Schokman v Link Wentworth Housing Ltd

Grounds of Appeal

1. Mr Schokman raises a number of grounds of appeal. First, he says that the Decision was not fair and equitable. He says that Link Housing cannot prove that it owns his property as it is owned by the New South Wales Government. He also says that he has not signed any residential tenancy agreement with Link Housing.
2. Secondly, Mr Schokman says that the decision was against the weight of the evidence. In this respect, he states: "Asked member to adjourn the hearing. very bad eyes. Not granted. Consider submissions in the brief order 11 February 2021. Could use to the tribunal by 18 February 2021 proof of owner. This did not happen. Rent & water rates paid in advance to FC & JB. Copy enclosed. [Family & Community Services and Justice Services] have not return my rent and water rates. This is a lie why would they do this. Was listed for hearing on 17 December 2021. Withdrawn cannot show proof of land lord owner. Told member Link Housing Ltd is the maintenance agent not landlord owner. Landlord owner [Family & Community Services and Justice Services]. Their signature and seal is missing in the orders sought."

Nature of an appeal

1. Section 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) sets out the basis upon which appeals from decisions of the Tribunal may be brought. That section 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)).
2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69, without listing exhaustively possible questions of law, the Appeal Panel considered the requirements for establishing an error of law giving rise to an appeal as of right.
3. The Appeal Panel also stated at [12] that, in circumstances where an appellant is not legally represented, it is appropriate for the Tribunal to approach the issue by looking at the grounds of appeal generally, and to determine whether a question of law has in fact been raised (subject to any considerations of procedural fairness to the respondent that might arise).
4. We have undertaken that exercise, and we have not identified a question of law in Mr Schokman's appeal. We note that during the hearing we indicated that we had, but on reflection we think the correct position is that Mr Schokman requires leave to appeal, which we will grant. The issue is the whether the evidence before the Tribunal supported the Tribunal's finding that Link Housing was Mr Schokman's landlord. A Tribunal that makes a finding based on a question of fact without supporting evidence makes an appellable error of law: see Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390; [2010] HCA 32, a decision of the High Court of Australia, which dealt with the equivalent provision relating to appeals from the Tribunal's predecessor, the Consumer Trader and Tenancy Tribunal. That is usually understood as meaning that a decision that is made with "no evidence" is an error or law: Commissioner of Police v DYD [2020] NSWCATAP 224 at [49]:
5. However, an erroneous decision which is made on some evidence is not an error of law. If made against the weight of the evidence, as claimed by Mr Schokman in his Notice of Appeal, leave is required.
6. Clause 12 of Sch 4 to the NCAT Act relevantly provides that the Appeal Panel may grant leave to appeal from a decision of the Tribunal if the appellant may have suffered a substantial miscarriage of justice because the Tribunal decision was against the weight of the evidence: cl 12(1)(b).
7. The principles to be applied by an Appeal Panel in determining whether or not leave to appeal should be granted are well settled. In Collins v Urban [2014] NSWCATAP 17 the Appeal Panel conducted a review of the relevant cases at [65]‑[79] and concluded at 84 that: "Ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (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; (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."
8. We are satisfied that Mr Schokman may have suffered a substantial injustice, and that it is appropriate to grant him leave to appeal.

Mr Schokman's submissions

1. Mr Schokman's expanded his grounds of appeal during the course of the hearing. In summary, Mr Schokman's grounds of appeal are: 1. the High Court of Australia has held that people with disabilities (such as Mr Schokman) cannot be the subject of concurrent leases as contemplated by s 13A of the Housing Act 2001 (NSW); 2. pursuant to direction (2) made by the Tribunal on 22 February 2021, (being a directions hearing in proceedings before the Tribunal), Link Housing was directed to provide to Mr Schokman "a legal document proving it [was] the landlord/owner of [the] premises" by 18 February 2021. Mr Schokman says that this never happened; 3. he is not in arrears of rent; 4. he never signed a residential tenancy agreement with Link Housing, and therefore does not have a "legally bound" agreement with it, a private company; 5. Link Housing has applied to the Tribunal for orders for termination of the residential tenancy agreement and vacant possession of the premises.

Link Housing's submissions

1. Link Housing provided submissions dated 11 May 2021, 18 June 2021 and supplementary submissions (undated). Link Housing's position is adequately summarised in the submissions of 11 May 2021 as follows: "On 3 December 2018 Link Housing became the Landlord of the Appellant by operation of a current lease and section 13A of the Housing Act 2001 when it entered into a concurrent lease with the owner of the property (the New South Wales Land & Housing Corporation -"LAHC"); He was sent a letter directing him to pay the new Landlord; The effect of the above and the law relating to concurrent leases is that Link Housing became the Appellant's landlord; Significantly he paid rent to Link Housing from 3 December 2018 to October 2020, almost two years. He did not object until October 2020. By his conduct he has accepted the legal arrangement, or in the alternative a lease has arisen between Respondent and the Appellant because of this conduct. The Appeal Panel decision of Reisner v Bridge Housing Limited [2019] NSWCATAP 109 (30 April 2019) has settled the law in this regard. In that case, the Appeal Panel found that the Community Housing Provider "Bridge Housing" had become the landlord of Ms Reisner by operation of a concurrent lease with the owner of the property (LAHC) and/or s13A of the Housing Act 2001. The concurrent lease Link Wentworth Housing has with the Appellant is in the same terms as the concurrent lease in Reisner. Both transfers were part of the same Social Housing Management Transfer Program from LAHC to the Community Housing sector. The Reisner Appeal Panel states relevantly at [58]: 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."

Consideration

1. This appeal can be considered in two parts. The first relates to the important policy issue that Mr Schokman raises in relation to people with disabilities, namely whether they can be subject to concurrent leases as provided for in s 13A of the Housing Act.
2. The second part relates to the particular circumstances of Mr Schokman's residential tenancy agreement.

Policy Issue

1. The first matter we note is that on the basis of the medical evidence Mr Schokman provided we are satisfied that he has a disability arising from a cerebral haemorrhage he suffered in 1991.
2. Mr Schokman submitted that the High Court of Australia has decided that people with disabilities in public housing cannot be the subject of concurrent leases as provided for in the Housing Act.
3. Mr Schokman cited as authority for this proposition the High Court decision of Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 (Project Blue Sky). That case set out the approach to determine whether a failure to comply with a statutory requirement affects the validity of an administrative decision. The joint judgment (McHugh, Gummow, Kirby and Hayne JJ) rejected the previous distinction between 'mandatory' and 'directory' statutory requirements, stating that this distinction merely recorded a result that has been reached on other grounds. Instead, their Honours stated that a better test for determining the issue of validity is to ask whether it was "the purpose of the legislation that an act done in breach of the provision should be invalid".
4. This case does not appear to have any relevance to support Mr Schokman's submission. He told us during the hearing that he might be confused about this. We note that this decision was referred to in Reisner v Bridge Housing Limited [2019] NSWCATAP 109 (Reisner), parts of which Mr Schokman included in his materials. In Reisner, the Appeal Panel referred to Project Blue Sky in the context of statutory interpretation, namely that the task of interpreting a statute 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".
5. Accordingly, we do not consider that Project Blue Sky is of any assistance to Mr Schokman, nor are we aware of any other High Court authority to the effect that he claims.
6. We accept that 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. As was discussed in Reisner (which we consider below) the effect of s 13A of the Housing Act is that when the landlord enters into a concurrent lease, the tenant no longer rents public housing.
7. However, there is no stated exception for persons with disabilities.
8. Accordingly, this ground of appeal should be dismissed.

Mr Schokman's residential tenancy agreement

1. It is common ground that on 19 January 2011 Mr Schokman entered into a residential tenancy agreement with Housing NSW.
2. At that time, Housing NSW was an agency of the Department of Communities and Justice that is responsible for the provision and management of public housing services with the aim to prevent homelessness in NSW. Housing NSW was later subsumed into the Department of Family & Community Services (FACS).
3. In October 2016, the Housing Act was amended by the insertion of s 13A. That section provides: 13A Entering into concurrent leases (1) The Corporation may enter into a concurrent lease with a registered community housing provider in respect of any housing owned by the Corporation (whether or not the housing is leased to a tenant at the time that the concurrent lease is entered). (2) On entering into a concurrent lease under this section‑ (a) any rent payable by a tenant (other than rent in arrears that was payable before the concurrent lease was entered into) becomes payable to the registered community housing provider and not to the Corporation and any provision of the concurrent lease, to the extent that it provides otherwise (whether directly or constructively), does not have effect, and (b) the tenant is no longer renting public housing. (3) On entering into a concurrent lease under this section in respect of housing, the Corporation may provide to the registered community housing provider any information in relation to the housing (including personal or health information about a tenant or any other person). (4) The Corporation is not to provide personal or health information to a registered community housing provider under this section unless the Corporation is satisfied that the registered community housing provider has procedures in place to ensure the privacy of the information. (5) Nothing in this section limits any other power the Corporation may have to enter into a lease or a concurrent lease (including entering into a concurrent lease with a registered community housing provider). (6) For the avoidance of doubt, the consent of a tenant is not required in order for the Corporation to enter into a concurrent lease or to provide information under this section.
4. The effect of s 13A was thoroughly considered by the Appeal Panel in Reisner, a decision with a factual background very similar to Mr Schokman's, save that the community housing provider in that case was Bridge Housing Ltd. Relevantly the Appeal Panel said: [26] There is no dispute in this appeal that the landlord who originally granted the residential tenancy agreement was the [Land Housing Corporation] LAHC. [27] 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. [28] 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. [29] 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. … [38] 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. [39] 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. [40] Secondly, a tenant is no longer renting public housing: s 13A(2)(b) Housing Act. [41] Thirdly, consent of the tenant was not required: s 13A(6) Housing Act. [42] 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. [43] 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. (Emphasis added.)
5. The Appeal Panel also examined the Parliamentary Reading Speeches introducing s 13A, and concluded that the legislature intended that there be a transfer from one landlord to another without further documentation involving the tenant: at [49] and [50].
6. In those circumstances, the Appeal Panel was satisfied that the effect of s 13A of the Housing Act 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 operated and the residential tenancy agreement remained in existence.
7. FACS wrote to Mr Schokman on 18 October 2017 stating: Change of tenancy management provider We wrote to public housing tenants in your area in October 2016 to say that the management of your tenancy would be transferred to a community housing provider. I can now advise that your new housing provider will be Link Housing. Link Housing is a social housing provider that offers secure, affordable, long-term housing similar to Family and Community Services. The NSW Government passed legislation in October 2016 that will make the transfer of your tenancy automatic. You do not need to do anything right now, as this change will not occur until quarter four of 2018. We will contact you again to invite you to a joint information session where you can meet staff from Family and Community Services and Link Housing who will walk you through the transfer process. When the transfer occurs: You will stay in your home The length of your lease will not change Your lease conditions will not change Your income after rent will not change You will pay your rent to Link Housing who will provide you with the relevant forms and assistance You will need to apply for Commonwealth Rent Assistance (CRA) from Centrelink. Link Housing will assist you with your CRA application If you are eligible to receive CRA from Centrelink, the full amount of CRA will be paid to Link Housing You will continue to call the maintenance line on 1800 422 322, 24 hours a day, 7 days a week. The NSW Government will still own the properties and lease them to [community housing provider]s to provide social housing. We are making this change to improve your experience in social housing. Community housing providers can also access more sources of funding to support their tenants. (Emphasis added.)
8. It is understandable that, on the basis of this letter alone, Mr Schokman may have been confused about the identity of his landlord, as the letter states that the NSW Government will continue to own properties, although they would be leased to and managed by Link Housing.
9. On 15 August 2018, Mr Schokman signed a Centrepay Deduction Authority Form authorising the Department of Human Services to make a deduction from his Disability Support Pension and to pay that amount to Link Housing for "Rent" and "Non-Rent" from 3 December 2018.
10. However, on 3 October 2020 Mr Schokman wrote to Centrelink cancelling that Deduction Authority. Instead, he asked Centrelink to transfer his rent and water rates to FACS.
11. On 9 November 2018, FACS wrote to Mr Schokman in the following terms: WHEN TO STOP PAYING RENT TO FAMILY AND COMMUNITY SERVICES We have written to you previously to tell you that the management of your tenancy will be transferring to Link Housing on 3 December 2018. From 3 December 2018 you will need to pay your rent and water charges and any other payments to Link Housing and not to the Department of Family and Community Services. If you currently pay your rent or water accounts at Australia Post, through the internet or by BPAY, you will need to stop using these payment methods from December 2018. (Emphasis added.)
12. This letter does not state that FACS had, or was about to, enter into a concurrent lease. The letter stated that management of Mr Schokman's tenancy was to be transferred. Again, it is understandable that, on the basis of this letter alone (or in combination with the letter of 18 October 2017), Mr Schokman may have been confused about the identity of his landlord.
13. On 2 December 2018, FACS wrote to Mr Schokman in the following terms: CONFIRMATION OF TRANSFER OF YOUR TENANCY We have previously written to you to advise that the Department of Family and Community Services will be transferring the management of your tenancy to Link Housing. This letter confirms that the transfer was completed on 3 December 2018.Your tenancy is now being managed by Link Housing from 3 December 2018. You have previously been paying your rent to the Department of Family and Community Services. As part of the transfer of the management of your tenancy, you must instead pay your rent to Link Housing. Attached is your statement showing the balance of your rent, water and any other accounts you have with FACS. If you are currently registered to use MyHousing Account and Information Portal, you will now be unable to access this service.
14. Again, this letter focuses on the transfer of management of Mr Schokman's tenancy. It does not in terms state, as we understand the situation, that on the previous day, 1 December 2018, NSW Land Housing entered into a concurrent lease with Link Housing in respect of Mr Schokman's property for a period of 20 years (the concurrent lease).
15. Not only was Mr Schokman not aware of this at the time, neither was the Tribunal.
16. It is in these circumstances we have to determine whether there was sufficient evidence before the Tribunal to allow it to conclude that Link Housing was Mr Schokman's landlord. We do not think there was. We consider that the letters and other materials before the Tribunal do not allow that conclusion on the balance of probabilities.
17. However, we accept Link Housing's submission that, as a matter of law, the existence of the concurrent lease governs the legal relationship between the parties, that is, by operation of s 13A of the Housing Act, through the execution of the concurrent lease Link Housing became Mr Schokman's landlord on 1 December 2018.

Relief

1. As noted, the concurrent lease was not before the Tribunal. We understand that this may, in part, have been as a result of the inexperience of the representative of Link Housing at the time. We consider that the Appeal Panel should not ignore legal reality (that being that a concurrent lease was entered into on 1 December 2021). The question is what are the appropriate orders for the Appeal Panel to make in the circumstances?
2. Section 81 of the NCAT Act provides: (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.
3. As we have identified an error in the Decision, the appeal should be allowed and the orders set aside, and consistent with the guiding principle, namely to facilitate the just, quick and cheap resolution of the real issues in the proceedings (NCAT Act, s 36), we propose to substitute our own decision pursuant to s 81(1)(d) of the NCAT Act. We are able to do so as we have before us the evidence that was before the Tribunal.
4. We note that Mr Schokman, who has always paid his rent, albeit to the wrong entity, told us that if he was satisfied that Link Housing was his landlord, he would of course pay rent to it. Through no fault of his own, Mr Schokman has been confused about the identity of his landlord.
5. We are satisfied that Housing NSW and Link Housing entered into a concurrent lease in respect of Mr Schokman's property on 1 December 2018 for a period of 20 years. As was held in Reisner, once the concurrent lease is entered into, a statutory assignment of the residential tenancy agreement is effected by which, in this case, Link Housing was substituted for NSW Housing as Mr Schokman's landlord. Therefore there was a change of the entity to whom the rent was payable. The right conferred is not as agent for NSW Housing, rather the concurrent lessee (Link Housing) acquired the right to be paid rent and the residential tenancy agreement was altered and without the need for consent of Mr Schokman. For a discussion about the effect of concurrent leases, see Trust Co of Australia v Chief Commissioner of State Revenue [2006] NSWSC 792 at [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])."
6. We are satisfied therefore that there was a residential tenancy agreement between the parties.
7. We are further satisfied that at the time of the hearing Mr Schokman was in arrears of rent and water in the amounts claimed, that Link Housing had served a valid notice of termination, and that the appropriate orders to make were for the payment of those arrears and not to make orders for termination and possession.
8. The effect of this conclusion is that while we have allowed the appeal, pursuant to s 81(1)(d) of the NCAT Act we confirm the orders made by the Tribunal, save that we will allow Mr Schokman six weeks to pay the arrears (which is the same length of time which was originally ordered by the Tribunal). This should allow Mr Schokman the time to make enquires with FACS to recover his monies which have been incorrectly paid to FACS.
9. In this respect we note that there was evidence that the monies had been returned to Ms Schokman, but this was denied by him. The Tribunal notes the agreement of Link Housing during the hearing to ask one of its officers to assist Mr Schokman in this regard.

Orders

1. The Appeal Panel orders: 1. The name of the respondent is amended to Link Wentworth Housing Limited; 2. Leave to appeal granted; 3. Appeal allowed; 4. Orders (1) to (5) in matter SH 21/02037 vacated and in lieu thereof order: 1. the appellant to pay the respondent rental arrears of $4,327.92 for rent owed for the period from 26 October to 15 April 2021 on or before 18 August 2021; 2. the appellant to pay the respondent rental arrears of $101.82 for water usage owed for the period from 26 October to 15 April 2021 on or before 18 August 2021; 3. the appellant to pay the respondent rent, presently $358.28 per fortnight, next payment due on 12 July 2021, and once the arrears are paid in full, to pay rent in accordance with the residential tenancy agreement; 4. the appellant to pay the respondent water usage, presently $7.44 per fortnight, next payment due on 12 July 2021, and once the arrears are paid in full, to pay water usage in accordance with the residential tenancy agreement; 5. If the orders in respect of rent and water are not complied with than at any time before 7 October 2021 the respondent may request the listing of the application to determine whether the tenancy should be terminated before the Tribunal.

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: 07 July 2021