1. The landlord (Catherine Swan) and tenants (Barbara Uecker and Michael Greaves) entered into a 12 month residential tenancy agreement on 21 August 2015 for an apartment in Fitzroy Street, St Kilda ("the rented premises").
2. On the back of a letter titled "Important Tenant Information", dated 18 August 2015, the tenants added some special conditions to the lease around repairs and cleaning. It also included the following statement - "For the term of this lease the following terms apply (1) occupy means permanently residing at the address."
3. On 12 January 2016, the landlord served a Notice to Vacate ("the NTV") on the tenants by registered post, with a termination date of 2 February 2016. The reason provided in the NTV stated -

You have assigned or sublet part of all of the premises without my permission or purported to.

Residents in the building have confirmed that you are using Air B&B to rent out a room of the apartment without prior consent of the landlord. I have checked Air B&B website and have confirmed that this is the case. The landlord requires you to vacate the property on or before 2.2.2016.

1. On 1 February 2016, the landlord applied to the Tribunal for a possession order.
2. The tenants oppose the landlord's application. They submit that the NTV is invalid because (a) it does not meet the formal requirements set out in the Residential Tenancies Act 1997 ("the RTAct"), (b) the landlord cannot prove the facts in the notice and (c) Airbnb is a licence and not a lease and as such there has been no assignment or sub-letting. Each of these issues will be addressed in turn.

1. The form of a notice to vacate is set out in section 319 of the RTAct. It states -

A notice to vacate given under this Part is not valid unless -

(a) it is in the relevant prescribed form; and

(b) it is addressed to the tenant, resident or site tenant (as the case requires); and

(c) it is signed by the person giving the notice or by that person's agent; and

(d) except in the case of a notice under section 263, 288, 314, 317ZF or 317ZG, it specifies the reason or reasons for giving the notice; and

(e) it specifies the date by which compliance is required (the "termination date").

1. The tenants submit that the contents of the NTV do not identify with particularity and precision the facts that are said to give rise to the alleged breach of the RTAct as required by section 319(d).
2. They submit that if the landlord has relied on the basis of claims by other residents, then the landlord needs to include the names of those guests in the NTV and the dates of the stays of the Airbnb guests.
3. The tenants rely on the decision of Smith v Director of Housing[1] ("Smith's case"), where Bonjiorno J stated -

The requirement laid down in s.319(d) is designed to require advice to be given to the tenant as to the reason the landlord demands possession with a sufficient degree of detail to enable her to understand the facts being alleged as a basis for terminating the tenancy. It requires no technical expression, no particular formal verbal formula and no particular legal knowledge to answer the question "Why is this notice being given?" A basic facility for communication in plain English is enough.

The answer, for the notice to comply with s.319(d), requires the setting out of the facts upon which the assertion that the tenant or her visitor has endangered or is endangering the safety of relevant neighbours with a sufficient degree of particularity to enable the tenant to understand why the landlord wishes to evict her and to contest those facts if she wishes.

Mr Williams sought to distinguish this case on the ground that it dealt with breaches of tenancy agreements which might be able to be remedied, whereas conduct giving rise to a right to give a notice under s.244 of the current Act cannot be remedied. That distinction, although real, ignores the purpose of s.319 which is to lay a proper basis for the pursuit by a landlord of a very summary method of terminating a tenancy and thus extinguishing the rights of the tenant. It is incumbent upon a landlord who seeks to avail himself of such a summary remedy to comply strictly with the law so as to ensure that by resorting to such a remedy he is neither deliberately nor accidentally trampling on the rights of the person against whom the remedy is being sought.

1. Smith's case requires that the notice contain a "sufficient degree of detail/particularity" to enable the tenant to understand the facts being alleged, why the landlord wishes to evict them and to be able to contest those facts.
2. In my view, the tenants were under no illusion about the case they had to meet - Were they using the premises for Airbnb guests? The question does not turn on the date of arrival and departure of guests or whether they were or were not seen by other residents in the premises. That is a matter of evidence.
3. After being told of the allegation that they were using the rented premises for Airbnb, the tenants themselves were then in the best position to know whether or not at any stage during the tenancy the rented premises had been used for that purpose.
4. The information to be contained in the NTV must give enough information about the allegations being put forward, so that the tenants are in a position to defend themselves. Six days before the initial hearing on 17 February 2016, the tenants' advocate provided the Tribunal and the landlord with a sixteen page written submission ("the tenants' written submission"). This document shows that the tenants were in no doubt about the case they had to defend.
5. I am satisfied that the technical requirements of the RTAct have been met by the landlord and that the detail provided in the NTV is sufficiently particularised.

1. The tenants originally submitted that the landlord could not prove the facts in the notice because the residents who saw the Airbnb guests did not attend the hearing on 4 March 2016 to give evidence.
2. This submission was withdrawn during the hearing, after it was pointed out that the tenants' written submission contained concessions, and the tenants admitted in evidence, that they had used the rented premises for Airbnb guests at times - either by offering one bedroom or two bedrooms if they were going on a holiday.
3. The tenants' written submission states -

The tenants listed the second bedroom ("spare room") in the rented premises on online accommodation platform AirBnB on 7 November 2016.

The first AirBnB guest stayed in the rented premises in the spare room on 4 December 2015, for a period of 4 days. Following this initial booking, other AirBnB guests stayed in the rented premises, from time to time.

During the tenancy to date, the tenants' relatives and friends stayed as guests in the spare room, from time to time.

The duration of AirBnB guests' stays in the rented premises never exceeded the duration of the tenants' friends and relatives stays in the rented premises: the longest stay by a friend or relative of the tenants was for a period of two weeks.

1. The landlord produced a web page print out of two advertisements on Airbnb dated 12 January 2016, the day the NTV was sent.
2. The first ad defines what part of the rented premises is able to be used - "You'll have use of the entire 2 bedroom apartment, its bathroom, kitchen, loungeroom and balcony." It also sets out some House Rules - "Since this is my home and I am leaving to allow you to have it all to yourself, I simply ask that you observe the normal courtesies such as being considerate about noise for the neighbour's sake and being careful with my TV, stereo and kitchen amenities. In addition, this is a strictly non smoking apartment - even on the balcony...."
3. The second ad defines guest access - "As my guest(s) you will have access to and be able to share with me my bright bathroom and my loungeroom with ajoining (sic) open air terrace.... Though my kitchen is not available for guests to cook in, I am happy to make room in the fridge for a few essentials, medications, etc. which you need to keep cold." The House Rules state "Since you are sharing my apartment with me, I simply ask that you observe the normal courtesies such as being considerate about noise and leaving the bathroom tidy after your showers. In addition, this is a strictly non smoking apartment - even on the balcony."
4. I am satisfied on the evidence of the advertisements and the concessions of the tenants themselves that the rented premises have been used either as a whole, or in part, by Airbnb guests.

1. To be entitled to serve a Notice to Vacate under section 253 of the RTAct, the landlord must prove that the use of the rented premises for Airbnb is a lease and as such the tenants have either assigned or sublet their tenancy without the landlord's consent.
2. Section 253 states -

(1) A landlord may give a tenant a notice to vacate rented premises if the tenant has assigned or sub-let or purported to assign or sub-let the whole or any part of the premises without the landlord's consent.

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

1. The landlord submits that she did not give consent for the rented premises to be used for Airbnb. She submits that the tenants inferred they would be the only occupants when they included a term in the tenancy agreement that "occupy means permanently residing at the address".
2. The tenants do not dispute the lack of consent from the landlord. I am satisfied that the landlord did not consent to the use of the rented premises for Airbnb and that no consent has ever been sought.
3. The real question for determination is whether the use of the rented premises for Airbnb is an assignment or sublet of the tenancy.
4. The tenants submit that Airbnb is a licence to occupy and use, all or part of, the rented premises and is not an assignment or sublet of the tenancy agreement they have with the landlord.
5. The tenants submit that while a grant of a tenancy does not have to be sourced from the RTAct, the exclusion of short term stays and holiday accommodation from the application of the RTAct are informative of the types of use to be covered by the legislation.
6. Section 9 of the RTAct states -

This Act does not apply to a tenancy agreement that is a fixed term tenancy agreement if -

(a) immediately before the agreement was entered into, the rented premises were the landlord's principal place of residence; and

(b) the fixed term is less than 60 days; and

(c) the agreement states that -

(i) immediately before the agreement was entered into, the rented premises were the landlord's principal place of residence; and

(ii) the landlord intends to resume occupancy of the premises on termination of the tenancy agreement.

This Act does not apply to a tenancy agreement if the rented premises are ordinarily used for holiday purposes.

1. The RTAct does not govern all forms of tenancy. The application of sections 9 and 10 may result in Airbnb agreements being excluded from the operation of the RTAct. However, use of part of a property for a commercial gain does not mean the provisions of the RTAct don't apply. Section 7 states -

This Act applies to a tenancy agreement if the rented premises are used primarily for residential purposes even if a trade, profession or business is also carried on by the tenant on those premises.

1. For there to be an assignment or subletting of rented premises, a tenancy (whether under the RTAct or not) must be created between either the tenant or landlord, and a third party. The definition of a tenancy has been considered by the Supreme Court of Victoria in Janusauskas v Director of Housing[2] ("Janusauskas' case").
2. Her Honour Justice Emerton affirmed the matters the Tribunal may take into account when considering whether the rented premises has been assigned or sublet -

The Tribunal identified the distinguishing feature of a lease to be the grant of exclusive possession, which carries with it the right to exclude all others, including the grantor. It acknowledged that while the principle was well established, a satisfactory statement of the criteria by which such a grant may be identified was elusive. Nonetheless, the Tribunal set out 'some useful directions' as to what the criteria for the grant of exclusive possession might be, including the following:

(a) a person may retain legal possession (that is, exclusive possession) even though another person has sole physical occupation of the premises;

(b) the words used by the parties are not conclusive; and

(c) an intention to create the relationship of landlord and tenant is not necessary in the formation of a lease."

None of this legal exegesis by the Tribunal is challenged.[3]

The Tribunal correctly stated that one does not look to the intention of the parties as to the legal consequence of their agreement but to the rights and duties they have in fact created. It found that 'regardless of his subjective intentions, [the applicant] in fact granted [the travellers] the right to exclusively occupy his room for up to six months to the exclusion of all others'. This is consistent with Radaich v Smith, in which Windeyer J stated that 'whether the transaction creates a lease or licence depends upon intention, only in the sense that it depends upon the nature of the right which the parties intend the person entering upon the land shall have in relation to the land'. There was no error in the Tribunal proceeding on the basis that it was unnecessary to identify the parties' intention to create the relationship of landlord and tenant. The Tribunal found that the parties intended that there be a particular arrangement between them and that this arrangement involved a grant of exclusive possession. If the arrangement between the parties amounts to a grant of exclusive possession, the grant itself creates legal relations between them.[4]

1. In determining whether a party has been granted exclusive possession, consideration (as a whole) should be given to (a) the wording of any agreement between the parties, (b) the intention of the parties, (c) the conduct of the parties before and after the agreement and (d) the legal consequences of the relationship.
2. The tenants submit that the Airbnb guests were not granted a right of exclusive possession but were able to use either part or all of the rented premises on certain conditions for a specified period.
3. (a) The Airbnb agreement

The tenants rely on the wording of the Airbnb agreement which states -

"Guests agree that a confirmed reservation is merely a licence[5] granted by the Host to the Guest to enter and use the listing for the limited duration of the confirmed reservation and in accordance with the Guest's agreement with the Host. Guests further agree to leave the Accommodation no later than the checkout time that the Host specifies in the Listing or such other time as mutually agreed upon between the Host and Guest. If a Guest stays past the agreed checkout time without the Host's consent, they no longer have a license to stay in the Listing and the Host is entitled to make the Guest leave."

The tenants submit that the wording of the Airbnb agreement is evidence of the intention of both themselves and the guests. They submit that the express use of the word "licence" supports the parties intention that the legal relationship between them was characteristic of a licence.

The tenants submit that the conduct of each Airbnb guest supports the existence of a licence. The tenants say that each stay was no longer than five days at a time and payments were made via the Airbnb online platform. The tenants maintain that on each occasion they acted as host and guests were not allowed to check-in before a certain time and were required to leave by a certain time on the exit date. The tenants say the rented premises has continued to be their principal place of residence since the commencement of the tenancy. They say at no stage have any of the guests considered the rented premises to be their principal place of residence.

The tenants submit that under the terms of the Airbnb agreement, they maintained their right to revoke the licence and eject the guests. They say the agreement provides "the Host is entitled to make the Guest leave".

1. Taking into account -
   • (i) the express words contained in the Airbnb agreement that the use of the rented premises by guests was a licence,
   • (ii) the short term stays by the guests, the payment platform, the terms of arrival and departure and the terms of use of the rented premises,
   • (iii) the tenants retention of the rented premises as their principal residence before, during and after, each of the Airbnb guests and
   • (iv) the ability of the tenants to access the rented premises during each Airbnb stay and make a guest who overstays leave the property;

I find that the Airbnb guests did not have exclusion possession of the rented premises.

1. Without an entitlement to exclusive possession, I am satisfied that the nature of the legal relationship between the tenants and Airbnb guests was not a tenancy. In my view, this was not a lease but a licence to occupy.

1. As the tenants did not enter into a tenancy with any of the Airbnb guests, they cannot be said to have assigned or sub-let their tenancy agreement with the landlord.
2. Without an assignment or sub-letting of the rented premises, the landlord has not proven the grounds to enable her to serve the NTV and as such the NTV is invalid.
3. Without a valid Notice to Vacate there is no basis to make an application for a possession order. The application must therefore be struck out.

[2] [2014] VSC 650 per Emerton J.

[3] Paragraphs 16 and 17 of Janusauskas' case.