This is an application by landlords under section 84 of the Residential Tenancies Act 2010 (RT Act) for orders for termination of the residential tenancy agreement and possession of premises on the ground that an end of fixed term termination notice has been served on the tenant (the application). This application was made to the Tribunal on 6 July 2021. The tenant resists the application on the basis that there is a formal defect in the application and on the further basis that the application is retaliatory and ought to be refused pursuant to section 115(1)(b) of the RT Act.
The application was first listed before the Tribunal in a Group List for Conciliation and Hearing by telephone on 29 July 2021 in accordance with NCAT's COVID-19 Revised Hearing Procedure. The landlord's Property Manager, Ms Field, attended that listing of the application on behalf of the landlord. Ms Hardiman (the tenant) also attended. In accordance with the Tribunal's usual practice where both parties are present in person at the first listing of an application, the Tribunal, differently constituted, attempted to assist the parties to resolve the dispute co-operatively by Conciliation. Those efforts were not successful.
As a consequence, the application was adjourned for a special fixture hearing and directions were given to the parties for the filing and service of the documentary evidence that they intended to rely on for that hearing.
The landlord relies upon a single bundle of documents filed and served on 4 August 2021. It was marked Exhibit A1. The tenant relies upon 3 bundles of documents, two of which were filed in these proceedings on 22 July 2021 and 3 August 2021 respectively, and the other filed in earlier proceedings (RT 20/32443) on 12 October 2020. These bundles were marked Exhibits R1, R2 and R3 respectively.
The Special Fixture Hearing was conducted by telephone in accordance with NCAT's COVID-19 Revised Hearing Procedure. Ms Field participated in that hearing as the landlords' representative. She gave oral evidence under oath. Ms Hardiman also participated in the hearing and gave oral evidence under oath. The parties had the opportunity to present their respective cases, to ask each other questions, and to make final submissions to the Tribunal.
The tenant contends that the application ought to be summarily dismissed because it contains a formal defect. In the "Order/s Sought" section of the application, the applicant landlords have selected "section 95 - An order for possession where the residential tenancy agreement has terminated and an occupant has not vacated". It is submitted, and it must be accepted, that section 95 is not relevant to this dispute. It confers power on the Tribunal to make an order for possession where non-tenant occupants remain in premises after a residential tenancy agreement has been terminated. In this case the applicant applies for an order to terminate a residential tenancy agreement on the ground of the end of fixed term. The apposite order making power is therefore found in section 84 of the RT Act.
The tenant's complaint about the form of the application overlooks what is stated in the section of the application form headed "Reasons for Orders" which is: "the tenant was provided with an end of fixed term termination (sic) in accordance with the act and has failed to provide vacant possession and return all keys to the property … as per the termination date of 29/06/21". It is clear from this section of the application form what order the landlords apply for and what source of power for that order is relied on even if section 84 is not explicitly referred to.
Section 38 of the Civil and Administrative Tribunal Act 2013 (NCAT Act) requires the Tribunal to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. In this case, despite the formal defect in the application form, there has never been any doubt as to what the substance of the landlords' application is. The application was first before the Tribunal on 29 July 2021 and the basis for the application was manifest to the tenant at that time (even if the application was not formally amended by the Tribunal at that listing). The tenant has had the opportunity to file evidence in relation to the substance of the application and has done so. There is therefore no procedural unfairness to the tenant arising from the Tribunal considering the application under section 84.
I therefore refuse the tenant's application for the summary dismissal of the application. It is also appropriate for me to formally amend the application pursuant to section 53(1) of the NCAT Act to state that it is an application for a termination order under section 84 of the RT Act.
I make the following findings of jurisdictional fact, none of which are controversial:
1. There is a residential tenancy agreement subsisting between the parties to which the RT Act applies. At the material time for this dispute it was a fixed term agreement of 52 weeks duration which was expressed to end on 29 June 2021;
2. The landlords have served the tenant with a termination notice under section 84 of the RT Act which complies with the requirements of that section and otherwise with the relevant requirements of Part 5 of that Act;
3. The notice was served on the tenant by email on 26 May 2021 in accordance with section 223 of the RT Act (email being a manner of service to which the tenant consented under the residential tenancy agreement);
4. The tenant failed to give up possession of the premises on 29 June 2021 in accordance with the termination notice;
5. The application was made to the Tribunal on 6 July 2021 after the date for termination and within the time period permitted by section 83(2) of the RT Act and Regulation 39(2) of the Residential Tenancies Regulation 2019, which is within 30 days from the date of termination.
In the circumstances set out above the Tribunal is required by the mandatory terms of section 84(3) to make an order terminating the residential tenancy agreement. The only issue in its discretion is whether the related order for possession should be suspended, and if so, by what period, to allow the tenant further time to move out.
However, in this case, in reliance upon section 115(1)(b) of the RT Act, the tenant contends that the Tribunal ought to refuse to make a termination order because the termination application is retaliatory. In this respect I note that it is settled law that the section 115(1)(b) discretion to refuse to make a termination order prevails despite the mandatory terms of section 84(3): Steinbeck v McDonald [2015] NSWCATAP 90 at [26]; Camilleri v Eastlake [2018] NSWCATAP 176; Quader v Bell [2017] NSWCATAP 24.
Section 115(1)(b) of the RT Act provides that the Tribunal may, when considering an application for a termination order, refuse to make a termination order if it is satisfied that the application was a retaliatory application. Section 115(2) provides that the Tribunal may find that an application is a retaliatory application if it is satisfied that the landlord was wholly or partly motivated to give the notice for any of the following reasons: (a) the tenant had applied or proposed to apply to the Tribunal for an order; (b) the tenant had taken or proposed to take any other action to enforce a right of the tenant under the residential tenancy agreement, the RT Act, or any other law; or, an order of the Tribunal was in force in relation to the landlord and tenant.
In Steinbeck v McDonald [2015] NSWCATAP 90 at [26], an Appeal Panel of the Tribunal described the exercise of the discretion conferred by section 115(1) as a "two-step process". In the circumstances of this case, the Tribunal must first determine having regard to the terms of section 115(2) if the termination application is a retaliatory application. If that is not found the section 115 application must be refused and step 2 is not reached. If the termination application is found to be retaliatory the Tribunal must then consider, as a matter of discretion, if it ought to refuse to make a termination order. If it does refuse to do so, the residential tenancy agreement continues unaffected by the landlords' termination notice and termination application.
In ordinary English use a "retaliatory" action means an act of revenge, and in the context of section 115, it bears the additional connotation that it is an unjustifiable or ethically wrong act of revenge that constitutes an abuse by the landlord of the superior title they hold in relation to residential premises. It is a serious matter to find that any person has acted in such a way, and it is therefore not to be found lightly.
From the outset this has been a troubled tenancy. There have been previous proceedings between the parties on the tenant's application (RT 20/32443) which resulted in money and work orders in the tenant's favour. There is a related proceeding commenced by the tenant just prior to the lodgement of this application by the landlord (RT 21/24663) which has been heard together with this application today in which the tenant applies for orders that rent has been and is excessive due to reduction of amenity, and for compensation for damage and loss she contends she has suffered due to the landlords' breach of their obligations to repair and not interfere with her quiet enjoyment. Surrounding these applications has been a history of complaint and dispute between the parties and the circumstances in which the tenant came to enter into the residential tenancy agreement and the condition of the premises. The circumstances contemplated by sections 115(2)(a), (b) and (c) of the RT Act are therefore each engaged.
However, having considered the whole of the evidence I am not satisfied that the termination notice issued by the landlord or the termination application before the Tribunal is an act of revenge. It is more fairly characterised as a normative exercise of a right of superior title in circumstances where there has been a total breakdown in the relationship between contracting parties. Clearly, there is a causal relationship between the tenant's complaints and applications to the Tribunal and the termination notice and termination application. But the causation is the landlords' reasonable recognition of the tenant's serious unhappiness with the tenancy, the high degree of conflict that subsists between them, their agent and the tenant, and their inability to appease the tenant's concerns despite what I find to be their mostly reasonable efforts to do so.
This is not to say that the tenant's complaints have been or are without foundation. There clearly has been and is a reasonable foundation to some of her complaints as has been found in the earlier and related proceedings. But I do not find that the landlords are motivated by a desire to avoid these complaints or their liability to the tenant under the RT Act per se in seeking termination of the tenancy. Rather, they want to bring to an end a failed contractual relationship that is a constant source of unhappiness for both parties. This is a morally neutral and rational motivation, rather than an act of unethical revenge.
Even if I were to be wrong in this conclusion, I would decline to refuse to make a termination order for the same reasons as a matter of discretion. This is a tenancy relationship that has been in serious trouble from the outset and which has been entirely broken down for some time. There is no reasonable prospect that it can be retrieved. It is in the interests of both parties that it be brought to an end. A residential tenancy agreement is ultimately a voluntary act of contract between a landlord and a tenant, albeit a regulated one. A landlord's estate in leased premises is also always superior to tenant's estate, and a tenant's estate must ultimately give way to it, subject to the operation of law. Section 115 exists to prevent an abuse of contractual rights and superior title by a landlord. It is not a vehicle to force a landlord into an indefinite involuntary relationship with a tenant in circumstances of perpetual conflict.
Having reached this conclusion the section 84 termination application must be approached in the usual way. The Tribunal must make a termination order. The only matter in its discretion is whether the order for possession should be suspended, and if so, by what period of time, to allow the tenant further time to move from the property. In the exercise of this discretion the Tribunal is to balance the relative hardship to the landlords and tenant from the order being suspended: s 114 of the RT Act.
The landlords submit that the order for possession ought to be suspended by 60 days from the date of the hearing to 5 December 2021. They contend that this is a substantial period of time that takes into account the difficulties that arise from COVID-19 related public health orders and the tenant's personal circumstances. This submission must be accepted. The Tribunal would rarely, if ever, suspend possession for such an extended period of its own motion, even in the extra-ordinary circumstances of the pandemic. If Parliament had intended such an outcome, it would have legislated for it in its COVID-19 pandemic response.
The tenant's submission is, in substance, that she ought to be able to continue to live at the property indefinitely despite her constant expressions of unhappiness in doing so. She submits that she has personal circumstances presently which mean that it would be seriously inconvenient and even traumatic for her to be required to move. I accept that some of these personal circumstances, which it is not appropriate to publish here, are compelling. Additionally, the tenant submits that being required to move so close to Christmas is unreasonable.
Even if I were to accept the tenant's submissions at their highest, the lengthy further period the landlords are prepared to allow for her to move remains a more than complete answer to them. As at the date of the hearing the tenant has known of the landlords' intention to recover possession of the premises for a period of 102 days (more than 3 months). The suspension of the order for possession to 5 December 2021 will mean that she will have had a total of 162 days (or more than 5 months) to arrange alternative accommodation since the termination notice was given. That is a very long period of time not matched by any of the statutory notice periods contained in Part 5 of the RT Act, or indeed, by section 154G of Part 7 of that Act which applies to social housing tenants who, in general, are socially vulnerable tenants (section 154G limits the Tribunal's power to suspend an order for possession to 28 days absent exceptional circumstances). The landlord's superior estate must be allowed to prevail over the tenant's leasehold interest to recover possession in these circumstances.
Although the tenant may stay in the premises until 5 December 2021, nothing compels her to do so. A termination notice has been given, the fixed term of the residential tenancy agreement has ended, and a termination order has been made. The tenant may move out at any time if the pre-Christmas period is an inconvenient time to do so. In any event, 5 December 2021 is still 20 days before Christmas. The rental market will not be dormant before that date.
For the foregoing reasons, I decline to refuse to make a termination order and terminate the residential tenancy agreement as at the date of publication of these reasons. The order for possession is suspended until 5 December 2021. I will deal with the issue of the occupation fee to be paid until 5 December 2021 in my disposal of the related proceedings (RT 21/24663).
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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
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Decision last updated: 15 February 2022