Reisner v Bridge Housing Limited

Summary of the Decision under appeal

1. The following is a summary of the Decision: 1. In or about June 2017 and in accordance with s 13A of the Housing Act, Ms Reisner was advised of a change of management of the tenancy to Bridge Housing from LAHC. Rent would not be accepted by LAHC after 10 July 2017. Bridge Housing wrote to Ms Reisner confirming that it was appointed to manage the tenancy from 10 July 2017 and provided bank account details for rent and water payments; 2. Bridge Housing issued a notice of termination dated 24 October 2017 by reason of non-payment of rent; 3. At the time of the hearing in November 2018, Ms Reisner was in arrears on her rental ledger but in credit on her water account ledger; 4. Ms Reisner submitted that she had entered into a residential tenancy agreement with LAHC and they are the landlord and owner of the property in respect of which she has a residential tenancy agreement; 5. The Tribunal found that Bridge Housing is a registered community housing provider and that in accordance with s 13A of the Housing Act, LAHC and Bridge Housing entered into a concurrent lease in respect of the premises rented to Ms Reisner. On entry into the concurrent lease the rent became payable to Bridge Housing and was no longer payable to LAHC; 6. The terms of the concurrent lease entered into between LAHC and Bridge Housing gave to Bridge Housing peaceful possession and enjoyment of the premises without interruption or disturbance and only a right for access by LAHC in limited and specific circumstances; 7. Bridge Housing is authorised to manage the property, including the collection of rent. Ms Reisner has failed to pay rent in accordance with her obligations; 8. There are rent arrears owing from 30 August 2017. The notice of termination issued by Bridge Housing is valid; and 9. The Tribunal did not make a termination order because Bridge Housing did not seek one. Rather, it requested the Tribunal to make an order for the immediate payment of rent arrears and for the tenant to continue to pay rent in accordance with the tenancy agreement. The Tribunal also made an order giving Bridge Housing the opportunity to relist the application if there is a breach of the Tribunal's orders. One presumes that this was made so as to give to Bridge Housing an opportunity to seek an order for termination. The Tribunal's procedures permit such an application: see cl 8 of Sch 4 of the Civil and Administrative Tribunal Act 2013 (NCAT Act).

Grounds of Appeal and Appellant's submissions

1. The Notice of Appeal contains submissions in support of Ms Reisner's Grounds of Appeal. These submissions may be summarised as follows:

Ground 1 1. The correct test in determining whether Bridge Housing was the landlord Bridge Housing is to have regard to s 3 of the RT Act. Bridge Housing does not come within the definition of a landlord under s 3 of the RT Act;

Ground 2 1. If the Tribunal's reasoning were correct, it would mean that Bridge Housing is a tenant under the RT Act. However, Bridge Housing cannot be a tenant as defined in s 3 of the RT Act because it does not have the sole right to occupy the residential premises. Mr Reisner had been granted the right to occupy the premises and the arrangements between LAHC and Bridge Housing do not result in a tenancy agreement between Bridge Housing and Ms Reisner;

Ground 3 1. The Tribunal relied upon the concurrent lease dated 27 September 2017 as being the legal instrument that authorised Bridge Housing to become the landlord. However, s 13A of the Housing Act does not contain provisions for the back dating of contractual and legal relationships. There was no legal basis on which the predated commencement date for management by Bridge Housing (10 July 2017) can stand. The Decision was not fair or equitable to Ms Reisner in allowing for the legal rights and obligations that affected her to be back dated from the executed date of the concurrent lease agreement. The Decision is not fair and equitable because it has the consequence that a tenant (such as Ms Reisner) may breach the Social Security Act 19991 (Commonwealth) if she were to lodge documents with Centrelink prior to 27 September 2017;

Ground 4 1. Ms Reisner claims that she paid money into a bank account specified by Bridge Housing and therefore fulfilled her obligations under the residential tenancy agreement "minus the dispute over the amount equal to Commonwealth rent assistance"; and

Ground 5 1. The notice of termination was not valid because Ms Reisner had paid rent in accordance with her residential tenancy agreement.

Ground 1

1. Bridge Housing submitted that the Tribunal did not err in finding that Bridge Housing is the landlord for the purposes of Ms Reisner's occupation of the premises. Section 3 of the RT Act defines a landlord to mean: landlord means: (a) the person who grants the right to occupy residential premises under a residential tenancy agreement, or (b) a successor in title to the residential premises whose interest is subject to the interest of the tenant, or (c) a tenant who has granted the right to occupy residential premises to a sub-tenant, and includes a prospective landlord.
2. Bridge Housing entered into a concurrent lease with LAHC and as a consequence, the relationship of landlord and tenant existed between Bridge Housing and Ms Reisner supplanting the relationship of landlord and tenant between LAHC and Ms Reisner. Bridge Housing became the landlord for the purposes of s 3 of the RT Act.
3. The decision Trust Co of Australia v Chief Commissioner of State Revenue [2006] NSWSC 792 at [50] provides: 50 When a landlord, who has granted a lease, grants another lease of the same land to a different tenant for some or all of the term of the first lease, a concurrent lease is created. The two leases operate concurrently during the period of their overlap. The landlord has granted to the second lessee a pro tanto disposition of the reversionary estate (Cole v Kelly [1920] 2 KB 106). A concurrent lease operates as an assignment of the reversion upon the first lease for the term of the second or concurrent lease (Minister of State for the Interior v Brisbane Amateur Turf Club (1949) 80 CLR 123 at 162). Or, as Professor Butt puts it, the second lease is a lease of the reversion (Butt, op cit at [1530]). The relationship of landlord and tenant is created between the second and first lessee without attornment (Buckby v Speed (1959) Qd R 30), and it supplants the relationship of landlord and tenant between the landlord and the first lessee (Megarry and Wade, op cit at [14-104]).
4. Having regard to the above principles, the relationship of landlord and tenant existed between Bridge Housing and Ms Reisner from 11 July 2017.

Ground 2

1. Bridge Housing refers to the submissions of Mr Reisner that the Tribunal erred in finding that a residential tenancy agreement existed between Bridge Housing and Ms Reisner. However, the Tribunal's findings and orders were based upon the LAHC and Bridge Housing having entered into a concurrent lease pursuant to and for the purposes of s 13A of the Housing Act. That concurrent lease came into effect and commenced on 10 July 2017.

Ground 3

1. Ms Reisner submitted that the date the Tribunal found that Bridge Housing became the landlord was against the weight of evidence and was not fair and equitable. The concurrent lease dated 27 September 2017 specifically provides that the commencement date of the lease was 10 July 2017. It is open to the parties to an agreement to agree upon the date (including a date in the past) from which their legal relations commence to have effect: see Gilsan v Optus [No 2] [2005] NSWSC 38 at [5].
2. There was evidence before the Tribunal supporting the Tribunal's finding that the concurrent lease came into effect on 10 July 2017. This included the correspondence sent to Ms Reisner in June 2017, the agreement dated 10 July 2017 between LAHC and Bridge Housing and the correspondence sent to Ms Reisner dated 11 July 2017 giving notice that the management of her tenancy had been transferred to Bridge Housing.

Ground 4

1. This refers to Ms Reisner's submission that the Tribunal erred in law and against the weight of evidence in finding the amount of rent arrears. The Tribunal found that from 31 July 2017 no payments were made to Ms Reisner's rental ledger and that from 31 July 2017 Ms Reisner had directed that all payments be directed to her water ledger account. Consequently, as at the date of the hearing, her water ledger account was in credit in the sum of $9,318.32. Bridge Housing had no authority to transfer that credit to Ms Reisner's rental account.
2. In addition to rental arrears arising by reason of payments being credited to the water account, there was a further reason monies were owing for rent. Payment could have been obtained by Ms Reisner from the Commonwealth Government through Centrelink by applying for Commonwealth rent assistance. Ms Reisner did not make such an application. At the date of the hearing, the total rent arrears was $11,199.24. There was evidence before the Tribunal supporting the finding that the rental ledger account was in arrears in that sum for rent owed from 30 August 2017 to 27 November 2018.

Ground 5

1. Bridge Housing refers to the submission of Ms Reisner that the Tribunal erred in finding that the notice of termination was invalid. Bridge Housing submitted that the notice was valid because it was the landlord for the reasons earlier described and there were rental arrears.
2. Bridge Housing states that since the hearing in November 2018 Ms Reisner has authorised the transfer of her credit in the water ledger account to the rental ledger account. The amount transferred was $9,318.32. However, Ms Reisner's rent remains in arrears by reason of her not having applied to Centrelink for Commonwealth rental assistance.

Supplementary Submissions

1. The Appeal Panel made directions for the parties to file supplementary submissions on 19 March 2019 dealing with the issue as to the basis upon which Bridge Housing claims to have standing as "landlord". Bridge Housing filed submissions and we will refer to them as necessary in these reasons.

The Appeal Hearing

1. The hearing of appeal occurred on 9 April 2019. Ms Reisner was not present. There was evidence on the Registry file that Ms Reisner was aware of the hearing and there was no explanation for her absence. We were of the opinion that it would not be procedurally unfair to hear the appeal in her absence. This was because Ms Reisner was both aware of the hearing and had been provided with an opportunity to provide written submissions on all issues raised by her in the appeal. At the appeal hearing, Counsel for Bridge Housing handed up a folder of the documents which had been included in the proceedings at first instance or referred to in prior submissions in this appeal. The only difference was that the documents were paginated to assist identification. The documents in the folder are marked and in this decision, the references to the documents adopt the page number references in the folder.
2. We will refer to the bundle as Appeal Bundle or AB.

Grounds 1, 2, 3 and 4

1. It is convenient to deal with these grounds of appeal together.
2. In essence, there are two issues for determination on the question whether Bridge Housing was properly entitled to an order that Ms Reisner pay rent of $11,199.24 in respect of the period from 30 August 2017 until 27 November 2018.
3. The first is whether Bridge Housing was a landlord within the meaning of the RT Act and became entitled to obtain orders for the payment of rent from the Tribunal in consequence of a breach of the residential tenancy agreement. The second is the date upon which the Ms Reisner became obliged to make such payments in consequence of the Bridge Housing entering into a concurrent lease with LAHC to lease the property which was subject to the residential tenancy agreement.
4. Pursuant to s 187(1)(c) of the RT Act, the Tribunal may, on the application of landlord, make an order for payment of money arising from a tenant's obligation to pay rent pursuant to a residential tenancy agreement and the tenant's obligation under s 33 of the RT Act.
5. As stated earlier, a landlord is defined in s 3 of the RT Act to mean: (a) the person who grants the right to occupy residential premises under the residential tenancy agreement, or (b) a successor in title to the residential premises whose interest is subject to the interest of the tenant, or (c) a tenant who has granted the right to occupy residential premises to a sub-tenant, and includes a prospective landlord. (we have already defined this)
6. There is no dispute in this appeal that the landlord who originally granted the residential tenancy agreement was the LAHC.
7. However, Bridge Housing contends that it became the landlord in consequence of entering into a concurrent lease within the meaning of the Housing Act with the LAHC. That is, it became the landlord for the purpose of the RT Act and was entitled to receive the rent. Reliance is placed on s13A of the Housing Act and the rights thereby granted to Bridge Housing.
8. In her Notice of Appeal, Ms Reisner contends LAHC remained the landlord within the meaning of the RT Act. This was because LAHC was the entity which granted the right to occupy the residential premises. Secondly, the rights given to Bridge Housing were only to "manage the tenancy from 10 July 2017" and Bridge Housing was not thereby made the landlord. Finally, Ms Reisner could not have become a subtenant of Bridge Housing because Bridge Housing would not be the "tenant who has granted the right to occupy residential premises" to Ms Reisner and therefore does not fit within definition (c) of a landlord.
9. A resolution of the question of whether Bridge Housing became a landlord requires a consideration of the Housing Act, particularly s 13A, and its effect on the pre-existing relationship between a landlord and tenant under the RT Act arising upon the entry of a concurrent lease.
10. A concurrent lease is not defined by the Housing Act.
11. At general law, a concurrent lease is the grant of a second leasehold estate over real property by a landlord who otherwise holds the reversionary estate in that property subject to a pre-existing lease.
12. Under the RT Act, a residential tenancy agreement may not create an interest in land. Rather, s 13 of the RT Act defines a residential tenancy agreement as follows: 13 Agreements that are residential tenancy agreements (1) A residential tenancy agreement is an agreement under which a person grants to another person for value a right of occupation of residential premises for the purpose of use as a residence. (2) A residential tenancy agreement may be express or implied and may be oral or in writing, or partly oral and partly in writing. (3) An agreement may be a residential tenancy agreement for the purposes of this Act even though: (a) it does not grant a right of exclusive occupation, or (b) it grants the right to occupy residential premises together with the letting of goods or the provision of services or facilities. Note. See section 8 for agreements that are not covered by this Act. Section 7 sets out premises not covered by this Act. (4) For the purpose of determining whether an agreement is a residential tenancy agreement, it does not matter that the person granted the right of occupation is a corporation if the premises are used (or intended for use) as a residence by a natural person.
13. All that is required is the grant for value of a right of occupation, whether or not that right is a right of exclusive occupation. That is there may be no lease of land: see the definition of residential premises in s 3 of the RT Act which provides: residential premises means any premises or part of premises (including any land occupied with the premises) used or intended to be used as a residence. Note. Land on which there is no residence cannot be subject to a tenancy or other provisions under this Act.
14. Consequently, while of assistance in resolving this appeal, care needs to be taken in examining the authorities to which Bridge Housing referred concerning concurrent leases of real property and their effect at general law when determining: 1. the effect of Bridge Housing entering into a concurrent lease, as that term is used in 13A of the Housing Act, upon the pre-existing relationship between LAHC and Ms Reisner; and 2. whether Bridge Housing can bring an application as landlord under the RT Act.
15. In this context, a "concurrent lease" is a lease entered into at a time when a residential tenancy agreement is already in existence. It is in this sense "concurrent" whether or not the residential tenancy is a lease of land at general law.
16. As indicated above, the starting point to resolving the issue of whether Bridge Housing became a landlord within the meaning of the RT Act is to consider the effect of s 13A upon the residential tenancy agreement. This raises an issue of statutory construction.
17. As made clear by the High Court in Project Blue Sky Inc & Ors v Australian Broadcasting Authority [1988] HCA 28; 194 CLR 34 at [69], the task of interpreting a statue requires a consideration of the text of the section and its context, and the interpretation must be "consistent with the language and the purpose of all provisions of the statute".
18. It is clear from the text of s13A(2) that a concurrent lease affects a residential tenancy agreement between a tenant and LAHC in at least three ways.
19. Firstly, on entering the concurrent lease, the rent payable by the tenant thereupon becomes payable to the registered community housing provider, in this case Bridge Housing: s 13A(2)(a) Housing Act.
20. Secondly, a tenant is no longer renting public housing: s 13A(2)(b) Housing Act.
21. Thirdly, consent of the tenant was not required: s 13A(6) Housing Act.
22. Accordingly, the Housing Act alters the contractual obligations arising under a residential tenancy agreement to alter the party to whom the rent is payable and to alter a substantial feature of the existing residential tenancy agreement, namely whether the tenant was renting public housing.
23. In our view, these provisions effect what might be referred to as statutory assignment of the residential tenancy agreement by which Bridge Housing is substituted for LAHC as the landlord, including for the purpose of the residential tenancy agreement and the RT Act. There is a change of the entity to whom the rent is payable. The right conferred is not as agent for LAHC. Rather, the concurrent lessee (Bridge Housing) acquired the right to be paid rent and the agreement is altered without the need for consent of the tenant.
24. Further, the tenant is no longer "renting public housing". Public housing is defined in s 3 of the Housing Act as follows: public housing means housing owned or leased by the Corporation, and managed by the Department, that is leased to members of the public that meet the Department's or the Corporation's eligibility criteria, but does not include … housing subject to a concurrent lease to a registered community housing provider.
25. This cessation in renting public housing as provided by s 13A(2)(b) of the Housing Act could only occur if the tenant's obligations under the residential tenancy agreement were owed to the concurrent lessee on entering into the concurrent lease and the concurrent lessee, as landlord of the tenant, thereupon became bound to perform the obligations of LAHC.
26. This interpretation of an intention to substitute the landlord with the concurrent lessee is supported by two further matters.
27. Part 7A of the Housing Act, permits termination of the lease of a "registrable person" as defined in the Child Protection (Offenders Registration) Act, 2000 (NSW) by an approved community housing provider where the residential premises are subject to a concurrent lease in favour of that provider: s58B(1A) Housing Act. Action taken under this section is not subject to the provisions of Parts 5-7 of the RT Act: s 58E Housing Act.
28. Parts 5-7 of the RT Act could only apply to action taken by an approved community housing provider under s 58B(1A) if that provider was a landlord for the purpose of the RT Act. That is, ss 58B(1A) and 58E are indicators that the legislature intended that upon entry into a concurrent lease an approved community housing provider would become the landlord of a tenant including for the purpose of the RT Act.
29. The second matter is the second reading speech by which the Housing Act was amended to insert s 13A. In this regard the Hon John Ajaka, Minister for Disability Services, Minister for Ageing, and Minister for Multiculturalism said on 12 October 2016: First, schedule 1 of the Bill amends the Housing Act 2001 to make clear that the Land and Housing Corporation, the statutory body that owns the State's public housing assets, will be able to enter into a lease arrangement, known as a concurrent lease, with a registered community housing provider for the specified public housing properties. This lease arrangement will enable the transfer of the management of public housing tenancies from the Land and Housing Corporation, as the landlord, to the community housing provider, as the landlord, in a way that is automatic and legally secure for all parties. Tenants will not have to sign any confusing documents, and there lease conditions for the most part will remain the same. They will, however, have a community housing provider as the landlord.
30. In our view, the above extract evidences that the legislature intended a transfer from one landlord to another without further documentation involving the tenant. A similar statement was made by the Hon Adam Searle MLC in the Legislative Council on 18 October 2016.
31. In these circumstances, we are satisfied that the effect of s 13A was to make Bridge Housing the landlord of Ms Reisner pursuant to the residential tenancy agreement originally entered into with LAHC for the period during which the concurrent lease operates and the residential tenancy agreement remains in existence.
32. Further, even if we are wrong in our interpretation of this section, it seems to us that upon entry into a concurrent lease, by operation of the general law Bridge Housing became entitled to the reversionary estate in the residential premises
33. In this regard, as was pointed out in Chief Commissioner of State Revenue v Centro (CPL) Limited [2001] NSWCA 325 at [73] (citations omitted): The grant of a concurrent lease brings about an assignment of the reversion to the extent of the concurrent lessee's interest… An immediate relationship of privity of a estate exists between the concurrent lessee and the original lessee ... The concurrent lessee, as landlord of the original lessee, can enforce all covenants in the original lease capable of running with the tenancy.
34. As such, if the residential tenancy agreement constitutes a relevant lease of land, any obligations of a tenant may be enforced by the concurrent lessee. This is because they have succeeded to the title of the original landlord in respect of the reversionary interest and to the benefit of the pre-existing obligations of the tenant. They have also thereby assumed the obligations of the landlord in respect of the existing residential tenancy agreement, having taken their interest subject to the pre-existing rights and obligations of the original landlord. Our views are consistent with the principles referred to earlier contained in Trust Co of Australia v Chief Commissioner of State Revenue.
35. To the extent the residential tenancy agreement is not a lease of land, the concurrent lessee becomes entitled to possession and to use and occupy the residential premises, subject to any existing residential tenancy agreement which operates to entitle the tenant to possession of the land in accordance with the provision of the RT Act.
36. In either event, a concurrent lessee becomes the successor in title to LAHC during the currency of the concurrent lease.
37. In these circumstances, definition (b) of a "landlord" in the RT Act would mean that Bridge Housing was a landlord for the purpose of the RT Act and was entitled to commence proceedings to recover rent.
38. It follows from the above analysis that, upon entry of the concurrent lease, either: 1. Section 13A affected a statutory assignment of the residential tenancy agreement by which a concurrent lessee becomes the landlord for the purpose of the RT Act; or 2. The concurrent lessee is a successor in title to LAHC and is, by the definition found in the RT Act a landlord.
39. Consequently, in the present case, Bridge Housing, as landlord, was entitled to bring proceedings against Ms Reisner under the RT Act in respect of the residential tenancy agreement.
40. The next issue is what is the date the concurrent lease commenced and from what date was rent payable by Ms Reisner to the respondent.
41. Ms Reisner contends that the agreement was not entered into until 27 September 2017. She relies on the date of the signed lease found at appeal bundle at AB 40.
42. Bridge Housing contends that the agreement was entered into on 10 or 11 July 2017. The documents said to record the agreement were at AB 53-59, as well as the (then) unsigned document entitled General Community Housing Property Lease - SHMT Tranche 1 found at AB 26 and following.
43. The Tribunal found at [11] that the concurrent lease commenced on 10 July 2017. In this regard the Tribunal noted this was the date specified in section G of the concurrent lease of the agreement which, by reason of clause 4.1, was to operate in the case of any inconsistency.
44. We agree with the Tribunal's conclusion that the concurrent lease commenced on 10 July 2017.
45. While the actual lease was not signed until 27 September 2017, Bridge Housing entered into an agreement with LAHC on 11 July 2017 by which it agreed to accept various properties, including the property to which the current dispute relates and to be responsible for the management of those properties on and from 10 July 2017. This is evidenced by the documents at AB 53 and following, as well as the document at AB 26 and following incorporated by reference found in the letter at AB 53.
46. The agreement contained in the letter is an agreement of the kind described as the "first class" in Masters v Cameron (1954) 91 CLR 353; [1954] HCA 72 at 360, namely "a contract binding on the parties at once to perform the agreed terms whether the contemplated formal document comes into existence or not, and to join (if they have so agreed) in settling and executing the formal document.
47. The fact that the formal instrument of agreement was subsequently signed, did not affect the immediate binding nature of the agreement recorded in the correspondence to which we have referred.
48. The Housing Act does not provide any formal requirements for entry into a concurrent lease. In these circumstances, there is no reason to conclude that a formal instrument of agreement was required before the provisions in connection with concurrent lease, as found in the Housing Act, operated to bind a tenant.
49. At this point we should briefly note Ms Reisner contended that the rights granted were only to manage the property, not to create a lease. Having regard to our conclusion above as to the terms of the agreement we do not agree. Clearly the parties intended to enter a lease of land, that being one of the documents constituting the agreement made in July 2017: see AB 27.
50. The Tribunal found at [5] that Ms Reisner was informed of the proposed entry into a concurrent lease and the changes to the requirements for the payment of rent in about June 2017. She did not challenge this finding. In any event, it is clear from the letter to her dated 11 July 2017 (AB 21) that she was notified of the change no later than this date. The fact she received notice is corroborated by Bridge Housing's rent ledger which confirms payments were made by Ms Reisner to Bridge Housing on and from 10 July 2017: see e.g. AB 70.
51. As such, no issue arises in this appeal as to whether notice was first required before s 13A of the Housing Act required Ms Reisner to pay Bridge Housing rent under the residential tenancy agreement.
52. Aside from the Bridge Housing's standing as a landlord to bring proceedings under the RT Act and the date on which the concurrent lease commenced, there is no dispute concerning the correctness of the Tribunal's decision to make an order in favour of Bridge Housing that Ms Reisner pay Bridge Housing the sum of $11,199.24 in respect of unpaid rent for the period 30 August 2017 until 27 November 2018.
53. Finally, in respect of Ground 5, in view of our decision in respect of Grounds 1 to 4, it follows that there is no basis for concluding that the notice of termination was invalid. This ground is rejected.
54. Consequently, the appeal should be dismissed.

Orders

1. The Appeal Panel makes the following order: 1. The appeal is dismissed. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 30 April 2019