Elabbas v CTTT & Anor

Supreme Court of NSW|2007-08-02|Before: Harrison J

Background 14 On 8 July 2005, the plaintiff and Housing Corporation entered into a residential tenancy agreement in respect of premises at Riverwood. There is a page at the end of the agreement that contains notes. Note 3 refers to what has to appear in the notice of termination. There is no dispute about the content of the notice of termination. 15 Note 4 refers to service and relevantly states: "(1) A notice of termination given to a tenant may be: (a) posted to the tenant's home; or (b) given to the tenant personally; or (c) given to a person aged 16 years and over who normally pays the rent; or (d) given to a person aged 16 years and over at the premises to pass on to the tenant. …" 16 The notice of termination was posted to the address of the premises referred to in the tenancy agreement. However, Note 4 differs from Clause 25 of the Residential Tenancies (Residential Premises) Regulation 1995 (NSW), which was in force at the relevant time I shall refer to it in more detail shortly. The Note and Regulation 25 are inconsistent so it is the Regulation that applies.

The proceeding in the Tribunal 17 On 31 August 2006, the defendant brought proceedings in the CTTT seeking an order ending the tenancy agreement and taking possession of the premised due to rent arrears. The reasons for seeking that order were because the tenant had failed to comply with the tenancy agreement by not paying rent on time, and the rent account exceeded 14 days in arrears when notice of termination was issued. The Department of Housing requested the tenancy to be terminated and possession given to the Department. The Department sought a daily occupation fee until possession was taken by the Department. 18 On 31 July 2006, the notice of termination was issued by the defendant and was served by post to the address of the property stipulated in the agreement. The notice, signed by the Senior Client Service Officer, contained an endorsement "I certify that this Notice of Termination was posted by me using pre-paid post at the local post office on 31 July 2006". 19 On 26 September 2006, Mr Elabbas wrote a letter "To Whom It May Concern" which was before the Tribunal Member. It stated that he, "a tenant of [he property] give authorisation to Shannon Attard who is my fiancée and wife to be in the near future, after all this mistake that has occurred to me, so in the mean time until this mistake is solved I wish my fiancée, Shannon Attard to act as my full representative in the matters relating to [the property]. Shannon Attard has and still a resident at [the property] since the 11/5/2006." 20 Section 130(4) of the Residential Tenancies Act 1987 (NSW) provides that "A notice of termination given under this Act may be given in such manner as may be prescribed for the purposes of this section." 21 Clause 25 of the Residential Tenancies (Residential Premises) Regulation 1995 which was in force at the time (and has since been repealed) is relevant. It is identical to Clause 29 of the Residential Tenancies Regulation 2006. This regulation is set out in the Tribunal Member's reasons. Clause 25(1)(c) read "by sending it by post to the residential premises occupied by the tenant."

The Tribunal Member's reasons 22 The Tribunal Member in his written reasons dated 9 May 2007 made the following relevant findings at [1]-[4] and [6] - [7]: "1. I am satisfied that the parties entered into a residential tenancy agreement as defined under the Residential Tenancies Act 1987, s.3 and accordingly that the Tribunal has the jurisdiction to hear this application. 2. I am satisfied the applicant has served a valid notice of termination on the respondent in accordance with the provisions of the Residential Tenancies Act 1987, s 57 and that the notice is in the form specified in s.63 . 3. That notice was served by posting it, on 31 July 2007, to the residential premises occupied by the respondent. The Residential Tenancies Regulations 2006 cl 29(1)(c) relevantly provides: "29 Service of notices of termination (1) For the purposes of section 130 (4) of the Act, a notice of termination given under the Act to a tenant may be given: (a) by delivering it personally to the tenant or a person apparently of or above the age of 16 years by whom the rent payable by the tenant is ordinarily paid, or (b) by delivering it to the residential premises occupied by the tenant and by leaving it there with some person apparently of or above the age of 16 years for the tenant, or (c) by sending it by post to the residential premises occupied by the tenant." The notice was, pursuant to the Interpretation Act 1987, s76 deemed to be received on 4 August 2006. The tenant was already 75 days in arrears of rent as at the date of service. 4. I am further satisfied the respondent has not given up possession of the residential premises in accordance with that notice. … 6. I am satisfied the applicant has established the grounds relied on in the notice of termination…." 7. I have considered all the relevant circumstances put to the Tribunal and am satisfied pursuant to s. 64(2)(b)(ii) that the breach, in the circumstances of the case, is such as to justify termination of the tenancy. The tenant did not, as claimed by his representative, have a blameless record in regard to rent arrears. In fact he was already some ten days in arrears as at the date of his arrest (26 May 2006). His tenancy had previously been terminated by order of the Tribunal for rent arrears. In all the time he was incarcerated, from 26 May 2006 to 7 November 2006, not one rent payment was made and no contact was made with the applicant's representatives directly by the respondent or on his behalf by his fiancée who was living at the premises."

Service of the Notice of Termination 23 It is common ground that the plaintiff was in gaol for the period 25 May 2006 to 7 November 2006. The plaintiff submitted that during that period the residential premises were not occupied by him. On 31 July 2006, when the notice of termination was issued, the plaintiff was in gaol. 24 The second defendant submitted that as this point was not raised before the Tribunal Member it should not be permitted to be pursued for the first time in these appeal proceedings. The plaintiff, in reply, submitted that the question of service is a jurisdictional fact and unless the notice of termination was served in accordance with the Act the Tribunal is precluded from making an order for possession. 25 The plaintiff submitted that the provisions of the Interpretation Act 1987 (NSW) should not have been relied on by the Tribunal Member in circumstances where the parties accepted that the plaintiff was in gaol and not in occupation of the premises to which the notice of termination was posted at the time of purported service. The plaintiff further submitted that if the Court were to adopt some strained interpretation of the meaning of "occupied" so as to find that the notice of termination had been sent to premises "occupied" by the plaintiff, then the plaintiff's sworn uncontested evidence that he did not receive the notice should displace the presumption of service which was otherwise available pursuant to s 76 of the Interpretation Act. 26 The defendant submitted that the natural and ordinary meaning of the relevant requirement (cl 25(1)(c) Residential Tenancies (Residential Premises) Regulation, 1995) for service by post of a Notice of Termination requires that service be effected at the demised premises. According to the second defendant, it does not required that the tenant must be physically present or in occupation and a construction that requires this of a landlord is not merely too broad but impracticable and unworkable. 27 The second defendant referred to s 33 of the Interpretation Act which reads: "In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote the purpose or object. " 28 According to the second defendant, the plaintiff contends for a wide and onerous interpretation of clause 25. Clause 25 is not expressed in terms that a tenant be "in occupation" at the time of service and that such a construction does not promote, but in fact hinders, the purpose or the object of the Residential Tenancies Act. 29 According to the second defendant, if the plaintiff's construction is to be preferred to the natural and ordinary meaning of the words (couched as it is in passive language, "occupied by") a landlord in the second defendant's position would be restrained from ever being considered to have effectively served tenants who, for whatever reason, are absent from the premises. 30 The second defendant further submitted that if the plaintiff's construction is preferred, situations would invariably arise where, as was the case here, a landlord without notice of the absence of a tenant for protracted periods could never effect valid service of a notice of termination. Where a landlord is unaware, and kept unaware, of the tenant's absence but the obligation to pay rent on time (or obligations as to maintaining the property) is otherwise met (by the tenant, or by a third party on his/her behalf), a landlord could conceivably never effect service of a notice of termination on the construction that the tenant was not at the time of receipt by post of the notice, "in occupation " of the premises. 31 According to the second defendant, the case is of particular significance for the defendant, a social housing provider with obligations under the Housing Act 2001 (NSW), and under gazetted Commonwealth-State funding agreements to provide low cost housing to eligible persons wait-listed for such accommodation, landlords with tenants convicted of serious offences which attract long periods of full time incarceration could, on the plaintiff's contention, never effect valid service in circumstances where the Housing Corporation was not notified of the imprisonment or was deliberately misled as to a tenant's whereabouts. 32 The second defendant did not know that the plaintiff was in gaol when it served its notice of termination. The Tribunal Member made a finding that in all the time that the plaintiff was incarcerated, from 26 May 2006 until 7 November 2006, no contact was made with the second defendant's representatives either directly by Mr Elabbas or on his behalf by his fiancée who was living at the premises. At the date that the notice of termination was served, the plaintiff had not notified the second defendant that he was not occupying the premises. The Macquarie Dictionary defines "occupied" as "to be resident or established in (a place) as its tenant; to tenant. It is my view that Mr Elabbas, as the tenant, had not taken any steps to notify the second defendant of any change to the tenancy, and therefore he still occupied the premises. Hence, service of the notice of termination complied with Regulation 25.

Calculation of arrears 33 As at the date of the hearing in the CTTT, the defendant submitted that the plaintiff owed $5,581.88 in rental arrears. The plaintiff submitted that as at the date of hearing, the amount of rental arrears was actually about $2,063, comprising of 10 days in arrears as at 22 May 2006, totalling approximately $70. $5 per week for 13 weeks = $65. $155 per week for 10.5 weeks = $1,627.50. 43 days from 7 November 2006 @ $7 per day = $301. 34 According to the plaintiff, he was incarcerated for 23.5 weeks so was liable to pay $5 per week for the first three months, that is, $65. He was liable to pay $155 per week for the balance of his imprisonment 10.5 weeks x $155 = $1,627.50. In respect of the 43 days from the date of release, 7 November 2006, until the date of hearing, 20 December 2006, the plaintiff was entitled to a rental subsidy which would have reduced his rent to approximately $49 per week. The plaintiff says that from the date of hearing, he continued to be entitled to a rental subsidy reducing his rent to approximately $49 per week, rather than the occupation fee ordered by the CTTT of $31.43 per day. These submissions were not made to the Tribunal Member. 35 The plaintiff referred to the second defendant's policy concerning a tenant who was serving a period of imprisonment. The plaintiff could have sought to obtain the benefit of a policy in relation to prisoner's rental obligations ($5.00 per week) for a period of three months. He did not do so. If he had done so, it was a discretionary decision of the second defendant as to whether or not he received this benefit. 36 On 24 July 2006, the second defendant forwarded a letter by post to the plaintiff informing him that the rent was to increase to $225 per week as from 2 October 2006. The plaintiff contended that this notice was not properly served and relied upon the same arguments as those raised in relation to the notice of termination. For the reasons given earlier, the notice was properly served upon Mr Elabbas. 37 In related to the rent arrears, the Tribunal Member stated: "…Indeed it was not disputed at any time by the respondent's representative that the rent arrears are now in excess of $5,000. It is noted that a substantial part of that arrears figure (approximately $2,300) arose as a result of the decision by the applicant to cancel the rent subsidy in November 2006 effective from 11 May 2006. The Tribunal has no jurisdiction to look behind a decision of the applicant to cancel a rent subsidy provided that the actual rent charged is not in excess of the market rent provided for in the tenancy agreement." (at [6]) 38 There is no error in the approach by the Tribunal Member in relation to the calculations of rental arrears. There is no error of law.

Procedural fairness 39 The plaintiff's Counsel referred to Glenn Nicholson v New South Wales Land and Housing Corporation also known as the Department of Housing, NSWSC, unreported, 24 December 1991 per Badgery-Parker J and Swain v Residential Tenancies Tribunal of New South Wales, NSWSC, unreported, 22 March 1995, per Rolfe J. 40 In Nicholson, Badgery-Parker J stated: "It seems to me to be abundantly clear in the present case that, by virtue of the public policy underlying the institution of public housing pursuant to the Commonwealth/State Housing Agreement, the statement in s4(a) of the Housing Act 1985 of the objects of that legislation, the policy statement of the Minister at the time of the introduction of that legislation into the Legislative Assembly, and the statement in the pamphlet Exhibit A, each with its particular emphasis upon accommodation which should be "secure" - which in the respective contexts clearly refer not to security from unauthorized entry but security of tenure - the plaintiff had as a public tenant a legitimate expectation of security of tenure except in the event of breach by him of the conditions of his lease. Accordingly, (a) if the decision of the defendant to exercise its right under the lease to give notice of termination pursuant to s58 of the Residential Tenancies Act was a decision of a kind apt to attract the rules of procedural fairness and (b) unless there is to be found any clear statutory indication to the contrary, the plaintiff was entitled to entertain a legitimate expectation of procedural fairness in respect of any decision made by the defendant which would have the effect of depriving him of his tenancy. It matters not how it be expressed. Either, he had a legitimate expectation of security of tenure, and was therefore entitled to procedural fairness in respect of a decision to deprive him of it; or, he in fact enjoyed the benefit of tenancy, and had a legitimate expectation of procedural fairness in respect of any decision which would adversely affect that benefit.

The position appears to me to be stronger in respect of a decision to take steps to terminate a tenancy. The position of a Housing Department tenant as compared with a private tenant is a matter of considerable value, because of the benefits of reduced or subsidised rent. To be deprived of it is to put the tenant back into the private housing market, a market which, by definition, he is incapable of competing in. To deprive him of his tenancy is therefore to deprive him of a very substantial benefit indeed. There is no question as to the right of the Department as a matter of contract to terminate the tenancy, but the decision to do so is an administrative decision which carries the capacity to deprive the tenant of substantial benefits, namely the availability of accommodation at a subsidised rent, and of security of tenure which, if not his right, was his reasonable expectation. In my opinion, on the authority of the cases which I have briefly referred to above, the relationship between the parties and the plaintiff's reasonable expectation of security of tenure apart from breach created a situation where the rules of natural justice bound the defendant not to take an adverse decision against him on the basis of adverse material known to it but not to him, without giving him an opportunity to comment on and if possible rebut such materials. In the present case the defendant did not afford the plaintiff that right, and by that omission, deprived him of what natural justice entitled him to." 41 In Swain, Rolfe J stated: "On the other hand the evidence seems to indicate that no clear line was drawn between the negotiation proceedings and the "formal" hearing of the application. This would not be a matter of particular concern to me, although it would perhaps be desirable for a distinction to be drawn. Of more concern is the unchallenged evidence as to the way in which evidentiary material was presented to the Tribunal. I leave aside whether witnesses were sworn to give evidence or not for, on one view, that is a matter entirely for the Tribunal. The matter which troubles me is that there seems to have been no formality introduced requiring a witness to furnish evidence from the witness box, or a place equivalent thereto, and, having done so, to be questioned by way of cross-examination by the plaintiffs. Rather there seems to have been an interchange of dialogue between the Tribunal, representatives of RTA and the plaintiffs without any structured furnishing of evidence, which would have allowed the plaintiffs to have concentrated upon the cross-examination of the particular witness giving the evidence. I understand the Tribunal is able to handle matters in the way provided by the Act but, in a case such as this, which Mr Cochrane recognised as one involving some degree of sensitivity, I think it may have been appropriate for a more formal approach to have been taken." 42 Section 28 of the CTTT Act reads: "28 Procedure of Tribunal generally

(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.

(4) The Tribunal is to take such measures as are reasonably practicable to ensure that the parties in any proceedings understand: (a) the nature of the assertions made in the proceedings and the legal implications of those assertions, and

(b) the procedure of the Tribunal and any decision or ruling made by the Tribunal that relates to the proceedings." 43 Section 35 of the Act reads: "Opportunity for parties to present case

The Tribunal must ensure that each party in any proceedings is given a reasonable opportunity:

(a) to call or give evidence and otherwise present the party's case (whether at a hearing or otherwise), and

(b) to make submissions in relation to the issues in the proceedings." 44 Section 35 provides that the CTTT "must ensure" that each party is given "a reasonable opportunity" to present its case. There are provisions which allow the CTTT a significant degree of flexibility in adapting its procedures to the exigencies of the case in determining the manner in which the proceedings will be conducted. Nevertheless, those provisions should not be construed so as to derogate from other provisions cast in obligatory language which constitute core elements of procedural fairness - see Italiano v Carbone & Ors [2005] NSWCA 177 at [105] and [106]. 45 The plaintiff appeared at the Tribunal on the day that the hearing took place. Ms Wilkinson appeared for him. The Tribunal Member outlined the procedure to be followed when he stated: "Mr Lavdeos, as the applicant, has the opportunity to give his evidence first and he has the burden of proof. So he will explain his side. He [can] produce documentary evidence that he's relying on. Ms Wilkinson, I'll ask you to listen without comment or interruption. If you wish to you can take notes and when Mr Lavdeos is finished you'll be given an opportunity to reply and to produce any documentary evidence that you're relying on. At the end of that process I will make a decision. My decision is final and binding. There's no avenue of appeal except to the Supreme Court. Do you understand the procedure?" 46 Mr Lavdeos replied "Yes". The Tribunal Member asked if the parties were ready to proceed with the matter. Both parties said that they were. 47 While Ms Wilkinson chose not to call Mr Elabbas as a witness, he took the oath in case he later decided to give evidence. When he was asked if he wanted to say anything extra, he said: "All I could say is that I never received anything through the goal. No letters, no anything, your honour. I just had to go on Shannon's word that she was paying the rent and that everything was fine." 48 The facts of this case are unlike that of Nicholson. In Nicholson, the Housing Commission made an adverse decision against the tenant on the basis of adverse material known to it but not to tenant without giving him the opportunity to comment on and rebut such material. This is not the case here. The Tribunal Member outlined the procedure to be followed and ensured that the parties were given a reasonable opportunity to give evidence and make submissions in relation to the issues in the proceedings. 49 Finally, the plaintiff submitted that the Tribunal member failed to exercise his discretion when deciding whether or not to terminate the tenancy. Section 64(2)(b)(ii) of the Residential Tenancies Act states:

(2) The Tribunal, on application by a landlord under this section, is to make an order terminating the agreement if it is satisfied: (b) in the case of a notice given by a landlord on the ground referred to in section 57, relating to a breach of the agreement: (i) that the landlord has established the ground, and (ii) that the breach, in the circumstances of the case, is such as to justify termination of the agreement, …" 50 The Tribunal Member took into account firstly, the arrears; secondly, that a previous order for termination for rent arrears had been made and that not one payment of rent had been made. Further, the Tribunal Member took into consideration that neither the plaintiff nor his representatives contacted the second defendant while he was incarcerated. The Tribunal Member exercised his discretion in accordance with s 64(2)(b)(ii). The appeal fails as does the claim for relief. 51 In supplementary submissions, the plaintiff sought once again to have the affidavit of Shannon Attard dated 29 March 2007 admitted into evidence. This affidavit was not in evidence before the Tribunal, and as a result I disallowed it for the purposes of these proceedings. I adhere to this decision. 52 The appeal is dismissed. The orders of the Tribunal Member Jeffrey Smith dated 20 December 2006 are affirmed. The further amended summons filed 2 August 2007 is dismissed. 53 Costs are discretionary. Costs normally follow the event. The plaintiff is to pay the defendants' costs as agreed or assessed.

(2) The orders of the Tribunal Member Jeffrey Smith dated 20 December 2006 are affirmed.

(3) The further amended summons filed 2 August 2007 is dismissed.

(4) The plaintiff is to pay the defendants' costs as agreed or assessed. **********

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.

Consumer, Trader and Tenancy Tribunal Act 2001(NSW)ss 28, 33, 35, 36, 39, 53, 54, 65, 67

Residential Tenancies Act 1987(NSW)

Consumer Trader and Tenancy Tribunal Act 2001(NSW)

Residential Tenancies (Residential Premises) Regulation 1995(NSW)

CITATION : Elabbas v CTTT & Anor [2007] NSWSC 878

Chapman v Taylor, Vero Insurance Ltd v Taylor [2004] NSWCA 456 Glenn Nicholson v New South Wales Land and Housing Corporation also known as the Department of Housing, NSWSC, unreported, 24 December 1991 CASES CITED : Italiano v Carbone & Ors [2005] NSWCA 177 Swain v Residential Tenancies Tribunal of New South Wales, NSWSC, unreported, 22 March 2995 Kalokerinos v HIA Insurance Services Pty Limited [2004] NSWCA 132

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