Towers v Awabakal Local Aboriginal Land Council

Background

1. The parties entered into a residential tenancy agreement for premises at Cameron Park, NSW, on 29 April 2015 for the sum of $200 per week.
2. The appellant failed to pay rent for long periods which led to the respondent commencing proceedings in the Tribunal against her.
3. On 10 April 2018, and in proceedings RT 18/12947, the Tribunal made a consent order that the appellant pay the respondent $6,428.25 for arrears of rent.
4. Six months later, on 25 October 2018, and in new proceedings RT 18/42877, the Tribunal made a consent order that the appellant pay the respondent $6,560.99 for arrears of rent. This sum appears to be an "updated" arrears amount from the order made on 10 April 2018, although the parties were wrong to think this new order would have that affect (in the absence of setting aside the earlier order) rather than being a new order for an additional amount.
5. On 14 February 2019, and in those same proceedings (RT 18/42877), the Tribunal made the following orders: "1. The Residential Tenancy Agreement is terminated in accordance with: • s 87 of the Residential Tenancies Act 2010 as tenant has breached the agreement. • failure to pay rent in accordance with agreement. 2. The Residential Tenancy Agreement is terminated immediately and possession is to be given to the landlord on the date of termination. 3. The order for possession is suspended until 14-Mar-2019. 4. The tenant shall pay the landlord a daily occupation fee at the rate of $28.57 per day from the day after the date of termination, namely 15-Feb-2019 until the date vacant possession is given to the landlord. 5. Within 60 days of the date for possession of the premises specified in these orders the landlord may request the relisting of the application to determine the amount of the occupation fee owing. 6. The landlord's agent is to advise the tenant in writing by the delivery of a letter to the premises by 6:00 pm on 14-Feb-2019 of the orders made today. 7. The tenant, CANDY TOWERS … is to pay the landlord, AWABAKAL LOCAL ABORIGINAL LAND COUNCIL … the sum of $6,649.56 on or before 14-Mar-2019. Reasons: • rent arrears from 27/06/18 to 14/02/19 $6,649.56."
6. It will be observed that the rent arrears identified in the last line of those orders covered a period from about four months prior to the consent order of 25 October 2018 (and which were obviously the subject of the order for payment of rent arrears made that day) and a period of about four months after that order.
7. Despite those orders, Ms Towers continued to occupy the premises, she continued to pay rent, the respondent accepted her payments of rent, and the parties discussed the possibility of Ms Towers entering into a new residential tenancy agreement with the respondent.
8. Such discussions also touched on Ms Towers paying the outstanding arrears of rent referred to in the earlier orders of the Tribunal, with Ms Towers disputing that she owed those amounts and that those representing her when making the consent orders to which we have referred did not have her authority to consent to those orders.
9. On 1 December 2020, the respondent issued a termination notice and served it upon Ms Towers, alleging that rent had been paid up to 13 April 2020 but was otherwise in arrears. It appears that the respondent's rental ledger was updated as if the termination order [which had ended the tenancy pursuant to s 81(3) of the Residential Tenancies Act 2010 (NSW)] made on 14 February 2019 had not been made, and thus the running rent account balance appearing in the respondent's rental ledger as at the date of the 1 December 2020 termination notice incorporated arrears due under the tenancy agreement terminated by the Tribunal's order of 14 February 2019.
10. On 21 January 2021 the respondent commenced proceedings RT 21/02949 against the appellant in the Tribunal seeking orders for the termination of the tenancy based upon alleged non-payment of rent and the termination notice of 1 December 2020.
11. Those proceedings were heard and decided by the Tribunal on 13 July 2021. Ms Towers appeared for herself before the Tribunal.
12. At the end of that hearing the Tribunal made the following orders: "1. The Residential Tenancy Agreement is terminated in accordance with s 87 of the Residential Tenancies Act 2010 as tenant has breached the agreement by failing to pay rent in accordance with agreement. 2. The Residential Tenancy Agreement is terminated on 03-August-2021 and possession is to be given to the landlord on the date of termination. 3. The tenant shall pay the landlord a daily occupation fee at the rate of $28.57 per day from the day after the date of termination, namely 04-August-2021 until the date vacant possession is given to the landlord. 4. Within 60 days of the date for possession of the premises specified in these orders the landlord may request the relisting of the application to determine the amount of the occupation fee owing. 5. The tenant, CANDY TOWERS … is to pay the landlord, AWABAKAL LOCAL ABORIGINAL LAND COUNCIL … the sum of $5,498.13 immediately. Reasons: • Rent arrears owed from 23-December-2020 to 09-July-2021 in the sum of $5,498.13."

The Appeal

1. Ms Towers appealed from the orders of 13 July 2021 and by the time of the hearing of this appeal was represented by Legal Aid.
2. Her Notice of Appeal was filed about eight weeks out of time and requires an extension of time.
3. On her appeal Ms Towers contended that the Tribunal had made a jurisdictional error in terminating the tenancy on 13 July 2021 (and making the order for payment of arrears of rent) because that tenancy had already been terminated by the orders made in the earlier proceedings (RT 18/42877) on 14 February 2019. If that error exists, it raises a question of law in relation to which Ms Towers has a right of appeal.
4. She also contended on this appeal that the parties had entered into a new residential tenancy agreement (for the same premises), being partly express and partly implied, and partly oral and partly by conduct, which commenced on or about 11 March 2021 for $200 per week rent. She said that there were no rental arrears under this new tenancy (as she said was demonstrated by the respondent's rental ledger), and so the basis for the Tribunal's order terminating the tenancy (being arrears of rent) was incorrect and thus the order terminating the tenancy should be set aside.
5. Before turning to those matters, we wish to note the helpful and competent assistance of the parties' legal representatives on this appeal in preparing the material for the appeal, and for their written and oral submissions.

Jurisdictional Error

1. Given the respondent's application filed on 21 January 2021 sought the termination of a residential tenancy agreement under the Residential Tenancies Act 2010 (NSW), there needed to be such an agreement in existence for the Tribunal to have jurisdiction.
2. As Sackville AJA, with whom Leeming JA and Adamson J agreed, said in Navazi v New South Wales Land and Housing Corporation [2015] NSWCA 308 at [15], the distinction between jurisdictional error and an error within jurisdiction is notoriously difficult to identify with clarity and may be chimerical.
3. Nevertheless, had it been necessary to decide in that case (the appeal was disposed of on other grounds) his Honour said that the Court would have found the Tribunal had committed a jurisdictional error.
4. His Honour described the jurisdictional error in that case as follows (footnotes omitted): "[58] There may be a stronger argument that the Tribunal committed a jurisdictional error by failing to address whether it should make a termination order despite the defect in the Notice of Termination (even though it was not asked to do so). If the Notice of Termination was in fact defective because it substantially misstated the extent of rental arrears, the Tribunal could only make a termination order if it was satisfied of the matters specified in s 113. The failure to consider whether it was satisfied of those matters may have constituted a jurisdictional error. However, it is not necessary to resolve this question. [59] I think that the Tribunal made a jurisdictional error for a different reason. In Brennan v New South Wales Land and Housing Corporation (Brennan), Basten JA construed the predecessor to s 87(4)(b) of the Residential Tenancies Act as stating a jurisdictional fact that had to be established, namely the Tribunal's satisfaction that the tenant's breach of the residential tenancy agreement was such as to justify termination of the Lease. His Honour pointed out that a state of satisfaction may not be validly reached in law where the Tribunal is bound to take into account a factor but fails to do so. Equally, the requisite state of satisfaction cannot be reached if the Tribunal takes into account an extraneous or irrelevant consideration that it should not take into account. [60] In this case, the Tribunal was satisfied that the breach of the Lease was sufficient to justify termination on the basis that the arrears of rent totalled over $128,000. Although this appears to be a factual finding, it rested on an erroneous understanding of the legal effect of the Corporation's cancellation of the applicant's rental subsidy. The Tribunal's state of satisfaction as to the seriousness of the breach was based on an extraneous and legally flawed consideration. It therefore committed a jurisdictional error. That the Tribunal may well have reached the same state of satisfaction even it assessed the arrears at only $20,000 or thereabouts does not alter this conclusion."
5. In our view similar reasoning applies in this case.
6. It is apparent from the Tribunal's reasons that the residential tenancy agreement it was considering was that entered into by the parties on 29 April 2015. That is apparent from [3] of the Tribunal's reasons wherein it said: "The parties entered into a residential tenancy agreement on the 29.04.15. A copy of the agreement is before the Tribunal. The rent is $200 per week. As at the date of the hearing the rent was owed from the 23.12.20 in the sum of $5,498.13."
7. No other tenancy agreement is referred to in the Tribunal's reasons.
8. In the absence of the setting aside of Order 1 of the orders made on 14 February 2019, that tenancy had been terminated and was no longer in existence. Thus, the Tribunal had no jurisdiction to make another order terminating something which no longer existed, a point accepted by the respondent.
9. Equally, the Tribunal's order for the payment of arrears of rent should be set aside because the parties and the Tribunal wrongly considered that an order for arrears of rent made on 13 July 2021 would merely update the amount due pursuant to the order of 14 February 2019. This point was also accepted by the respondent.
10. This latter order was wrong because once the tenancy was terminated, and the order terminating the tenancy remained undisturbed, no rent which had accrued before the termination date was recoverable under whatever arrangement existed after the termination date absent some agreement for that to happen being entered into between the parties (and no party contended for such an agreement).
11. Once a contract (a residential tenancy agreement is a contract) is terminated, the parties are discharged from future performance of any obligations they had under that contract, and therefore Ms Towers had no legal obligation under that contract to pay rent (from the date of termination), albeit it remained her legal obligation to pay rent up to the date of termination - see Advanced National Services Pty Ltd v Daintree Contractors Pty Ltd [2019] NSWCA 270 per Gleeson JA, with whom White JA and Barrett AJA agreed, at [48].
12. What did remain, post-termination, was the obligation to pay the daily occupation fee ordered by the Tribunal, but that order was ignored by the parties and the Tribunal.
13. It follows that the termination order and the order for payment of arrears of rent should be set aside.
14. Given the remaining orders made by the Tribunal on that day depended on the two orders we have considered above for their existence, they are now otiose and should also be set aside.

A New Tenancy

1. On this appeal, Ms Towers also submitted that a new residential tenancy agreement had come into existence on or about 11 March 2021 for $200 per week rent, there were no arrears of rent under that tenancy and so the basis for the Tribunal's order terminating the tenancy was incorrect and thus the order terminating the tenancy should be set aside.
2. Putting aside the contention that acceptance of those submissions would add an additional basis for setting aside the termination order, the effect of accepting those submissions would involve making factual findings which would govern the parties' present and future legal relationship.
3. However, this point (new tenancy and no arrears of rent under that new tenancy) was not taken before the Tribunal.
4. Ms Towers submitted that the point was taken and drew our attention to parts of the transcript. Those parts to which our attention were drawn are set out below, with some additional lines of transcript which contain relevant material.
5. At T 35 the following exchange took place (Ms Glavocevic being the respondent's representative): "Member: - - - In February 2019, your tenancy was terminated. I don't know what happened. What happened after that termination? Was some money paid? How was it that - did you - what happened in relation to that? Ms Towers: I don't - I don't - I wasn't there when they did that. I don't - that just came in the mail. I don't know what happened. Member: Did you ever vacate the premises though? Ms Towers: No, never. Why? Why would I vacate - - - Member: Just one minute. Mr Myers, what did the landlord do after it got the notice of termination from - got the orders of termination from the tribunal in 2019? Ms Glavocevic: As per my understanding, the tenancy just continued after that, so it was not enforced. Member: But, clearly, the tenancy continued, Ms Glavocevic. Ms Glavocevic: Yes."
6. At T 37 the following exchange took place: "Member: There's a notice of termination issued in front of me - - - Mr Myers: Yes. Member: - - - in matter no. 18/42877 on 14 February. There is no correspondence I can see before the tribunal, and I might be wrong, but I can't see any correspondence. Yes, here we go. You were able to enter into a new lease. So even though the tenancy is terminated, the tenant says she will start paying $250 a week. I see. All right. So that's what happened. Ms Glavocevic: Okay. Member: So then you entered into a new agreement with her, did you? Mr Myers: Yes, just so we could get some sort of rent coming in to pay the costs, so - - - Member: All right. So Ms - - - Mr Myers: - - - rather than evict them, we would rather keep them paying rent to pay it off. Member: Yes. That's all right. So, Ms Towers - - - Ms Towers: Yes. Member: - - - your tenancy was - there is correspondence. Your tenancy was terminated in February 2019. You were on notice that you still had that debt and you said, "Yes, I will start paying back 250 per week starting from today." That was 8 March 2019."
7. As can be observed, the Tribunal referred to the tenancy as having been terminated by the Tribunal's orders, and did refer to a "new lease", but never made such a finding, did not appear to receive any submissions as to rental arrears in relation to the "new lease", and made no findings in its reasons as to any "new lease" (and whether there were any arrears of rent under that "new lease").
8. The respondent submitted on this appeal that no new tenancy had come into existence after 14 February 2019. It pointed to, for example, a contemporaneous email dated 7 August 2020 from Ms Towers to a representative of the respondent in which Ms Towers wrote: "I am emailing you today just to ask when could I get a new rental agreement could you please let me know ASAP thanks I have been waiting for a one a few years now."
9. This email is some evidence suggesting the parties had not entered into a new tenancy agreement.
10. In our view, based on the material and particularly the Tribunal's reasons and the transcript, Ms Towers did not take the point before the Tribunal that a new tenancy had come into existence and that she was not in arrears of rent under that new tenancy, or at least not squarely or clearly so. Neither did the Tribunal decide that issue which is suggestive that the Tribunal did not perceive that point as having been taken.
11. Therefore, in our view, Ms Towers seeks to raise that point for the first time on appeal. We would not allow her to do so because it is a point upon which the respondent could have called evidence (for example, the email from Ms Towers) referred to above.
12. The relevant principle was described by Mason P, with whom Gleeson CJ and Priestley JA agreed, in Multicon Engineering Pty Ltd v Federal Airports Corporation (1997) 47 NSWLR 631 at 645: "Since this is an appeal by way of re-hearing, the matter should be approached in accordance with the principles stated in cases such as Suttor v Gundowda Pty Ltd (1950) 81 CLR 418 at 438 and Coulton v Holcombe (at 7-9). A party seeking to advance for the first time on appeal a new ground not taken at trial will be precluded from doing so if the new ground could possibly have been met by calling evidence at the hearing or if, had the ground been raised below, the respondent might have conducted the case differently at trial."
13. Therefore, we reject the application to allow this point to be raised for the first time on this appeal.

An Extension of Time

1. Time to appeal should be extended given the jurisdictional error into which the Tribunal fell. The respondent, properly, did not submit otherwise.

Orders

1. We make the following orders: 1. Time to appeal is extended up to and including 21 September 2021. 2. Appeal upheld. 3. The orders made by the Tribunal on 13 July 2021 are set aside. 4. In lieu thereof, order that the respondent's application be dismissed. 5. The appellant's application for a stay of the Tribunal's orders made on 13 July 2021 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: 24 November 2021