(1) An agreement is a residential tenancy agreement _if, under the agreement - _

(a) a person gives someone else (the tenant) a right to occupy stated premises; and

(b) the premises are for the tenant to use as a home (whether or not together with other people); and

(b) in writing, oral, or partly in writing and partly oral.

(b) given with a right to use facilities, furniture or goods.

(4) This section is subject to the following sections:

• section 6D (Certain kinds of agreements not residential tenancy agreements)
• section 6E (Certain people given right of occupation not tenants)
• section 6F (Certain kinds of premises mean no residential tenancy agreement).

6E Certain people given right of occupation not tenants

_(1) A residential tenancy agreement does not include an agreement for the right to occupy premises if the person given the right of occupation is - _

(a) a party to an agreement entered into honestly for the sale or purchase of the premises; or

(2) This section is subject to the following sections:

• section 6B (Residential tenancy agreement if agreement written and says it is residential tenancy agreement)
• section 6C (Residential tenancy agreement if agreement part of employment).

_(1) An agreement is an occupancy agreement if - _

(a) a person (the grantor) gives someone else (the occupant) a right to occupy stated premises; and

(b) the premises are for the occupant to use as a home (whether or not with other people); and

(d) the agreement is not a residential tenancy agreement.

(b) in writing, oral, or partly in writing and partly oral.

Note After 6 weeks, the occupancy agreement should be in writing (see s 71E (c)).

(b) given with a right to use facilities, furniture or goods.

_(4) The person given the right to occupy the premises may be - _

(b) someone prescribed by regulation for this section.

Note This Act does not apply to nursing homes, hostels for aged or disabled people or other prescribed premises (see s 4).

1. The application of these definitions is considered below.

1. Before considering the main issue in this interim hearing, it is necessary to note the additional complications caused by section 128 of the RT Act and clause 72 of the Standard Terms. Read together, these terms provide that a sub-tenancy of premises entered into without the permission of the lessor is unenforceable. Any attempt to create a sub-tenancy without the consent of the lessor results not in a sub-lease, but in a bare licence.
2. The Tribunal did not have before it at the preliminary hearing sufficient evidence to decide whether the applicant had permission from her lessor to sub-lease the premises - neither party was prepared to make submissions on this issue and the lessor's representatives were not parties and were not present. I observe that it is apparent from correspondence provided at hearing that the lessor was agreeable to another person living in the premises, with approval, but this is not necessarily the same thing as granting approval for a sub-tenancy. As such, the only issue that the Tribunal could resolve was whether the relationship can be characterised as an 'occupancy' or not - with the consequences of that decision to be considered at a later hearing.

1. The arrangement between the parties was an informal one. The parties entered into it without any real consideration of the RT Act. The Tribunal is now asked to fit the arrangements into the somewhat uncomfortable legislative framework by that Act.
2. The RT Act regulates residential tenancy agreements and occupancy agreements. It overrides many parts of the common law that governed those arrangements, but it does not deal with all issues and therefore is not a Code.[6] There are common law accommodation arrangements that fall outside the scope of the Act - the licence arrangement established by the operation of section 128 of the RT Act and clause 72 of the Standard Terms is one example.
3. Having regard to the legal framework that governs domestic accommodation (ie. the RT Act and the common law), it seems that 'flatmate' arrangements may broadly fall into one of the following legal categories.
4. The first category is that of joint tenants.[7] Under this arrangement, the flatmates are all parties to the tenancy agreement with the lessor (which may be oral or implied, albeit in such cases the Standard Terms will apply). They are jointly and severally liable to the lessor under the lease and also have contractual duties to one another. The creation of a joint tenancy in this case would have necessitated the termination of the previous single tenancy and the creation of a new joint tenancy with the lessor's concurrence. There was no suggestion by either party that this arrangement was a joint tenancy, so I do not need to consider this further.
5. The second category is a head-tenant/sub-tenant arrangement. Under this framework, there are two tenancy agreements - the first between the lessor and the head-tenant, and a second between the head-tenant and one or more sub-tenants.[8] Under this arrangement, the head-tenant becomes, in effect, a lessor, with a lessor's rights and obligations toward the sub-tenants. These obligations include the requirement to give appropriate notice prior to terminating the agreement. This is arrangement the applicant contends existed in this case.
6. The third category is an 'occupancy'. Occupancy agreements are provided for in Part 5A of the RT Act, and are clearly intended to be an alternative to a residential tenancy agreement. Unfortunately, the definitions for 'occupancy agreement' in section 71C of the RT Act and 'residential tenancy agreement' in section 6A are nearly identical, so it is not always a simple thing to determine which side of the line any agreement falls on. The definition of an occupant includes a 'lodger'. The respondent, in effect, contends that the applicant was a lodger, rather than a sub-tenant.
7. A fourth category is that of a 'bare licence' to occupy. Under this arrangement, a flatmate is given a limited licence to stay in accommodation in circumstances that do not give rise to a residential tenancy or an occupancy. Given the broad definitions of residential tenancy agreement and occupancy agreement, cited above, this is most likely to arise where the relationship is transitory or temporary, where there is no payment or other consideration, or where there is no right to "occupy the premises as a home". However, it can also arise where a purported sub-tenancy fails because of the operation of section 128 of the RT Act.

1. The question to be resolved is whether the agreement between the parties can be characterised as a residential tenancy agreement or an occupancy agreement. If the agreement is a residential tenancy agreement, then any notice to vacate must comply with the prescribed terms and any term inconsistent with the prescribed terms is void.[9] If it is an occupancy agreement, then only 'reasonable notice' must be given (section 71E(1)(h)).
2. The numerous tribunal cases that have considered the distinction between a residential tenancy agreement and occupancy agreements were most recently canvassed by Senior Member Lennard in The Young Women's Christian Association of Canberra v Carne[10] (Carne). I adopt Senior Member Lennard's observations in that case. I do not intend to repeat them here in full, other than to note the Tribunal's concluding comments, set out in paragraph 14:
   1. I have therefore determined that the appropriate approach is as follows:
      • (a) To examine the agreement to determine whether it falls within the definition of a residential tenancy agreement in accordance with section 6A of the RT Act;
      • (b) if the agreement does fall within the definition of a residential tenancy agreement then the Tribunal should have regard to the exceptions that are set out in the RT Act - section 6E is the relevant section in this matter.
      • (c) If the agreement falls within the exception contained in section 6E, then the Tribunal should have regard to the provisions dealing with occupancy agreements to determine whether the agreement is an occupancy agreement.
      • (d) In relation to all three steps, but particularly steps (b) and (c) the communications between the parties and the terms of the agreement may be taken into account.
3. Applying the Carne approach to this case, the first question is whether the agreement between the applicant and the respondent meets the definition of a 'residential tenancy agreement' as defined in section 6A of the RT Act. This requires an examination of the terms of the agreement. As noted above there was no written agreement, but the RT Act clearly provides that residential tenancy and occupancy agreements may be implied or oral[11]. The terms of this agreement may be found in the advertisement and in the evidence of the conversations between the parties and their conduct when performing the agreement, as set out above.
4. The first indicia of a residential tenancy agreement[12] is the "right to occupy the stated premises". The right need not be exclusive. To 'occupy' a premises is to be resident in it.[13] This test is clearly met in this case, with the applicant having a right to occupy the bedroom, ensuite bathroom and balcony areas.[14]
5. The second indicia of a residential tenancy agreement is a right to occupy the premises "to use as a home (whether or not together with other people)." [15] This criteria is presumably designed to distinguish a lease or occupancy arrangement from a more temporary or transient arrangement, such as a short stay in self-contained accommodation. It was not seriously in dispute that the applicant was entitled to use the premises 'as a home' during the course of the arrangement.
6. The third indicia of a residential tenancy agreement is that the right was given 'for value'.[16] This may be contrasted with allowing a person, such as a guest or relative, to reside in a premises for free. This indicia is met in the present case, as the applicant paid rent of $380 a week.
7. On balance, therefore, I am satisfied that the agreement meets the definition of a residential tenancy agreement in section 6A(1)(c). That, however, is only the first phase of the consideration process.
8. Section 6A(4) of the RT Act then provides that certain agreements that may otherwise meet the definition of residential tenancy agreement are in fact not residential tenancy agreements, but are something different. This includes agreements that fall within the scope of section 6E - entitled "Certain people given right of occupation not tenants".
9. Section 6E provides, relevantly, that a residential tenancy agreement does not include an "agreement for the right to occupy premises" if the person is a "boarder or a lodger". If, under the terms of the arrangement, the applicant is a "boarder or a lodger", then the agreement is for an occupancy, not a tenancy.
10. In Community Housing Canberra t/as CHC Affordable Housing v Connell [2013] ACT 68 (Connell), Member Daniel, as she then was, offered the following observation in relation to the terms boarder and lodger:

The terms boarder and lodger are not defined in the RTA, however each has an accepted meaning at common law. The Butterworths Australian Legal Dictionary defines a boarder as a person who lives in the house of another and receives food and lodging in return for payment of a fixed regular sum of money: Norblett & Mansfield v Manley [1952] SASR 155. The term lodger is defined as a person who occupies a room or rooms in a house which is generally under the control of the owner or lessee of the house, or his or her representative. A lodger is similar to a boarder in legal status, but is not provided with food by the person in control of the house: Porter v Busch [1974] 1 NSWLR 593.

1. The applicant was not provided with food and therefore clearly cannot be said to have been a 'boarder', but she may meet the definition of a 'lodger'. But what is a lodger?
2. In Connell, Member Daniel went on to describe a lodger arrangement as follows:
   1. In Walker v Puvesi Pty Ltd (NSW RTT 86/000006) a lodger was defined as:

a person who has been granted the right, for value, to occupy residential premises (as defined by the act) for the purpose of their use as a residence, without having being given the right to exclusive possession of such premises, although he or she may have been given the enjoyment of exclusive use of a part, but in circumstances where the owner remains in possession and occupation (either personally or by his servant), and retains the character of Master of the house and with the owner exercising control and dominion over the whole.

1. While the phrases "master of the house" and "dominion" are considered out of date, the concept of the grantor maintaining control of the premises and how life is lived in the premises remains a necessary defining element of the owner/lodger relationship:

[t]o decide if a particular relationship is one of lodger and owner, in effect one is deciding how closely it resembles that of a person renting a room in a household dominated by another person (or, indeed, a family). Or, to start at the other end, how closely it resembles an arms length tenancy arrangement where, by and large, and subject to a number of relatively commonsensical requirements about maintenance of the property, quiet enjoyment, and of course payment of rent, a tenant is free to act as she wishes in the rented premises (Jericho v Carillon Ave P/L [2005] NSWCTTT 514 at [33]).

1. Other authorities indicate, consistent with the Tribunal's comments in Connell, that the 'primary test' is the degree of control the landlord continues to exercise.[17]
2. For his part, Mr Christensen contended that the applicant not a lodger because:

We say the authorities are very clear that if you've got exclusive possession you must have a tenancy. Now, obviously in some of the student things with the sharing of meals and things like that, that may change it but that possibly - I haven't thought through that properly, but I mean certainly if there's any form - and certainly my advice to anyone who wants to make it clear there's an occupancy agreement is one of the sure ways of making that clear is to provide some services.

... a boarding or a lodging arrangement, you would either have to have an explicit, "This is a boarder-lodger," or occupancy agreement, and that's legitimate under the Act. In boarding houses they provide facilities or services, such as, "We'll wash your towels," or whatever, and we say that is very much a case that turns it into a boarder-lodger arrangement as opposed to an actual tenancy.

Ultimately, we say, it's the fact that reality of exclusive possession, that all the cases - most of them, I admit, before the Residential Tenancies Act came into force - that make it a residential tenancy - but I mean, lots of boarding house type cases and share house type cases where they have housekeepers or people moving in, or they provide tea and coffee, I mean, clearly a lodger wouldn't apply. Now, I never get this right. I think a lodger, traditionally they provide meals. That clearly takes it outside a residential tenancy.

1. With due respect to Mr Christensen, I am not satisfied that a key distinction between a boarder or lodger style occupancy and a tenancy is the "provision of services", although the provision of such services may be a relevant consideration. I do, however, accept that exclusive possession is indicative, if not determinative, of a tenancy. The concept of exclusive possession is reflected in the very definition of a 'lease' - for example, Butterworth's Concise Australian Legal Dictionary defines 'lease' as:

A right to exclusive possession of land given by one person (lessor or landlord) to another person (lessee or tenant) usually in return for rent.

1. However, I am not satisfied that the facts of this case demonstrate that the applicant actually had the kind of 'exclusive possession' Mr Christensen suggests is indicative of a tenancy. The most persuasive evidence of this lack of exclusivity is that the respondent could, and did, enter the applicant's room, even in her absence, in order to adjust the air-conditioning, but there are other factors too.
2. This is not a case where rooms within a property are leased out by an absentee landlord (as in Connell or Carne). The respondent was looking for a flatmate who was 'social and honest' and who shared her lifestyle because she would continue to live in the premises. She does not appear to have been a very demanding flatmate, and the evidence does not disclose many occasions when she exercised a lot of 'control' (at least prior to the disputation with the applicant, when tensions escalated and the agreed rostering arrangements were put in place), but the language of the advertisement makes it clear she was looking for a person who would complement and cooperate with her lifestyle. She advised the applicant that her parents would share the premises from time to time, a matter over which the flatmate would have little control. There were house rules, albeit they were negotiated ones. These are all elements of the arrangement that were contrary to the 'exclusive possession' and 'quiet enjoyment' indicative of a tenancy.
3. The respondent's continuing control of the premises is, in my view, the key consideration in this case. The issue of control goes to the rights of the parties and not necessarily to how those rights were in fact exercised. The tenant of a property is contractually bound to the lessor for compliance with the terms of the tenancy agreement, including taking care of premises. A boarder or occupant, by contrast, has no contract with the lessor. It is both the right and duty of the tenant to ensure that any occupants they bring upon the premises do not cause a breach of the tenancy agreement. Whether the tenant chooses to actually exercise their rights in relation to their occupants is another thing, but this does not deny the existence of the right and duty in the tenant to do so. The power to control the premises is the important indicia, and that power continued to lie with the respondent.
4. In this case, the applicant was told before the commencement of her residency that the respondent's parents would be arriving in Australia and would be living in the apartment as well. The applicant apparently acquiesced in this arrangement, although it later caused friction. If the applicant was truly a sub-tenant of the premises then she had an exclusive right to her bedroom and an agreed contractual license to the common property. In these circumstances it would be beyond the power of the respondent to unilaterally determine that her parents would move in and share the common property. The fact that the respondent could and did unilaterally determine this issue indicates the controlling role of the respondent and subservient status of the applicant. It indicates a fundamental lack of certainty in respect of the extent of the premises over which the applicant could and did assert the rights of a sub-tenant.
5. There are two other factors that also weigh against finding this arrangement is a residential tenancy: intention and policy.
6. Section 6A of the RT Act does not require that the parties intend to create a residential tenancy - it is a definition that captures a factual circumstance. However, tenancies are a species of contract (as well as an estate in land)[18]. For this reason, an important consideration in determining whether a tenancy has been created is the intention of the parties, objectively determined, to create a relationship in the form of a residential tenancy.[19] That is to say, the parties must have had some intention to create a contractual arrangement that would satisfy the legislative requirements of a residential tenancy agreement.
7. For a contract to be enforceable, it must be possible to find the essential terms of a tenancy objectively agreed with certainty.[20] The essential terms are:
   • (a) the identity of the parties;
   • (b) the identity of the premises in question;
   • (c) the duration of the tenancy (even if that duration is ongoing or periodic);
   • (d) the rent; and
   • (e) the commencement date.
8. In the present case, there was no agreed term of the tenancy. The only evidence of duration was that the respondent indicated her probable intention to stay for a few months. The parties explicitly agreed that either party could terminate the agreement of two weeks' notice (with the applicant possibly entitled to leave on one). This does not constitute an objective agreement for a fixed term tenancy. At best, it may indicative a periodic sub-tenancy, but even then the reserved power to the respondent to give two weeks' notice to the respondent and the power of the applicant to give one weeks' notice to the applicant, is inconsistent with the an intention to create a periodic tenancy under the RT Act. The circumstances of the arrangement suggest a transitory arrangement, and perhaps even a trial arrangement, for a period of two weeks. There was not sufficient certainty about the duration of the arrangement to constitute a tenancy.
9. In any case, having regard to the words of the advertisement, the objective intention of the applicant was, on any view, a desire to create a lodger arrangement of the kind described in Connell. Nothing in the rest of the terms suggests an objective intention to create any other kind of arrangement.
10. Which leads to the final point - that of policy. To suggest that a short-term arrangement of this kind could, as a matter of law, be characterised as 'sub-tenancy' defies common sense. The respondent did not intend that the applicant would be a sub-tenant, with the rights (and the responsibilities) that entails. The expectation of privacy and exclusivity that accompanies a tenancy is simply not consistent with the living arrangements established in this case. To impose such an arrangement in these circumstances would create an absurdity. It would entangle both the applicant and the respondent in a mesh of mutual obligation that could never been contemplated by either of them at the commencement of this arrangement. One serious manifestation of that absurdity would be the obligation on the respondent to give the applicant a 26 week notice in circumstances of mutual incompatibility, such as the present.
11. The imposition of a sub-tenancy may also create a situation where actions of the purported sub-tenant, over which the head-tenant has not control, then expose the head-tenant to breach at the hands of the lessor.
12. When people who are veritable strangers come to live in close proximity, sharing personal space, the risk of conflict is inevitable. The conflict may escalate to the level that people dread doing home, or even fear doing so. There must be some civil means to intervene in such circumstances for the sake of safety and order. If an occupant is lightly inferred to be a sub-tenant as opposed to an occupant then the available means for resolving these disputes are reduced. Posit, for example, that the police had in fact intervened at the behest of the applicant and removed the present respondent and her parents from the apartment. This would have immediately put the respondent in the position where she was still bound to her contract with the lessor, but was deprived of the capacity to exercise her duty and powers as a tenant (including but not limited to paying rent). Given such practical risks, the existence of a sub-tenancy should only be inferred in the clearest of circumstances. The circumstances of this case do not meet that test.
13. Accordingly, having regard to the above, I am satisfied that the applicant was an occupant, not a sub-tenant and I make that declaration accordingly.

[1] The Standard Terms being implied into all residential tenancy agreements pursuant to section 8(1)(a) of the RT Act

[2] Transcript of proceedings 15 May 2018, page 19, lines 32 to 36

[3] Transcript of proceedings 15 May 2018, page 9, lines 40-45

[4] Transcript of proceedings 15 May 2018 at 10-13

[5] Email from applicant to the Tenants Advice Service, 30 April 2018

[6] Bangura & Fan [2013] ACAT 38 at [30]

[8] Permission of the lessor is a legal requirement

[9] Community Housing Canberra trading as CHC Affordable Housing v Connell [2013] ACAT 68 at [21]

[10] [2017] ACAT 15

[11] 6A(2)(a) and (b) and 71C(2)(a) and (b)

[14] The applicant's lawyer agreed that, at best, she had a licence to use the common areas - there was no suggestion that the tenancy went beyond the bedroom, ensuite and balcony

[17] Anforth et al, Residential Tenancies Law and Practice New South Wales, (Federation Press, 7th ed) at 2.3.8

[18] Anforth et al, Residential Tenancies Law and Practice New South Wales, (Federation Press, 7th ed) at [2.13.13]

[19] Anforth et al, Residential Tenancies Law and Practice New South Wales, (Federation Press, 7th ed) at [2.13.2]

[20] Anforth et al, Residential Tenancies Law and Practice New South Wales, (Federation Press, 7th ed) at [2.13.3]