NSW Land and Housing Corporation v Pinchin

1. This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) ('NCAT Act') against a decision made in the Consumer and Commercial Division of the Tribunal on 27 November 2024.
2. The application to the Tribunal was brought by the appellant which we will refer to as the landlord, against the respondent whom we will refer to as the tenant.
3. For the reasons set out below, we grant leave to appeal to the extent necessary and allow the appeal.

1. The parties entered into a residential tenancy agreement governed by the Residential Tenancies Act 2010 (NSW) ('RTA') on 29 July 2016 in respect of premises at Cranebrook in New South Wales.
2. The tenancy agreement is a social housing tenancy agreement and the tenant received the benefit of a rental subsidy until 4 March 2024.
3. On 4 March 2024, following an investigation under s 58 of the Housing Act 2001 (NSW) ("Housing Act") the landlord determined that the tenant had failed to declare income from employment received between 7 June 2018 and 13 February 2023, and had failed to declare an additional occupant at the premises from 15 August 2019.
4. On the same date, the tenant's rental subsidy was cancelled pursuant to s 57 of the Housing Act and his rent became the market rent of $395.00 per week.
5. A letter from the landlord dated 4 April 2024 advised the tenant of the subsidy cancellation and the new rent and informed him that due to the subsidy reassessment, a debt of $82,557.45 had been placed on his rental account ('the s 57 letter'). The s 57 letter stated that the unsubsidised rent took effect from 4 March 2024.
6. The letter advised the tenant of his right to seek review of the decision. The tenant did not seek a review.
7. On 6 May 2024 the landlord issued a notice of termination to the tenant on the basis that he had breached the tenancy agreement by failing to pay rent on time. The notice of termination records arrears of $83,059.20 based on a weekly rent of $395.00. The termination date was 6 June 2024.
8. The tenant did not vacate the premises.

1. The application to the Tribunal was lodged on 2 July 2024. The landlord sought the following orders:

(1) An order for termination of the tenancy for breach of the agreement - s 87 RTA;

(2) An order that the tenant has frequently failed to pay rent on time - s 89(5) RTA;

(3) An order for vacant possession of the premises - s 187(1)(i) RTA;

(4) An order for payment of an occupation fee - s 123 RTA;

(5) In the alternative, an order that restrains any action in breach of the residential tenancy agreement - s 187(1)(a) RTA.

1. The matter was listed before the Tribunal on 27 November 2024.
2. The landlord provided a transcript of the hearing. References to the transcript in this decision refer to the relevant time stamp.
3. The Tribunal dismissed the application, noting that oral reasons were given. Although the transcript does not suggest that the Tribunal clearly delineated its reasons, it is apparent that the Member commenced explaining his reasons for decision at 1:00:47. At 1:06:03 the Member stated:

That's my reasoning in this matter for the orders I'm about to make unless you can persuade me that that's incorrect.

1. The solicitor appearing for the landlord stated there were no further submissions from the landlord and the Member continued stating (or re-stating) his reasons. We consider it appropriate to treat all that the Member said from 1:00:47 as the Tribunal's reasons for decision.
2. Relevantly, the Tribunal said:

(1) The Tribunal has wide discretion pursuant to s 154E of the RTA. Relevant to that discretion is how the debt arose, the date from which it was applied, and whether there is an issue as to the validity of that debt.

(2) Based on the ledger, the tenant was not in arrears until the date the subsidy was cancelled and the ledger adjusted (i.e. 3 April 2024) and the tenant "has made a considerable effort to pay the increased amount since that calculation was made".

(3) The landlord has the onus of proof and must establish on the evidence:

(a) How the debt was calculated; and

(b) The period of time from which it was calculated.

(4) The landlord's calculation of the debt must be incorrect because, for around a 12 month period, and on other occasions between 18 April 2018 and 3 September 2021, the additional occupant (the tenant's daughter) was incarcerated and thus not residing in the premises.

(5) There are inconsistencies in the time periods of the calculation, and no evidence before the Tribunal of the tenant's income.

(6) The landlord's case fails because it has not established on the balance of probabilities:

(a) How the debt arose and the period of time for which it applies;

(b) That the tenant was receiving income which he did not declare for the period stated in the s 57 letter; and

(c) The period of time the tenant's daughter was occupying the premises.

(7) If the Tribunal is wrong, then it exercises its discretion under s 154E to refuse the termination, taking into consideration that:

(a) The debt arose "out of a review of which the contents are not before me ... and the termination notice arose from the consequences of that debt"; and

(b) The tenant has been doing his best to pay the increased rent, since the subsidy cancellation.

1. The basis upon which appeals from decisions of the Tribunal may be brought are identified in s 80 of the NCAT Act which states that an appeal may be made "as of right on any question of law, or with leave of the Appeal Panel, on any other grounds" (s 80(2)(b)).

1. The meaning of a "question of law" was discussed in detail by the Appeal Panel in Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 (Cusumano) at [25]-[40]. A pure question of law does not depend on the facts found, and the question of law must be, self-evidently, a question of law and not depend on the answer. A question of law is distinct from a mixed question of fact and law, for which leave to appeal is required. Examples of questions of law include the matters set out in Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [13] and _Cusumano a_t [32]. However, the categories of question of law are not closed. As was stated at Cusumano at [37]-[39]:

What constitutes a question of law is vexed and context dependent in the sense that the distinction between matters of fact and of law may turn on the circumstances in which the question arises: Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2) [2023] NSWSC 416 at [33(4)], citing Thomas and Naaz [2023] NSWCA 40 at [52] and Da Costa v The Queen [1968] HCA 51; (1968) 118 CLR 186 at 194; [1968] HCA 51.

For instance, a ground of appeal that raises the question whether there were adequate reasons may constitute an attack on the merits which would not raise a pure question of law. On the other hand, it may be a contention that the decision is unreasonable in the requisite sense or that the Tribunal failed to exercise the jurisdiction, which would likely raise a question of law: see the exposition of this issue in Wollondilly at [28]-[32]. Care must in any event be taken. As has been clarified by amendment to the NCAT Act since Prendergast was decided, the Tribunal is not required to give reasons for all decisions it makes: NCAT Act, s 62(2A; see too: New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 at [53]-[54], [109]-[114].

Therefore, discernment and care must be taken to ensure the grounds relied upon by the appellant, properly understood, raise questions of law and arise in the proceedings; or whether leave is required.

1. Clause 12 of Sch 4 to the NCAT Act provides that the Appeal Panel may grant leave to appeal from a decision of the Consumer and Commercial Division of the Tribunal pursuant to section 80(2)(b) of the NCAT Act, only if it is satisfied that the appellant may have suffered a substantial miscarriage of justice because:

(1) the decision of the Tribunal under appeal was not fair and equitable; or

(2) the decision of the Tribunal under appeal was against the weight of evidence; or

(3) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. The Appeal Panel considered the meaning of a substantial miscarriage of justice for the purposes of cl 12 of sch 4 of the NCAT Act in Collins v Urban [2014] NSWCATAP 17 at [76], stating that a substantial miscarriage of justice may have been suffered:

... where there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.

1. Even if a substantial miscarriage of justice is established, the Appeal Panel must consider whether it should use its discretion to grant leave to appeal.
2. The principles to be applied in exercising that discretion were considered in Collins v Urban. the Appeal Panel concluded at [84] that:

(2) Ordinarily it is appropriate to grant leave to appeal, only in matters that involve:

(a) Issues of principle; or

(b) questions of public importance or matters of administration or policy which might have general application; or

(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; or

(d) a factual error that was unreasonably arrived at and clearly mistaken; or

(e) the Tribunal having gone about the fact-finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.

1. It is important to note that an appeal is not an opportunity for the losing party to rerun their case (Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 at [10]).

(1) The Notice of Appeal lodged on 11 December 2024;

(2) Reply to Appeal lodged on 16 January 2025;

(3) Appellant's submissions lodged on 18 February 2025;

(4) Respondent's submissions dated 6 March 2025.

1. The Notice of Appeal was lodged on 11 December 2024, which is within the 14 day time period specified in cl 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW) (the Rules).
2. If successful in the appeal, the landlord seeks the following orders:

(1) The appeal is allowed;

(2) The orders made on 27 November 2024 in 2024/00242434 are set aside;

(3) The matter is remitted to the Tribunal for reconsideration according to law before a differently constituted Tribunal.

1. The grounds of appeal identified on page 2 of the Notice of Appeal are as follows:

1. The Tribunal erred in its consideration that the Applicant should have filed its application under section 147 of the Residential Tenancies Act 2010 (NSW) (the RTA) instead of section 87 of the RTA.

2. The Tribunal erred in considering the Respondent's evidence challenging the calculation of the rental arrears as the Tribunal does not have the jurisdiction to look behind the calculation of a debt.

1. The landlord also seeks leave to appeal on the grounds that:

(1) The decision was not fair and equitable because the Tribunal asserted the landlord should have brought its application under s 147 of the RTA and not s 87, and suggested the landlord did so to avoid delays;

We note that this raises the same issue as the first identified ground of appeal.

(2) The decision was against the weight of evidence because the Tribunal should have given more weight to the rental ledger which demonstrated the debt owed by the tenant, and the Tribunal should not have considered the tenant's evidence that the debt calculation was incorrect.

1. In his Reply to Appeal the tenant says that the Tribunal's decision was unlikely to have caused a 'substantial miscarriage of justice' because:

(1) There was not a 'significant possibility' that the landlord would have obtained a more favourable result, referring to NSW Land and Housing Corporation v Diab [2015] NSWCA 133 ('Diab') which held that the retrospective cancellation of a tenant's rental rebates under s 57 does not convert the amount of the rebate into rental arrears.

(2) The landlord did not have the right to invoke s 87 of the RTA due to the decision in Diab.

(3) The decision in Diab makes it unlikely that the statements filed by the tenant would have had a material impact on the Tribunal's conclusion that the application should not have been filed under s 87.

1. In written submissions dated 14 February 2025, the landlord submits:

(1) The Tribunal identified the wrong issue/asked the wrong question by focussing on sections 143 - 147 of the RTA (which relate to termination on eligibility grounds), when the basis of the termination by the landlord was properly breach for non-payment of rent under s 87.

(2) The application to the Tribunal was brought correctly pursuant to s 87, in accordance with s 154A of the RTA.

(3) Section 154A was inserted into the RTA after Diab and provides that a debt arising from the cancellation of a rental rebate amounts to non-payment of rent and constitutes a breach of the agreement.

(4) The Tribunal reviewed the landlord's decision to cancel the rental subsidy under s 57 of the Housing Act, when the Tribunal does not have jurisdiction to do so. The landlord relied on the decisions in Naish aka Khosroabadi v NSW Land and Housing Corporation [2023] NSWCATAP 99 ('Naish') and Herbert v New South Wales Land and Housing Corporation [2019] NSWSC 1703 ('Herbert').

(5) The Tribunal proceeded on the basis that its discretion under s 154E of the RTA enabled it look behind the cancellation of a rental rebate, whereas the discretion is properly limited to matters that may be considered under the RTA, not under the Housing Act.

(6) The application of s 154A of the RTA in the termination of social housing tenancies is a matter of public importance.

1. The landlord further submits that leave to appeal should be granted on another ground: that the decision was not fair and equitable and the landlord was not afforded procedural fairness due to the Tribunal conducting a review of the decision under s 57 of the Housing Act, in the absence of jurisdiction and without evidence from the landlord about its investigations under s 58 of the Housing Act.

1. In his written submissions dated 6 March 2025 the tenant says:

(1) The Tribunal was entitled to consider how the debt to the landlord arose because the Tribunal must be satisfied of the rent owed; that the rent arrears are accurate; that the breach is sufficient to warrant a termination order; and the history of the tenancy, pursuant to s 154E(1)(d).

(2) The Tribunal did not ask the wrong question or identify the wrong issue. Its decision was ultimately grounded on consideration of s 87, not s 147 of the RTA. The presiding Member did not state that the landlord could not bring the proceedings under s 87, or ought to have brought them under s 147.

(3) Herbert does not establish that the Tribunal does not have jurisdiction to consider the merits of decisions under s 57 of the Housing Act.

(4) The Tribunal was not required to follow Naish.

(5) Section 154E does not limit the Tribunal's discretion as submitted by the landlord.

(6) While the tenant did not press his reliance on Diab in the submissions of 6 March 2025 (or at the appeal hearing), he submits that there has not been a substantial miscarriage of justice because:

(a) The Tribunal was entitled to consider how the alleged debt to the landlord arose in the circumstances and whether the amount of the debt was accurate to determine whether there was a breach of the agreement;

(b) The landlord's legal representative did not object to the tendering of the custody record of the tenant's daughter during the hearing at first instance; and

(c) The landlord's evidence during the hearing at first instance on the question of the amount owed to it by the tenant was inconsistent.

(7) While s 154A of the RTA allows the landlord to commence proceedings pursuant to s 87 of the RTA to recover a debt arising from s 57 of the Housing Act, s 154A was not in issue in the proceedings at first instance.

1. Section 58 of the Housing Act provides:

58 Investigation of application

(1) The Corporation may make an investigation to determine the weekly income of -

(a) a person who is an applicant for, or a recipient of, a rental rebate under this Part, and

(b) any other resident of the house in which that person resides.

(2) The Corporation may require a person who is an applicant for, or a recipient of, a rental rebate under this Part to produce such evidence as the Corporation thinks fit of the person's weekly income and of the weekly income of any other resident of the house in which that person resides.

1. Plainly therefore, the investigation and determination of a tenant's income, and that of any other resident, is a matter for 'the Corporation', ie the landlord, the New South Wales Land and Housing Corporation.
2. Section 57 of the Housing Act provides (emphasis added):

57 Cancellation or variation of rental rebate

(1) The Corporation may, after conducting an investigation under section 58, vary or cancel any rental rebate granted under this Part.

(2) The Corporation is to determine the date (being a date occurring before, on or after the making of the determination) on which the variation or cancellation has effect or is taken to have effect.

(3) The Corporation is to give notice in writing to a tenant of any decision to vary or cancel any rental rebate being received by the tenant and is to include in the notice the date on which the variation or cancellation takes effect or is taken to have effect.

(4) If the Corporation reduces or cancels a tenant's rental rebate under this Part with effect from a preceding date, the Corporation may, by notice in writing to the tenant, require the tenant to pay to the Corporation -

(a) an amount equal to any rental rebate or part of a rental rebate received by the tenant on or after the date that the variation or cancellation took effect to which, because of the variation or cancellation, the tenant was not entitled, and

(b) interest (at the rate prescribed under section 101 of the Civil Procedure Act 2005 in respect of unpaid judgments) on any outstanding amount under paragraph (a) from a date specified in the notice, being a date not earlier than the date on which the notice is issued to the tenant.

(5) Any amount (together with interest) referred to in subsection (4) that is unpaid may be recovered by the Corporation as a debt in any court of competent jurisdiction.

1. Thus, cancellation or variation of a rent rebate for tenants renting public housing is a decision for the landlord, which also determines the date the cancellation or variation takes effect.
2. By subs 57(3), if a rebate is reduced or cancelled, the tenant must be notified of the date the variation or cancellation takes effect.
3. By par 57(4)(a), the landlord may claim from the tenant any rebate the tenant was not entitled to on or after the date that the variation or cancellation took effect.
4. Section 154A of the RTA provides:

154A Termination notice for non-payment of amount payable on variation or cancellation of rent rebate

If a tenant owes a landlord under a social housing tenancy agreement a debt arising under section 57 of the Housing Act 2001 or otherwise as a consequence of the variation or cancellation of a rent rebate, sections 87, 88 and 89 apply as if the amount owed were rent and the failure to pay were a breach of the agreement.

87 Breach of agreement

(1) A landlord may give a termination notice on the ground that the tenant has breached the residential tenancy agreement.

(2) The termination notice must specify a termination date that is not earlier than 14 days after the day on which the notice is given.

(3) The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement.

(4) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that -

(a) the tenant has breached the residential tenancy agreement, and

(b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement, and

(c) the termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice.

(5) In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following -

(a) the nature of the breach,

(b) any previous breaches,

(c) any steps taken by the tenant to remedy the breach,

(d) any steps taken by the landlord about the breach,

(e) the previous history of the tenancy.

(6) The Tribunal may refuse to make a termination order if it is satisfied that the tenant has remedied the breach.

88 Termination notices for non-payment of rent

(1) A termination notice given by a landlord on the ground of a breach of the residential tenancy agreement solely arising from failure to pay rent (a non-payment termination notice) has no effect unless the rent has remained unpaid in breach of the agreement for not less than 14 days before the notice is given.

...

89 Repayment of rent and charges owing following issue of non-payment termination notice

(1) This section applies if a landlord gives a tenant a non-payment termination notice.

(2) The Tribunal must not make a termination order on the ground set out in the notice if the tenant pays all the rent, water usage charges or charges for the supply of electricity, gas or oil (utility charges) owing or enters into, and fully complies with, a repayment plan agreed with the landlord.

(3) A termination of the residential tenancy agreement solely on the ground of non-payment of rent, water usage charges or utility charges, and any warrant for possession issued as a result of any order for possession, cease to have effect if the tenant pays all the rent, water usage charges or utility charges owing or enters into, and fully complies with, a repayment plan agreed with the landlord and the tenant has not vacated the residential premises.

...

(5) The Tribunal may, on application by a landlord, make a termination order despite subsection (2) or (3) if it is satisfied that the tenant has frequently failed to pay either or both of the following amounts owing to the landlord for the residential premises -

(a) rent, on or before the day set out in the residential tenancy agreement,

143 Termination notice may be given on ground that tenant not eligible for social housing

A landlord under a social housing tenancy agreement may give a termination notice to the tenant on the ground that the landlord has determined, as the result of an assessment carried out under this Subdivision, that the tenant is not eligible to reside in the class of social housing premises to which the agreement applies (the eligibility ground).

147 Termination by Tribunal on eligibility ground

(1) The Tribunal must, on application by the landlord under a social housing tenancy agreement, terminate the agreement on the eligibility ground if it is satisfied that -

(a) any notice required to be given, or any review required to be carried out, was given or carried out in accordance with this Subdivision before giving the termination notice on the eligibility ground, and

(b) a termination notice has been given in accordance with this Subdivision, and

(c) the landlord has determined, as a result of an assessment under this Subdivision, that the tenant is not eligible to reside in the class of social housing premises to which the agreement applies.

(2) In deciding whether or not to make an order, the Tribunal is not to review the eligibility of the tenant to reside in the class of social housing premises to which the agreement applies.

154E Exercise of discretion to make termination order

(1) In considering whether to make a termination order for a social housing tenancy agreement, the Tribunal must have regard to the following -

(a) the effect the tenancy has had on neighbouring residents or other persons,

(b) the likelihood that neighbouring residents or other persons will suffer serious adverse effects in the future if the tenancy is not terminated,

(c) the landlord's responsibility to its other tenants,

(d) the history of the current tenancy and any prior tenancy arising under a social housing tenancy agreement with the same or a different landlord,

(e) whether the tenant, wilfully or otherwise, is or has been in breach of an order of the Tribunal.

(2) This section does not limit any other matter that may be considered by the Tribunal under this Act.

113 Defects in termination notices

The Tribunal may make a termination order for a residential tenancy agreement or any other order even though there is a defect in the relevant termination notice or the manner of service of the notice if -

(a) it thinks it appropriate to do so in the circumstances of the case, and

(b) it is satisfied that the person to whom the notice was given has not suffered any disadvantage because of the defect in the notice or service or that any disadvantage has been overcome by the order and any associated order.

1. As we noted above, the first ground of appeal and the first identified reason for seeking leave to appeal raise similar, if not identical, issues.
2. It is convenient to deal with those issues together after dealing with the second identified ground of appeal.

The Tribunal does not have the jurisdiction to look behind the calculation of a debt arising under s 57 of the Housing Act.

1. If this proposition were established, the Tribunal's finding that the landlord's calculation of the debt must be incorrect constitutes jurisdictional error and thus this ground of appeal raises a question of law in respect of which there is a right to appeal (Chase Oyster Bar Pty Ltd v Hamo Industries Pty Ltd (2010) 78 NSWLR 393; [2010] NSWCA 190; Haritos v Commissioner of Taxation [2015] FCAFC 92; (2015) 233 FCR 315).
2. The ordinary meaning conveyed by s 57 of the Housing Act is that the cancellation or variation of a rent rebate is a decision for the landlord.
3. The ordinary meaning conveyed by s 58 of the Housing Act is that the investigation and determination of a tenant's income, and that of any other resident, is a matter for the landlord.
4. The Housing Act does not confer jurisdiction on the Tribunal to review the landlord's investigation and determination of the income of a tenant and resident, or its decision to cancel or vary a rebate, or the date such a decision takes effect.
5. This is confirmed by the debates in committee concerning the Residential Tenancies and Housing Legislation Amendment (Public Housing - Antisocial Behaviour) Act 2015 (NSW) (which inserted s 154A in the RTA). Consideration of those debates is permitted to "confirm that the meaning of [a statutory] provision is the ordinary meaning conveyed by the text of the provision": Interpretation Act 1987 (NSW) s 34(1)(a).
6. In opposing a proposed amendment to confer upon the Tribunal the power to review decisions concerning rental rebates, the Hon Richard Colless, Parliamentary Secretary representing the minister, made clear Parliament's intention (expressed through the defeat of the proposed amendment) that the granting of a rental rebate is a policy decision which is not subject to review by the Tribunal:

The granting of a rental rebate to eligible public housing tenants who are not able to afford the market rent for their public housing property is rightly a matter of policy to be implemented by Family and Community Services. Tenants who believe that Family and Community Services has not correctly assessed their entitlement to a rental rebate, in accordance with the published policy, already have appeal rights to both the department and the independent Housing Appeals Committee. The granting of rental rebates to tenants is not an obligation of the department under the Residential Tenancies Act 2010. Therefore, such decisions would not be appropriate for review by the NSW Civil and Administrative Tribunal: New South Wales Legislative Council, Parliamentary Debates (Hansard), 14 October 2015.

1. As the tenant submits, Herbert did not directly concern the same issues as this appeal.
2. In that case, Adamson J dismissed an appeal from an Appeal Panel of the Tribunal brought on the ground that the landlord had not complied with s 41 of the RTA (which requires at least 60 days' notice of a rent increase) when cancelling a rent rebate under s 57 of the Housing Act. Her Honour held that the landlord under a social housing tenancy agreement is not required to comply with s 41 when cancelling a rent rebate.
3. While Herbert may not be direct authority for the proposition that the Tribunal does not have jurisdiction to review a decision of the landlord under s 57 of the Housing Act, Adamson J did observe, at [73], consistently with the Parliamentary Debates, that:

Parliament has expressed its intention that the Corporation be entitled to cancel the rental rebate. The cancellation of can be retrospective, immediately or prospective ... These are matters for the Corporation.

1. On the other hand, the Appeal Panel decision in Naish is clear authority that the Tribunal does not have jurisdiction to review a decision of the landlord under s 57 of the Housing Act. The Appeal Panel said, at [67]:

The Member told the tenant that she did not have jurisdiction to "look behind the rent that had been calculated". ... the Member is clearly stating that the Tribunal has no power to review the rent calculated by the landlord after the determination of the applicable rebate. As the Member correctly stated, "I can't look behind the social housing policy of the calculation of the rent."

1. Contrary to the submission of the tenant, Naish is a decision which should have been followed by the Tribunal. It is not necessarily correct to say that the Tribunal is not bound by precedent. In Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186, at [196], the Appeal Panel said:

... it is appropriate for any Members sitting at first instance in the Tribunal to consider themselves bound, at least, to follow decisions of the Appeal Panel on questions of law.

1. Although the Appeal Panel is not bound by the decision in Naish, we consider that it is correct and should be followed.
2. The transcript of the proceeding indicates that the Tribunal conducted the hearing on the erroneous basis that it did have jurisdiction to review the landlord's investigation and determination under s 57.
3. The landlord informed the presiding Member:

I understand that there is precedent that the Tribunal doesn't have power to look beyond the calculation of the rental subsidy. (23.25)

1. In response, the Tribunal explicitly - and erroneously - asserted its purported jurisdiction:

That's if the application was brought under 147. That's not the case. You've brought an application for non-payment of rent which arose as a result of the review that was conducted under s 57 of the Housing Act and so that enlivens my power to determine whether the rent that was charged was charged under a proper fashion.

1. There were further exchanges regarding jurisdiction. The applicant repeated that:

...the Tribunal has no power to look beyond the calculation and cancellation of the rental subsidy and into the social housing policy ... (25.40)

Are you saying I don't have the power under s 87 to work out how the rent arose? That would be inconsistent with every residential tenancy case that's brought before the Tribunal. The power for the Tribunal is to determine how much rent is outstanding. (26.10)

1. Further, the presiding Member told the applicant:

Had you brought the claim under s 147 then the statute prohibits me, but you brought it under s 87 and the Act permits me to make those enquiries where there is a basis to depart from the usual rule that the tenancy ledger is prima facie evidence ... (38.34)

1. It is apparent the presiding Member did not give due consideration to the operation of s 154A of the RTA. Its enactment effectively reversed the result in Diab, which therefore cannot assist the tenant.
2. The effect of s 154A is that once the landlord has conducted an investigation under s 58 and determined to cancel or reduce a rent rebate pursuant to s 57, the resulting debt is treated as rent and the tenant's failure to pay it is a breach of the agreement.
3. Because such rent was determined by the landlord in the exercise of its power under s 57(4)(e) of the Housing Act, any attempt by the Tribunal to scrutinise or re-assess the cancellation of a rent rebate is beyond its jurisdiction.
4. While s 87 of the RTA requires the Tribunal to be satisfied that rent remained unpaid for not less than 14 days before the termination notice was given, this does not empower the Tribunal to investigate the circumstances in which a debt, treated as unpaid rent by virtue of s 154A, arose.
5. The Tribunal also considered that s 154E of the RTA allowed it to take into consideration the 'validity' of the landlord's determination of the tenant's debt:

I'm not limited to 154E of the matters I can take into account, it opens discretion across the board. Which also allows me to consider how the debt arose in the first place and the date from which it was applied from and whether it was an issue arose as to the validity of that debt arising. (1:00:47)

1. Section 154E(2) does not confer such power on the Tribunal. While the discretion of the Tribunal in determining whether to make a termination order is undoubtedly wide, it cannot extend to a critique of the landlord's investigation or determination under s 57 or s 58 because that would frustrate Parliament's intention that the granting or revocation of a rental rebate is a decision which is not subject to review by the Tribunal.
2. In that light, the proper meaning of s 154E(2) is to confine the discretion to matters that may be considered under the RTA ("under this Act").
3. The transcript demonstrates the Tribunal proceeded on the basis that it was entitled to undertake a process of review, thus exceeding its jurisdiction:

... this is a unique case where there's been a review which created the debt for which the landlord now seeks to terminate. In those circumstances the Tribunal is entitled to consider whether that debt is correct ... (33.51) ... The moment the $82,557.55 was applied the tenant had no chance. ... In these circumstances, how could it be that I would not have the power to enquire whether that amount is correct when you bring an application on the basis of that amount ... My view is in the interests of justice I have an obligation to determine whether that amount is correct ... (38.34)

1. The Tribunal also admitted into evidence the custody record of the tenant's daughter which the tenant submitted was relevant as to whether the rent subsidy should apply (43.40) and which the Tribunal's reasons for decision as recorded in the transcript (from 1:00:47) state the Tribunal took into consideration in a re-assessment of the landlord's decision to cancel the rebate.
2. Ultimately, the reasoning and findings grounded in error include the findings expressed in the reasons for decision that:

(1) The landlord has the onus of proof and must, regardless of the operation of s 154A, establish on the evidence:

(a) How the debt was calculated; and

(b) The period of time from which it was calculated.

(2) The landlord's calculation of the debt must be incorrect because, for around a 12 month period, and on other occasions between 18 April 2018 and 3 September 2021, the additional occupant (the tenant's daughter) was incarcerated and thus not residing in the premises.

(3) There were inconsistencies in the time periods of the calculation, and no evidence before the Tribunal of the tenant's income.

(4) The landlord's case fails because it has not established on the balance of probabilities:

(a) How the debt arose and the period of time for which it applies;

(b) That the tenant was receiving income which he did not declare for the period stated in the s 57 letter; and

(c) The period of time the tenant's daughter was occupying the premises.

1. The exercise of the Tribunal's discretion also manifests the jurisdictional error:

I exercise my power under s 154E ... I find that ... the debt arose out of a review of which the contents is not before me ... and the termination notice arose from the consequences of that debt... I find it's appropriate in the circumstances that I exercise my power not to terminate the residential tenancy. (1:06:03)

1. The Tribunal having fallen into jurisdictional error, we allow the appeal.

The Tribunal asserted the landlord should have brought its application under s 147 of the RTA and not s 87

1. If the Tribunal did determine the application as if it was brought pursuant to s 147 of the RTA, rather than s 87, then the Tribunal erred on a question of law in that it identified the wrong issue or asked the wrong question.
2. However, the Tribunal's reasons indicate that it did purport to determine the proceedings on the basis of s 87, and therefore it cannot be said that the Tribunal erred on a question of law.
3. Nevertheless, for the following reasons, we consider that the Tribunal's findings were affected by its view expressed during argument that the termination should have been brought under s 147. On that basis we conclude that the decision was not fair and equitable.
4. The Notice of Termination was based on the tenant's failure to pay rent which was a result of the cancellation of his rental subsidy under s 57 of the Housing Act 2001.
5. There was evidence before the Tribunal that the tenant owed rent in excess of $83,000.00, due to a debt arising under s 57 of the Housing Act.
6. The Termination Notice and the application to the Tribunal were thus properly brought pursuant to s 87 of the RTA.
7. As the tenant submits, the presiding Member did acknowledge that the termination was based on s 87, eg at 10:03 and 23.43.
8. However, the Tribunal did assert during evidence and submissions that the termination should have been made pursuant to s 147 of the RTA:

So, has the notice been issued irrespective of payment of rent under s 87 in order to avoid the time obligations under the eligibility grounds? (13.20) ... it appears to me that the Applicant has created the rental arrears situation based on the eligibility ground and then sought to terminate on the consequences of that ... The proper course would have been for the applicant to bring an application under s 147 ... (14.36)

1. Elsewhere the Tribunal focused its enquiry on 'the eligibility question' as the basis of termination.
2. For example, the presiding Member asked the applicant:

How was it determined that the daughter was an occupant from 15 August 2019? (22.39)

1. When the applicant answered that the evidence used in the landlord's investigation was not before the Tribunal, the Member incorrectly identified as an issue for determination the validity of the landlord's investigation and determination regarding the daughter's occupancy. The Member asked the applicant:

So how can you maintain your case? ... the basis for which the rent was charged at market rate was because the daughter was living in the premises from at least 2013. Without seeing evidence to that effect and working out whether the calculation justifies the rental increase for that time is correct, how can you sustain the application? (23.20; 23.43)

In circumstances where the whole process is now up in the air with respect to the basis on which the application was brought - being the eligibility ground - how am I to determine whether the eligibility ground was justified? (16:05)

1. Referring to the respondent's right to seek a review of the decision to cancel his subsidy, the Tribunal asked:

A review has not been requested ... on what you're telling me? So ... how can I find that a termination is warranted when the review hasn't been conducted and the basis for the termination is the consequences of the eligibility ground review? (17:08)

1. Whether the 'eligibility ground' was established was not an issue or question relevant to the matter before the Tribunal because the termination notice was not based on s 143 of the RTA. We note, in passing, that it is clear from s 147(2) of the RTA that the Tribunal has no power to assess whether a tenant is eligible to reside in a particular class of social housing. The only issues for the Tribunal, when a social housing provider seeks to terminate a tenancy on the eligibility ground, is whether the landlord has made a determination of ineligibility and the relevant notices and reviews have been given or carried out in accordance with the RTA.
2. The above considerations by the Tribunal, based on an erroneous understanding of ss 87 and 147 of the RTA, clearly impacted the findings we have highlighted at [77]. We consider there is a significant possibility that the landlord may have been deprived of a more favourable result as a consequence. This raises an important issue of principle and in the exercise of our discretion we grant leave to appeal on this ground and we allow the appeal.

The decision was against the weight of evidence because the Tribunal should have given more weight to the rental ledger which demonstrated the debt owed by the tenant, and the Tribunal should not have considered the tenant's evidence that the debt calculation was incorrect.

1. It follows from our consideration above that, in reaching its conclusion, the Tribunal took into account evidence, including evidence of the tenant's daughter having been in custody, which was not relevant to the issues it was required to determine and, by requiring the landlord to justify its assessment of the tenant's income, failed to give the rent ledger the weight it should have been accorded.
2. We consider there is a significant possibility that the landlord may have been deprived of a more favourable result as a consequence of these matters. This raises important issues of principle and policy, and in the exercise of our discretion we grant leave to appeal on this ground and we allow the appeal.

Should the proceedings be remitted to the Tribunal for reconsideration?

81 Determination of internal appeals

(1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following -

(a) the appeal to be allowed or dismissed,

(b) the decision under appeal to be confirmed, affirmed or varied,

(c) the decision under appeal to be quashed or set aside,

(d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it,

(e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel.

(2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance.

1. Although the landlord has sought that the proceedings be remitted, it would be open to the Appeal Panel, if satisfied that the landlord must inevitably have succeeded if the application had been determined on correct principles, to substitute an order terminating the tenancy for the order dismissing the application.
2. We are reluctant to do so in circumstances where the tenant may not be on notice that that is a possible outcome. We have also taken into consideration some irregularities regarding the notification to the tenant of the debt under the Housing Act.
3. The s 57 letter dated 4 April 2024 gave the tenant notice that the new, unsubsidised rent took effect from 4 March 2024.
4. By s 57(4)(a) of the Housing Act, the landlord may give the tenant notice in writing that requires the tenant to pay an amount equal to any rental rebate received on or after the date the cancellation took effect.
5. The letter gave notice that a debt of $82,557.45 was placed on the rental account. The ledger, which was before the Tribunal, records that the debt was recorded on 3 April 2024.
6. Even at the new rent of $395.00 per week, it is impossible for the tenant to have accrued a debt of $82,557.45 between 4 March 2024 and 3 April 2024.
7. The landlord's submissions regarding the background to these proceedings state that the market rent was backdated to 7 June 2018.
8. That date, however, was not recorded on the s 57 letter and the tenant was not provided notice that the cancellation took effect from that date.
9. It may be that the landlord made an administrative error in its notice that the subsidy change took effect from 4 March 2024, rather than from the earlier date, which might have accounted for the significant debt.
10. Be that as it may, while the Tribunal does not have jurisdiction to review the debt, it must be satisfied that the tenant was at least 14 days in arrears prior to the issue of the termination notice, before it can make a termination order under s 87 of the RTA.
11. Whether this tenant was at least 14 days in arrears prior to 6 May 2024, the date of the termination notice, is a question that requires the proper scrutiny of the Tribunal, assisted by the evidence and submissions of the parties. Relevant considerations may include:

(1) The record of the ledger that, just before the manual adjustment of the $82,557.45 debt on 3 April 2024, the rent was in credit; and

(2) The amount equal to the cancelled rental rebate ($308.85 per week) from the date the cancellation took effect on 4 March 2024 to 6 May 2024.

1. The extent of the tenant's arrears is also relevant to a finding as to whether he had frequently failed to pay rent on time (s 89(5) of the RTA) and may also impact the exercise of the Tribunal's discretion under s 87(4)(b) in assessing whether the breach is, in the circumstances of the case, sufficient to justify termination of the tenancy.
2. There is a further issue. The termination notice stated:

You owe $83059.20 in outstanding rent as at 4th May 2024. Based on a weekly rental of $395.00, this is more than 14 days late.

1. If the amount of $83,059.20 was not due and payable on 4 May 2024, then the termination notice contained a defect which arguably was not just arithmetical.
2. This would be a relevant consideration in the exercise of the Tribunal's discretion under s 113 of the RTA as to whether or not to make a termination order, in the event the other requirements for termination were satisfied.
3. We have determined that the proceedings should be remitted for reconsideration.

(1) To the extent necessary leave to appeal is granted.

(2) The appeal is allowed.

(3) Order 1 made by the Tribunal on 27 November 2024 in proceedings 2024/00242434 is set aside.

(4) The application is remitted to the Consumer and Commercial Division of the Tribunal to be determined consistently with these reasons for decision on the evidence previously filed and such further evidence as the Tribunal may allow.

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.