Held, setting aside and substituting the original decision:

• A residential tenancy agreement existed between the parties;
• The tenancy was terminated as the tenant was in serious breach of the agreement in relation to rent arrears and the use of the property for an unauthorised purpose;
• The implications of the COVID-19 Emergency Response Act 2020 (SA) did not prevent an order for possession being made in the circumstances.

The Tribunal grants leave to apply for internal review.

I set aside the order of the Tribunal made on Tuesday 12 May 2020 in matter number 2020/SH003444 and substitute the following orders instead:

1. The tenant must vacate the property by 9.00am on Monday 17 August 2020. This order may be enforced by the Tribunal bailiff.
2. The bond of $1,920.00 (Bond No. 4303920-5) will be paid to the landlord.
3. The tenant must pay $1,671.84 to the landlord within 14 days of the date of this order. If the tenant does not pay, this order may be enforced in the Magistrates Court.

Internal review - Residential tenancy - Landlord application - Termination and vacant possession - Breach of agreement - Rent arrears

Internal review - Residential tenancy - Jurisdictional matters - Existence of residential tenancy agreement - property advertised for short term rental - no intention by tenant to reside in the property - whether arrangement commercial in nature

South Australian Civil and Administrative Tribunal Act 2013 (SA) _s_s 70, 82

COVID-19 Emergency Response Act 2020 (SA) s 8

Residential Tenancies Act 1995 (SA) s 87

Re AKS [2016] SACAT 19

Azedagan v Kirby [2020] SACAT 10

Street v Mountford [1985] UKHL 4; (1985) AC 809

Radaich v Smith [1959] HCA 45; (1959) 101 CLR 209

Made under the South Australian Civil and Administrative Tribunal Act 2013 (SA) s 70(6)(c)(i)

1. The landlord has sought a review of an order made by the Tribunal which dismissed his application for possession on the basis of rent arrears, because the Tribunal found that the agreement between the parties was not a residential tenancy agreement.
2. This is an application for leave to apply for an internal review. It is also the consideration of the application for internal review of an order made by the Tribunal on 12 May 2020 (matter number 2020/SH003444) (the original Order).
3. The applications are made under s 70 of the South Australian Civil and Administrative Tribunal Act 2013 (the SACAT Act). The Tribunal will deal with applications of this nature in two stages. First, the Tribunal will determine whether or not leave should be granted. Second, if the Tribunal grants leave for the internal review application, then the Tribunal will review the decision made at the previous Tribunal hearing.

Issue 1: Should leave be granted for the internal review application?

1. Section 70(1a) of the SACAT Act provides that an application for internal review may only be made with leave of the Tribunal. The applicant, as the person, who has applied for internal review, has the responsibility of demonstrating that the discretion to grant leave should be exercised in their favour.
2. The Tribunal will adopt the following approach as set out by Justice Parker in Re AKS [2016] SACAT 19 (at para 14) in determining whether or not permission should be granted:

...the Tribunal should take the same approach to the exercise of its discretion...

to grant permission for an internal review as is taken by the Supreme Court when it decides whether or not to grant permission for a civil appeal. The overriding principle is always the interests of justice. The ordinary approach is that permission will only be granted where an appeal is reasonably arguable and the subject matter is of sufficient substance to justify consideration.

1. In this matter, I consider that leave should be granted as the landlord claimed that he had fresh evidence in direct contravention of evidence provided to the Tribunal in the original hearing by the tenant and any dispute about jurisdiction is an important issue for the Tribunal.

Issue 2: Should the previous decision be affirmed, varied or set aside?

1. The original Order dismissed the application on the grounds that the Tribunal did not have jurisdiction to deal with the matter because the parties had agreed that the tenant could use the property for a commercial purpose and therefore the arrangement between them was not a residential tenancy agreement.
2. Section 70 of the SACAT Act requires the Tribunal to adopt the following approach when conducting an internal review:

(a) it must examine the initial decision in light of the evidence or material before the Tribunal at the time that decision was made;

(b) it may, as it thinks fit, allow further evidence or material to be presented to it;

(c) it must reach the correct or preferable decision; and

(d) it must have regard to, and give appropriate weight to, the decision of the Tribunal at first instance.

1. The questions for me to answer in this matter are:-
   1. Is the agreement between the parties a residential tenancy agreement?
   2. If so, should the tenancy be terminated on the basis of rent arrears or for some other reason?
   3. If the tenancy is to be terminated, what impact does the COVID-19 Emergency Response Act 2020 (the COVID Act) have on the question of possession?

Question 1: Is the agreement between the parties a residential tenancy agreement or not?

1. Mr Nejad gave evidence that:-
   • He bought the property during the current tenancy (from the former owner who had entered into the agreement with the tenant);
   • When he bought the property he understood that there was a residential tenancy agreement in place with the tenant;
   • He had never been informed of, or approved of, any arrangement by which the tenant was permitted to advertise the property for paying guests for a short or long term rental.
2. Mr Nejad submitted that the original Order was incorrect and the agreement between the parties is a residential tenancy agreement.
3. Mr Nejad called Samantha Bunyan who gave evidence that:-
   • She had sent an email to the original landlord on 13 September 2019 in relation to prospective tenants for the property in which she stated -

Application One [being Mr Rochow] is a company that want to rent for their executive team that are flying in from interstate. They have to ensure the property is clean etc. I have spoken with their accountant and they can afford the property. They want to take the property early next week if they are successful

• She recalled Mr Rochow saying to her that from a company's point of view renting the apartment for 12 months would be cheaper than the company having to pay out hotel bills;
• At no time did Mr Rochow disclose to her or the former landlord that he intended to rent out the property by advertising it for paying guests for short or long term stays;
• She has been a property manager with Harcourts for 5 years and her firm does not permit arrangements of the kind which Mr Rochow has been conducting at the premises;
• If Mr Rochow had sought permission to advertise the property for paying guests for short or long term stays, she would have asked the landlord for their attitude (but this did not occur)
• She dealt with Mr Rochow on the basis that the arrangement between him and the landlord was an ordinary residential tenancy agreement.

1. Ms Cannon gave evidence that she had been in the room with Mr Rochow and Ms Bunyan when Mr Rochow signed the tenancy agreement as she was new in the firm at that time, and she was observing as part of her training. She gave evidence which essentially confirmed the evidence of Ms Bunyan.
2. Mr Rochow disputed the evidence of the former agent. He said that:-
   • He rented the property with a view to advertising it on Bookings.com for paying guests for short or long term stays - as a serviced apartment;
   • This is the nature of the business he operates from a number of properties;
   • He had discussed this use of the property with the agent and the agent had agreed in relation to this property - he had assumed that the landlord had agreed;
   • This purpose should have been evident from the tenancy application and also the email exchanges between him and the agent.
3. For these reasons, Mr Rochow submitted that he had rented the property for a commercial purpose and the original Order was correct in finding that the arrangement between him and the landlord was not a residential tenancy agreement.

1. At the original hearing, Member Kennedy observed that the name by which the parties refer to the agreement is irrelevant in relation to the proper construction of the document and what matters is the actual nature of the agreement between the parties. I agree with that view. That approach is supported by the decision of Azedagan v Kirby[1]:-

The definition of a residential tenancy agreement is contained in s 3 of the Act:

"..means an agreement (other than a rooming house agreement) under which a person grants another person, for valuable consideration, a right (which may, but need not, be an exclusive right) to occupy premises for the purpose of residence"........

Does the description used by the parties (or either of them) determine the nature of the arrangement between them?

It is clearly established that it does not matter what label parties place on a document, or how they might describe an arrangement, it is the true character of the arrangement which will determine its legal nature.

Street v Mountford[2] involved a dispute between the parties as to whether or not the arrangement between them constituted a residential tenancy agreement or a licence. The agreement was described by the parties as a licence, but the argument that the description (which was used throughout the agreement) determined the nature of the agreement was rejected and the Court said that even if the parties described the arrangement as a licence (to occupy), in doing so, they could not alter the true effect of the agreement[3] and "...the professed intentions of the parties is irrelevant..."[4]

This approach was also applied in the leading Australian authority of Radaich v Smith.[5]

1. That means that I must closely examine the evidence of the parties about the arrangements. Their evidence is contradictory. On balance, I have decided to accept the evidence of the landlord and former agent because -
   • Their evidence is consistent with the email exchanges between the former agent and the former landlord;
   • Their evidence is consistent with the information provided by the tenant on the tenancy application form;
   • Their evidence is consistent with the terms of the tenancy agreement;
   • I did not consider that the emails referred to by the tenant supported his submissions;
   • I did not consider that the tenancy application form supported the tenant's submissions.
2. Therefore I have concluded that there is a residential tenancy agreement between the parties. This conclusion requires me to set aside the decision of Member Kennedy. However, my decision is in no way a criticism of the original Order which I consider was correct on the basis of the evidence available to Member Kennedy at the time. I consider that Member Kennedy's reasoning and his approach at this original hearing was absolutely correct but I have had the benefit of further evidence which was not available at the original hearing.

Question 2: If there is a residential tenancy agreement between the parties, should the tenancy be terminated on the basis of rent arrears or for some other reason?

1. The landlord sought an order for possession.
2. On the basis of the landlord's rent record (which was not disputed by the tenant), I have calculated that rent is paid to 25 May 2020 with a credit of $248.15.[6] Rent arrears at today's date are $3,408.99.
3. The tenant initially submitted that, due to the reduction in his business income because of the COVID-19 pandemic, he should be entitled to rent relief. However, that submission was made on the basis that the arrangement was a commercial tenancy. I have found that is not the case.
4. I consider that an order for possession is appropriate because -
   • Rent arrears are well in excess of the bond (which is $1,920.00);
   • It appears that the tenant will not be in a position to pay full rent on a regular basis in the future as he was relying on visitors for his income and the COVID-19 pandemic means there will be substantially less visitors;
   • The term of the tenancy is due to expire next month in any event.
5. After some discussion, Mr Rochow agreed to vacate on Monday 17 August 2020.

Question 3: If the tenancy is to be terminated, what impact does the COVID Act have on the question of possession?

1. Section 8(1)(h) of the COVID Act states that a tenant cannot be evicted for rent arrears if the tenant is in a position of financial difficulty due to the pandemic.
2. Although Mr Rochow submitted that he had suffered a significant downturn in his business due to the pandemic, I consider that notwithstanding s 8(1)(h) of the COVID Act, as the tenant has used the property for a commercial purpose rather than as a residence, this is in breach of clause 3.1.9 of the tenancy agreement (which requires him to use the property as a residence), and the combination of rent arrears and that unauthorised use, mean that the tenant is in serious breach of the agreement.
3. Accordingly, it would be appropriate to deal with the application on that basis (under s 87 of the Residential Tenancies Act 1995 pursuant to s 82 of the SACAT Act). It is also relevant to note that the tenant was behind in rent before the COVID-19 pandemic.

1. Taking into account all of the evidence, I have decided to terminate the tenancy on Monday 17 August 2020. I will make ancillary orders in relation to the bond and rent arrears.

The Tribunal grants leave to apply for internal review.

I set aside the order of the Tribunal made on Tuesday 12 May 2020 in matter number 2020/SH003444 and substitute the following orders instead:

1. The tenant must vacate the property by 9.00am on Monday 17 August 2020. This order may be enforced by the Tribunal bailiff.

2. The bond of $1,920.00 (bond number 4303920-5) will be paid to the landlord.

1. The tenant must pay $1,671.84 to the landlord within 14 days of the date of this order. If the tenant does not pay, this order may be enforced in the Magistrates Court.

1. [1] [2020] SACAT 10 at paras 14 and following.
2. [2] [1985] UKHL 4; (1985) AC 809.

[5] [1959] HCA 45; (1959) 101 CLR 209.

[6] My calculations concerning rent arrears are made on the basis that when Mr Nejad took over the tenancy on 1 November 2019, rent was paid to 11 November 2019 and since that time Mr Rochow has paid rent of $9,208.15.