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[2026] ACAT 48
ACT Civil and Administrative Tribunal
2026-07-24
Original judgment source is linked above.
Source: the ACT Civil and Administrative Tribunal (www.acat.act.gov.au). Converted to plain text by ZoeLaw. Not the official version.
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
ZHOU v CAI (Civil Dispute) [2026] ACAT 48
XD 121/2026 Catchwords: CIVIL DISPUTE – unlawful sublease to university student – bare licence – termination without notice – no protection under residential tenancy legislation – rent reimbursed – compensation claim withdrawn – respondent’s counterclaim dismissed
Legislation cited: Civil Law (Wrongs) Act 2002 Residential Tenancies Act 1997 ss 54, 58, 83, 128, sch 1
Tribunal: Senior Member E Morrison
Date of Orders: 17 April 2026 Date of Reasons for Decision: 17 July 2026 Date of Publication: 24 July 2026 AUSTRALIAN CAPITAL TERRITORY ) CIVIL & ADMINISTRATIVE TRIBUNAL ) XD 121/2026
BETWEEN: PENG ZHOU Applicant AND: ZHIYU CAI Respondent
TRIBUNAL: Senior Member E Morrison DATE: 17 April 2026
ORDER The Tribunal orders that:
The respondent is to pay to the applicant the sum of $285.46, comprising: (a) $189.57 refund of ‘rent’; (b) $5.89 interest; and (c) $90.00 tribunal filing fee.
The sum in order 1 is to be paid in full by 8 May 2026.
The respondent’s counterclaim is dismissed.
……………………………….. Senior Member E Morrison REASONS FOR DECISION
Summary 1. The parties are international students at the Australian National University.
In November 2025, Mr Cai ‘rented’ his apartment to Mr Zhou. Mr Zhou paid rent in advance, equivalent to 105 days.
Two weeks later, Mr Cai was told that his security access card would be cancelled and he had to vacate immediately.
The card was cancelled because Mr Cai was, in fact, renting the apartment himself and had purported to sublet it to Mr Zhou without his lessor’s consent.
Mr Cai repaid some of the rent, but not all. 1
Mr Zhou applied to ACAT for an order requiring Mr Cai to repay the balance of his rent paid in advance. Mr Zhou also claimed $1,300 compensation for failing a university exam, which he attributed to stress caused by having to find alternative accommodation without notice.
Mr Cai filed a counterclaim for cleaning costs.
Both parties were assisted by an interpreter during the ACAT proceedings.
I ordered Mr Cai to repay the balance of Mr Zhou’s rent, plus interest and the ACAT filing fee.
Mr Zhou withdrew his compensation claim because he was worried that Mr Cai would leave Australia before his ACAT proceedings were finalised.
Even if Mr Zhou proceeded with his compensation claim, it was unlikely he would have been successful: (a) Mr Zhou was not protected under the Residential Tenancies Act 1997 (RT Act) because the purported sublease was unlawful. This meant Mr Cai
1 In these reasons, a reference to ‘tribunal’ or ‘ACAT’ refers to the ACT Civil and Administrative Tribunal generally, whereas ‘Tribunal’ refers to the members who heard the application could terminate the arrangement without notice, and Mr Zhou could not claim compensation under the RT Act for unlawful termination of a tenancy 2 agreement. (b) Mr Zhou faced significant practical hurdles in advancing a claim for breach of contract or personal injury because he did not have supporting evidence and had not complied with the relevant statutory process (for personal injury claims). This was unsurprising given Mr Zhou is an international student with a language barrier and is unfamiliar with the ACT legal system.
I dismissed Mr Cai’s counterclaim for the reasons set out below.
This matter demonstrates the legal and practical challenges experienced by persons who are granted an unlawful sublease. Individuals experiencing language or other barriers are particularly vulnerable. There is a public interest in publishing short reasons on this matter.
Subletting without consent
The Standard Residential Tenancy Terms (Standard Terms) apply to all residential tenancy agreements in the ACT. The Standard Terms are set out in Schedule 1 to the RT Act.
Section 72 of the Standard Terms sets out the rules that apply to subletting: Tenant must not sell, dispose of, or sublet tenancy without consent of lessor 72 (1) The tenant must not assign or sublet the premises or any part of them without the written consent of the lessor. (2) Consent may be given at any time. (3) No rights in relation to the premises may be created in any third party before consent is obtained from the lessor.
Section 128 of the RT Act explains what happens when a tenant purports to sublet the premises without the landlord’s consent:
2 Nor were other protections available to Mr Zhou under the RT Act 128 Purported co-tenancy, assignment or subletting (1) This section applies if, in contravention of this Act, a tenant under a residential tenancy agreement for premises purports to— (a) consent to a person becoming a co-tenant under the agreement; or (b) assign the tenant’s interest under the agreement; or (c) sublet the premises. (2) The purported co-tenancy, assignment or subletting is unenforceable and the person living in premises under the purported co-tenancy, assignment or subletting, does so as a licensee only. (3) Subsection (2) does not apply to a co-tenancy, assignment or subletting of premises in accordance with a term of the residential tenancy agreement endorsed by the ACAT.
Under these provisions: (a) A tenant must obtain the lessor’s consent before subletting any part of the premises. (b) If a tenant purports to grant a sublease without consent, or before consent is given: (i) the RT Act does not recognise or protect the purported sublease; and (ii) the arrangement between the tenant and the other person is a ‘bare licence’. (c) Also: (i) the tenant will be in breach of their tenancy agreement; and (ii) the lessor can apply to the ACAT for an order to terminate the ‘head’ 3 residential tenancy agreement for breach. Rights under a bare licence
A bare licence is simply permission to occupy premises. It is a personal right and does not create any legal interest in the land.
A bare licence can generally be revoked at will.
3 RT Act, s 54; section 54 sets out the circumstances in which the ACAT can make an order to terminate the tenancy for a purported sublease
An exception may arise where the parties enter into a contract restricting revocation, or where equity intervenes because it would be unconscionable to revoke the licence.
In this case, there was no evidence that the parties had agreed to limit Mr Cai’s right to revoke the arrangement. Further, the Tribunal does not have equitable jurisdiction which meant I could not grant relief on unconscionability grounds even if the circumstances otherwise justified equitable intervention.
Once a bare licence is revoked, the person must leave the premises immediately.
The person is not entitled to protection or remedies under the RT Act. They cannot apply to the ACAT for an order to reinstate their living arrangements, or to require the ‘head’ tenant to pay compensation to them for unlawful termination 4 or wrongful eviction.
The person may be entitled to contractual damages, but any claim will be assessed according to contract law principles. For example, the person would need to prove that they suffered loss or damage because they were induced to enter into the contract by fraudulent or negligent misrepresentation, or because of a breach of contract. However, there are often significant practical difficulties in proving liability, establishing loss and quantifying damages, as illustrated by the circumstances of Mr Zhou.
The applicant’s claim for repayment of advance rent
4 See RT Act, ss 58, 83 (d) Mr Zhou had lived at the apartment for 15 days. This equated to 2,778 RMB ‘rent’. (e) By 22 November 2025, Mr Cai had refunded a total of 15,800 RMB. (f) The outstanding rent paid in advance was 868 RMB. (g) The applicable exchange rate on 21 November 2025 was 1 RMB = 0.2184 AUD. (h) The outstanding rent paid in advance in AUD was $189.57.
I determined that the outstanding rent was a debt owed by Mr Cai to Mr Zhou.
That debt arose on 21 November 2025, which was the day after Mr Zhou vacated 5 the apartment. Interest payable to the hearing date was $5.89.
I made an order for Mr Cai to pay to Mr Zhou the outstanding rent ($189.57), interest ($5.89) and the ACAT filing fee ($90).
Compensation claim
It is unnecessary for me to determine Mr Zhou’s claim for compensation because he withdrew that aspect of his application before I made final orders.
However, it is worth noting that the hurdles faced by Mr Zhou in presenting his case were unsurprising given his circumstances as an international student: (a) Because the RT Act did not apply, Mr Zhou needed to do more than prove a lack of notice to terminate; he needed to establish a separate legal cause of action. (b) Mr Zhou did not have evidence that he failed his university exam because he had to vacate the apartment without notice. He also did not have evidence quantifying the loss he suffered as a result. This may have impacted any claim for breach of contract. (c) The arrangement between the parties was very informal. It was unclear whether Mr Zhou knew that Mr Cai was renting the apartment himself, and
5 Calculated at the pre-judgment interest rate of 7.60% if so, what impact that might have on the purported sublease. This may have impacted any claim for inducement of contract by misrepresentation. (d) Mr Zhou was unaware of the requirements in the Civil Law (Wrongs) Act 2002 relating to personal injury claims and so he did not comply with those requirements before lodging his ACAT application. This would have affected his ability to claim compensation for damages based on liability (in contract or tort) for poor mental health caused by the stress of having to vacate the apartment without notice.
Counterclaim for cleaning costs
Mr Cai claimed he was entitled to withhold the outstanding rent for cleaning.
The arrangement was an unlawful sublease. This meant Mr Cai could not claim compensation under the RT Act on the basis that the apartment was not left in substantially the same condition as at commencement of the arrangement, subject to fair wear and tear.
Mr Cai’s counterclaim did not succeed in contract because: (a) There was no evidence of loss or damage. (b) Mr Cai had moved back into the apartment as soon as the security access card was reactivated. This broke any causal link between Mr Zhou’s use of the premises and the alleged loss or damage.
……………………………….. Senior Member E Morrison
Date of hearing: 17 April 2026 Applicant: Audio-visual link Respondent: In person
ZHOU
CAI (Civil Dispute)