Hudson v Arap 1

NCAT Appeal Panel|2014-10-09|Before: Wright J

Introduction 1The appellant, Mr Hudson, is the tenant of premises at Burraneer in NSW under an agreement entered into between the appellant and the respondent as part of set of transactions relating to the appellant's sale of the premises to the respondent. 2In January 2014, the Tribunal held that it did not have jurisdiction to hear the matter as a result of the operation of s 8(1)(f) of the Residential Tenancies Act 2010 (NSW) (the RT Act). On I July 2014, the Appeal Panel upheld an appeal against this decision, see Arap 1 (NSW) Pty Ltd v Hudson [2014] NSWCATAP 30, and remitted the matter to the Consumer and Commercial Division to be heard. 3On 21 August 2014, the matter came before the Tribunal for a second time. On that occasion, orders were made terminating the tenancy agreement and giving possession to the respondent. 4The appellant now appeals against that decision. For the reasons given below, we are of the view that the appeal should be dismissed.

Orders Below 5This appeal is against a decision of the Consumer and Commercial Division in proceeding RT 13/66464 made on 21 August 2014. On that date, the following orders were made: (1)The Residential Tenancy Agreement is terminated in accordance with s 84 of the Residential Tenancies Act 2010, as the landlord has served a termination notice for termination at the end of the fixed term. (2)The Residential Tenancy Agreement is terminated immediately and possession is to be given to the landlord on the date of termination. (3)The order for possession is suspended until 02-Oct-2014. Written reasons for decision were given on that date.

Procedural Matters 6The appellant lodged his notice of appeal form on 8 September 2014. The appeal was lodged within time. A stay of the orders was requested but as the suspended date for possession had not yet passed, the matter was listed for an urgent hearing so as to avoid any prejudice to either party by the granting or not granting a stay. 7The matter was listed for hearing on 26 September 2014. On that occasion, the appellant appeared in person and Mr Rodgers, solicitor, appeared for the respondent. The appellant sought an adjournment on the basis that he had not been able to obtain representation for that hearing. The Appeal Panel decided to grant a short adjournment and ordered that the hearing of the appeal should be stood over to 2.15pm on Thursday 9 October 2014. 8The Panel also gave directions for the filing and serving of written submissions by the parties, if they so wished. At the same time, it was formally noted in the orders that: 4. The adjournment has been granted on the basis that the appeal will be heard on 9 October 2014 whether or not the appellant has been able to retain a legal representative or a tenancy advocate to appear for him on that occasion. 5. The respondent has agreed not to execute any warrant for possession of the premises until after midnight on 9 October 2014. 9At the hearing on 9 October 2014, Ms Breeze of counsel appeared for the appellant and Mr Docker of counsel appeared for the respondent. 10At the outset Ms Breeze made an oral application for leave to amend the grounds of appeal to include a ground to the effect that the agreement under which the appellant occupied the premises was not a residential tenancy agreement within the meaning of s 13(1) of the RT Act because the appellant was not granted a right of occupation "for value" under the agreement. The consequence was said to be that the Tribunal did not have jurisdiction to hear the matter. This ground was not formulated in writing. Mr Docker had only been given notice of the intention to seek leave to amend, immediately before the hearing commenced. The argument had not been raised in the Tribunal below or in the previous Appeal Panel hearing in this matter which had determined that the Tribunal did have jurisdiction. 11Significantly, the proposed ground of appeal appeared to be inconsistent with the findings made by the Tribunal at first instance. At [1] of the reasons for decision published on 21 August 2014, the Tribunal found: ... [T]he residential premises occupied by the tenant [appellant] were originally owned by him. He sold the premises to the landlord [respondent], with completion of the sale taking place on 7 December 2012. Completion of the sale was subject to the parties entering into a residential tenancy agreement. The parties entered into a residential tenancy agreement on the date the sale was completed, for a fixed term of 12 months, with an annual amount of rent payable in advance by instalments of $2919.23 per fortnight. 12Further, at [13] in the reasons for decision below it was held: ... It is not in dispute that the tenant [appellant] has failed to pay rent since November 2013. I am satisfied that the rent arrears are in excess of $50,000. 13These findings as to the existence and extent of at least part of the "value" in return for which the right of occupation was granted under the tenancy agreement were not sought to be challenged on this appeal. Without these findings being challenged and overturned, there is no appropriate basis to conclude that the Tribunal did not have jurisdiction for the reason that the agreement under which the appellant occupied the premises was not a residential tenancy agreement within the meaning of s 13(1) of the RT Act because the appellant was not granted a right of occupation "for value" under the agreement. 14In other words, these unchallenged findings are sufficient to meet any argument that the Tribunal lacked jurisdiction on the basis sought to be raised. In addition, the Appeal Panel had already determined that the Tribunal had jurisdiction to hear and determine this matter on 1 July 2014 in Arap 1 (NSW) Pty Ltd v Hudson [2014] NSWCATAP 30 and there had been no appeal against that decision. 15The appellant submitted that the issue raised by this proposed ground of appeal would turn on the factual circumstances surrounding what were said to be complex transactions which included the contract of sale of the property, the agreement under which the appellant became a tenant and an option agreement. It was conceded by Ms Breeze that there was no question but that the respondent may have conducted its case differently and led different evidence in the Tribunal below if this issue had been raised at first instance. The situation appears to be similar to the circumstances referred to by Mason J in O'Brien v. Komesaroff (1982) 150 CLR 310 at 319 (even though the Appeal Panel is far from an ultimate court of appeal): In some cases when a question of law is raised for the first time in an ultimate court of appeal, as for example upon the construction of a document, or upon facts either admitted or proved beyond controversy, it is expedient in the interests of justice that the question should be argued and decided (Connecticut Fire Insurance Co. v. Kavanagh (1892) AC 473, at p 480; Suttor v. Gundowda Pty. Ltd. [1950] HCA 35; (1950) 81 CLR 418, at p 438; Green v. Sommerville [1979] HCA 60; (1979) 141 CLR 594, at pp 607-608). However, this is not such a case. The facts are not admitted nor are they beyond controversy. The consequence is that the appellants' case fails at the threshold. They cannot argue this point on appeal; it was not pleaded by them nor was it made an issue by the conduct of the parties at the trial. 16In the circumstances, the Panel refused the oral application and gave some limited oral reasons for doing so at that time. 17The appellant then sought an adjournment for the purpose of making a written application for leave to amend the grounds of appeal as foreshadowed in the oral application. This application was also refused. 18From some of the circumstances raised in submissions from the bar table, it appeared to the Appeal Panel that the circumstances surrounding the transactions in this matter might raise issues that extend far beyond the present dispute concerning termination of a tenancy agreement. If this is so, and the Appeal Panel has no basis for concluding whether it is or not, it appeared to the Panel that is would be preferable for the present appeal to be determined expeditiously so that the parties could take whatever action they might be advised in any appropriate forum.

The Appeal - General Nature 19In the notice of appeal the appellant identified 7 grounds of appeal all of which related to the question of whether the Tribunal had jurisdiction to deal with the application because of the terms of the RT Act, s 8(1)(f). 20Section 8(1)(f) provides: 8 Agreements to which Act does not apply (1)This Act does not apply to the following agreements: [...] (f) an agreement for the sale of land that confers a right to occupy residential premises on a party to the agreement. 21The problem that arises with the present appeal is that the Appeal Panel has already heard and determined an appeal in relation to these proceedings in Arap 1 (NSW) Pty Ltd v Hudson [2014] NSWCATAP 30. That earlier appeal decided the very question that the appellant wishes to have determined on this appeal, namely, whether s 8(1)(f) of the RT Act applies in the present case so that the Tribunal does not have jurisdiction to hear and determine the application. In the earlier appeal, determined on 1 July 2014, the Appeal Panel held that the Tribunal did have jurisdiction notwithstanding s 8(1)(f) of the RT Act. The Appeal Panel's reasons were, in summary, that the right of occupation in this case was conferred by the agreement under which the appellant occupied the premises, the tenancy agreement, and not the contract for sale. Consequently, the Tribunal was not deprived of jurisdiction by s 8(1)(f).

Circumstances Giving Rise to this Appeal 22The question in the present appeal arises as a result of circumstances found in the earlier Appeal Panel decision at [18] to [22] and which were not sought to be challenged then. These findings are also consistent with findings by the Tribunal below, which have also not been sought to be challenged on this appeal. 23The appellant, as vendor, and the respondent, as purchaser, entered into a contract for sale of land in relation to the Burraneer premises on 19 November 2012. Clause 41 of that contract provided: 41. Tenancy 41.1 The Vendor and the Purchaser acknowledge that the Vendor occupies the property at the contract date and will not be required to provide vacant possession at the date of completion of this contract, subject to the parties entering into the Tenancy Agreement. 41.2 Completion of this Contract is subject to and conditional upon the Vendor and the Purchaser entering into the Tenancy Agreement. 41.3 The Vendor requests to pay the first year's rental pursuant to the Tenancy Agreement in advance upon settlement of this Contract ("the Vendor's Request"). In making the Vendor's Request, the Vendor specifically acknowledges Section 33(2) of the Residential Tenancies Act 2010 No 42 which provides:- 33(2) A landlord, or landlord's agent, must not require a tenant to pay more than 2 weeks rent in advance under a residential tenancy agreement or to pay rent for a period of the tenancy before the end of the previous period for which rent has been paid. Note. A tenant may pay more than 2 weeks rent if the tenant wishes to do so. Maximum penalty: 10 penalty units. 41.4 The Vendor's Request is made voluntarily by the Vendor as an inducement to the Purchaser to enter into this Contract. The purchaser will agree to the Vendor's Request on the basis that the advanced payment of rental is made in the manner detailed in Special Condition 38 above. The Vendor represents to the Purchaser that it will not withdraw the Vendor's Request during the term of the Tenancy Agreement. The Vendor acknowledges that the Purchaser would not have entered into this Contract if not for the Vendor's Request. 24Clause 30.2 of the contract contained the following definition of the term "Tenancy Agreement": Tenancy Agreement - means the written agreement between the Purchaser (as the Landlord) and the Vendor (as Tenant) for the occupation of the Property, entered contemporaneously with this contract. 25The contract was completed on 7 December 2012 and the parties entered into the Tenancy Agreement as defined in cl 30.2 on that same day. It is that agreement which is the subject of the termination orders made by the Tribunal below on 21 August 2014. Clause 1 of that agreement provided as follows: The landlord agrees that the tenant has the right to occupy the residential premises during the tenancy. The residential premises include the additional things (if any) noted under "Residential premises". 26The Tenancy Agreement contained an annexure headed "Annexure A Part 3 Special Terms". Special Terms 1, 5 and 6 provided as follows: 1. The term of this Tenancy Agreement shall be 12 months commencing on the date of settlement of the Contract. 5. This Tenancy Agreement is subject to and conditional upon:- Settlement of the Contract of Sale for the premises between the Lessor (as Purchaser) and the Tenant (as Vendor) referred to in these Special Conditions as "the Contract"; Execution of the Option Agreement between the Lessor (as Vendor) and the Tenant (as Purchaser) to which a copy of this Tenancy Agreement is attached ("the Option Agreement"). 6. The parties agree that an essential condition of this Tenancy Agreement is that the Tenant punctually observe and comply with the terms of the Option Agreement at all times during the term of this Tenancy Agreement and that a Material Breach of the Option Agreement by the Tenant shall be a breach of an essential term of this Tenancy Agreement.

Grounds 1, 2, 3 and 4 27The appellant's first ground of appeal highlights the problem arising out of the earlier appeal. The ground is in the following form: The Tribunal Member erred in replying upon the decision of the Appeal Panel dated 1 July 2014 to the effect that the Tribunal had jurisdiction to deal with the Application and that Section 81F [sic] of the Act did not apply to the Tenancy Agreement and in doing so, the Tribunal Member failed to exercise the Tribunal Member's obligation to determine the Application presented to the Tribunal Member. 28Given the nature and function of appeals to the Appeal Panel under the Civil and Administrative Tribunal Act 2013 (NSW) (the Act), the Tribunal when constituted at Divisional level cannot be said to have erred simply because it relied on a decision of the Appeal Panel as to jurisdiction in the very proceedings, where the Appeal Panel had determined the issue that was raised and had remitted the proceedings to the Tribunal to be heard on the basis that it did have jurisdiction. 29In Arap 1 (NSW) Pty Ltd v Hudson [2014] NSWCATAP 30 the Appeal Panel determined the issue of whether the Tribunal lacked jurisdiction to hear and determine the application in this matter by operation of s 8(1)(f) of the RT Act having regard to the same or substantially similar matters as are raised in grounds 2, 3 and 4: see, in particular, [22] - [25] and [30] of those reasons for decision. To that extent, neither ground 1 nor grounds 2, 3 or 4 raise any new matters or arguments that were not covered by the Appeal Panel's original decision. Thus, this appeal to the extent that it based on these grounds should be dismissed. 30Whilst it might be appropriate to characterise these grounds of appeal as an abuse of process or "otherwise misconceived", to use the terminology of s 55(1)(b) of the Act, and to deal with them accordingly, the Appeal Panel believes it is sufficient in the present case simply to dismiss the appeal to the extent that it is based on grounds 1, 2 3 and 4.

Grounds 5, 6 and 7 31The remaining grounds 5, 6 and 7 raise the issue of whether cl 43.2 of the contract for sale between the appellant and the respondent has the effect that the right to occupy the premises after completion of the sale was conferred by the contract for sale and not the Tenancy Agreement. 32It does not appear that any argument based upon cl 43.2 was advanced at the hearing below or at the earlier appeal. As the question is one of construction and there is no contested issue of fact, the Appeal Panel will address the substance of these grounds, having regard to the obligations imposed by ss 36 and 38 of the Act. 33The appellant's argument in this regard is based upon cl 43.2 of the contract for sale which was a special condition in the following terms: This contract contains the entire understanding between the parties concerning the subject matter of the contract and supersedes all prior communications between the parties. 34Despite ground 7 in the document attached to the notice of appeal which suggested that cl 43.2 was as follows: Agreement that the Contract contained the entire understanding between the parties concerning the sale of the property and the right to occupy the property from the date of completion of the sale. that clause did not expressly refer to any right to occupy the property. 35Ms Breeze indicated that the words set out in ground 7 (quoted in the preceding paragraph) were merely the appellant's submission as to how cl 43.2 should be construed. 36In the light of cl 41 read with cl 30.2 of the contract for sale and cl 1 of the Tenancy Agreement (which have been quoted above), cl 43.2 provides no basis for concluding that the right of occupation of the premises was conferred by the contract for sale rather than the Tenancy Agreement. Clause 43.2 appears to be designed to circumscribe the ability of the parties to argue that their prior negotiations and communications form part of the terms of the contract for sale. The clause does not even refer to the Tenancy Agreement and it could not be construed as having the effect that the Tenancy Agreement was a part of the contract for sale and not an independent agreement, albeit related to the contract for sale. It is entirely possible for the contract for sale to contain the entire understanding between the parties concerning the subject matter of that contract and the right of occupation of the premises to be conferred by the Tenancy Agreement and not the contract for sale. Thus, it does not follow from the terms of cl 43.2 that the RT Act did not apply in the circumstances of this case by virtue of s 8(1)(f) of that Act. 37Furthermore, even if the appellant were correct in its submission that cl 43.2 should be construed as meaning "the Contract contained the entire understanding between the parties concerning the sale of the property and the right to occupy the property from the date of completion of the sale", it would not have the consequence that the right of occupation was conferred by the contract for sale. 38The parties' understanding appears to have been that the right to occupy the premises after completion was to be conferred by the Tenancy Agreement not the contract for sale. As it happened, the Tenancy Agreement was entered into on 7 December 2012, the date of completion. A right to occupy the premises was conferred by cl 1 of the Tenancy Agreement. No separate or distinct right of occupation after completion has been identified by the appellant in the contract for sale. 39The appellant's submission was essentially that the contract for sale and the Tenancy Agreement were in substance one agreement not two. Thus, it was submitted that the right of occupation was conferred by the contract for sale. This, however, is inconsistent with the findings made by the Tribunal below and by the Appeal Panel in the earlier appeal as to the existence and terms of the two separate but obviously related agreements, the contract for sale and the Tenancy Agreement. No challenge was made to those findings in the earlier appeal and no challenge has been made in this appeal to the relevant findings in the Tribunal below. In any event, cl 43.2 does not provide any support for this submission. 40On these bases, the Appeal Panel is of the view that cl 43.2 does not have the effect that the right of occupation on the vendor/appellant after completion was conferred by the contract for sale. That right was conferred by the Tenancy Agreement. That conclusion is not affected by the fact that completion of the contract for sale was conditional upon the parties entering into the Tenancy Agreement. 41Thus, grounds 5, 6 and 7 do not provide any basis for upholding the appeal.

Costs 42At the conclusion of the hearing both the appellant and the respondent indicated that neither of them wished to make any application for costs in relation to the appeal.

Notation and Orders 43For these reasons, this appeal should be dismissed. In addition, the Appeal Panel should make formal orders dealing with the applications to amend the grounds of appeal and for an adjournment, which were refused. 44Finally, in order to ensure that the appellant could take any further steps he wished to take before a warrant for possession of the premises would be executed, the Appeal Panel accepted an undertaking by counsel for the respondent designed to ensure that any warrant for possession was not executed before 22 October 2014. 45Accordingly, the Appeal Panel: (1)accepts the undertaking by counsel for the respondent on behalf of the respondent that the respondent will not cause or request any warrant for possession of the premises the subject of these proceedings to be executed prior to midnight on 21 October 2014 and that the respondent will request the Sheriff not to execute such a warrant prior to that time. (2)orders that: (a)the appellant's application to amend the grounds of appeal as made orally is refused; (b)the appellant's application for an adjournment to allow him to make a written application to amend the grounds of appeal is refused; (c)the appeal is dismissed. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar

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: 15 October 2014

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