed term. But if the term of the letting is "your life or as long as you wish to stay", that is not in my view a fixed term, because the "or as long as you wish to stay" means that the term that has been granted comes to its natural determination when the tenant no longer wishes to stay, and there is nothing fixed about "as long as you wish to stay". It would in substance be possible to achieve the same result by having an agreement for a fixed term, and a power of the tenant to bring the term to an early end in certain circumstances. However one would need to be able to see the two elements - the agreement for the fixed term, and the power to terminate early - in what had been agreed, before such an agreement was characterised as an agreement for a fixed term. In my view the Tribunal was referring to its inability to see those two elements in the statutory declaration version of the conversation when it said it did "not provide the certainty which would be required to create a new legal relationship." If that matter of characterisation is a "decision with respect to a matter of law", in my view it is not shown to be erroneous.

[34]

Incorrect Reliance on Subsequent Conduct? 64 It is uncontroversial law that conduct subsequent to the time that a contract is alleged to have been entered can be used to decide whether a contract was in truth entered: Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407 at [326] and cases there cited. 65 Ground 2.5 of the Amended Notice of Appeal in the District Court (para [33] above), is in my view a ground that of itself, even if correct, would not show that the Tribunal had decided a question with respect to a matter of law in a way that was erroneous. The use that the Tribunal made of the subsequent conduct (final paragraph quoted at para [31] above) was to find an additional reason for a conclusion already reached. Further, it is not as though the only subsequent conduct that the Tribunal took into account was payment of the rent increases - as well it took into account the lack of attempts to formalise a new or varied agreement. 66 The tenancy agreement that the Respondent had entered in June 1993 contained a holding over clause that read: "At the end of the term the tenant can stay in the residential premises at the same rent (or at an increased rent if the rent is increased in accordance with the Residential Tenancies Act 1987 ) but otherwise under the same terms unless or until the agreement is ended in accordance with the Residential Tenancies Act 1987 ." 67 If an agreement was entered on 3 December 1998, and it took the form of a variation of the existing residential tenancy agreement rather than a new tenancy agreement, the agreement as so varied would continue to contain that provision. A provision of the Tenancies Act on which the Tribunal relied, section 45(4), provides: "The rent payable by a tenant under a residential tenancy agreement that creates a tenancy for a fixed term shall not be increased during the currency of the term unless the amount of the increase, or a method for calculating the amount of the increase, is set out in the agreement." 68 Even if there were to be a varied agreement containing the holding over clause, the holding over clause does not state, concerning any rent increase "the amount of the increase, or a method for calculating the amount of the increase." Thus, there would be no contractual right, or statutory mechanism, by which the rent could be raised during the Respondent's lifetime. That, along with the fact that the alleged agreement entered on 3 December 1998 was never formalised, and that subsequent rent increases were agreed to, seem to me to be matters that the Tribunal could legitimately take into account in deciding whether an agreement was entered on 3 December 1998. 69 I recognise that, had there been an agreement, of the type for which the Respondent contended, entered on 3 December 1998, it was possible that the rent increases could have been effected by a variation of that agreement. It was a matter for the Tribunal to decided whether the rent increases had that character, or were matters that tended against there having been an agreement of the type for which the Respondent contended. In my view, the use that the Tribunal made of that subsequent conduct did not involve any erroneous decision with respect to a matter of law.

[35]

Source of Obligation to Set Out Findings? 70 While I doubt its relevance to an appeal under section 67(1), there is one further argument I should deal with. The judge found the "jurisdictional task" that the Tribunal had failed to perform to be one "laid out in section 28 of the Act". She had quoted the whole of section 28(1)-(5) in her judgment. Section 28 deals with the topic of the procedure of the Tribunal. While the only part of section 28(5) that I have quoted is section 28(5)(b), the rest of section 28(5) concerns procedural powers and obligations that do not relate to the present question. Mr Knoll seeks to support the judge's decision by arguing that section 28(5)(b) at least implicitly required the Tribunal to determine "all of the relevant facts in issue in any proceedings", and that by failing to determine the precise terms of the conversation it had breached that requirement. 71 That argument needs to be considered in the light of the requirement of section 49(3)(b) for the reasons of the Tribunal to "set out the findings on any material question of fact". In Minister for Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR 323, the High Court held that a requirement under section 430(1)(c) Migration Act 1958 (Cth) for the Refugee Review Tribunal, in making a finding, to prepare a written statement that "sets out the findings on any material questions of fact", required it to set out the findings it has actually made, not findings on every question of fact that a court, reviewing the Tribunal's decision, might regard as being material: at [9]-[10] per Gleeson CJ, [33]-[34] per Gaudron J, [68]-[69] per McHugh, Gummow and Hayne JJ. I see no reason for reading section 49(3)(b) of the Tribunal Act any differently. Indeed, it is hard to see what a conscientious Tribunal, seeking to carry out its obligation under section 49(3)(b), could do other than set out the findings on any question of fact that it regarded as material. When section 49(3)(b) states expressly the extent to which the Tribunal must state its factual findings, I would not read section 28(5)(b) as imposing, by an implication, any more extensive duty upon it. That is particularly so when the duty that section 28(5)(b) imposes on the Tribunal in its terms concerns the extent to which it is required to ensure that material is disclosed to it. The provision is not in its terms concerned with what the Tribunal is required to do once material has been disclosed to it. 72 Another aspect of section 28(5)(b) supports this conclusion. The obligation of the Tribunal under section 28(5)(b) to ensure disclosure of material is limited in three ways. The first is that the material be relevant. The second is the limitation imposed by the words "as far as practicable". The third is that the extent of disclosure required is limited by the purpose for which that disclosure is sought, namely to put the Tribunal into a position where it can determine all the relevant facts in issue in the proceedings. At the stage at which disclosure of material is being required by the Tribunal, it will be in no position to decide what are the facts that it will ultimately regard as relevant. The sort of relevance that section 28(5)(b) is concerned with is potential relevance. 73 The jurisdiction of the Tribunal in the present case arose under section 64 of the Tenancies Act. That jurisdiction brought with it a correlative duty to decide a matter that was submitted to it under section 64. But, for the reasons I have given, section 28 does not impose any duty on the Tribunal concerning the extent to which it should determine a question in the course of exercising its jurisdiction.

Dayeian v Davidson

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Judgment (45 paragraphs)

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