Tawadros v Grubisic

THE APPLICATION

1. In an application filed in the Tribunal on 16 April 2020 the landlords requested an order under section 93 of the Residential Tenancies Act 2010 ("the Act") for the early termination of the residential tenancy agreement of the premises on the basis that in the special circumstances of the case the landlords would suffer undue hardship if the residential tenancy agreement were not terminated.
2. The tenants opposed the making of the order on the basis that they would suffer significant hardship if the Tribunal made the order sought by the landlords.
3. The application was given an urgent conciliation/ hearing.

PROCEDURAL DIRECTIONS

1. On 23 April 2020 the Tribunal made directions for the parties to file and serve any documents upon which they intended to rely by close of business on 24 April 2020. Both parties filed and served documents which were tendered and formed part of the evidence in the proceedings.

JURISDICTION

1. There was no submission that the Tribunal does not have jurisdiction to hear and determine the application. The dispute involves a residential tenancy agreement between the parties made on 13 August 2019.
2. The premises are "residential premises" within the meaning of section 3 of the Residential Tenancies Act 2010 ("the Act"). The agreement is a "residential tenancy agreement" "as defined in section 13(1) of the Act. Matters arising under the Act are allocated to the Consumer and Commercial Division of the Tribunal under Schedule 4 of the Civil and Administrative Tribunal Act 2013.
3. I find that the Tribunal has jurisdiction to hear and determine the application. The proceedings relate to an order for the termination and possession of a residential tenancy agreement of the premises under the Act.
4. The Tribunal attempted to conciliate the dispute but was unable to resolve the matter. The parties requested the Tribunal to determine the matter.

LANDLORDS' DOCUMENTS

1. The landlords' bundle of documents included the following: 1. Medical report from Dr Boulis dated 1 April 2020; 2. Statutory Declaration of Esther Solomon Tawadros dated 14 April 2020; 3. Australian Government information sheet providing advice for older people in dealing with coronavirus; 4. National Cabinet Statement; 5. Water Rate Notice for Lugarno Property; 6. Notice to Terminate Tenancy Agreement dated 30 March 2020; 7. Email from Tegan Kingham to tenants dated 30 March 2020 requesting possession of the property; 8. Email to NCAT dated 18 April 2020 requesting urgent hearing; 9. Tenant's Rent Ledger dated 14 April 2020; 10. Residential Tenancy Agreement dated 13 August 2019; 11. Email from Landlords to NCAT enclosing copies of Mortgage Account Statement, photographs of the property management agreement and updated rent ledger. 12. Letter from tenants to landlords dated 24 April 2020 regarding rent arrears; 13. Response dated 29 April 2020 to the Statutory Declaration of Vanja Grubisic including ingoing inspection report.

TENANTS' DOCUMENTS

1. The tenants' bundle of documents included the following: 1. Statutory Declaration of Vanja Grubisic dated 27 April 2020 and attachments including emails and payment receipts; 2. Email from Vanja Grubisic to NCAT dated 30 April 2020 concerning difficulties with emailing statutory declaration in an acceptable form.

THE TENANCY

1. It was common ground that the parties entered into a residential tenancy agreement in the usual form on 13 August 2019 for a period of 52 weeks commencing on 12 August 2019 and ending on 9 August 2020. The fortnightly rent was $1340.00. The tenant paid a rental bond of $2680.00.
2. The premises were managed for the landlords by McGrath Property Management at the time the tenancy agreement was signed.
3. The landlords have served the tenants with a notice of termination under section 84 of the Act (end of fixed term) dated 30 March 2020 which requires the tenants to give vacant possession of the premises on 9 August 2020 ("the Notice").
4. However the landlords request an order for the earlier termination prior to the vacate date in the Notice on the basis there are special circumstances and they will suffer undue hardship if the tenancy is not terminated before the end of the fixed term.

LANDLORDS' POSITION

1. Abraham Tawadros relied on the documentary material which had been filed and made oral submissions in support of the landlords' case.
2. In the section of the application headed "Reasons for the Order/s" the landlords set out the reasons for seeking the order for termination. Those reasons are summarised hereunder.
3. The landlords and their two children reside with Esther Tawadros in a house owned by her in Kingsgrove. Esther Tawadros is the mother of Abraham Tawadros. By living with Esther Tawadros, the landlords have been able to rent out the premises.
4. Esther Tawadros is 77 years of age and has many health issues which have been documented in a certificate from Dr Boulis dated 1 April 2020. Her chronic health issues include diabetes, kidney disease, heart disease and high blood pressure.
5. The landlords submit that Esther Tawadros is in a high risk category if she is infected with coronavirus because of her age and serious health conditions. They are concerned that she will not recover if she is infected with coronavirus.
6. Abraham Tawadros continues to work in the construction industry and may come into contact with persons infected with the virus. He may unknowingly have the virus and bring it home.
7. Safaa Roufael has recently been stood down from her work in childcare. The landlords' children are currently not attending school. They have frequent contact with Esther Tawadros because they are at home with her.
8. The landlords are concerned that Esther Tawadros "is unable to self isolate in accordance with Australian Government health recommendations and is at significantly heightened risk of contracting Covid -19 given the circumstances set out in our application."
9. At the hearing Mr Tawadros stated his family were extremely worried they would expose Esther Tawadros to the coronavirus and infect her with resultant consequences. He argues there is considerable emotional pressure and stress on the family who want to move back into the premises to protect Esther Tawadros.
10. If the landlords could return to the premises, there would be a lower risk of Esther Tawadros being infected and ease the stress on the family.

TENANTS' POSITION

1. The tenants relied primarily on the statutory declaration of Vanja Grubisic and both Mr Noss and Ms Grubisic made oral submissions.
2. The tenants opposed the making of the termination order and argued they would suffer considerable hardship if they were required to vacate the premises.
3. Vanja Grubisic set out the tenants' response to the application in a statutory declaration dated 27 April 2020. That response is briefly summarised below.
4. She describes various problems with the premises when the tenancy commenced in August 2019. These issues included general maintenance items, problems with the oven and power supply and the general condition of the premises.
5. The tenants allege ongoing difficulties with the landlords. The tenants were in arrears for a short time when their daughter was stranded in Peru. She returned home on 31 March 2020. The tenants have spent several thousand dollars to repatriate her. At the date of the hearing there were no arrears and the rent was paid to 3 May 2020.
6. In opposing the application the tenants submitted that the landlords had not provided any evidence of special circumstances or undue hardship. Further, they asserted that the landlords' conduct was retaliatory because they had requested repairs to the premises. The tenants tendered email correspondence between the agent and themselves regarding the repair issues.
7. The tenants also raised the issue of the financial cost to them if they were required to vacate the premises. They estimated their moving costs to be approximately $5,000.00. Further, the tenants alleged that the landlords were motivated by concerns about the tenants' ability to continue to pay the rent.
8. The tenants argue that COVID-19 is having a serious impact on many in the community. There are five people residing in the premises and any move would result in severe disruption to the family. They argued it would be difficult to find other accommodation with the restrictions for viewing properties which are in place. The premises are a four bedroom house which suits the tenants' requirements. If the tenancy were terminated the tenants would seek substantial compensation.

Section 93 of the Act

1. The application for termination is brought by the landlords pursuant to section 93 of the Act which provides: Hardship to landlord (1) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that the landlord would, in the special circumstances of the case, suffer undue hardship if the residential tenancy agreement were not terminated. (2) The Tribunal may, if it thinks fit, also order the landlord to pay compensation to the tenant for the tenant's loss of the tenancy. (3) The tenant must take all reasonable steps to mitigate the loss and is not entitled to compensation for any loss that could have been reasonably avoided by the tenant. (4) A landlord may make an application under this section without giving the tenant a termination notice. (5) The Tribunal may make a termination order under this section that takes effect before the end of the fixed term if the residential tenancy agreement is a fixed term agreement.
2. The landlords as the applicants bear the onus of proof and must provide evidence which satisfies the Tribunal on the balance of probabilities that the order being sought in the application can be made.
3. The Tribunal has a discretion whether to make a termination order. The evidence must be sufficient to satisfy the Tribunal that the landlord would "in the special circumstances of the case, suffer undue hardship if the residential tenancy agreement were not terminated".
4. In the event the landlords are able to satisfy the Tribunal of the matters required by section 93 for termination, the making of the order is not mandatory. The use of the word "may" in the section confirms that the Tribunal retains a discretion about whether to make an order for termination.
5. The landlords' application under section 93 for an order terminating the residential tenancy agreement must be considered in stages. Firstly the Tribunal must determine if there are "special circumstances". Secondly if "special circumstances" are established, the Tribunal must determine the question of "undue hardship". Finally is it appropriate for the Tribunal to exercise its discretion to terminate the tenancy.

Are there "special circumstances"?

1. What are "special circumstances"? The term is not defined in the Act and accordingly the Tribunal looks for guidance from decided case law.
2. Where the term appears in other legislation the Courts have suggested the intention is that judicial discretion should not be confined by precise definition, or where the circumstances of potential relevance are so various as to defy precise definition.
3. In Perpetual Finance Corporation Ltd v Blain and Another [1996] 9BPR 16,243 the Supreme Court of New South Wales considered the meaning of the words "in the special circumstances of the case" as they appeared in section 76(3) of the Residential Tenancies Act 1987 (NSW) (repealed). The Act replaces the Residential Tenancies Act 1987.
4. Giles CJ stated: An order may be made if the court "….. thinks it is appropriate to do so in the special circumstances of the case…"s76(3) of the Act. The Blanks submitted that "special" means particular rather than extraordinary, requiring that regard be had to all relevant circumstances but without any notion that the circumstances warrant departure from the ordinary position that the person entitled to possession should have possession to the exclusion of the tenant. I do not agree. If "special" meant no more than particular it would be otiose, since in any event regard must be had to all relevant circumstances: the phrase "in the circumstances of the case" would be enough. The word "special" invites comparison, so that it may be asked special in relation to what. There must be more than the fact that the tenant must otherwise give up possession (see also s 53(e) of the Act earlier mentioned); not all tenants who have to give up possession will qualify, and the successful tenant must provide grounds for taking his position out of the ordinary to the extent that the circumstances attract the description of special. There will then arise whether, in the exercise of discretion, an order should be made. Section 76 of the Act gives no more explicit guidance upon what might constitute special circumstances. All relevant circumstances must be considered.
5. Similarly in Megerditchian v Kurmond Homes Pty Ltd (2014) NSWCATAP 120 at [11] the Appeal Panel stated: "Special circumstances are circumstances that are out of the ordinary. They do not have to be extraordinary or exceptional."
6. The Tribunal must consider all relevant circumstances in determining the issue of whether there are "special circumstances" in the present case. Are the circumstances of this case out of the ordinary?
7. The tenants submit that the landlords have not demonstrated there are "special circumstances" and the application should be dismissed. I reject that submission. The Tribunal has noted the statements regarding determination of "special circumstances" set out above and applied them to the facts of this matter.
8. I am satisfied on the evidence the landlords have established there are "special circumstances" in this case. The situation created by the coronavirus can be described as unusual or uncommon and are "circumstances that are out of the ordinary". The living arrangements between the landlords and Esther Tawadros have been impacted by the coronavirus and their fears for the wellbeing of Esther Tawadros are reasonable.

Will the landlords suffer undue hardship if the residential tenancy agreement is not terminated?

1. As well as demonstrating there are special circumstances, the landlords must prove they will suffer undue hardship if the residential tenancy agreement is not terminated.
2. What constitutes "undue hardship" was considered in State of New South Wales v Austeel Pty Ltd [2004] NSWSC 81 at [22]. The Court stated: 22 "Hardship" is defined in The Macquarie Dictionary, Federation Edition, The Macquarie Library, at page 865, as "a condition that bears hard upon one; severe toil; trial; oppression, or need". The New Oxford Dictionary of English, Clarendon Press, Oxford 1998, defines "hardship" at page 837, as "severe suffering or privation". "Undue" has been defined relevantly as, "not proper, fitting, or right; unjustified" and "unwarranted or inappropriate because excessive or disproportionate": The Macquarie Dictionary at 2043; The New Oxford Dictionary of English at 2017. Lord Denning MR said that undue hardship: "simply means excessive. That is greater hardship than the circumstances warrant. Even though a claimant has been at fault himself, it is an undue hardship on him if the consequences are out of proportion to his fault": Liberian Shipping Corporation v A King & Sons Ltd [1967] 1 Lloyd's Rep 302 at 307.
3. As noted earlier the landlords bear the onus of proving they will suffer undue hardship if the residential tenancy agreement with the tenants is not terminated. The termination of a residential tenancy agreement for any reason is a serious matter and will have profound consequences for both parties.
4. The Tribunal accepts that Esther Tawadros is elderly and has significant health problems. It is undisputed she is in a high risk category if she is infected with corona virus and may not recover. The Tribunal is satisfied that the landlords have genuine fears for her health and safety if they continue living with her.
5. There is no evidence that any member of the landlords' family have corona virus or is at an increased risk of contracting the virus. The landlords ask the Tribunal to terminate the residential tenancy agreement on the possibility that a member of the family may become infected with the virus and pass it on to Esther Tawadros.
6. The landlords have tendered advice from the Australian Government as part of their case The fact sheet tendered by the landlords includes a section headed "Protecting yourself". Whilst the advice is that the elderly persons should avoid contact with others, the advice does not state the elderly person should totally isolate themselves from the rest of the community. The fact sheet provides a range of measures to minimise the risk of being infected with the virus when interacting with others.
7. The landlords also tendered documents about advice from National Cabinet for people in certain categories to self-isolate at home "to the maximum extent practicable for Australians". In my view the general advice is for an elderly person to take proper precautions and to remain at home. It does not follow that any person residing with the elderly person should move out of the residence.
8. The Tribunal has considered the medical evidence tendered by the landlords. Dr Boulis does not state in his report that Esther Tawadros must self-isolate or must live alone. He makes no comment about the current living arrangements with the landlords and the risk to his patient if they continue living with her.
9. The difficulty for the landlords is their evidence does not properly or adequately address what alternatives are available to them. The tenants assert that the landlords have not proved they will suffer undue hardship. They argue the landlords want them to vacate the premises because they have a need.to return to the premises.
10. The tenants argue that the landlords have provided little or no evidence about the availability of alternative accommodation, the cost of that accommodation or steps taken to find other accommodation. They argue the landlords should move to rented accommodation rather than terminate their tenancy.
11. Mr Tawadros was questioned about enquiries he had made on behalf of the landlords to find alternative accommodation. It was suggested to him that a granny flat was available as alternative accommodation for his family but he rejected that proposition because of it was not habitable due to its poor condition.
12. As far as looking for rental accommodation, Mr Tawadros stated he had only viewed properties on the internet. In my opinion he did not make a genuine attempt to find other accommodation. There was minimal evidence of the enquiries which he made about available rental accommodation.
13. The landlords submitted they will suffer financial hardship if the tenancy is not terminated. They are currently paying a mortgage and cannot afford to rent for another property. The Tribunal notes that if the tenancy was terminated the landlords would lose the rental income from the property. I have considered that submission. I am not satisfied the evidence establishes sufficient financial hardship to justify termination of the tenancy.
14. After considering the evidence and submissions of both parties, I am not satisfied that the landlords have proved, in the special circumstances of this case, they would suffer undue hardship if the residential tenancy agreement was not terminated.
15. The landlords have not provided evidence of hardship which is excessive or disproportionate to the circumstances of the case. The landlords in my opinion have not fully explored other options available to them to minimise the risk posed by coronavirus to Esther Tawadros.
16. As noted earlier termination of the tenancy is a serious matter and would render the tenants homeless. For the foregoing reasons, the landlords have not satisfied the requirements in section 93 of the Act for the Tribunal to make an order for the termination of the residential tenancy agreement.

COSTS

1. The tenants seek an award of costs. As I indicated at the commencement of the hearing it was highly unusual for a party to be represented in this type of proceedings. The application for legal representation was made at the hearing.
2. Section 60(1) of the Civil and Administrative Tribunal Act 2013 provides that each party to the proceedings is to pay the party's own costs. The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs.
3. I find there are no special circumstances warranting an award of costs and I make no order as to costs. G A Kinsey General Member Civil and Administrative Tribunal of New South Wales 12 May 2020

I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 18 May 2020