Gurisik v Gurisik

REASONS FOR DECISION

1. Brothers Ahmet and Sermet Gurisik, the respondents in this appeal, are the registered proprietors of a property in Kings Langley, Sydney. For the past 25 years, a third brother, Mehmet Gurisik (the appellant), has resided at the property.
2. In 1991, Sermet Gurisik and his wife Suzanne, the then owners of the property, entered into an oral agreement with the appellant (the 1991 agreement). The terms of that agreement are now in dispute.
3. Sermet and Ahmet Gurisik claim that, under the terms of the 1991 agreement, in return for the right to occupy the property the appellant was required to pay them $200 per week plus all outgoings relating to the upkeep of the premises. The appellant does not dispute the quantum of payments agreed to, but claims that it was agreed that the weekly payments would be treated as payment toward the mortgage on the property, and that, on discharge of the mortgage, the property would pass to him.
4. In 2011, Suzanne Gurisik transferred her share of the property to Ahmet Gurisik.
5. In 2015, the respondents lodged an application in the NSW Civil and Administrative Tribunal (NCAT) seeking a termination order under s 94 of the Residential Tenancies Act 2010 (NSW) (the 2010 Act). Section 94 of the 2010 Act states that, on application by a landlord, the Tribunal may make a termination order for a "residential tenancy agreement", providing certain conditions are met.
6. The appellant asserted that the Tribunal lacked jurisdiction to make the order sought because the 1991 agreement was not a "residential tenancy agreement" within the meaning of the 2010 Act.
7. In a decision made on 29 July 2016, the Tribunal found that the 1991 agreement was a residential tenancy agreement and therefore the Tribunal had power to determine the application lodged by the respondents in 2015.
8. The appellant now appeals that decision. For the reasons that follow we refuse leave to appeal and dismiss the appeal.

The Appeal

1. The decision under appeal concerns the question whether the Tribunal has jurisdiction to deal with the application to NCAT made by the respondents. Accordingly, it is an "ancillary decision" as defined by s 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (the NCAT Act).
2. The appellant may appeal against this decision as of right on any question of law or, with the leave of the Appeal Panel, on any other grounds: s 80(2)(b) of the NCAT Act. Pursuant to Clause 12 of Schedule 4 of the NCAT Act, as this is an appeal from a decision of the Consumer and Commercial Division of NCAT, leave to appeal may be granted only: if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
3. The appellant relies on four grounds of appeal: 1. That he was denied procedural fairness as a result of the Tribunal's alleged failure to give him the opportunity to respond to the affidavits filed by the respondents. 2. That the Tribunal misconstrued s 94 of the 2010 Act by failing to have regard to the relevant provisions of the Residential Tenancies Act 1987 (NSW) (the 1987 Act), as in force when the 1991 agreement was made. 3. That the finding made by the Tribunal that the 1991 agreement did not amount to an "agreement for the sale of land that confers a right to occupy residential premises on a party to the agreement", was against the weight of evidence. 4. That significant new evidence is now available that was not available in the hearing, including a valuation report concerning the subject property prepared in 1995.
4. The first two grounds raise questions of law. The third and fourth ground do not raise question of law and may be maintained by the appellant only if the Appeal Panel grants leave to appeal on those grounds.

Ground 1: Denial of procedural fairness

1. The appellant contends that he was denied procedural fairness in that the Tribunal failed to give him the opportunity to file evidence in reply concerning the threshold jurisdictional issue. He submits that the Tribunal fell into error by putting in place a timetable which required him to file and serve his submissions and evidence on the jurisdictional issue before the respondents, thereby "reversing the onus of proof". In addition, he submits that this unfairly disadvantaged him as "he could not know the case that [the respondents] would put that there was a residential tenancy agreement".
2. The respondents disagree. They assert that at no point did the Tribunal reverse the onus of proof and point out that they conceded at the hearing at first instance that it fell to them to establish that there was a residential tenancy agreement within the meaning of the 2010 Act. With respect to the contention that the appellant was disadvantaged as he did not know the case he had to meet, they argue that this is "bordering on the absurd".

Procedural history

1. To put the parties' submissions in context it is necessary to set out the procedural history to the decision under appeal. The following is taken from the Reasons given by the Tribunal at [7] - [18] (the Reasons). Neither party disputes the accuracy of that summary.
2. At a directions hearing on 17 December 2015, the appellant challenged the Tribunal's jurisdiction to determine the Application. The Tribunal directed that the appellant file and serve submissions and evidence on that issue by 18 January 2016. In answer to that direction, the appellant filed a statutory declaration on 11 January 2016, in which he declared at [4]: Shortly after I entered into possession of the premises [in May 1991], my brother Sermet Gurisik said to me words to the effect: "You can have the premises, if you pay the mortgage payments. When you pay out the mortgage and the property is yours".
3. At a further directions hearing on 25 February 2015, the Tribunal listed the question of jurisdiction for hearing on 20 April 2016 and directed the respondents to file and serve their material on that issue. That hearing was adjourned to 9 June 2016, on the application of the appellant.
4. On 24 March 2016, the respondents filed their submissions and evidence. On 20 April 2016, the parties informed the Tribunal that all documents relating to the jurisdictional question had been filed.
5. On 13 May 2016, the appellant filed submissions addressing the jurisdictional issue. In addition, he informed the Tribunal that he consented to the requirement to hold a hearing being dispensed with and the issue of jurisdiction being determined "on the papers" as permitted by s 50(2) of the NCAT Act. The respondents opposed the issue being determined in that manner and the Tribunal proceeded with the hearing listed on 9 June 2016.

Consideration

1. The Tribunal was obliged to afford all parties procedural fairness. As part of that obligation the Tribunal was required to take such measures as are reasonably practicable to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings: ss 38(2) and 38(5)(c) of the NCAT Act.
2. Subject to that obligation and the "guiding principle" - to facilitate the just, quick and cheap resolution of the real issues in the proceedings - the Tribunal was entitled to determine its own procedure, unless the NCAT Act or the procedural rules otherwise provided: ss 36(2) and 38(1). Neither the NCAT Act nor the Civil and Administrative Tribunal Rules 2014 (NSW), stipulate the procedure to be followed in proceedings relating to an application made under the 2010 Act and/or proceedings which involve a challenge to the Tribunal's jurisdiction.
3. The contention that the Tribunal failed to afford the appellant procedural fairness cannot be accepted for a number of reasons.
4. First, it was self-evident from the initiating application lodged by the respondents in September 2015 (the Application), that they were asserting there was a residential tenancy agreement. They bore the onus of proof in respect of the existence of a residential tenancy agreement and acknowledged that in the proceedings before the Tribunal. (Transcript of proceedings, Gurisik and anor v Gurisik, NCAT, 9 June 2016 p 11, ll 10- 12).
5. The appellant relied upon [45.1] of the Reasons in support of the proposition that the Tribunal had "reversed the onus" of proof of the existence of a residential tenancy agreement.
6. Paragraph [45.1] of the Reasons is in the following terms: The Respondent's version of the Agreement is implausible, even between blood brothers who presumably had a close family relationship at the time the Agreement was entered. The Premises were worth between $162,000 and $185,000 at the time of the Agreement. It is implausible that Sermet agreed to sell the Premises to Mehmet for less than $81,500, at some unknown date in the future, possibly never (if the Respondent never paid off the mortgage). On any view of it, accepting the Respondent's submissions would be to accept that the Applicants agreed to sell property for less than 50% of its value or worth, at some unknown date in the future, and in doing so remove their right to sell or profit from the ownership of the Premises. This view is implausible, and becomes more so when the Tribunal considers the transfer in December 2011 from Sermet's wife to Ahmet; it is implausible that Ahmet would acquire a half share in Premises in 2011 which were to be sold for the payment of less than $81,500, even if the proposed purchaser were his own brother. No businessman, which I accept Ahmet is, would be party to such a non-commercial deal. I am supported in this view by the words Ahmet said to Sermet in late 1990 or early 1991 about Mehmet renting the premises from Sermet and his wife. In that conversation, which is set out in Ahmet's affidavit at [11], Ahmet said "tell [the mortgagee] that although the rent will be to break even only, as he is our brother, we will benefit in the long term in capital appreciation".
7. That paragraph does not suggest that the Tribunal reversed the onus of proof or applied an incorrect onus. In that paragraph the Tribunal Member recorded her view that the agreement propounded by the appellant was implausible. That conclusion is founded upon the underlying facts set out in the paragraph. It does not involve the application of any onus or burden of proof.
8. Second, the proposition that by directing the appellant to provide his evidence first, the Tribunal fell into "procedural error", cannot be accepted. As noted above the Tribunal was entitled to determine its own procedure in relation to the timetable for the filing of material. There was no "rule", as the appellant appears to assert, requiring the Tribunal to direct the party asserting jurisdiction to file their material before their opponent. In any event, it was the appellant who raised the jurisdictional issue and it was therefore appropriate that he file his evidence in relation to that question first.
9. Third, it cannot reasonably be argued that the appellant was not given an opportunity to put his case because the Tribunal set a timetable which did not extend him an invitation to file evidence in reply. In the intervening 10 weeks between receiving the respondents' material and the hearing, the appellant, who was then legally represented, did not request the opportunity to file evidence in reply. Nor, in the hearing itself, did he apply either to adduce further evidence or require any of the respondents' witnesses for cross-examination. Indeed, as the respondents point out, in the course of the hearing the Member made repeated enquiries about whether the appellant wished to rely on further evidence or make further submissions. In addition, prior to the hearing, the appellant had informed the Tribunal that he consented to the matter being dealt with "on the papers". From this it can be inferred that at that stage his legal representatives considered that there was no additional evidence which might assist the appellant's case.
10. Fourth, the appellant was squarely on notice of the issue to be determined. Since 25 February 2016, the parties were aware of the Tribunal's intention to hold a hearing to determine the threshold jurisdictional issue. The appellant was given the evidence and submissions relied upon by the respondents ten weeks before the hearing. There is no basis for his claim that he was ambushed or placed at an unfair advantage.
11. The contention that the Tribunal failed to afford the appellant a reasonable opportunity to put his case cannot be accepted. This ground of appeal fails.

Ground 2: Misconstruction of 2010 Act

1. The appellant submits that, in coming to its conclusion that, for the purposes of s 94 of the 2010 Act, there was a "residential tenancy agreement", the Tribunal failed to have regard to the provisions of the 1987 Act, as in force when the 1991 agreement was made.
2. The appellant says that the agreement between the parties was not an "existing residential tenancy agreement" within the meaning of s 13 of the 2010 Act. He submits that only if a residential tenancy agreement had been created pursuant to the 1987 Act could there be a "residential tenancy agreement" under the 2010 Act for the purposes of this case.
3. In support of this proposition, the appellant cites dicta of Bathurst CJ in Hudson v Arap 1 (NSW) (2015) 90 NSWLR 477; [2015] NSWCA 126 at [26]-[27]. The question His Honour was discussing in those passages was whether the agreements he was considering fell within the terms of s 8(1)(f) of the 2010 Act, which provides that the 2010 Act does not apply to an "agreement for the sale of land that confers a right to occupy residential premises on a party to the agreement". His Honour said: [26] In the present case, the section is designed to exclude from the protective provisions of the Act an agreement which confers a right to occupy a residential premises where the right is not conferred by an agreement operating as a lease or licence, but by a contract for the sale of land. [27] In this context, the section may be contrasted with its predecessor, s 6(1)(a) of the Residential Tenancies Act 1987 (NSW), which provided that the Act did not apply to a residential tenancy agreement if the tenant was party to an agreement made in good faith for the sale or purchase of residential premises.
4. Nothing said in either of those paragraphs provides support for the proposition the appellant now advances. Moreover, the paragraph that preceded them is, in fact, far more relevant. In it His Honour summarised the relevant principles of statutory interpretation: [25] The principles concerning construction of statutory provisions are well established. As was stated by the plurality of the High Court in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (NT) [2009] HCA 41; 239 CLR 27 at [47], "the task of statutory construction must begin with a consideration of the text itself. … The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy." See also Certain Lloyd's Underwriters v Cross [2012] HCA 56; 248 CLR 378 at [23]; Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [69].
5. In this case, the Tribunal was required to construe s 94 of the 2010 Act according to those principles. In our view, there was no warrant for the Tribunal to go beyond the confines of the 2010 Act in order to properly construe s 94. This is because the 2010 Act as a whole provided the necessary context and because s 13 of that Act provided the statutory definition of a residential tenancy agreement that was relevant to the Tribunal's decision. Section 13 states: 13 Agreements that are residential tenancy agreements (1) A "residential tenancy agreement" is 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. (2) A residential tenancy agreement may be express or implied and may be oral or in writing, or partly oral and partly in writing. (3) An agreement may be a residential tenancy agreement for the purposes of this Act even though: (a) it does not grant a right of exclusive occupation, or (b) it grants the right to occupy residential premises together with the letting of goods or the provision of services or facilities. Note: See section 8 for agreements that are not covered by this Act. Section 7 sets out premises not covered by this Act. (4) For the purpose of determining whether an agreement is a residential tenancy agreement, it does not matter that the person granted the right of occupation is a corporation if the premises are used (or intended for use) as a residence by a natural person.
6. Second, it is a fundamental proposition of statutory interpretation that, as Bathurst CJ put it, "the task of statutory construction must begin with a consideration of the text itself". Unless, for a proper understanding of the context of the legislation in question, it is necessary or otherwise helpful to examine repealed legislation, this will not be done. We can see no ambiguity in s 13 of the 2010 Act that requires the Tribunal to interpolate a definition of "residential tenancy agreement" drawn from the repealed 1987 Act into s 94 of the 2010 Act. This would have been a fundamentally wrong approach to the task of statutory construction that the Tribunal was required to perform. Sections 8, 13 and 94 of the 2010 Act stood on their own. It was those sections which the Tribunal had to construe in the context of the 2010 Act as a whole and nothing else.
7. Third, as the appellant argues, the transitional provisions in the 2010 Act (as set out in Part 2 of Schedule 2 to the 2010 Act) pick up certain aspects of the 1987 Act. However, they do little more than preserve existing rights under existing tenancy agreements. They do not affect the definition of "residential tenancy agreement" in s 13 of the 2010 Act. Indeed, cl 3(2) of Schedule 2 to the 2010 Act provides, "This Act applies to any such agreement [ie an existing residential tenancy agreement] despite the terms of the agreement". In other words, any previously existing residential tenancy agreements, whatever their terms, are picked up by the 2010 Act and the terms of the 2010 Act apply to them without reference to the 1987 Act. If any further clarification of this point is needed it is provided in s 6 of the 2010 Act which provides, "This Act applies to residential tenancy agreements [as defined in s 13 of the 2010 Act] in respect of residential premises whether made before or after the commencement of this section."
8. This ground of appeal fails.

Ground 3: Finding against the weight of evidence

1. The Tribunal found there was "no agreement between the parties (in particular between Sermet and Mehmet) for the sale of the Premises that conferred a right on Mehmet to occupy the premises": Reasons at [45]. This finding was critical to the Tribunal's ultimate decision that the 1991 agreement was a residential tenancy agreement for the purpose of the 2010 Act, because, as stated above, that Act does not apply to an "agreement for the sale of land that confers a right to occupy residential premises on a party to the agreement": s 8(1)(f) of the 2010 Act.
2. The appellant contends that the finding that the 1991 agreement did not fall within the s 8(1)(f) exception, was against the weight of evidence. He contends that the Tribunal failed to give proper regard to his statutory declaration dated 11 January 2016 and the annexed supporting documentation.
3. The Tribunal outlined in its Reasons the evidence relied upon by the parties and gave clear and persuasive reasons for the conclusion that the 1991 agreement did not fall within the s 8(1)(f) exception.
4. The Tribunal found at [45] that it was implausible that the proprietors would agree to sell the subject property, valued at between $162,000 and $185,000 at the time of the 1991 agreement, for a sum of effectively less than $81,500 (the amount of the mortgage) at some undetermined future date. That evidence was not in dispute. This finding, in itself, would been sufficient, in our view, to justify a finding that the 1991 agreement did not amount to an agreement for the sale of land.
5. But the Tribunal found several other reasons for rejecting the appellant's account of the 1991 agreement. Each was explained in detail and cogently reasoned.
6. First, the Tribunal rejected the appellant's contention that it would not have been favourable to him to "pay the owner's mortgage, without any benefit to [him]". The Tribunal found that the appellant did in fact receive a benefit, namely being able to live at the subject premises at "a very low rent": at [45].
7. Second, the Tribunal found that even if there was an agreement of the type alleged by the appellant, it was not an agreement to sell the property: Reasons at [45.4]. Rather it was a conditional agreement to sell the property at some time in the future. This too was a finding open to the Tribunal on the evidence.
8. Third, the Tribunal found there to be no evidence that the agreement to sell (if it existed) itself conferred a right on the appellant to occupy the premises: [45.4]. Certainly, in our view, it could be inferred from the fact that the appellant occupied the premises for an extended period that there was an agreement for him to do so, but, in order to fall within s 8(1)(f) that agreement was required to be part of an agreement for the sale of land. The requirement that the right to occupy must be conferred by the sale contract itself was confirmed, as the Tribunal recognised, by the Court of Appeal in Hudson v Arap 1 (NSW) at [28]. Again, the finding of the Tribunal was open on the evidence.
9. Fourth, the Tribunal found that the $200 per week paid by the appellant was insufficient to cover the mortgage costs, let alone reduce the principal: [45.5]. If the agreement was that the appellant would pay the mortgage, he was doing so only in part. In our view, it was open to the Tribunal Member to conclude from this, as she did, that it was more likely that these payments were made as rental payments kept at a low rate because of the family relationship.
10. Fifth, evidence given by the appellant that in 2014 he had met with Ahmet Gurisik to "make an offer" on the property is not necessarily inconsistent with the appellant having previously taken an equitable interest in the house. However, it was open to the Tribunal Member to conclude in the light of all the other evidence available to her that the appellant would not have made such an offer if he had believed that he already owned the house pursuant to the agreement made in 1991: at [45.6].
11. Sixth, the Tribunal noted that, notwithstanding the claimed agreement, the major improvement - a swimming pool - made to the premises was entirely funded by an increase in the mortgage which bound the respondents, not the appellant: at [45.7] The respondents also paid for other improvements, such as the removal of a tree. These actions are consistent with them retaining ownership of the property. The Tribunal rejected the appellant's claim that he had made improvements to the property at his own expense. These findings were open to the Tribunal.
12. A further piece of evidence that supported the finding that the agreement was a residential tenancy agreement was the fact that the $200 payments were declared as "rental income" in the tax returns of the respondents: at [43].
13. For all these reasons, in our view, the finding that the 1991 agreement did not amount to an agreement for the sale of land that confers a right to occupy residential premises on a party to the agreement was open to the Tribunal and not against the weight of evidence.
14. Leave to appeal on this ground is refused.

Ground 4: Availability of significant new evidence

1. The appellant seeks leave to appeal on the ground that significant new evidence is now available, namely: 1. A valuation report of the subject property prepared in 1995; 2. An ex tempore judgement given by the Federal Court on 13 April 1992 awarding the respondents and others costs in relation to an application seeking orders for discovery in unrelated commercial proceedings; 3. A certificate of transfer issued by Land and Property Information evidencing that the respondents had purchased a property (not the subject property) in January 1991.
2. The basis for which it is contended that these documents are "new" is unclear. In the notice of appeal, the appellant wrote that the valuation report was not available at the time of the hearing because of "procedural fairness grounds". No explanation was proffered as to why the other two documents were not available to the appellant at the time of the hearing.
3. But perhaps more to the point, the appellant has failed to explain how any of these documents are even remotely relevant to the issue of jurisdiction. None expressly or impliedly refer to the 1991 agreement. Only the valuation report refers in any way to the subject property. Having carefully examined each document we conclude that not only are they not significant, in the sense that may be decisive of the issues between the parties, but they have no probative value at all.
4. Leave to appeal on this ground is refused.

Conclusion

1. Each of the ground of appeal fails. Leave to appeal is refused and the appeal must be dismissed. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 04 April 2017