Zhen v Yan

1. The application of s 38 (5) of the NCAT Act must be considered in the context in which "the concern of the law is to avoid practical injustice": per Gleeson CJ said in Re Minister for Immigration and Multicultural Affairs; Ex parte Lam [2003] HCA 6; (2003) 214 CLR 1 at [37].
2. Recently, in LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12; 98 ALJR 610, the plurality of the High Court said in relation to the question of materiality of error, including by the denial of procedural fairness:

16. In sum, unless there is identified a basis on which it can be affirmatively concluded that the outcome would inevitably have been the same had the error not been made, once an applicant establishes that there has been an error and demonstrates that there exists a realistic possibility that the outcome of the decision could have been different had that error not been made, the threshold of materiality will have been met (and curial relief will be justified subject to any issue of utility or discretion).

1. In view of the aspects of the hearing in the primary proceedings to which we have already referred, we are satisfied that the tenant was not afforded procedural fairness in respect of his defence of the action for the termination order. He was not provided with a reasonable opportunity to present his evidence and submissions in support of that defence.
2. As appears below, clearly, the conditions referred to in each of s 115 (2) (a), (b) and (c) from which a conclusion of the relevant motivation might conceivably have been reached did exist. Such a conclusion was available even though a retaliatory motivation had been rejected in respect of the notice of termination. Given the considerable delay between issue of the notice of termination and the commencement of proceedings for a termination order, it was not out of the question that a retaliatory motivation existed in respect of the latter even though it had been found that it did not exist in respect of the former.
3. Accordingly, we uphold the ground of appeal based upon procedural unfairness. It is unnecessary for us to consider the remaining grounds of appeal. The orders for termination and possession made on 14 July 2025 must be set aside.

A new hearing of the merits of the application for termination

(3) The Appeal Panel may -

(a) decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and

(b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances.

1. After raising with the parties at the hearing of the appeal on 18 December 2025 our interest in proceeding to deal with the appeal by way of a new hearing, we decided to conduct such a hearing. Both parties agreed that we should proceed in that way after we had informed them that we had real concerns about the fairness of the hearing in the primary proceedings, and of the Appeal Panel's power set out in s 80 (3) (a).

1. It is well established that the mandatory terms of (the former) s 85 of the RTA are subject to the application of s 115 of the RTA.
2. It is also well-established that s 115 of the RTA can be used as a defence to an application for a termination order without the need for a claim to be brought by a tenant under s 115 (3): see Chatterjee at [65] to [74].
3. With respect to this defence, the principles in Hughes v Hume Community Housing Association Co Ltd [2023] NSWCATAP 109 (Hughes) apply: see Chatterjee at [74]. These principles include that the tenant bears the onus of establishing, on the balance of probabilities, that the motive for the application to terminate falls within the terms of s 115 (2): see Chatterjee at [51] (1). Accordingly, to the extent that the first instance decision in Anderson v Fimmano [2023] NSWCATCD 132 is at odds with this principle, it is incorrect. In Anderson, a case which concerned a retaliatory eviction claim brought by the tenant, the Senior Member stated that although the tenant bore the formal onus of proof in establishing that the termination was a retaliatory notice, the landlords' defence required them to discharge "the practical onus of establishing that the termination notice was not motivated by one or more of the reasons set out in s115 (2). That is because motive is the essence of the cause of action conferred by s 115": at [49].
4. This aspect of the decision in Anderson was given considerable emphasis by the tenant in support of his defence. However, it is contrary to the well-established principle as expressed in both Hughes and Chatterjee.
5. There is a two-stage approach required by s 115. First, whether the Tribunal is satisfied that the application was retaliatory within the terms of s 115 (2). Secondly, even if retaliatory, whether the Tribunal should exercise its discretion to refuse to make a termination order: see Chatterjee at 51 (2).
6. As to the exercise of the discretion whether to refuse an order to terminate, the Tribunal must balance the competing interests of the landlord and the tenant: see Steinbeck, Sonia and Steinbeck, Graeme v McDonald at and [57].

"As the Appeal Panel identified in Steinbeck, although the discretion is broad, the matters to be taken into account should appropriately focus upon the competing rights and interests of the landlord and tenant under the RT Act and the residential tenancy agreement. The Tribunal must then identify and weigh the matters taken into account and explain why it is satisfied that the discretion should, or should not, be exercised in favour of declaring the termination notice as having no effect, or refusing to make the termination order.

Such matters may include, depending on the circumstances of the case:

(1) The reasons the landlord seeks possession of the premises.

(2) If the landlord was only partially motivated to issue the Notice or file the termination application by reason of one or more of the matters in s 115 (2) (a)-(c), the degree to which those matters motivated the landlord in comparison to other matters that fall outside of s 115 (2) (a)-(c).

(3) If the landlord is a social housing provider, the waiting list for social housing.

(5) Whether there is substantial hardship to either the landlord or the tenant if the tenancy is not terminated despite the fact that the landlord was wholly or partially motivated to issue the Notice or file termination proceedings by reason of one or more of the matters in s 115 (2) (a)-(c) of the RT Act.

(5) Whether the relationship between the parties has broken down to such a degree that it is in the overall interests of the parties to terminate the tenancy so that both parties may move forward. In this regard, a relevant enquiry is why the relationship has broken down and whether the parties have been involved in a cycle of disputation and litigation that is likely to continue if the tenancy is not terminated. However, any such enquiry must be careful not to unfairly benefit a party who has not complied with its obligations under the RT Act and should consider the conduct of both parties".

(1) The parties entered into a residential tenancy agreement for a fixed term of 6 months in late August 2021;

(2) On 22 May 2024 the landlord served a valid termination notice requiring vacant possession on 20 August 2024.

1. Furthermore, as we have already mentioned, there was no challenge by the tenant to the Tribunal's orders made on 15 July 2025 extending the time for lodging the tenant's application the subject of the new hearing to 11 June 2025, and to the amendment of the application to seek a termination order.
2. Accordingly, subject to the tenant's defence that the Tribunal should refuse to make a termination order pursuant to s 115 (1) (b), in determining the proceedings the subject of the new hearing, s 85 of the RTA requires that we make an order for termination of the tenancy agreement between the parties.

1. In conducting the new hearing we received documentary material from each of the parties and heard sworn oral evidence from both the tenant and the landlord. We permitted some cross examination of the landlord. The solicitor for the landlord said that he did not wish to cross examine the tenant.
2. The documentary material that we received from the tenant in support of his defence consisted of:

(1) A 47 page bundle lodged on 17 December 2025 with a title page "Appellant Reply Submission". This was marked as Exhibit 1. The bundle commenced with a 21-page type written document described as the "Appellant's Final Reply to the Respondent's Reply Submission-Case Number 2025/0027 8108".

(2) Three volumes of documents in yellow folders lodged on 3 September 2025 (in part unpaginated). These were marked as Exhibit 2.

(3) A small unpaginated bundle of legal materials, the first page of which was a copy of s 115 of the RTA. This was marked as Exhibit 3.

(4) A bundle of documents (in part unpaginated) presented to the Tribunal in respect of the stay application pending the appeal, consisting of a bundle lodged on 25 July 2025 with a title page of "Appellant Submission" in a bundle lodged on 5 August 2025 with a title page of "Respondent Submission".

1. This documentary material from the tenant consisted of a mixture of material which was in its nature either submissions or evidentiary. It was impractical to draw a clear distinction between the two.
2. Exhibit 1 contained the most pertinent material relied upon by the tenant, namely a section of the 21-page type written reply submission commencing on page 12 and ending on page 21. In that part of the reply submission the tenant set out the "evidence" which he says he would have provided if he had been given a fair hearing in the primary proceedings. He also set out contentions as to "Evidence the Landlord would be required to provide to the Tribunal". The material in this section included cross references to attachments to be found in the section of the first volume of Exhibit 2 behind a Tab "Content Miscellaneous".
3. The documentary material from the landlord consisted of an unpaginated bundle with a title page of "Respondent Submission Due 5 December 2025". This was marked as Exhibit R1.
4. Exhibit R1 commenced with a 3-page document headed "Submission Opposing Application for Appeal". Included in that document was a statement that "The premises are now being used as intended for my family member who is visiting and staying for an extended period. The leased room forms part of my home, and due to limited space, the room was required for legitimate family accommodation. The current use of the premises is fully consistent with the purpose for which the termination notice was issued. Any change to the already executed order or intervention would disrupt this intended and necessary family use."
5. The statement was unsigned and the landlord gave no sworn evidence to this effect. We give no weight to this assertion. The landlord gave no evidence, specifically, about his reason for commencing and pursuing his application for a termination order.

1. These reasons should be read in conjunction with the reasons for decision of the Appeal Panel in Zhen v Yan [2025] NSWCATAP 94 (the First Appeal Decision) concerning the tenant's proceedings for an order under s 115 of the RTA in respect of the termination notice, including the background facts and circumstances set out in those reasons.
2. The residential premises the subject of the written tenancy agreement consist of a room in a house owned by the landlord which is occupied by the landlord's son, the son's wife and their two young children. The room is on the ground floor. Under the tenancy agreement the tenant has the non-exclusive right to use of a kitchen and a small bathroom on this floor. Until recently, a second bedroom on this ground floor was occupied by another tenant. Bedrooms, a kitchen and living room on the first floor of the property are occupied by the landlord's son and his family.
3. Since August 2020, the mother of the landlord's daughter-in-law, Mrs Wang, has stayed at the property at various times when visiting from China on a tourist visa. Mrs Wang lives in China with her husband. During these visits, Mrs Wang has made use of one of the bedrooms on the first floor of the property, which is also occupied by her grandchildren.
4. Since July 2022, Mrs Wang has entered Australia under a tourist visa covering the period from 24 July 2022 to 23 July 2025. It is uncontroversial that Mrs Wang stayed at the landlord's house occupied by her daughter and family from about August 2022 to 1 August 2023, and also from about 16 March 2024 until 15 March 2025.
5. Communications from the landlord to the tenant seeking to have the tenant vacate the residential tenancy premises first commenced on 22 August 2023. This followed communications that day between the parties about a rental increase.
6. Relevant events between that date and the issue by the landlord of a valid 90-day notice of termination on 24 May 2024 are described in the First Appeal Decision. The tenant's response to the notice of termination was to commence proceedings on 17 June 2024 for relevant orders under s 115 of the RTA. On the same day the tenant commenced separate proceedings against the landlord challenging a proposed rent increase on the grounds that it was excessive.

(1) The prospective arrival of the mother of the landlord's daughter-in-law from China.

(2) Related to (1), the landlord's grandchildren, who now attend elementary school, were said to need independent rooms to live in: see [11]-[12] of affidavit by the landlord sworn on 3 September 2024 in the retaliatory proceedings.

(3) The tenant's resistance to the landlord's attempt to increase the rent to $200 per week in August 2023.

(4) The tenant's resistance to communications from the landlord in November 2023 insisting that the tenant leave the residential premises due to the pending arrival of the mother of the landlord's daughter-in-law.

(5) Disparaging remarks made by the landlord to the tenant in the course of an exchange between the parties on or about 31 December 2023 about there being no water and electricity at the premises: see [97] of the First Appeal Decision and [21] of the Tribunal's decision in the lockout decision dated 21 May 2024.

(6) The lockout proceedings commenced in January 2024 by the tenant. These resulted in an order made by the Tribunal on 21 May 2024 for compensation in the amount of $5,595 to be paid by the landlord to the tenant.

(7) First right of refusal proceedings in respect of the residential tenancy commenced by the tenant in the Tribunal and then withdrawn by him in June 2025. These had first been the subject of an unsuccessful application by the tenant for an interim order in March 2025.

1. In the First Appeal Decision, the Appeal Panel noted [at 45] that in the primary proceedings the subject of that appeal, the tenant based his retaliatory claim, first, on the basis that the notice of termination had been issued in retaliation for the tenant's response to the rent increase proposed on 18 August 2023 and, secondly, on the basis that the notice had been issued in retaliation for the tenant's application to recover possession of the premises and compensation following the lockout in January 2024. The Appeal Panel also noted [at 46] that on appeal the tenant relied primarily upon a case based upon retaliation in response to the tenant's application to the Tribunal in January 2024 for possession and compensation.
2. At the hearing of the appeal, the tenant informed us that, as stated in his Notice of Appeal, he contended that each of the circumstances described in s 115 (a), (b) and (c) were operative.
3. He contended that the circumstances in s 115 (a) were operative because the tenant had applied for orders:

(1) to restore possession of the premises to the tenant in the lockout proceedings;

(2) for compensation in the lockout proceedings;

(3) for excessive rent;

(4) for relief against the termination notice as retaliatory;

(5) for exercising his first right of refusal.

1. He contended that the circumstances in s 115 (b) were operative because the tenant had taken action to enforce his first right of refusal in respect of the residential tenancy.
2. He contended that the circumstances in s 115 (c) were operative because of the orders the tenant had obtained in his favour in the lockout proceedings (both to restore possession and for compensation) and in respect of the excessive rent.
3. All of these actions by the tenant, save for his actions concerning his first right of refusal, had been taken before the issue of the termination notice.
4. We can deal quite shortly with the tenant's action concerning his first right of refusal, which was only faintly relied upon by the tenant. There was no sound basis for a conclusion that this was a motivating reason for the termination proceedings even if it could be said to be, potentially, a retaliatory reason within the terms of s 115. Legal action to pursue a claim was not substantively taken until 18 June 2025, after the landlord commenced the termination proceedings. There had been an interim application about it before the landlord commenced the termination proceedings made on 13 March 2025, which was dismissed on or about 19 March 2025.
5. In arriving at the decision in the retaliatory proceedings issued on 15 April 2025, the Tribunal made factual findings with respect to the reasons the landlord gave the termination notice which bind the parties in both the primary proceedings the subject of this appeal and on this appeal.
6. Those key factual findings were as follows:

29 In respect to the first question, I find based on the evidence that the Respondent issued the termination notice because he required the room to accommodate his daughter (sic) mother- in law. [Plainly, the Tribunal meant to refer to his daughter in law's mother].

......

33 In the circumstances, I find that the s 85 termination notice of 22 May 2024, although entangled between a series of applications before the Tribunal commenced by the Applicant was not motivated by those applications, or the enforcement of any of the Applicants' rights as alleged.

34 Rather I find based on the evidence as set out above that the motivation for the termination was the arrival of the daughter in-laws family which such motivation commenced on 22 August 2023 and had remained despite the applications which appear to be the result of the respondents self-managing the rental without an agent or sufficient understanding of the tenancy laws in this state.

1. Of course, these are binding findings of fact about the reasons for issuing the termination notice and not the reasons for pursuing the application for a termination order, which occurred considerably later. Nevertheless, the tenant confronted the practical difficulty of having to show that a (or the) reason motivating pursuit of the application had changed from the reason that had motivated the giving of the notice of termination and that a relevant retaliatory reason or reasons had emerged from actions taken by the tenant before the issue notice of termination even though those actions had not been influential in giving that notice.
2. As to this difficulty, the tenant focused upon evidence that at the time the landlord commenced the application for a termination order on 11 June 2025, the visa permitting the daughter-in-law's mother entry into Australia would soon expire. The tenant also pointed to material showing the procedures that needed to be gone through in order to obtain another tourist visa. He contended that usually it would take a few months to obtain such a new visa. The tenant contended that as a consequence the landlord's pursuit of a termination order could not be for the reason that the room was required by this person.
3. However, we do not consider that any of these facts and matters about Mrs Wang's ability to come to Australia negate the continued applicability of the reason found by the Tribunal to have been operative in issuing the termination notice. Plainly enough, another tourist visa can be obtained for Mrs Wang.
4. The tenant also focused upon evidence that the tenant in the other bedroom on the ground floor, Mr Xu, had departed from the premises in January 2025. The tenant contended that this demonstrated that the pursuit of a termination order was not motivated by Mrs Wang's accommodation needs because this other bedroom on the ground floor was now available for Mrs Wang's use or the landlord could have asked the tenant to move into Mr Xu's old room. Furthermore, the tenant contended that the landlord's statement in a reply submission, dated 26 February 2025, in respect of the First Appeal Decision that the landlord had already arranged for a new tenant to occupy that room, showed that the landlord's termination action was retaliatory in nature because he would rather find a new tenant for Mr Xu's old room than arrange for the tenant to move into that room.

1. For the following reasons, even if we were wrong, and the tenant had established that a relevant retaliatory reason or reasons was a motive for the landlord's pursuit of a termination order, we would not refuse to make a termination order pursuant to s 85 of the RTA. In our view, this is not a situation in which the Tribunal should, in effect, force the parties to re-establish the operation of a landlord and tenant relationship between themselves.
2. At the time of the hearing of the appeal the tenant was no longer in possession of the residential premises following the execution of a warrant for possession. The tenant was living in alternative premises. There was no suggestion by the tenant that these alternative premises resulted in any hardship or were unsuitable to his needs.
3. It was common ground at the hearing of the appeal that the relations between the landlord and tenant were sour and had been for a considerable period of time.
4. The landlord, strongly, opposed any return by the tenant to live in the premises. It was clear that both the landlord and his wife were distressed at the prospect that the tenant would return to live in the residential tenancy premises.
5. We consider that this breakdown of relations assumes even greater significance given that the tenancy premises are a room within the landlord's house where his son's family lives. As a consequence, there is a special degree of proximity and occasion for interaction between the landlord's family (as well as the landlord) and the tenant. which sharpens the impact of the breakdown in relations.
6. We consider that this has particular significance in this case, regardless of the true reason for the breakdown in relations, which was a matter of contest between the parties. It would have been a considerable forensic exercise in itself to come to any firm conclusion about the real reason for the breakdown in relations. On the one hand, the tenant contended that the breakdown was sourced in the landlord's attempts in late 2023 to increase the rent. On the other hand, it was apparent that the landlord had come to a poor view of the tenant as a person based upon a range of alleged dealings.
7. In giving evidence at the hearing of the appeal, in response to questions from the Appeal Panel about the breakdown in relations and the relevance of this to the exercise of the Tribunal's discretion, the tenant said that he may not want definitely to return to the premises. However, he said he believed that the landlord should compensate him for his suffering as a consequence of what he said was not a proper action to terminate the tenancy, and that he wished to correct the landlord's misuse of the law to obtain advantages.

1. For the above reasons, we make the following orders:

(1) The appeal is allowed.

(2) Orders 3, 4 and 5 made by the Tribunal on 14 July 2025 are set aside and in substitution for those orders it is ordered that the residential tenancy agreement between the parties is terminated immediately and vacant possession is to be given to the landlord immediately.

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.