1. The landlord has proven the grounds for giving the notice

1. The landlord is entitled to a possession order.

2. The tenant must vacate the rented premises today.

1. The principal registrar, at the request of the person who obtained the possession order and on payment of the prescribed fee, shall issue a warrant of possession to be executed within 30 days after the date of issue. (Any request must be made no later than 23 July 2014).

Warning to tenant: If you fail to vacate the rented premises by the date stated in this order you may be forcibly vacated by a member of the police force or an authorised person carrying out a warrant of possession.

1. The Director of Housing ("the Director") is the landlord of a two bedroom apartment at 808/1a Surrey Road, South Yarra. Mr Janusauskas ("the tenant") has been renting the apartment since April 2013, but has previously lived in other public housing for over a decade.
2. In this application, the Director seeks possession of the rented premises on the basis that the tenant has sublet or purported to sublet those premises without his consent, contrary to s 81 of the Residential Tenancies Act 1997 ("the Act").
3. On 30 September 2013 the Director served on the tenant by registered post a notice to vacate under s 253 (1) of the Act, requiring him to vacate by 17 October 2013. The Director then applied to the Tribunal under s 322(1) for a possession order.
4. The matter was listed for hearing on 22 October 2013, the tenant having unsuccessfully applied for an adjournment. The Director was represented by two of his staff and Ms Evans of Counsel, and the tenant appeared in person.
5. At the initial hearing the Director relied on the oral evidence of his employees Ms Mrad and Ms Beattie, the affidavits of Ms Marika Peterson dated 11 October 2013 (together with 3 exhibits) and 17 October 2013 (together with one exhibit), and a statement of a neighbour of the tenant. In addition, the Director 's case included an "Outline of Submissions" dated 14 October 2013 prepared by Ms Evans of Counsel, and oral submissions made Ms Evans.
6. The tenant who was not represented, gave oral evidence.
7. The hearing had not been allocated sufficient time and was not fully completed when concluded at approximately 4.30 pm. Given the gravity of the order sought by the Director and the fact that the Director had received significant legal support, it seemed to me fair to allow the tenant to seek legal advice and make submissions to the Tribunal, and for both parties to give further evidence if necessary. Accordingly, I adjourned the proceedings part heard, and made directions regarding the filing of submissions by the tenant and the Director.
8. Pursuant to those directions the parties filed further submissions; the tenant's dated 30 October 2013 and the Director's reply thereto dated 6 November 2013.
9. The matter was relisted before me on 28 November 2013. Ms Mrad and Ms Beattie appeared on behalf of the Director and the tenant appeared again in person. Both parties gave oral evidence. At the conclusion of the hearing I reserved my decision, which I how provide with written reasons as requested by the Director.

1. A number of provisions of the Act are relevant to the Director's application and these are summarised below.
2. Section 81 contains a prohibition against sub-letting the whole or any part of the rented premises without the landlord's written consent.
3. Section 82 allows a tenant to challenge unreasonable withholding of consent, empowering the Tribunal to make a determination that such consent is not required.
4. Section 253 entitles a landlord to give a tenant a notice to vacate if the tenant has assigned or sub-let, or purported to assign or sub-let the premises.
5. Lastly, s 330 requires the Tribunal to make a possession order if it is satisfied that the landlord was entitled to give the notice, and the notice has not been withdrawn.

1. The questions for the Tribunal to decide are therefore:

1. The first and third head of enquiry can be dealt with quickly. The tenant does not challenge the validity of the notice, and on its face it complies with the both the requirements of the Act and the test espoused by Bongiorno J in Smith v Director of Housing [2005] VSC 436. The Director has not withdrawn the notice.
2. The critical question therefore is whether the Director was entitled to give the notice. Clearly, the Director is the landlord, so his entitlement to give the notice will only be nullified if he cannot prove the grounds for so doing.
3. Further, it is clear that, if it is established that the Director is entitled to give the notice - that is, that the alleged sub-letting has in fact occurred - then the Tribunal must make a possession order under s 330 of the Act.

1. Before considering the facts of this matter in detail, which are discussed further below, it is helpful to outline the relevant legal principles. It is not in dispute that the premises were in fact occupied for a period of time by persons other than the tenant. Clearly, tenants can and do allow other people to stay in their houses without breaching the prohibition against sub-letting in s 81 of the Act. The key question is whether any such occupation was pursuant to a lease, or a mere licence to occupy. It is only if the former is established that the Director will have proved his entitlement to give the notice.
2. The High Court has laid down that the decisive factor in distinguishing a lease from a licence is that of exclusive possession: see Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209. Just as a lease involves the grant of exclusive possession, so the grant of exclusive possession connotes the granting of a lease.

21. This test has been endorsed and applied in numerous cases over the years and is rightly accepted as definitive by both parties. However, while the principle is well established, the proper characterisation of the a right to occupy can be difficult, as noted by the Victorian Court of Appeal in KJRR Pty Ltd v Commissioner of State Revenue [1999] VSCA 2; [1999] 2 VR 174. In the words of Tadgell JA at [10]:

"The question whether an occupation agreement amounts to a lease conferring a proprietary interest, or merely to a contractual licence, is ancient and familiar. It is nevertheless a question that has over the years posed tantalising problems for the courts in a variety of contexts. It is easy enough to say that a grant of exclusive possession (or occupation) of premises is a hallmark of a lease, and that such a grant carries with it a right to exclude - i.e. to maintain an action for trespass against - all others, including the grantor. A satisfactory statement of the criteria by which such a grant may inevitably be identified is, however, elusive."

1. Whilst a clear statement of the relevant criteria remains elusive, some useful directions are apparent from the case law.

1. Distinguishing between exclusive possession on one hand, and occupation or sole occupation on the other in important in determining whether a legal right to exclusive possession has been given. A person may retain legal possession (that is, exclusive possession) even though another person has sole physical occupation of the premises. As Mc Hugh J noted in The State of Western Australia v Ward [2002] HCA 28 at [518]:

"Possession and occupation - even sole occupation - are different concepts ....As Windeyer J pointed out in Radaich v Smith .... 'persons who are allowed to enjoy sole occupation in fact are not necessarily to be taken to have been given a right of exclusive possession in law.'"

1. In Radaich Windeyer J expanded on the comment cited above, explaining that the question of whether sole occupation amounts to exclusive possession must be answered by considering the terms of any deed granting rights of occupation and the relevant surrounding circumstances, in particular the nature of the premises.

1. The words used by parties are not conclusive; it is the substance of the agreement that matters. For example the use of the word "licence" is not decisive, but it is a significant indicator of the parties' intention: AG Securities v Vaughan [1990] 1 AC 417; Radaich at 214. Similarly using the word "rent" is not definitive: an intention to enter into legal relations must be ascertained objectively: Great Lakes Pty Ltd v KS Easter (1985) 2 NSWLR 309.

1. Exclusive possession imparts the right to exclude all others, including the grantor. For example, if the right of the grantor to enter onto the property is unlimited as to the purpose, frequency and time of entry, such right will be inconsistent with any claim of the occupant to exclusive possession, which is the point of distinction between and licensee and a tenant; see Nishtom Pty Ltd v Robinsons (Trustee); in the matter of Kinsella (Bankrupt) [2007] FCA 978 (2 July 2007) at 17.

1. 27. It is not necessary in the formation of a lease that the parties intend to create the relationship of landlord and tenant, conversely, a subjective intention to create some other relationship will not be conclusive. What is important is an objective assessment of the leasehold and its grant. This has been most famously put by Lord Templeman by way of analogy (in Street v Mountford [1085] 3 All ER 289 at 294):

"The manufacture of a five pronged instrument for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade".

1. One does not therefore look to the intention of the parties but to the rights and duties they have in fact created (Windeyer J in Radaich at 222, approved and applied in Street at 300). In other words, the transaction is something that is real and has an objective existence independently of the intentions, expectations and wishes of the parties, the words they use, and indeed the physical nature of the occupation.

1. A tenancy under the Act need not be in writing (cf s 126 of the Instruments Act 1958 (Vic)) nor is there any requirement that a tenant pay a bond to the landlord, nor that the entire premises be let - a grant of exclusive possession over a single room will still amount to a lease of that room. It is also apparent that a room or rooms may be let empty or furnished, and with or without the grantor's personal possessions.

1. I turn now to consider the facts of this matter in more detail. Most of the facts surrounding this application are not in real dispute; what is in issue is their legal characterisation. The Director says that they establish that the tenant sub-let or purported to sub-let the premises. The tenant does not generally disagree with the Director regarding what happened, at least in respect of Ms Peterson and Ms Rikken, but he says that no lease came into existence as there was no such grant. There is no suggestion that the landlord gave permission for any sub-lease.

1. The tenant has a number of medical problems and wished to travel abroad for rehabilitation purposes. Shortly after moving in to the apartment he approached the landlord for permission to be temporarily absent from the property. Key dates surrounding this arrangement, which I accept, are set out in detail in the Director's outline of submissions dated 14 October 2013 and I do not propose to repeat them in detail here. In summary, the Director advised the tenant on 5 June 2013 that it had approved his application for temporary absence for a period of 6 months from 30 June - 31 December 2013. Around this time the tenant told the Director that his sister would act on his behalf while he was away. He also indicated that no-one would be living in his unit during his absence.

1. In his evidence the tenant said that he had been given a two bedroom unit as he needed a "carer" - Mr Harland - due to his complex medical conditions. This proposition was not accepted by the Director. In any event, it seems that Mr Harland, although not a registered carer, had previously acted and continued to act in this role. According to the tenant, he spent "up to three nights a week" staying with the tenant.

1. The tenant has a dog. He gave evidence that he had arranged for his sister to look after the dog when he was away. That arrangement fell through however, and he says that consequently he placed an advertisement on a "couch-surfing" website seeking someone to live in his apartment and look after his dog. I have not seen a copy of the advertisement but understand it to have been placed sometime in late May 2013.

1. The website itself indicates that "couch-surfing" (as the name suggests) is not intended to confer any legal rights or obligations on the parties. Unlike similar accommodation services offered on the internet on sites like Gumtree, the stated intention of the service offered by the couch-surfing website is to facilitate a social relationship between "hosts" and tourists, or "guests", who wish to stay on a "couch", air-mattress", or in a "spare room" and possibly be shown by the host around their city.

1. Nevertheless, the evidence indicates that the ultimate arrangement reached between the parties did not have these characteristics. The tenant cannot be said ever to have played the role of "host" to the occupiers of his apartment; nor did they assume the role of "guests". Indeed, he only ever met one of them and that was at the conclusion of her stay. All communication between the parties until that point seems to have occurred electronically, by email and text messaging.

1. The tenant left Australia on about 15 June 2013. At that stage it appears no-one had responded to his advertisement. On 17 June 2013 Ms Mrad and Ms Beattie of the Director were told by the tenant's sister that "Wayne" - Mr Harland - was living at the rented premises. On 19 June they conducted a home visit and spoke to Mr Harland. Following that discussion, according to the Director, Mr Harland said that "he would tell the tenant that [the tenant] would need to find someone else to look after his property while he was away".

1. Shortly after the tenant left Australia, he made arrangements with two travellers from Estonia, Ms Peterson and Ms Rikken, to occupy a room in his apartment. They had responded to the advertisement on the couch surfing website and, after discussions with the tenant, agreed to move into the rented premises on certain conditions. Ms Peterson provides evidence regarding the arrangement between the parties in her two affidavits.

1. The contents of Ms Peterson's affidavits were not generally disputed by the tenant. Relevantly, they attest to the following arrangements:
   • - Ms Peterson and Ms Rikken were to rent the tenant's bedroom

- The term of the agreement was 6 months

• - The "rent" was to be $108 per person per week if two people occupied the room, and $150 per week if one person occupied the room

- Rent was to be paid directly to the tenant's bank account

- There were no utility charges

• - Ms Peterson and Ms Rikken were to share the apartment with Mr Harland, who occupied the other bedroom
• - Ms Peterson and Ms Rikken were to walk and feed the tenant's dog, and deduct the cost of dog food from the rent
• - The tenant was prepared to move all of his personal possessions from his bedroom into a storage shed

1. These arrangements were made by way of combination of email correspondence and text messages between the parties. I have not seen the text messages. The exhibits to Ms Peterson's affidavits include the email correspondence, which provide the clearest objective evidence of the arrangement between the parties.

1. The following excerpts (transcribed verbatim from the emails) are of particular relevance:

"So basically I had this add for my room on for 3weeks b4 I left and noone answered till NOW?? Typical..After I leave!!! So I didn't actually get my room cleared out of all of my Clothes from my Wardrobe! But it will not be too much of a Problem as I have a Storage Shed downstairs and everything can just go in there!! And because I am not there atm all contact to look at the Apartment and get the Key and everything will have to go through my sister!! But i did leave a bank payment book behind so you can pay the rent with that!! I left it for my sister to put money into!! So I hope you ok with that? I will give you her number and just give her a call to arrange for her to meet you at the Apartment!

So there is 2 of you...Ok , now also would you be ok to take my Dog for a cpl of walks a day as well, and to feed him? Of course I will supply all of the Food :-) But if you are able to do this it would be very handy as Wayne who is a very Lovely guy... is hardly ever at home as he is either at work or at the Gym!!...he is at a friends atm, but it is only for a few Days....

...So please know there is still all my Clothes and personal stuff in the Bed side drawers! But that is easy to clear and then it's perfect!..." (email from the tenant to Ms Peterson and Ms Rikken dated 18 June 2013)

- "...you sound Great, and also the Fact that your Friend would be staying on would be Great as a 6 month stay at my Apartment would be Perfect!! But not always applicable with tourists and Visitors?...." (email from the tenant to Ms Peterson and Ms Rikken dated 15 June 2013)

- "...The place we are renting now is just temporary couse the real renter comes back from his holiday soon....so a permanent place we can call home would be great..." (email to the tenant dated 18 June from Ms Peterson and Ms Rikken)

1. Ms Rikken and Ms Peterson were shown around the rented premises on 20 June by Mr Harland, and moved in 2 days later. Shortly afterwards, they were given a key and security pass by Mr Harland. Ms Peterson states that Ms Rikken paid a month's rent when they moved in. Between 1 July and 2 September 2013, Ms Peterson paid the tenant 9 instalments of approximately $108 each (some payments were slightly less, presumably reflecting the cost of dog food).

1. Ms Rikken moved out of the apartment on 1 September 2013, and Ms Peterson then paid a further 4 instalments of around $150 (again, often slightly reduced, I assume to take into account dog food costs), with the last payment being made on 30 September 2013. All payments to the tenant were made directly to his bank account.

1. According to the tenant, the "rent" paid by Ms Peterson and Ms Rikken was to cover the costs of "utilities" - electricity, internet and cable television supplied to the apartment - which the tenant estimated amounted to be about $300 per month. However, the facts suggest the monies paid by Ms Peterson alone - between $101 - 108 per week and later between $133 - $148 per week - exceeded those costs.

1. At the time of the initial agreement, the tenant was charged rent by the Director of $99.55 per month. That amount was later increased because Mr J had failed to lodge a rental rebate form with the Director.

1. Ms Rikken moved out of the premises on 1 September 2013 and left Australia, and Ms Peterson stayed on the apartment. Ms Mrad conducted a home visit on 2 September and informed Ms Peterson that the tenant was illegally subletting the room to her. Ms Peterson states that she was "shocked" to hear that, and immediately started looking for somewhere else to stay.

1. The tenant returned on 30 September 2013. He explained that he had to return earlier than planned to deal with complaints regarding the dog barking. Ms Peterson states that she was "very surprised as [she] was not expecting him to return". She stayed in the room, with the tenant sleeping on the couch, until she left a few days later on 5 October 2013. According to Ms Peterson, at that time, Mr Harland indicated to her that he would be leaving too.

1. This is not a straightforward case of the tenant sub-letting to Ms Peterson and Ms Rikken or indeed to Mr Harland. Most of the indicia of a conventional lease are not present. The property was never advertised as a sub-lease, no documents were signed, no bond was paid, the term was somewhat uncertain (in that, although initially for a period of 6 months, exact commencement and termination dates were never set), the premises were still full of the tenant's possessions, all utilities remained in his name, and there were no locks on the bedroom doors.

1. I accept that the tenant's primary motivation for renting his room was to ensure that his dog was looked after. It seems to me that he did not necessarily intend to become a "landlord" as defined by the Act, nor to create a formal lease at law. Ms Rikken and Ms Peterson similarly may not have seen themselves as "tenants" with the rights given to them by the Act; indeed it is hard to imagine them taking proceedings to enforce their legal rights.

1. However I am satisfied, particularly on the basis of the emails referred to above, that regardless of his subjective intentions, the tenant in fact granted Ms Rikken and/or Ms Peterson the right to exclusively occupy his room for up to 6 months to the exclusion of all others (including himself) in return for periodic rent payments and for looking after his dog.

1. It is evident both from the tenant's emails and from Ms Peterson's evidence that Mr Harland also lived at the premises at times and had sole use of one bedroom during the period of the tenant's absence, although the arrangements surrounding that occupation are less than clear. The tenant maintains that Mr Harland sometimes stayed at his apartment but at all times had a principal residence elsewhere but Ms Peterson's evidence - and indeed the tenant's own emails - belie that assertion. Mr Harland did not give evidence regarding his use of the premises.

1. Whilst I accept that Mr Harland lived at the premises during the relevant period, I do not consider I have sufficient evidence to make a finding regarding the nature of his occupation. In any event, that is not necessary.

1. In summary, it seems to me on considering all the facts that the landlord has established on the balance of probabilities that the tenant has subleased or at every least purported to sublease the premises to Ms Peterson and/or Ms Rikken. In these circumstances I am bound to make an order of possession.