In this appeal the appellants (landlords) challenge orders by the Tribunal ordering them to return possession of residential premises (a granny flat) to the respondent (tenant) after they had locked him out of those premises and to provide the respondent with keys to the premises. They do not seek to disturb the Tribunal's order that they pay the respondent $233.00.
The principal issue on the appeal was whether the Tribunal could make such orders in circumstances where the appellants had not received approval from the local council (Bayside Council) for the construction or use (as a residence) of the granny flat.
For the reasons that follow this appeal is dismissed.
[2]
Background
In or about April 2017 a verbal agreement was entered into between the appellants and the respondent for the respondent to rent a granny flat (as a residence) situated at the rear of the appellants' property at Brighton-Le-Sands, NSW.
The evidence does not reveal when the granny flat was first constructed, nor the circumstances in which it was constructed or converted from other uses. In any event from about August 2019, the first appellant was aware that Bayside Council was investigating whether the granny flat was an illegal dwelling.
In October 2019 the appellant's son advised the respondent that he needed to vacate the property.
By letter dated 20 January 2020 the appellants were notified by Bayside Council that a complaint had been received to the effect that an unapproved granny flat had been constructed on the property.
That letter included advice from Bayside Council that the Council was empowered under Part 9, Division 9.6, Section 9.58 of the Environmental Planning & Assessment Act 1979 (NSW) ("EPA") to issue:
"… Orders and penalty notices for any unauthorised structures (granny flat) without prior approval from Council, in a case where prior approval was required."
After receiving that letter, the appellants engaged an architect and builder to assist them with the lodgement of a development application to obtain approval for the granny flat.
On 30 October 2020, the appellants served the respondent with the termination notice. It was conceded at the hearing before the Tribunal that this termination notice was invalid.
Also on 30 October 2020, and in circumstances which do not need repeating, a provisional apprehended personal violence order ("AVO") was issued by NSW Police against the respondent. The protected person named in the AVO was the first appellant.
In relation to that AVO the Tribunal said:
"23. The APVO dated 30 October 2020 does not prohibit the tenant returning to the property and the tenant's solicitor indicated that the tenant understood the seriousness should he breach the APVO by approaching or contacting the landlord as outlined in the APVO. I find the APVO does not prohibit the tenant returning to the granny flat at the rear of the premises."
On or about 10 November 2020 the appellants locked the respondent out of the granny flat when they put locks on the granny flat and prevented the respondent obtaining access.
The respondent paid rent up to 1 December 2020. However, he did not pay any further rent after that date as he was unable to obtain access to the granny flat.
On 1 December 2020 the respondent commenced his proceedings in the Tribunal against the appellants.
The appellants received further correspondence from Bayside Council on 3 December 2020 and 29 January.
We were not provided with a copy of the letter dated 3 December 2020, but in relation to that letter the Tribunal said:
"The letter from Council dated 3 December shows there was an issue with the construction of the granny flat."
The letter dated 29 January 2021 from Bayside Council was addressed to the appellants' architect. It had not been tendered to the Tribunal, the appellants asserting that they had not received it from their architect until after the hearing. The respondent consented to its tender on this appeal, and we admitted it into evidence.
That letter said that development approval was given, subject to the included 53 conditions, for the:
"Change of use of rear outbuilding to a secondary dwelling, demolition of shed and side boundary fencing."
Neither we, nor the Tribunal it seems, were provided with the plans referred to in that approval and which would have contained a more precise description of what work was approved.
Conditions included in the DA approval included the requirement for the obtaining of a Construction Certificate, the obtaining of a Soil and Water Management Plan and erection of signs and temporary fencing prior to any building work commencing. Conditions also included certain requirements to be adhered to during construction.
The DA approval contained 15 conditions which had to be complied with prior to the issue of the "Occupation Certificate or Commencement of Use (sic)".
One of those conditions was Condition 35. It said:
"An Occupation Certificate shall be obtained in relation to the approved works prior to any use or occupation of the building."
By letter dated 2 February 2021 Bayside Council informed the respondent:
"Thank you for your submission regarding the proposed development at the above property.
The application has been assessed in accordance with the provisions of the Rockdale Local Environmental Plan 2011, in addition to other statutory and non-statutory instruments and note that the application has been approved, subject to conditions. Your concerns were taken into consideration during the assessment of the application."
What was contained in the respondent's submission to Council, and what were his concerns, was not revealed by the evidence.
The hearing of the proceedings by the Tribunal took place and was determined on 17 February 2021.
During the hearing before the Tribunal the appellants applied for an adjournment. In its reasons the Tribunal explained the basis for the adjournment application, and its reasons for refusing that application, as follows:
"14. The landlords' solicitor requested an adjournment on the basis that the tenant had served evidence late, that his clients spoke English as a second language and the Apprehended Personal Violence Order (APVO) and criminal proceedings have not been finally determined. The adjournment application was refused for the following reasons.
15. The Tribunal is obliged pursuant to the guiding principle of the NSW Civil and Administrative Tribunal Act to determine matters quickly, justly and cheaply. The matter was listed for a three hour hearing. The landlords have had legal representation since at least 2 December 2020. There was no request for an extension of time or a request for an adjournment prior to the hearing. There was no explanation provided to the Tribunal as to why the request had not been made prior to the day of the hearing. The landlords' solicitor raised issues about the late service of evidence by the tenant. However those documents were served on 15 January 2021, four weeks prior to the hearing. Furthermore, the landlord has still not lodged their cross application for termination of the tenancy under s 92 and the APVO and criminal proceedings would be most relevant to that application had it been made.
16. In the circumstance, given the need for timely resolution of proceedings, the application for an adjournment was refused. The solicitor for the landlords was given an opportunity to make oral submissions and to provide any documents. The documents provided by the landlord were admitted into evidence.
That application having been refused, the Tribunal proceeded to hear and determine the proceedings with written reasons for the decision provided on 18 February 2021.
In its reasons the Tribunal referred to the issue of the lack of Council approval for the granny flat. In relation to that issue the Tribunal said:
"21. The letter from Council dated 3 December shows there was an issue with the construction of the granny flat. The further letter of the 20 January from Bayside Council established that the granny flat has not been approved. However, this was not pressed by either party at the hearing as an issue preventing the orders sought being made."
(Our emphasis)
The last sentence from that passage is important. A party is bound by the case he or she ran in the Tribunal below, and the appellants now seek to argue that, contrary to the position they took before the Tribunal, the lack of Council approval is an issue which would prevent the Orders that were made from being made. That cannot be allowed except in exceptional circumstances.
In McInnes v Rheem Australia Pty Limited [2021] NSWCA 89 Gleeson JA, with whom Bell P and Payne JA agreed, observed:
"[44] It is trite that a party is bound by the case he or she ran below. As the High Court said in University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481 at 483, in the context of an application to reopen a case following judgment:
'It is elementary that a party is bound by the conduct of his case. Except in the most exceptional circumstances, it would be contrary to all principle to allow a party, after a case had been decided against him, to raise a new argument which, whether deliberately or by inadvertence, he failed to put during the hearing when he had and (sic) opportunity to do so.'
It would be inimical to the interests of justice to allow Ms McInnes to make an entirely new and different costs application on appeal, after having failed on a different basis before the primary judge: Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645-646; Water Board v Moustakas (1988) 180 CLR 491 at 487; [1988] HCA 12."
Metwally (No 2), which is particularly apposite in the present appeal, was a case in which a party to completed proceedings by way of case stated in the High Court sought to vacate a declaratory order which had been made by the Full Court of the High Court after it had been perfected by being taken out. The applicant desired to raise a point which had not been raised on the hearing in the High Court and which was in direct conflict with the basis of the case presented on his behalf in the completed proceedings in the High Court. On the application he wished to assert the constitutional invalidity of the Racial Discrimination Act 1975 (Cth) after having lost an earlier argument which assumed the validity of that Act, contending that it was inconsistent with a State Act.
Having noted that neither party asserted that the lack of Council approval was an issue preventing the orders sought being made, the Tribunal said that the appellants' locking-out of the respondent was a repudiation of the residential tenancy agreement, that repudiation had not been accepted by the respondent and the respondent's failure to pay rent did not indicate acceptance of the appellants' repudiation. The Tribunal said:
"27. … Although the tenant has not returned to the premises he clearly indicated that he wished to remain in the tenancy by his application to the Tribunal immediately after being locked out. I am satisfied that the landlord's action in locking the tenant out of the premises constitutes a repudiation of the agreement by the landlord. I am not satisfied that the tenant accepted the landlord's repudiation of the agreement. Rather, the tenant, upon finding he was locked out on 1 December 2020 filed an application to the Tribunal requesting that he be given access to the premises. This is still the outcome the tenant seeks. I find that the tenant by his action has clearly indicated that he has not given vacant possession or abandoned the premises. I am not satisfied that the failure to pay rent indicates an acceptance of the landlord's repudiation of the residential tenancy agreement. Rather, on the basis of the tenant's submissions I accept that he did not pay rent as he was not able to live in the premises. The landlord has not given the tenant a valid non-payment termination notice in any event."
In relation to the balance of the case the Tribunal said:
"27. … It was submitted that in locking the tenant out after an altercation the landlords followed advice from the police. They now accept that advice was wrong.
28. The evidence before the Tribunal does not lead me to conclude that there would be any particular danger to the landlords if the tenant is allowed back into the property. The tenant's solicitor maintained that the tenant could return to the granny flat without being in breach of the APVO and was aware of the seriousness of any breach of the APVO. I find in the circumstances that the tenant should be allowed to return to the premises. The keys should not however be collected from the landlord in person.
29. Further orders are made pursuant to Section 73(c) of the Act that on or before-22 February 2021 the landlord is to give to the tenant a copy of any keys required to access the property. These keys should be made available to be collected from the agent for the landlord or from the solicitor for the landlord to ensure there is no breach of the APVO.
30. In relation to the application for compensation, the tenant was locked out of his property on his return from a country location. He provided a copy of his bank statement with the payment to the Novotel at Brighton Beach on 1 December 2020 for the sum of $233.00. The landlord objected to this claim saying there was no evidence to suggest the accommodation was not for an unrelated reason. However, I accept that when the tenant returned from the country he found he was locked out without notice. I find on the balance of probabilities the accommodation charge was as a result of the lockout. I find that the tenant has established a claim for compensation in the amount of $233.00, as but for the lockout the expense would not have been incurred."
On 24 March 2021 two things happened, although it is not known which occurred first: the appellants filed their appeal and Bayside Council emailed the appellants' solicitor (which email was admitted without objection on this appeal) and said:
"Further to our phone conversation I can confirm that without an Occupation Certificate, the building cannot be lived in and is illegal to be used as a secondary dwelling.
It is also not considered structurally safe without an Occupation Certificate, as a building certifier needs to certify the works have been constructed according to plan and to the building code.
If the building was being used without an Occupation Certificate, Bayside Council would commence legal action against the owner of the property.
If I can advise on anything further please let me know."
[3]
The Appeal
The appellants' grounds of appeal were:
1. The Tribunal erred in refusing the appellant's adjournment application.
2. The Tribunal erroneously interpreted the DA issue.
3. The Tribunal incorrectly found the respondent had not accepted the appellants' repudiation.
4. The Tribunal erred in failing to take properly into account the AVO and associated charges against the respondent.
[4]
Refusal of the Appellant's Adjournment Application
On 19 March 2021, the Appeal Panel made the following directions in these appeal proceedings:
1. Leave is given to the Appellant to be legally represented.
2. Leave is given to the Respondent to be legally represented.
3. ...
4. The Appellant is to lodge with the Tribunal and give to the Respondent by 16 April 2021:
1. All the evidence given to the Tribunal below on which it is intended to rely;
2. Any evidence not provided to the Tribunal in making the decision under appeal, on which it is intended to seek leave to rely;
3. The Appellant's written submissions in support of the appeal; and
4. The sound recording or transcript of the hearing at first instance, if oral reasons were given and/or what happened at the hearing is being relied on and a typed copy of the relevant parts.
The appellants did not comply with orders 4(a), (c) or (d). Compliance with the Tribunal's directions is mandatory, not voluntary - s 36(3) of the Civil and Administrative Tribunal Act 2013 (NSW).
On the afternoon of 18 May 2021, the Appeal Panel received a written application for an adjournment made by the respondent. The application referred to the directions made on 19 March 2021 and said:
"We note the entirety of the Appellant's submissions, evidence and documents that they intend to rely on was only received by the Respondent on 16 May 2021 (being Sunday). The Appellant has informed us that the delay was due to the delay in receiving the sound recording and/or transcript from the hearing at first instance.
Considering the significant delay in the Appellant serving its documents, the Respondent requires three weeks to prepare its documents in reply, otherwise, the Respondent will be prejudiced during the hearing of the Appeal.
…
We confirm the (Appellants') solicitor has informed us that they do not oppose the adjournment of the hearing date."
Two things may be said about this letter. First, it is a little inaccurate in that the submissions served related to a stay application and not the substantive appeal, and the evidence was the fresh evidence (which we have admitted) but did not include any evidence from the hearing before the Tribunal.
Second, although no criticism of the respondent's solicitor could be made for making that application, it was the appellants who had created the situation and it was for them to make any application to vary the directions made on 19 March 2021 and/or seek an adjournment if necessary.
The letter refers to the sound recording of the hearing before the Tribunal. As was revealed during the hearing of the appeal, the appellants obtained a copy of the sound recording on 8 May 2021, served a copy of that sound recording on the respondent's solicitor on 10 May 2021, but did not lodge a copy of the sound recording with the Appeal Panel at any time between 8 May and the date this appeal was heard, being 20 May 2021.
We refused to grant the respondent's application on 19 May 2021 (when it first came to our attention) and said we would deal with it on the hearing of the appeal.
On the hearing of the appeal on 20 May 2021 the respondent renewed his application.
We pointed out that as the appellants had failed to comply with the directions made on 19 March 2021, we proposed to proceed with the appeal on the basis that the appellants did not intend to rely on any of the evidence given to the Tribunal, anything that occurred at that hearing and which was recorded, and in the absence of any service of written submissions to the respondent (to the extent that any oral submissions did not prejudice the respondent).
The appellants, as it turned out, did wish to rely on that material, and applied for an adjournment in order to lodge that material with the Appeal Panel and serve it on the respondent.
We refused that application and said we would provide reasons for that refusal subsequently. These are those reasons.
On that application the appellants adduced evidence from a para-legal and a personal assistant employed by the appellants' solicitor.
Their evidence was to the effect that when the sound recording was received on 8 May 2021 it was sent to a transcription service and the appellants' solicitor did not receive that transcript until 13 May 2021.
There was no evidence given:
1. explaining the non-compliance with orders 4(a), (b) and (d) made on 19 March by the due dates or at all,
2. why the sound recording had not been lodged with the Appeal Panel in the twelve days between its receipt and the date for hearing of the appeal;
3. why the transcript had not been lodged with the Appeal Panel in the seven days between its receipt and the date for hearing of the appeal.
The appellants' solicitor, who appeared for the appellants on this appeal and who could have given evidence on those matters, declined to do so.
Instead, the appellants' solicitor submitted that the non-compliance with the directions made on 19 March 2021 was because of the delay in obtaining a transcript of the sound recording.
We did not accept that submission.
There was no evidence that the delay in obtaining the transcript prevented the appellants from complying with orders 4(a) and (b). There was no evidence why the sound recording was not lodged with the Tribunal on or shortly after 8 May 2021 (when it was received) and why, assuming the appellants needed that sound recording to prepare proper submissions, why such submissions could not have been provided before the hearing of the appeal.
In the circumstances we considered the explanation for non-compliance with the Appeal Panel's directions to amount to no explanation at all. The proceedings have been on foot for some time, there is prejudice to the respondent in delaying the hearing of the appeal and we held the view that the appellant's prospects of success on the appeal were remote.
We shall now address the four grounds of appeal.
[5]
Ground 1
The appellants contended that the Tribunal erred in refusing their adjournment application. They made no oral or written submissions in support of this ground and so that ground may be taken to have been abandoned.
[6]
Ground 2
The appellants contended that the Tribunal erroneously interpreted the DA issue. By this they meant that the Tribunal erred in not holding that the Tribunal could not have made the orders it did in circumstances where the appellants had not received approval from Bayside Council for the construction or use (as a residence) of the granny flat.
The appellants pointed to the correspondence from Council dated 24 March 2021 in which Council adverted to the possibility of legal action which may be taken against the appellants.
There are three answers to the appellants' contention.
The first is that the appellants conducted their case before the Tribunal on the basis that the absence of approval from Council did not prevent the Tribunal making the orders sought. On the authorities which we have cited at [30]-[31] above, the appellants are bound by the conduct of their case before the Tribunal. No exceptional circumstances have been established which would justify allowing the appellants to now adopt the contrary position.
The second answer is that it has been held that the EPA does not render illegal, or void, a residential tenancy agreement (which is a contract).
In ZID v Green [2018] NSWCATAP 198 the respondents contravened the EPA by converting the downstairs part of a residence into a separate dwelling without development consent. The Appeal Panel held that the conversion without Council's consent did not make the Tenancy Agreement void and unenforceable. The Appeal Panel held:
"[88] In our opinion, the EPA did not impliedly prohibit the making of the Tenancy Agreement. The Tenancy Agreement was not an agreement for doing the act which was prohibited under s 76A. Furthermore, whether use of the Flat had to cease depended upon whether or not the Council exercised the discretionary power to so order under s 121B (1)."
In Kings v Chand [2019] NSWCATAP 180 the Appeal Panel, citing ZID amongst other authorities, set aside orders of the Tribunal which resulted from the Tribunal's finding that a residential tenancy agreement was void and unenforceable because the landlord had failed to obtain an occupation certificate under the EPA. The Appeal Panel held that:
"In any event, even if the making of the agreement was impliedly prohibited by the EPA Act, for largely the reasons given by the Appeal Panel in ZID at [90], on the proper construction of that Act it cannot be said that an implied statutory consequence of the prohibition on making that agreement rendered the agreement void and unenforceable."
In accordance with established principle, we should not depart from the decisions in those authorities unless convinced they are clearly wrong. We are not so convinced and therefore we shall follow them.
The third answer is that the EPA does not contain an absolute prohibition on occupation prior to the issue of an occupation certificate in circumstances such as the present. There are exceptions to the prohibition. The version of the EPA in force when the tenancy agreement commenced contained ss 109M and 109N which were in the following terms:
109M Occupation and use of new building requires occupation certificate
(1) A person must not commence occupation or use of the whole or any part of a new building (within the meaning of section 109H) unless an occupation certificate has been issued in relation to the building or part.
(2) This section does not apply to:
(a) the occupation or use of a new building for any purpose if the erection of the building is or forms part of exempt development or development that does not otherwise require development consent, or
(b) the occupation or use of a new building at any time after the expiration of 12 months after the date on which the building was first occupied or used, or
(c) the occupation or use of a new building by such persons or in such circumstances as may be prescribed by the regulations, or
(d) the occupation or use of a new building that has been erected by or on behalf of the Crown or by or on behalf of a prescribed person.
109N Change of building use of existing building requires occupation certificate
(1) A person must not effect a change of building use for the whole or any part of an existing building unless an occupation certificate has been issued in relation to the building or part.
(2) This section does not apply to:
(a) a change of building use of an existing building if the change of building use is or forms part of exempt development or development that does not otherwise require development consent, or
(b) the continued occupation or use of a building at any time after the expiration of 12 months after the date on which the building was first occupied or used, or
(c) a change of building use of an existing building by such persons or in such circumstances as may be prescribed by the regulations, or
(d) a change of building use of an existing building that has been erected by or on behalf of the Crown or by or on behalf of a prescribed person.
Section 109M applies, in terms, to "new buildings". Section 109N applies to the change in use of an existing building. Both sections include exemptions. For s 109M the exemptions included the occupation or use of a new building at any time after the expiration of 12 months after the date on which the building was first occupied or used. For s 109N the exemptions included the continued occupation or use of a building at any time after the expiration of 12 months after the date on which the building was first occupied or used.
As the appellants are the ones seeking to contend that the lack of an occupation certificate leaves them open to prosecution by the Bayside Council if the tenancy agreement is enforced, the onus lay on them to prove that the exemptions in those provisions (whichever applied) were not applicable. They have not done so.
For those reasons we dismiss ground 2.
[7]
Ground 3
The appellants contended that the Tribunal erred in finding that the respondent had not accepted the appellants' repudiation.
Other than making this assertion, no submission was developed in which any purported error was identified or demonstrated. Fundamentally the finding is one of fact, and no leave has been sought or granted to appeal from that finding of fact.
We can see no error in the Tribunal's finding and we dismiss ground 3.
[8]
Ground 4
The appellants contended that the Tribunal erred in failing to take properly into account the AVO and associated charges against the respondent. They made no oral or written submissions in support of this ground at the hearing of the appeal and so that ground may be taken to have been abandoned.
In any event, the Tribunal did take the AVO into account, it is mentioned in [23] of the Tribunal's reasons. What the Tribunal found was that the terms of the AVO did not prohibit the respondent occupying the granny flat, a finding not challenged on appeal.
We have no evidence of any "charges" against the respondent, and no submissions were made about them.
We dismiss ground 4.
[9]
Orders
For those reasons the appeal is dismissed.
We make the following orders:
1. Appeal dismissed.
2. If any party desires to make an application for costs of the appeal:
1. the applicant for costs is to lodge with the Appeal Panel and serve on the respondent to the costs application any written submissions of no more than five pages, and any evidence in support of the application, on or before 14 days from the date of these reasons;
2. the respondent to any costs application is to lodge with the Appeal Panel and serve on the applicant for costs any written submissions of no more than five pages, and any evidence in opposition to the application, on or before 28 days from the date of these reasons;
3. any reply submissions limited to three pages are to be lodged with the Appeal Panel and served on the other party within 35 days of the date of these reasons;
4. the parties are to indicate in their submissions whether they consent to an order dispensing with an oral hearing of the costs application, and if they do not consent, submissions of no more than one page as to why an oral hearing should be conducted rather than the application being determined on the papers.
[10]
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: 02 June 2021