Yonan v NSW Land and Housing Corporation

NCAT Appeal Panel|2017-02-07

Background

This appeal arises out of a decision made in the Consumer and Commercial Division of the Tribunal on 7 October 2016. The appellant is a tenant under a residential tenancy agreement and the respondent to the appeal is the landlord. We shall refer to the appellant as the tenant and to the respondent as the landlord.
The appeal was filed with the Tribunal on 19 October 2016 and therefore was filed within the time required by the Civil and Administrative Tribunal Regulation 2014 (the Regulation).
The decision which is the subject of this appeal (the Decision) made orders to the following effect: 1. The residential tenancy agreement is terminated in accordance with s 87 of the Residential Tenancies Act 2010 (RT Act) as the tenant has breached the agreement by failure to pay rent; 2. The Tribunal is satisfied in accordance with s 89(5) that the tenant has frequently failed to pay rent owing for the residential premises; 3. The residential tenancy agreement is terminated immediately and possession is to be given to the landlord on the date of termination (order 3); 4. The order for possession is suspended until 21 October 2016 (order 4); and 5. The tenant shall pay the landlord a daily occupation fee at the rate of $61.43 per day from 8 October 2016 until the date vacant possession is given to the landlord (order 5).
In addition, an order was made to the effect that the tenant must pay the landlord the sum of $119.30 for rent owed for the period from 6 October to 7 October 2016 (order 7).
The Decision contained a statement of reasons which may be summarised in these terms: 1. The residential tenancy agreement, the notice of termination and rent ledger were tendered. The particulars of the agreement, the notice, rent owing as at the date of the hearing, and the date the rent was last paid were set out in the "Hearing Notes" completed by the applicant's representative who gave evidence that particulars in the "Hearing Notes" were true and correct; 2. The Tribunal found that there was a residential tenancy agreement and the Tribunal had jurisdiction to hear and determine the application for termination; 3. The Tribunal found that the notice of termination complied with the legislation and had been served in compliance with the requirements of the legislation; 4. In par h the Tribunal recorded the finding that the tenant had "persistently breached the terms of the residential tenancy agreement in relation to the payment of rent. The Tribunal examined the rent ledger and is satisfied that the Respondent has been continuously in arrears since 28 May 2016, that is, a period of four months. Since the start of 2016, the rent has been in arrears on numerous occasions"; 5. In par i the Tribunal recorded its finding that the landlord had requested payment of arrears of rent and was a social housing provider. The Tribunal also recorded that there is a "a high demand for premises such as the one the subject of this application"; 6. In par j the Tribunal stated the following: Nothing is put as to the tenant's circumstances which provide a reasonable explanation for not paying the rent. Notwithstanding that the Respondent gave evidence that: his income is irregular, he has had health issues, his 36 year old son who lives at the Premises also has health issues, almost no maintenance has been done by the Applicant during his tenancy; the subsidised rent has been in arrears as set out in paragraph (h) above 1. In par k the Tribunal found that the breach, being the frequent failure to pay rent, in the circumstances of the case, is such as to justify a termination of the tenancy; 2. In par l the Tribunal stated the following: The Tribunal has considered the matters set out in section 154E of the Act and is satisfied that, a termination order should be made having regard to the poor rental history since February 2014 1. In par m the Tribunal recorded the finding that "having regard to the rent ledger tendered by the Applicant, is satisfied in accordance with subsection 89(5) of the Act that the Respondent has frequently failed to pay rent owing for the Premises on time".

Stay

Following lodgement of the appeal, the Tribunal considered an application by the tenant to stay the operation of the orders. The Tribunal made an order staying the operation of orders 3 and 4 conditional upon the tenant complying with orders 5 and 7, pending the outcome of the appeal.

Notice of Appeal

The tenant's grounds of appeal may be summarised in the following terms: 1. The Member erred in law by not taking into account s 87(5) of the RT Act in considering the circumstances of the case. There was no evidence recorded or discussion within the reasons as to the steps that either the landlord or tenant had taken to remedy the breach; 2. There was no evidence offered as to whether the landlord had offered any reasonable arrangements for the tenant to pay off arrears "of which the tenant would have been compelled to engage in under s 140 of the RT Act". This was a failure to take into account a relevant consideration; 3. The Member noted in par j of the reasons that "nothing" had been offered from the tenant to provide a reasonable excuse for his poor rental history. The reasons then go on to list a series of issues which could have had a serious impact on the tenant's ability to pay rent on time, being irregular income and health issues. This constituted a failure to take into account a relevant consideration; 4. The Member erred in law when considering the additional matters listed in s 154E of the RT Act. Par l of the reasons indicates that the Member only appears to consider the poor rental history since February 2014. Section 145E states that the Tribunal must have regard to the following and therefore the Member should have considered the following: 1. The effect on neighbouring residents or other persons; 2. The likelihood that neighbouring residents or other persons will suffer serious adverse effects in the future if the tenancy is not terminated; 3. The landlord's responsibilities to its other tenants; 4. The history of the current tenancy and any prior social housing tenancies; and 5. Whether the tenant, wilfully or otherwise, is or has been in breach of an order of the Tribunal. 1. Further to the above ground the tenant submitted that there was no evidence concerning the impact of this tenancy on neighbours. There was no evidence or discussion in the reasons of any impact on the landlord's other tenants or if the tenant is or has ever been in breach of a Tribunal order. The only consideration taken into account by the Member with respect to s 154E appears to be the rental history from the ledger; 2. The tenant suffered a substantial miscarriage of justice because the landlord's case did not meet the threshold of evidence required to achieve a successful termination. The Member did not take into consideration the effect the tenancy has had on its neighbours in both the past and possibly the future. Nor did the Member consider any steps taken by the landlord or tenant to remedy the breach; 3. The tenant's irregularity of income, health situation and impact on ability to work go substantially towards explaining how the tenant was in arrears. However, as the amount owing at the time of the hearing was two days rent, that evidence shows that the tenant had taken steps to remedy the breach since the termination notice. This fact was not taken into consideration; 4. The tenant suffered a substantial miscarriage of justice because no evidence was offered that there has ever been any other breach of the tenancy other than rental arrears noted on the ledger. The tenant was a good tenant, causing no issues other than minor rental arrears due to irregular work and health problems; and 5. The tenant suffered a substantial miscarriage of justice because there was no evidence that the landlord had engaged in any steps to prevent the rental arrears from continuing or reoccurring, despite having s 140 of the RT Act at their disposal.

Reply to Appeal

The landlord's Reply to Appeal may be summarised in these terms: 1. For the purposes of s 87(4)(b) of the RT Act the tenant's breach of the residential tenancy agreement is sufficient to justify the termination of the agreement when the nature of the breach, the previous breaches, the steps taken by the tenant to remedy the breach, the steps taken by the landlord about the breach and the previous history of the tenancy are considered; 2. There was no failure to take into account a relevant consideration. The matters set out in s 87(5) are not mandatory considerations. In any event, it is apparent from the reasons that all relevant considerations were considered by the Tribunal in its exercise of its discretion under s 87; 3. There is sufficient and adequate detail in the Tribunal's reasons especially in the statement at par l that the Tribunal has considered the matters set out in s 154E to be satisfied that the Tribunal asked the right questions and applied the correct test when determining whether to exercise its discretion to terminate the residential tenancy agreement; 4. A mere failure to expressly refer to or deal with each of the matters listed in s 154E does not give rise to an inference that such failure is an error or law because the facts and circumstances of the breach relied on for the termination order (i.e. frequent non-payment of rent) do not engage with many of the s 154E(1) matters; 5. The landlord disputes that the tenant has suffered a substantial miscarriage of justice and submits that leave to appeal on one of the grounds set out in cl 12 of Sch 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) should not be granted; 6. The landlord submitted that the appeal should be dismissed but if not dismissed then the appropriate order would be an order to remit the proceedings back to the Consumer and Commercial Division for a rehearing.

Submissions

The following paragraphs summarise the effect of the tenant's and the landlord's written and oral submissions.

Tenant's Written and Oral Submissions

The tenant's submissions centre around ss 87 and 154E of the RT Act and for convenience the provisions of those sections are set out below: 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. 154E Exercise of discretion to make termination order (1) In considering whether to make a termination order for a social housing tenancy agreement, the Tribunal must have regard to the following: (a) the effect the tenancy has had on neighbouring residents or other persons, (b) the likelihood that neighbouring residents or other persons will suffer serious adverse effects in the future if the tenancy is not terminated, (c) the landlord's responsibility to its other tenants, (d) the history of the current tenancy and any prior tenancy arising under a social housing tenancy agreement with the same or a different landlord, (e) whether the tenant, wilfully or otherwise, is or has been in breach of an order of the Tribunal. (2) This section does not limit any other matter that may be considered by the Tribunal under this Act.
The tenant does not dispute that a valid notice of termination was served by the landlord and that there were still rental arrears owing as at the date of the hearing.
The tenant submitted that s 87(4) of the RT Act conveys a discretionary power on the Tribunal, provided certain conditions are met. By the use of the word "may" in that subsection the Tribunal has the power, but it not obliged to, terminate a tenancy if the conditions are met. The preconditions to enliven the discretionary power are that the tenant has breached the residential tenancy agreement (s 87(4)(a)) and that the breach is, in the circumstances of the case, sufficient to justify termination (s 87(4)(b)), and that the notice of termination was given in accordance with the section, and the tenant has not vacated the premises as required by the notice (s 87(4)(c)).
Subsections (a) and (c) are not in dispute in this matter. However, subsection (b) is disputed.
Section 87(4)(b) requires the Tribunal to examine the breach in the light of the circumstances of the case and determine if the breach is sufficient. Section 87(5) addresses how to assess the circumstances of the case. In the ordinary course the law requires the Tribunal to make findings in accordance with s 87(4) and to consider the matters referred to in ss 87(5) and (6) (see Roydon Cooke v NSW Land and Housing Corporation [2015] NSWCATAP 126 at [12]).
The tenant submitted that the Member has taken into consideration the "oral and physical evidence" put forward by the landlord's agent as determinative considerations - see par i of the reasons. However, some of the evidence presented by the landlord was "oral and unsubstantiated by any other form of evidence". The tenant submitted that the rental arrears were "hereditary" and go back beyond the statement presented to the Member. The tenant further submitted that the landlord's agent gave evidence in circumstances where the agent was not sworn in for this matter and nor was there a reminder by the Member to the agent that she was still under oath (having been sworn in in an earlier matter before the same Member).
The tenant submitted that the tenant's oral evidence was given very little weight. In summary, that evidence was to the effect that the tenant had had two accidents and that had affected his ability to work, that his wife had died a couple of years ago, that he has resided in the property for 20 years and has only had problems since the accidents approximately 1.5 to 2 years ago, that he lives with his adult son who is ill and on a pension and that he works for himself for clients who do not always pay on time. The tenant's submissions included other factual matters concerning the tenant's circumstances.
The tenant submitted that the Member had erred by not taking into consideration the tenant's circumstances described above or otherwise referred to above earlier in these reasons.
The tenant submitted that the Member erred by providing a "lack of reasons as to why such a substantial amount of evidence that would directly impact upon the tenant's ability to pay rent was described simply as: "Nothing is put as to the tenant's circumstances which would provide a reasonable explanation for not paying the rent"".
The tenant submitted that s 154E mandates the requirement for the Tribunal to take into account the matters listed in subsections (a) to (e) in that section. The tenant submits that there was no evidence put forward to show that the tenant has affected neighbouring residents or other persons. No evidence of any impacts by the tenant were put forward by the landlord or neighbours or other persons.
The tenant submitted that the Member erred in assessing s 154E as no evidence was presented on the mandatory considerations and the Member did not make enquiries into the mandatory subsections. The Member must enquire into and consider each of the mandatory requirements in s 154E. This, the Member failed to do.
The tenant submitted that the Member erred by not taking into account, as a whole, all of the circumstances laid out by the tenant described or referred to above. Thus the Decision was against the weight of evidence. Not taking into consideration the effects on the neighbours as required under s 154E in making a decision against the weight of evidence has led to a substantial miscarriage of justice.
At the hearing the tenant's representative informed us that the tenant had now caught up with the arrears and had been paying the occupation fee as required by the current order. We were also informed that the tenant did not dispute the findings in par h of the Decision, namely that the tenant had been continuously in arrears since 28 May 2016 and in arrears on numerous occasions since the start of 2016.

Landlord's Written and Oral Submissions

The landlord submitted that the Tribunal had not made any error of law and that it had regard to all mandatory considerations. The reasons were adequate. Leave to appeal should be refused and the appeal dismissed.
The landlord generally agreed with tenant's summary of the legislative scheme of the RT Act. We were provided with a transcript of the hearing and the parties made reference to it. The landlord submitted that the Decision reveals that the Member considered the tenant's frequent failure to pay rent and therefore considered the matter referred to in s 87(4)(b) of the RT Act. The Tribunal's discretion under s 87(4)(b) is broad and includes the factors set out in 87(5) if the Tribunal considers them to be relevant. The submissions of parties may influence what are mandatory considerations (see Collins v Urban [2014] NSWCATAP 17 at [29]).
The Tribunal reasons and the transcript establish that all of the matters listed in s 87(5) were considered namely: 1. The nature of the breach - the frequent failure to pay rent on time; 2. Any previous breaches - the Tribunal examined the rent ledger and was satisfied that there had been previous rent arrears on numerous occasions; 3. Any steps taken by the tenant to remedy the breach - the Tribunal noted the date that the rent was last paid on 6 October 2016 and on the date of hearing the rent was two days in arrears; 4. Any steps taken by the landlord about the breach - the Tribunal asked the landlord's representative as to whether the parties had entered into an agreed repayment plan and the answer to that question was in the negative; and 5. The previous history of the tenancy - the tenant had been in the premises with members of his family for 20 years. There was a poor rental history since February 2014.
The landlord referred to the transcript in support of the submission that the tenant had given evidence as to circumstances which might weigh against a termination order being made. It is apparent from par j of the reasons that the Tribunal had regard to the tenant's evidence and submissions.
The landlord submitted that the Decision contained adequate reasons in that the Decision complies with s 62(3) of the NCAT Act. In summary that section requires the reasons to set out: 1. The findings on material question of facts (here the frequent failure to pay rent was such as to justify termination), referring to the evidence or other material on which that finding was based; 2. The Tribunal's understanding of applicable law either by express reference to or paraphrasing the provisions of s 87 of the RT Act; and 3. Albeit, in a brief way, the reasoning process that lead to the Tribunal's conclusion.
The landlord submitted that the authorities indicate that a decision maker is not required to address and reconcile every contradiction or inconsistency in the evidence or to give lengthy or elaborate reasons: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at [280] per McHugh JA.
The landlord submitted that the Decision contained adequate reasons having regard to the guidance provided by an Appeal Panel in Collins and in particular to the Tribunal's requirements to facilitate the resolution of issues between parties in such a way that the costs to the parties and the Tribunal is proportionate to the importance and complexity of the subject matter of the proceedings.
The landlord submitted that any contention by the tenant that the Tribunal's decision was manifestly unreasonable or that no weight should have given to the landlord's evidence on the alleged basis that the landlord's evidence was "unsworn" should be rejected. There was evidence that the landlord's representative had been sworn in. The landlord submits that the tenant's real complaint is that the tenant regards the Tribunal to have given more weight to the landlord's evidence than the tenant's evidence. This does not constitute an error of law, but rather is directed at the merits of the Tribunal's decision. Accordingly, the tenant's complaint may only be considered by reference to the provisions of cl 12 of Sch 4 of the NCAT Act. The decision in Collins describes the requirements which must be met for an appeal to be successful if it is brought relying upon the provisions of cl 12.
The landlord submitted that the tenant did not claim that the evidence of the circumstances in its totality preponderates so strongly against a termination order. The landlord's submissions refer to evidence which was before the Tribunal which supported the granting of a termination order.
The landlord submitted that the Decision discloses in sufficient detail that the Tribunal had regard to the considerations set out in s 154E. It would be a mistake to conclude from the failure to refer to each subsection of s 154E(1) that the Tribunal Member did not take into account all of the relevant subsections: Steed v Minister for Immigration and Ethnic Affairs (1981) 37 ALR 620 at [62, 30].
Further, in par l of the reasons the Tribunal stated that it was satisfied that a termination order should be made having regard to the poor rental history since February 2014. This statement, it is submitted, covers matters under both subsections (d) and (e) of s 154E(1). In addition, the Decision expressly refers to consideration of matters that fall under subsections (a) and (c) of section 154E namely: 1. The reference to the tenant's son; and 2. The reference to the landlord being a social housing provider and that there is a high demand for premises (referable to s 154E(1)(c)).
The only matter in s 154E(1) not expressly dealt with in the Decision is the subject matter referred to in subsection (b) (i.e. the likelihood that neighbouring residents will suffer serious adverse effects if the tenancy is not terminated) and this was not a matter that warranted specific comment because of the nature of the breach and the lack of contested evidence and/or arguments by either party relying on this factor.
The requirement for the Tribunal to have regard to the matters set out in s 154E(1) does not require the Tribunal to enquire into and consider each of those matters as contended for by the tenant. The Tribunal in fact dealt with matters that had any weight, significance or relevance.
The landlord's alternative submission was that, in the event that the Appeal Panel were to hold that the Tribunal erred in not having regard to the matter set out in s 154E(1)(b), the Decision should not be set aside as such error was not material in the sense that it might have or may have made a difference: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at [353].
Finally, the landlord submitted that the tenant had not satisfied the requirements necessary to satisfy cl 12 of Sch 4 of the NCAT Act and that there has been no substantial miscarriage of justice. Whether the Appeal Panel might have come to a different conclusion on the facts is insufficient, it was a conclusion that was available to the Tribunal to make based on the evidence before it, within the scope of its broad discretion under the RT Act and was not "unreasonable or plainly unjust" in the sense described in House v King [1936] HCA 40.

Decision

In our view, the appeal should be upheld and the proceedings remitted for rehearing. Our reasons follow.
Critical to the Decision in our view was par l in which the Tribunal recorded that it had considered the matters set out in s 154E of the RT Act and was satisfied that a termination order should be made having regard to the poor rental history since February 2014.
There was in fact no evidence of rental history in 2014. The rental ledger tendered in evidence recorded rental payments from 3 January 2015 until 6 October 2016. Accordingly, the Decision in par l was in error in relying upon the period "since February 2014". As at January 2015 the ledger shows the tenant to have been in credit until 14 February 2015. The ledger shows arrears between 14 and 15 February 2015, in credit between 21 and 23 February 2015, then in arrears until 22 June 2015, and in credit from 25 June 2015 to 12 September 2015. The picture for the balance for 2015 shows periods of arrears and other periods where the tenant was in credit. At the beginning of 2016 the ledger was in arrears.
The Member would, in our view, have been justified in finding that there was a poor rental history since 2015 but there was no evidence supporting such finding concerning 2014.
As stated above, the finding in par l was a critical matter. That finding concerned the tenancy history being one of the mandatory considerations required to be addressed under s 154E of the RT Act. The finding, adverse to the tenant, that there was a poor rental history in 2014 without supporting evidence increased the "poor rental history" to thirty four months ( i.e. 2014, 2015 and ten months of 2016) but the evidence available was only in respect of a period of twenty two months (2015 and ten months of 2016).
The Tribunal was required under s 87(4)(b) to be satisfied that the breach was, in the circumstances of the case, sufficient to justify termination. In addition the Tribunal was required, in this case, to comply with s 154E of the RT Act. By that section, the Tribunal must have regard to the matters identified in subsections (a) to (e). One of the matters listed is the "history of the current tenancy". Although the Tribunal stated that it had given consideration to the matters listed in s 154E, one matter (namely the poor rental history), was based upon a finding for which there was no evidence.
The error which we have identified is in our view an error of law in that the Tribunal acted upon a misunderstanding of a significant fact: see House v the King.
We do not think that this is a matter where the mistake concerning the rental history was likely to have made no difference. The circumstances of the case involved considerations weighing in the tenant's favour. They are referred to in the Decision and include the fact that the tenant was two days in arrears when the termination order was made. If the Tribunal had been aware that the evidence available concerned the period from February 2015, the finding in par l of the Decision (namely that "a termination order should be made having regard to the poor rental history since February 2014") may have been different.
We are of the opinion that we do not have sufficient materials to substitute our decision for that of the Tribunal at first instance and accordingly the appropriate order is for the orders previously made to be set aside and for the proceedings to be reheard.
We wish to add the following comments.
We do not agree with the submission made on behalf of the tenant that the effect of s 154E is that the Member must enquire into and consider each of the mandatory considerations set out in that section. We agree with the landlord's submission that it would be a mistake to conclude from the failure to refer to each subsection of s 154E(1) that the Tribunal did not take into account all of the relevant subsections. The Tribunal stated that it had taken into account s 154E and specifically referred to some circumstances to which s 154E relates. As the landlord submitted, the only matter in s 154E not expressly dealt with in the Decision concerns the likelihood that neighbouring residents will suffer serious adverse effects if the tenancy is not terminated. That subject matter did not warrant a specific comment because there was no evidence and/or argument by either party relying on that matter. In short, we agree with the landlord's submission that the requirement for the Tribunal to have regard to the matters set out in s 154E(1) does not require the Tribunal to enquire into and consider each of those matters but rather to deal with matters that have weight, significance or relevance.
In Collins v Urban an Appeal Panel of the Tribunal explained the nature and extent of the duty to give reasons. The Appeal Panel stated that the content and detail of reasons will vary according to the nature of the jurisdiction... "and the particular subject matter the subject of the decision". The Appeal Panel went on to give specific guidance in relation to uncontested residential tenancy matters. This appeal does not arise out of an uncontested matter. It was contested but our view is that the Decision sufficiently reveals that the Tribunal discharged its obligation to have regard to the matters identified in s 154E notwithstanding that each and every matter is not specifically referred to.
Finally, we refer to the tenant's submission that the landlord's witness was not properly sworn in. The transcript reveals that the Tribunal did swear in the landlord's witness. This aspect of the appeal is rejected.
Orders are made accordingly.

Orders

The Appeal Panel makes the following orders: 1. Appeal upheld; 2. Orders made in SH 16/31928 are set aside; and 3. Proceedings SH 16/31928 are remitted to the Consumer and Commercial Division for rehearing. 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: 22 February 2017

At a glance

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Judgment (9 paragraphs)

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Legislation Cited (1)

Cases Cited (6)