Lethorn v Wagenheim

NCAT Appeal Panel|2020-09-23|Before: Blake AM

Introduction

In determining this issue it is necessary to consider the relevant provisions of the RT Act.

The relevant provisions of the RT Act

Part 5 Division 1 (ss 80-83) contains general provisions dealing with the termination of a residential tenancy. Section 81 deals with the circumstances of termination of residential tenancies, and relevantly provides: 81 Circumstances of termination of residential tenancies (1) Termination only as set out in Act A residential tenancy agreement terminates only in the circumstances set out in this Act. (2) Termination by notice and vacant possession A residential tenancy agreement terminates if a landlord or tenant gives a termination notice in accordance with this Act and the tenant gives vacant possession of the residential premises. (3) Termination by order of Tribunal A residential tenancy agreement terminates if the Tribunal makes an order terminating the agreement under this Act. (4) Other legal reasons for termination A residential tenancy agreement terminates if any of the following occurs - … (d) the tenant abandons the residential premises, (e) the tenant gives up possession of the residential premises with the landlord's consent, whether or not that consent is subsequently withdrawn,

Consideration

In Rathod v Liu [2019] NSWCATAP 80 at [60] the Appeal Panel held that, in the absence of a finding that the tenant had abandoned the premises, an order under s 107 of the RT Act for the payment of a break fee could not be made.
Consistent with the finding in Rathod v Liu at [20], we are satisfied that a finding that the tenant had abandoned the premises is a jurisdictional fact which is a condition for the exercise of the power of the Tribunal under s 107 of the RT Act to order a tenant to pay compensation to the landlord for any loss, including loss of rent, caused by the abandonment of the residential premises by the tenant.
By failing to make any finding that the appellant had abandoned the premises the Tribunal committed a jurisdictional error.
In these circumstances it is necessary to determine how the tenancy agreement terminated within s 81 of the RT Act and in particular whether by notice and vacant possession within s 81(2) of the RT Act, with the respondents' consent within s 81(4)(e) of the RT Act or by abandonment of the premises within s 81(4)(d) of the RT Act.
The appellant submitted that there had been a termination of the tenancy agreement by notice and vacant possession within s 81(2) of the RT Act by reason of the service of the notice of termination on the appellant and the appellant giving up possession of the premises on 5 February 2020.
The respondents submitted that there had been a termination of the tenancy agreement by abandonment of the premises within s 81(4)(e) of the RT Act by reason of the appellant's request in the 21 January 2020 email for the respondents to allow him and his partner to leave the premises on 5 February 2020.
We are not satisfied that there had been a termination of the tenancy agreement by notice and vacant possession within s 81(2) of the RT Act. In circumstances where the tenancy agreement did not specify an email address for the service of notices on the appellant and the notice of termination was attached to the 22 January 2020 email, the notice of termination was not served by an authorised method of service within s 223(1)(a)(v) of the RT Act. It follows that the respondents did not give a termination notice "in accordance with" the RT Act as required by s 81(2). Termination of the tenancy agreement by this method would require consideration of whether this defect in the manner of service of the notice of termination could be waived pursuant to s 113 of the RT Act.
In Darren and Julia Patterson v David Patterson [2015] NSWCATAP 31 (Patterson) at [56] the Appeal Panel held that abandonment occurs when a tenant vacates within the fixed term of a lease without the consent of the landlord or without a Tribunal order.
We are not satisfied that there had been a termination of the tenancy agreement by abandonment of the premises within s 81(4)(d) of the RT Act by reason of the appellant's request in the 21 January 2020 email. As held by the Appeal Panel in Patterson at [56] and consistent with s 106(4)(b) of the RT Act, there can be no abandonment of the residential premises by the tenant unless the tenant no longer resides at the premises. The appellant's request for the respondents to allow him and his partner to leave the premises on 5 February 2020 did not constitute an abandonment of the premises.
In McDonald v Pochin [2016] NSWCATAP 259 the Appeal Panel at [15] and [19] found that there had been a termination of a residential tenancy agreement with the landlord's consent within s 81(4)(e) of the RT Act in circumstances where the written termination notice was not received, the agent gave the tenant notice by telephone that he was to give possession of the premises by a specified date, and the tenant gave up possession of the premises on that date. The Appeal Panel at [20] held: "20 Similarly s 107 of the [RT Act] refers to a landlord's remedies on abandonment by the tenant. In circumstances where the Tribunal found that the tenancy came to an end by the consent of the parties, it cannot be said that the tenancy was abandoned by the tenant."
We are satisfied that there had been a termination of the tenancy agreement with the respondents' consent within s 81(4)(e) of the RT Act in circumstances where the notice of termination was actually received by the appellant (although not given "in accordance with" the RT Act as required by s 81(2)) and the appellant gave up possession of the premises on 5 February 2020.
Consistent with the finding in McDonald v Pochin at [20], we are satisfied that, since there has been a termination of the tenancy agreement with the respondents' consent within s 81(4)(e) of the RT Act, there cannot have been an abandonment of the premises within s 81(4)(d) of the RT Act.
We find that, as there had been no abandonment of the premises by the appellant, the Tribunal had no power under s 107(1) and (3) of the RT Act when read with cl 41.1 of the tenancy agreement to order the appellant to pay to the respondents a break fee of $5,400.00 being six weeks rent.
It follows that the appeal must be allowed and an order made in substitution for the orders in the Tribunal decision that the appellant pay $7,085.71 to the respondents.

Orders

We make the following orders: 1. The name of the second named respondent is amended to Jaimie Wagenheim; 2. The appellant is granted leave for to be represented by Grace Crowley-Shaw; 3. The appeal is allowed; 4. The orders made by the Tribunal in proceedings RT 20/05814 are set aside; 5. The following orders are substituted in place of the orders made by the Tribunal in proceedings RT 20/05814: 1. The tenant, Colin Lethorn, is to pay the landlords, Michael Wagenheim and Jaimie Wagenheim, the sum of $7085.71 for rental arrears to 5 February 2020. 2. Rental Bond Services is to pay the landlords Michael Wagenheim and Jaimie Wagenheim the sum of $3400.00, being the bond paid by the tenant Colin Lethorn for the tenancy at 12/56-58 Birriga Road, Bellevue Hill NSW 2023, and this amount so paid is to be deducted from the above total of $7085.71.

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: 30 September 2020

Whether the appellant has a right to appeal against the Tribunal decision

Section 80(2)(b) of the NCAT Act relevantly provides that an internal appeal may be made as of right on a question of law.
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 (Prendergast) the Appeal Panel at [13] set out a non-exclusive list of questions of law which relevantly includes whether the wrong principle of law has been applied, and whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations.
Another question of law is whether the Tribunal committed a jurisdictional error which includes proceeding in the absence of a jurisdictional fact, in the sense of disregarding something that the relevant statute requires to be considered as a condition of jurisdiction: Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd [2010] NSWCA 190; (2010) 78 NSWLR 393 at [158].
We are satisfied that each of grounds 1 and 2 raise a question of law. Rather than expressing these grounds by reference to one or more of the questions of law identified in Prendergast at [13], we consider that the preferable way to express the question of law is whether the Tribunal committed a jurisdictional error by failing to make a finding of the existence of the jurisdictional fact that the appellant had abandoned the premises.
Accordingly, we find that the appellant has a right to appeal against the Tribunal decision.

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