Wells v Mottram

The Facts

1. The appellant, Mr Scott Wells, is the tenant and the respondent, Mr Clinton Mottram, is the landlord of premises in East Lismore. Mr Wells originally occupied the premises under a written residential tenancy agreement with Mr Mottram dated 23 October 2015. That agreement expired on 22 October 2016. After that time, Mr Wells's continued occupation of the premises would be under the periodic agreement that arises by operation of s 18 of the RT Act.
2. Under cover of a letter dated 19 September 2016, Ms Waugh, the landlord's agent, sent Mr Wells a notice headed "Notice of Termination by a Landlord". The covering letter relevantly contained the following: "Notice of Termination - 30 Days Residential Tenancy Agreement Ends We write to advise that your Residential Tenancy Agreement ending on 22nd October 2016 will not be renewed due to the following clauses: 15.2 The tenant agrees to not cause or permit a nuisance. 15.3 The tenant agrees to not interfere or cause or permit interference, with the reasonable peace, comfort privacy of neighbours. The landlord has requested vacant possession of the premises on or before 22nd October 2016." (underlining and emphasis in original)
3. Ms Waugh signed the letter in her capacity as principal of the landlord's real estate agency. The notice included with that letter was only partially complete. The sections that were completed included: 1. the name of the tenant; 2. the tenant's address; 3. the location of the residential premises the subject of the notice; 4. the name of the landlord's agent; 5. the date "22/10/2016" in section E, which is labelled "TERMINATION OF FIXED TERM AGREEMENT (Section 84)"; 6. the date of the notice, which was "20/09/2016"; and 7. the section headed "ENDORESEMENT AS TO SERVICE [To be completed on Agent's copy and signed by the person who served this notice]" except for the fact that there was no signature as provided for in this section of the form.
4. In addition to the absence of a signature in the section headed "ENDORESEMENT AS TO SERVICE [To be completed on Agent's copy and signed by the person who served this notice]", the following parts of the notice were not completed as follows: 1. The landlord's name was left blank; 2. Sections A, B, C, D and F which relate to the grounds for termination available under ss 86, 87, 88 & 89, 85 and 109 & 108 respectively were either blank or left undeleted. In this respect, it can be noted that after section F there is an instruction in a text box as follows "COMPLETE ONLY THE APPLICABLE GROUND AND DELETE ALL OTHERS"; 3. The space next to the words "SIGNATURE OF LANDLORD/LANDLORD'S AGENT" did not contain any signature; 4. The section headed "CONFIRMATION OF RECEIPT [Complete on the Agent's copy when receipt by the tenant is confirmed" was blank.
5. On 28 October 2016, the landlord lodged an application with the Consumer and Commercial Division of the Tribunal in relation to this matter. The application contained the following: "Order/s Sought Section 87 - A termination order where the tenant has breached the residential tenancy agreement. Reasons for the Order/s 15.2 The tenant agrees not to cause or permit a nuisance. 15.3 The tenant agrees to not interfere or cause or permit interference with the reasonable peace, comfort or privacy of neighbours. The reasons for requesting the orders are the tenant was given the appropriate termination notice to vacate. That date has passed and tenant has made no moves to vacate the property. Instead, the tenant has decided to make more noise and continually intimidate the neighbours around them making them feel unsafe."
6. The hearing of the landlord's application took place on 16 November 2016 in Lismore. At the hearing, the Tribunal received evidence from the landlord's agent which included not only the residential tenancy agreement and the termination notice but also documents recording complaints about the tenant's behaviour and a copy of photographs and comments from his Facebook page. Mr Wells's father also gave evidence on behalf of his son concerning his son's mental illness, the length of the tenancy, the difficulty his son faced finding alternative accommodation and his opinion as to why the problem of his son creating noise had recently arisen.
7. It also appears that, although the application filed by the landlord sought a termination order under s 87, at the hearing the landlord's agent sought a termination order under s 84. Mr Hollingsworth, on behalf of Mr Wells, contended that no amendment of the application to reflect this change was ever sought or ordered. The landlord's agent, Ms Waugh, did not suggest on the appeal, and nothing was brought to our attention that would indicate, that the application was so amended.
8. On the day of the hearing, the Tribunal below made orders as follows: "1. The Residential Tenancy Agreement is terminated in accordance with section 84 as the landlord has served a termination notice for termination at the end of the fixed term. 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 December 2016. 4. The tenant shall pay the landlord a daily occupation fee at the rate of $34.28 per day from the date of termination, namely 17 November 2016 until the date vacant possession is given to the landlord. 5. Within 60 days of the date of possession of the premises specified in these orders, the landlord may request the relisting of the matter to determine the amount of the occupation fee."
9. At the request of the tenant, under s 62(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act), the Tribunal provided written reasons for its decision on 8 December 2016.

The Appeal

1. On 19 December 2016, Mr Wells lodged his notice of appeal. This was within 14 days of the written reasons being provided and it was not in dispute that the appeal was within time under r 25(4)(b) of the Civil and Administrative Tribunal Rules 2014.
2. Mr Mottram filed a reply to appeal on 21 December 2016.
3. By directions made by the Appeal Panel on 21 December 2016, Mr Wells was permitted to file an amended notice of appeal, which was filed on 9 January 2017.
4. The decision of Tribunal at first instance was a decision made in proceedings for a general decision and thus was an internally appealable decision under s 32 of the NCAT Act. Mr Wells was entitled to appeal as of right against this decision on a question of law and by leave on any other ground, under s 80(1) and (2) of the NCAT Act.

Grounds of Appeal

1. The grounds of appeal stated in the amended notice of appeal were: "Error at law to hear the matter under section 84 when an application had been made under section 87 only. Procedural error in that no order to amend the application was requested or made and yet the termination proceeded to be heard and decided under s 84. Decision unfair & inequitable in that the termination notice consisted of two pages, the first page clearly stating it was issued due to breaches of clauses of the tenancy agreement. Decision unfair and inequitable in that the tribunal did not facilitate resolution of the real issues between the parties in a just manner as stipulated in s 36(1) of the New South Wales Civil and Administrative Tribunal Act 2013 and the NCAT Rules. The Tenant suffers an injustice in that he is unable to defend the clauses he had alleged to have breached and tenancy agreement to which he feels he has [a] substantive case in defence."
2. Mr Wells's position was further explained in section 6C(i) of the amended notice of appeal as follows:
3. "The tenant had reasonably determined that the case he had to defend was related to allegations of breach and that he [was] only served a termination notice due to these alleged breaches. . . .
4. The tenant did not get to defend or to seek to resolve the real issues between himself and the landlord because the matter was not heard in accordance with the application under s 87.
5. The tenant was disadvantaged in that he lost his right to answer the case her reasonably understood he had to address because the substantive issues were overlooked in the proceedings."
6. In appendix E attached to the amended notice of appeal, Mr Wells indicated that he now sought the following orders on appeal: "• An order that the Existing orders be set aside AND SUBSTITUTED BY • An order that the tenant comply with the obligations from section 51 of the [RT Act] and • An order that the Landlord has leave, for three months, to relist the matter of the tenant breaches the above order (assuming that the breaches alleged are proven to the satisfaction of the Tribunal to be actual breaches)."
7. The submissions further contended that: 1. "… the termination notice was defective by quoting section 84"; 2. "Section 82(1)(c) [of the RT Act] should apply because the notice was served as a two page document to which the first page clarified the grounds and the nature of the case that was to be met"; and 3. "no order [was] made under section 53(1) allowing an amendment under the [NCAT Act]".

Landlord's Reply

1. Mr Mottram's reply included the following: "The tenant was to be out of the premises under section 84. The tenant has made no effort to find other accommodation. He had until 14th December 2016. [He] has had sufficient notice."
2. On 22 December 2016, Ms Waugh, on behalf of Mr Mottram, also filed a bundle of documents, described as "letters of complaint" about the tenant's conduct. The landlord submitted in effect that these letters demonstrated that the tenant was abusive and intimidating, and that the other tenants in the complex were frightened of him.

Frist Two Grounds of Appeal

1. Given the conclusion that we reached on the first two grounds of appeal, it is unnecessary for us to consider in these reasons for decision the other grounds of appeal and whether to grant leave to appeal.
2. The first two grounds of appeal raised the question of whether the Tribunal below erred in law by dealing with the matter under s 84 of the RT Act when the application was expressly and only made under s 87 and had not been amended under s 53 of the NCAT Act.
3. Section 87 of the RT Act provides: "87 Breach of agreement (1) A landlord may give a termination notice on the ground that the tenant has breached the residential tenancy agreement. (2) The termination notice must specify a termination date that is not earlier than 14 days after the day on which the notice is given. (3) The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement. (4) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that: (a) the tenant has breached the residential tenancy agreement, and (b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement, and (c) the termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice. (5) In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the breach, (b) any previous breaches, (c) any steps taken by the tenant to remedy the breach, (d) any steps taken by the landlord about the breach, (e) the previous history of the tenancy. (6) The Tribunal may refuse to make a termination order if it is satisfied that the tenant has remedied the breach."
4. Section 84 is in the following terms: "84 End of residential tenancy agreement at end of fixed term tenancy (1) A landlord may, at any time before the end of the fixed term of a fixed term agreement, give a termination notice for the agreement that is to take effect on or after the end of the fixed term. (2) The termination notice must specify a termination date that is on or after the end of the fixed term and not earlier than 30 days after the day on which the notice is given. (3) The Tribunal must, on application by a landlord, make a termination order if it is satisfied that a termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice. (4) This section does not apply to a residential tenancy agreement if the tenant has been in continual possession of the same residential premises for a period of 20 years or more and the fixed term of the original fixed term agreement has ended."
5. The two provisions are clearly different. Section 87 depends on there being a breach by the tenant of the residential tenancy agreement and gives the Tribunal a discretion whether or not to terminate, if a breach is established, see s 87(4) and (5). By way of contrast, under s 84, where: 1. there is a fixed term agreement; 2. the notice requirements have been complied with; 3. the tenant is not a long term resident; and 4. the tenant has not vacated the premises as required by the notice, the Tribunal has no discretion and must make a termination order.
6. There is no doubt in the present case that the application lodged on Mr Mottram's behalf was an application for an order under s 87. The application form says this expressly and the "[r]easons for the order/s" given in the application are consistent with the application being made under s 87. There is no mention of s 84 or anything else that would indicate that the application was made under s 84.
7. One of the purposes of application forms lodged with the Tribunal is to inform the respondents to the applications of the case that is being made against them. In the present case, the application form informed Mr Wells that he had to meet a case that he had breached cll 15.2 and 15.3 of the residential tenancy agreement and Mr Mottram was asking the Tribunal to terminate the agreement because of those breaches.
8. It is true that the Tribunal is required under s 38(4) of the NCAT Act "to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms." This does not, however, permit the Tribunal to decide a matter on a basis different from that disclosed in the application without first taking appropriate steps such as: 1. informing the respondent that the Tribunal intends to do so; 2. giving the respondent a proper opportunity to consider whether to oppose the Tribunal taking that course; 3. adequately disclosing the grounds or bases upon which it proposes to decide the matter, for example, by requiring the applicant to give to the respondent an amended application setting out the new grounds or basis of the application; 4. allowing the respondent a proper opportunity to consider the new grounds or bases and any evidence upon which the applicant intends to rely in support of those new grounds or bases; 5. allowing the respondent a proper opportunity to prepare, lead any evidence and make any submissions which the respondent considers appropriate to meet the new grounds or bases of application.
9. This follows not only from general conceptions of justice and a fair hearing but also from the specific requirements of the NCAT Act: 1. in s 38(2), that the Tribunal apply the rules of natural justice, even if it is not bound by the rules of evidence; 2. in s 38(5)(a) and (c), that the Tribunal is to take such measures as are reasonably necessary to ensure that: 1. the parties to the proceedings before it understand the nature of the proceedings: and 2. the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings.
10. There may be cases where appropriate notice and opportunities to respond can be given effectively during a hearing without the need for any, or a lengthy, adjournment. Other cases may require the matter to be adjourned to a later date for a further hearing. It will depend upon the nature of the application, the nature and extent of the evidence, whether the parties are represented and other relevant circumstances of the case.
11. In the present case, it does not appear to us that Mr Wells was given proper notice that the Tribunal proposed to decide the matter under s 84 and not s 87. As noted above, Mr Hollingsworth, who represented Mr Wells, put his submissions on the basis that no order amending the application was made and Ms Waugh did not contend to the contrary. Nothing was brought to our attention which would indicate that the Tribunal made an order, under s 53 of the NCAT Act, amending the application. Section 53 of the NCAT Act provides: 53 Amendments and irregularities (1) The Tribunal may, in any proceedings, make any amendments to any document (for example, an application or appeal) filed in connection with the proceedings that the Tribunal considers to be necessary in the interests of justice. (2) Any such amendment may be made: (a) at any stage of the proceedings, and (b) on such terms as the Tribunal thinks fit, but may only be made after giving notice to the party to whom the amendment relates. (3) If a provision of this Act or the procedural rules is not complied with in relation to the commencement or conduct of proceedings, the failure to comply is to be treated as an irregularity and does not nullify the proceedings or any decision in the proceedings unless the Tribunal determines otherwise. (4) The Tribunal may, however, in dealing with any such irregularity, wholly or partly set aside the proceedings or a decision in the proceedings.
12. It is important to note that an amendment may only be made under s 53 "after giving notice to the party to whom the amendment relates", s 53(2).
13. The Tribunal's reasons state (at [3]) that, at the hearing, the landlord sought a termination order under s 84 of the RT Act. As the Tribunal also noted at [3], the application indicated that an order of termination was sought under s 87. In addition, the Tribunal received evidence and made findings about whether cll 15.2 and 15.3, and s 51 of the RT Act, had been breached and about matters going to the exercise of discretion under s 87 (see [6] - [10]). It thus appears to us that the hearing was conducted, at least in part, as if the application was still being made under s 87.
14. The reasons make it clear, however, that the decision to terminate was made under s 84 (see the reasons at [11] to [14] and [16]). In doing so, it appears that the Tribunal overlooked the need to amend the application so that it was made under s 84 and not 87. If this had been done, the Tribunal would have been required to comply with s 53 of the NCAT Act and not make any amendment until after giving notice to Mr Wells of what was proposed. On the appeal, it was not suggested that such notice had been given to Mr Wells or that the absence of an order amending the application was a mere irregularity that could be overlooked.
15. We are more than satisfied that Mr Wells was prejudiced by the approach taken by the Tribunal on at least two bases. First, if the Tribunal had proceeded under s 87 instead of s 84, the termination order would not have been made. This was so held by the Tribunal below at [16] of its reasons for decision.
16. Secondly, if Mr Wells had received proper notice that the Tribunal was proposing to deal with the matter under s 84 of the RT Act, he could have argued that the notice of termination was defective as a notice for the purposes of s 84 in the light of the deficiencies which we have referred to above. The defects were not limited to the fact that the notice was not signed by the landlord's agent. The difficulty is that Mr Wells does not appear to have been given the opportunity to consider and make submissions about whether the other deficiencies in the notice had the consequence that the notice did not comply with the requirements of s 84 and other relevant requirements. It is not the case that the deficiencies were so minor or inconsequential that there was no real argument as to the validity of the notice.
17. For these reasons, in our view, the Tribunal below failed to comply with the rules of natural justice and the requirements of ss 38(5)(a) and (c) by dealing with the matter under s 84 of the RT Act when the application was made under s 87 and was not amended in accordance with s 53 of the NCAT Act. This was an error of law. Accordingly, we allowed the appeal, on the first and second grounds relied upon by Mr Wells. In the circumstances, we were also of the opinion that it was appropriate to set aside the orders made by the Tribunal on 16 November 2016.

Further Disposition of the Matter

1. Having decided to allow the appeal and set aside the Tribunal's orders, we were also required to address whether to dispose of the matter ourselves or remit it to the Consumer and Commercial Division.
2. In the original notice of appeal, Mr Wells had sought that, if the appeal was allowed and the orders were set aside, the matter should be remitted to the Consumer and Commercial Division for rehearing. As we noted above, however, in the attachment to the amended grounds of appeal, Mr Wells at the hearing sought that we substitute orders for the order we set aside. Mr Wells sought substitute orders to the effect that: 1. Mr Wells is required to comply with cll 15.2 and 15.3 of the residential tenancy agreement and s 51(c) and (d) of the RT Act; 2. Mr Mottram should be able to relist the matter within 3 months if Mr Wells fails to comply with those obligations.
3. In support of this approach, it was submitted on Mr Wells's behalf that: "Now that the Written reasons have been received it is clear that the Member would have been compelled to make orders of the above nature if he had heard the Landlord's application under section 87 of the [RT Act]."
4. This, as we understood it, was a reference to [16] of the Tribunal's written reasons for decision which was as follows: "If I am wrong in my conclusion that a termination order should be made under section 84, and I should have dealt with the matter under section 87 on the grounds of a breach by the tenant of section 51 of the Act and the corresponding terms of the lease, I would add that I would not have made a termination order. Instead, I would have made a specific performance order requiring the tenant to comply with the lease and section 51, and granted the landlord leave to relist the application if the tenant breached the order so the issue of termination could then be decided. The reasons for such an order in lieu of termination would have ben that, given the tenant's need to be able to continue to reside in the premises, his compliance with the other terms of the lease, and the existence of support in the form of his father and disability advocate, it is likely the need to curtail the noise would be sufficiently pressed upon him such that he would do so, and termination of the tenancy agreement would not be necessary."
5. At the hearing, the landlord's position was, in effect, that if it came to a choice between remitting the matter or having it resolved by way of the substitute orders sought by Mr Wells, the landlord would support the Appeal Panel making those substitute orders. This view was expressed on the basis that the landlord was not precluded by those orders from serving a termination notice under s 85 in respect of the tenancy at any time.
6. In these circumstances, we accepted that the appropriate course was for us to make the substitute orders sought by Mr Wells.
7. If the substitute orders were to be made under s 87, it was essential that the requirement in s 87(4)(c) was satisfied. Given the deficiencies in the notice of termination, which we have identified above, we enquired of the parties whether they both accepted that the termination notice relied upon by the landlord was a valid notice for the purposes of s 87. Both parties indicated that there was no dispute as to the validity of the notice, for the purpose of our making the substitute orders.
8. Accordingly, the Appeal Panel formally noted that there was no dispute between the parties that the termination notice dated 20 September 2016, read together with the letter of 19 September 2016, constituted a valid termination notice for the purposes of s 87 of the RT Act.
9. Conclusion
10. For these reasons and in these circumstances, on 9 February 2016, we made the following orders: 1. The Amended Notice of Appeal lodged on 9 January 2017 stand as the Notice of Appeal in this matter. 2. The appeal is allowed. 3. Orders 1, 2, 3, 4 and 5 made on 16 November 2016 are set aside. 4. In lieu of the orders made on 16 November 2016, the tenant, Mr Scott Wells, is required to comply with cll 15.2 and 15.3 of the residential tenancy agreement and with ss 51(1)(b) and (c) of the Residential Tenancies Act 2010 (NSW). 5. If the above Order 4 is not complied with, the landlord, Mr Clinton Mottram, may, on or before 9 May 2017, seek the relisting of the application for termination, under s 87 of the Residential Tenancies Act 2010 (NSW), of the residential tenancy agreement.
11. At that time, we also made a formal notation in the following terms: The Appeal Panel notes that there is no dispute between the parties that the termination notice dated 20 September 2016, read together with the letter of 19 September 2016, constitutes a valid termination notice for the purposes of s 87 of the Residential Tenancies Act 2010. 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

Amendments 28 February 2017 - Date of orders amended to 9 February 2017 from 24 February 2017. 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: 28 February 2017