Holiday Accommodation Lease Subject to Residential Tenancies Act

The Tribunal dismissed the landlord's appeal, ruling that the Residential Tenancies Act 2010 applied to the holiday accommodation lease due to the terms of the lease indicating such applicability.

Civil and Administrative Tribunal New South Wales Medium Neutral Citation: [COMPANY] v [NAME] [2020] NSWCATAP 244 Hearing dates: 28 October 2020 Date of orders: 23 November 2020 Decision date: 23 November 2020 Jurisdiction: [NAME]: T Simon, Principal Member [NAME] SC, Senior Member Decision: (1) Leave to appeal is refused. (2) The appeal is dismissed. (3) The stay order made by the Tribunal on 18 August 2020 is lifted. Catchwords: LEASES AND TENANCIES – leases and tenancy agreements – construction and interpretation ADMINISTRATIVE LAW – particular administrative bodies – NSW Civil and Administrative Tribunal – existence of jurisdictional facts Legislation Cited: Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Rules 2014 Residential Tenancies Act 2010 Cases Cited: Café Great Pty Ltd v [NAME] [2019] NSWCATAP 203 Collins v Urban [2014] NSWCATAP 17 Jackson v NSW Land & Housing Corporation [2014] NSWCATAP 22 Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206; (2017) 95 NSWLR 597 Toll v Alphapharm Pty Ltd (2004) 219 CLR 165 Texts Cited: [NAME], Authority to Decide: The Law of Jurisdiction in Australia (2020, [COMPANY]) Category: Principal judgment Parties: [COMPANY] (Appellant) [NAME] (Respondent) Representation: Solicitor: [redacted] [NAME] (Tenancy Advocate) File Number(s): AP 20/34179 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 6 July 2020 Before: P Boyce, Senior Member File Number(s): RT 20/14155

REASONS FOR DECISION

Introduction 1. The appellant landlord has appealed a decision of the Tribunal made on 6 July 2020 in which the Tribunal ordered the landlord to pay the respondent tenant the sum of $15,000.

2. The appellant contends that the Tribunal erred in law because it did not have jurisdiction conferred upon it by the Residential Tenancies Act 2010 (RT Act) to hear the proceeding and make orders in circumstances where the subject premises may only be used for holiday accommodation. The appellant also seeks leave to appeal on the basis that the Tribunal's decision was against the weight of evidence.

3. The Notice of Appeal was lodged out of time, and thus the appellant requires an extension of time to appeal. For the reasons set out below, we refuse the application to extend time to appeal and dismiss the appeal.

Documents 1. The [NAME] has received the following materials relating to the appeal from the parties:

1. Notice of Appeal dated 10 August 2020, with accompanying documents and submissions;

2. Application for the stay of the decision pending the appeal, dated 11 August 2020;

3. Reply to Appeal with accompanying documents and submissions, dated 14 August 2020 (received 18 August 2020);

4. Documents and submissions received from the appellant on 11 September 2020;

5. Further submissions and documents received from the respondent on 24 September 2020;

6. Further submission received from the appellant on 26 October 2020.

1. The [NAME] also has before it a copy of directions made by the [NAME] on 18 August 2020 (including an order staying the Tribunal's decision) and a copy of the original application that was made by the respondent to the Tribunal.

2. The operation of the orders of the Tribunal was stayed by the [NAME] on 18 August 2020 until further order and on the condition that the appellant pay the respondent $7,500 on or before 25 August 2020.

Notice of Appeal 1. The ground of appeal contained in the Notice of Appeal is 'that the Tribunal Member made an error of law in finding that the Residential Tenancies Act 2010 applied to premises that can only be used as holiday accommodation'. The appellant also seeks leave to appeal, on the ground that the Tribunal's decision that it had jurisdiction was against the weight of evidence.

Reply to Appeal 1. In her Reply to Appeal, the respondent supported the orders made by the Tribunal and opposed any grant of leave to appeal. The respondent also indicated that the appellant required leave to file the Notice of Appeal out of time and opposed such leave being given.

Evidence before the Tribunal 1. We set out below in some detail the evidence before the Tribunal, taken from the witness statement of [NAME], a director of the appellant, and from documents relied upon by the parties before the Tribunal. 2. [NAME] is a registered real estate agent.

3. The appellant is the sub-lessee of an apartment located in Thredbo, a ski resort in the Snowy Mountains. [NAME] is the subject of a long term crown lease and the apartment is the subject of a registered sub-lease. The terms of the sublease that were in evidence before the Tribunal provide that the apartment is only to be used by the sub-lessee (i.e. the appellant) and the sub-lessee's invitees for holiday accommodation and the sub-lessee must not part with possession or otherwise deal with the apartment except for the purposes of holiday letting.

4. The apartment was let from time to time on a holiday rental basis usually for periods of a week or less and was serviced between stays and once a week during longer stays. The respondent and her husband stayed at the apartment on a holiday rental basis on a number of occasions during the 2019 ski season for a total of approximately 30 days.

5. During the July 2019 school holidays, the respondent's husband discussed with [NAME] the possible purchase of the apartment. They reached agreement for the sale of the apartment at a particular price and that the purchaser was to be the respondent or her nominee.

6. After various negotiations but no exchange of contracts for sale and purchase, [NAME] and the respondent's husband agreed in December 2019 to extend the time for exchange until the end of February 2020 and that the appellant would be compensated an amount of $50,000 for not putting the apartment back on the market and not taking winter holiday rentals.

7. The agreement was documented by way of a document titled 'Residential Tenancy Agreement' (Residential Tenancy Agreement). It was prepared by [NAME] using the standard form.

8. The compensation was to be paid as a non-refundable deposit of $25,000 on the signing of the Residential Tenancy Agreement and the balance of $25,000 on 1 April 2020. This was discussed and agreed by [NAME] and the respondent's husband. They also agreed that once the sale proceeded to exchange and settlement the monies paid would be credited towards the purchase price on settlement of the sale of the apartment.

9. In December 2019, [NAME] signed the Residential Tenancy Agreement on behalf of the appellant.

10. On 3 and 4 February 2020, the respondent provided to the appellant the Residential Tenancy Agreement signed by the respondent and $25,000. The terms of the Residential Tenancy Agreement included: 1. an acknowledgement that the RT Act applied to the Residential Tenancy Agreement; 2. a term of 18 weeks from 1 June 2020 to 4 October 2020; 3. the respondent had a right to occupy the apartment during the tenancy (cl 1); 4. the following additional term: The tenant agrees to pay the rent as follows: a 50% deposit is due by the 20th of December 2019 the final deposit is due 60 days from arrival ie the 1st of April 2020 the tenant agrees that the deposit is non-refundable except if the tenant proceeds with the sale of this apartment 1. From 13 to 24 March 2020, there was an exchange of emails between [NAME] and the applicant's husband, the salient features of which are reproduced below:

1. On 13 March 2020, [NAME] enquired of the respondent and her husband as to their readiness to purchase the apartment; 2. on the same day, the respondent's husband responded: 'We will not be proceeding with the purchase'; 3. on the same day, [NAME] responded: 'Please note that the final payment of $25,000 for the rental of the apartment is due on or before 1 April 2000'; 4. later that day, after the respondent's husband queried the basis of the obligation to pay rent on 1 April 2020, [NAME] responded: 'The special conditions of the signed tenancy agreement sent on the 18th of December 2019 and resent for [NAME]'s signature on the 2nd of February 2020 stated the initial 50% deposit by the 20th of December 2019 and the final 50% payment by the 1st of April 2020'; 1. on 15 March 2020, the respondent's husband responded: 'Further to sub clause 32.3 of the residential tenancy agreement we would like your permission to transfer part of the tenancy and/or sub let part of the tenancy' ; 1. on 16 March 2020, [NAME] replied: 'For me to better consider this request could you please outline whom you would like to sublet the property to. Would they be taking the property under the same conditions eg maximum 5 occupants etc' ; 1. on the same day, the respondent's husband replied: 'Due to the corona virus we would like to sublet part of tenancy to a family or suitable occupant. The terms of the sublet would be the same as our lease i.e. maximum of 5 occupants. In order to sublet the property we may of (sic) may not engage the services of a local firm.' ; 1. on 17 March 2020, [NAME] replied: 'I am happy to consider your request when but I need to be provided with the name and address of the sub-tenant(s) so that I can check their details against the [NAME] to determine if they are an acceptable tenant' 1. on 23 March 2020, the respondent's husband notified [NAME] that the respondent 'would like to break the lease on [the apartment] due to financial hardship'; 2. on the same day, [NAME] responded in an email which included: 'I understand that you can apply to the tribunal on hardship grounds and request a hearing but you are required to keep paying the rent' ; 1. on 24 March 2020, the respondent's husband indicated that he and the respondent were not prepared to provide details of the hardship unless it became necessary to commence proceedings in the Tribunal. [NAME] responded: 'In the absence of any evidence of hardship I am not prepared to agree to the termination of the agreement and expect you to honour the agreement by paying the rent payment due on 1 April' ;

1. On 15 April 2020, [NAME] forwarded a termination notice of the Residential Tenancy Agreement, signed by him, to the respondent. The ground for termination was stated to be the non-payment of rent due on 1 April 2020. [NAME] considered it necessary to formally terminate the Residential Tenancy Agreement so that he would be free to sell the apartment and take short term holiday rentals for winter 2020.

Further evidence 1. The appellant and the respondent each sought to place before the [NAME] evidence which was not before the Tribunal.

2. We are not satisfied that the further evidence of either party should be received. In neither case was there a satisfactory explanation as to why the evidence was not presented to the Tribunal and the material was reasonably available to provide as part of the documents at the time.

3. The appellant sought to rely upon the full version of the sub-lease, from which the clauses relied upon before the Tribunal had been extracted. The appellant offered no explanation as to why the full version of the sub-lease had not been provided to the Tribunal.

4. The respondent sought to rely upon a statutory declaration made by her and dated 21 September 2020, in which she provided evidence as to conversations between herself and [NAME], and as to her statement of mind, touching upon the use and intended use of the apartment. The respondent submitted that this evidence was not placed before the Tribunal because the issue of the use of the intended use of the apartment was not raised below. We reject that submission – this issue was raised in [NAME]'s statement and was dealt with by the Tribunal in its Reasons.

Application for an extension of time 1. It is common ground that the Notice of Appeal was lodged outside the 14-day time period specified in cl 25(4) of the Civil and Administrative Tribunal Rules 2014. The appellant received the Tribunal's Reasons on 15 July 2020 but the Notice of Appeal was not received by the Tribunal until 10 August 2020.

2. The [NAME] has power to extend time under s 41 of the Civil and Administrative Tribunal Act 2013 (NCAT Act). In Café Great Pty Ltd v [NAME] [2019] NSWCATAP 203, an [NAME] set out the relevant principles as follows: 39 The principles on which an extension of time would be granted to bring an appeal were set out by the [NAME] in Jackson v NSW Land & Housing Corporation [2014] NSWCATAP 22 at [21]-[22], drawing on early orthodox principle and authority: "Time limits, including the specification of the time within which an appeal from an internally appealable decision to the [NAME] of the Tribunal must be lodged, are established by legislation for the purpose of promoting the orderly and efficient conduct of proceedings in the Tribunal, providing certainty for the parties to proceedings, especially the party in whose favour orders have been made, and achieving finality in litigation.

For these reasons, these time limits should generally be strictly enforced. That is not to say, however, that exceptions should not be made where the interests of justice so require. The express power in s 41 of the Act to grant extensions of time allows the Tribunal to prevent the rigid enforcement of time limits becoming an instrument of injustice." 40 The criteria for assessing an extension application can be summarised from [NAME] as follows: (1) the appellant must demonstrate that strict enforcement of the time limit will work an injustice on the appellant; (2) the respondent, having obtained a favourable primary decision, can be thought of as having a "vested right" to retain the benefit of that decision after the normal time for appeal has expired; (3) Consistent with the foregoing, the factors to be considered are the length of the delay, the reason for the delay, the prospects of success ("that is usually where the applicant has a fairly arguable case"), and the extent of any prejudice suffered by the respondent to the appeal; (4) "It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable".

1. We turn now to consider the factors identified in Jackson v NSW Land & Housing Corporation [2014] NSWCATAP 22 - the length of the delay, the reason for the delay, the prospects of success and the extent of any prejudice to the respondent caused by the delay.

2. The Notice of Appeal should have been filed by 30 July 2020. It was not filed until 10 August 2020.

3. The appellant provided no evidence as to the reasons for delay in filing the Notice of Appeal. In submissions, [NAME] for the appellant indicated that he had thought it was sufficient to have notified the respondent, within the 14 day period, of the appellant's intention to appeal. He also submitted that the failure to file in time was an oversight.

4. We consider below the prospects of success on both the ground of appeal and on the application for leave to appeal.

Error of Law – No Jurisdiction 1. As noted above, the appellant's ground of appeal is that the Tribunal lacked jurisdiction to make the order it made because the RT Act does not apply to premises that can only be used as holiday accommodation.

2. The starting point is s 28 of the NCAT Act which provides that the Tribunal has such jurisdiction as may be conferred or imposed on it by or under the NCAT Act or any other legislation.

3. The RT Act is 'other legislation' which confers jurisdiction upon the Tribunal in various respects. For present purposes, it is necessary to: (1) identify the statutory basis or bases of the power or discretion under which the Tribunal's order was made and (2) to determine whether the jurisdictional facts which enliven the exercise of that statutory power or discretion existed. This in turn requires that we consider whether the evidence is sufficient to establish those jurisdictional facts: see [NAME], Authority to Decide: The Law of Jurisdiction in Australia (2020, [COMPANY]) at [3.5]. The ground for which leave to appeal is sought, namely that the Tribunal's conclusion that it had jurisdiction was against the weight of evidence and which is considered below, involves a similar task.

4. The order challenged is the Tribunal's order that the appellant pay the respondent $15,000. The Tribunal's reasoning for that order was as follows (Reasons [64] – [69]): 1. the appellant required the respondent to pay $50,000 rent in advance by two instalments of $25,000 and the respondent paid the initial instalment; 2. the appellant was prohibited, by s 33 of the RT Act, from requiring the respondent to pay more than two weeks rent in advance (and $50,000 was well in excess of two weeks' rent); 3. the appellant contravened s 33 and is required to refund the $25,000 which the respondent had paid to it; and 4. the amount of $25,000 is reduced to $15,000 because the respondent conceded that she should pay compensation of $10,000 to the appellant for the loss of the tenancy.

1. We turn now to the statutory basis or bases of the power or discretion under which the order was made. The Tribunal did not identify the particular provision(s) of the RT Act it used to make the order that the appellant pay $15,000 to the respondent, although it did refer at paragraph [53] of its Reasons to the respondent seeking a compensation order under s 187(1)(d) of that Act. There are several provisions which provide such power. The first is s 47(5) of the RT Act which provides: The Tribunal may order that rent or any other amount be repaid to the tenant if it finds that the rent or amount was not required to be paid by the tenant under this Act or the residential tenancy agreement.

1. The second is s 187 of the RT Act, which provides in so far as is presently relevant: (1) The Tribunal may, on application by a landlord or tenant or other person under this Act, or in any proceedings under this Act, make one or more of the following orders— … (c) an order for the payment of an amount of money, (d) an order as to compensation, … (2) Without limiting the Tribunal's power to make an order as to compensation, the Tribunal may order compensation to be paid for the following— … (b) any other breach of a residential tenancy agreement, 1. The jurisdictional facts that need to be satisfied to enliven the statutory discretions in ss 47(5) and 187 of the RT Act in the present case include that: 1. the respondent was a tenant, which in turn requires that the apartment be residential premises; and 2. the Residential Tenancy Agreement was a residential tenancy agreement, within the meaning of those terms in the RT Act.

1. Tenant is defined in s 3 of the RT Act in terms which, in the present case, turn on whether the respondent had 'a right to occupy residential premises under a residential tenancy agreement'. It is clear from cl 1 of the Residential Tenancy Agreement that the respondent had a right to occupy the apartment. The definition of tenant also includes a prospective tenant.

2. Residential premises are defined in s 3 of the RT Act as meaning: any premises or part of premises (including any land occupied with the premises) used or intended to be used as a residence.

1. This definition invites an inquiry as to whether the apartment was (1) 'used' or (2) 'intended to be used' as a residence. As to (1), the respondent did not use the apartment as a residence – the Residential Tenancy Agreement was terminated by notice dated 15 April 2020 before the period of the tenancy was due to commence on 1 June 2020. Further, the evidence of [NAME] was that prior to the Residential Tenancy Agreement, the apartment was used for holiday rentals.

2. As to (2), the Residential Tenancy Agreement, which was signed by [NAME] on behalf of the appellant and by the respondent, provides powerful evidence that the premises were intended to be used as a residence. So much is clear from its title and its terms.

3. The law attaches significance to the signing of a document as an indication that the signatory intends to be bound by its contents. Such a signature is a representation that the signatory either has read and approved the contents of the document or is willing to take the chance of being bound by those contents: see, for example, Toll v Alphapharm Pty Ltd (2004) 219 CLR 165 at 180-182 [42]-[47].

4. The inference to be drawn from the terms of the Residential Tenancy Agreement that the apartment was intended to be used as a residence is strengthened when account is taken of the fact that the Residential Tenancy Agreement was prepared by [NAME], a registered real estate agent, who might be expected to be familiar with the terms of the Standard Form Residential Tenancy Agreement.

5. The appellant submitted that the appellant and the respondent did not intend to be bound by the terms of the Residential Tenancy Agreement (and thus that the apartment be used as a residence) because they had a broader agreement concerning the proposed purchase of the apartment. In other words, the submission is that the Residential Tenancy Agreement was a sham agreement.

6. We reject that submission. In considering whether the Residential Tenancy Agreement was a sham, it is permissible to consider the conduct of the parties after the Residential Tenancy Agreement was signed. As noted above, the Residential Tenancy Agreement had been executed by both parties by early February 2020. The following subsequent events suggest that the appellant and the respondent both regarded the Residential Tenancy Agreement as reflecting their true intentions: 1. [NAME]'s reminder on 13 March 2020 that payment for rental was due on 1 April 2020; 2. the email exchange which occurred on 15 to 17 March 2020 concerning a sub-lease by the respondent on the same terms including [NAME]'s requirement that he be able to check the proposed sub-tenants against the [NAME]; 3. [NAME]'s assertion on 23 March 2020 that the respondent was still required to pay rent while any hardship application was dealt with; 4. [NAME]'s refusal on 24 March 2020 to agree to a termination of the Residential Tenancy Agreement and his insistence that the respondent honour it by paying rent; 5. the 15 April 2020 Notice of Termination on the ground of non-payment of rent; and 6. [NAME]'s evidence that he considered it necessary to formally terminate the Residential Tenancy Agreement so that he would be free to sell the apartment and take short term holiday rentals for winter 2020.

1. The appellant also submitted that the apartment could not be residential premises because of the prohibition in the sub-lease on any use other than holiday rental. We reject this submission. The definition of residential premises in s 3 of the RT Act turns on actual or intended use rather than permitted use. For the reasons discussed above, the intended use of the apartment under the Residential Tenancy Agreement was as residential premises and it is no answer for the appellant to say that such use was not intended because it was not allowed. The evidence establishes that the appellant intended such use despite it being prohibited.

2. Section 7 of the RT Act also provides that certain premises are premises to which the RT Act does not apply. The appellant relies upon s 7(c) of the RT Act, which provides: This Act does not apply in respect of the following premises- … (c) serviced apartments, that is, buildings or parts of buildings used to provide self-contained tourist and visitor accommodation that are regularly cleaned by or on behalf of the owner or manager 1. As noted above, there is evidence that the apartment was serviced between stays prior to entry into the Residential Tenancy Agreement. However, the Residential Tenancy Agreement does not provide for regular cleaning by or on behalf of the owner or manager. Further, there is no evidence that the apartment is a self-contained tourist accommodation that was regularly cleaned by or on behalf of the owner or manager. As a result, s 7(c) of the RT Act does not apply.

2. For all of the above reasons, the apartment was residential premises within the definition of that term.

3. Residential tenancy agreement is defined in ss 3 and 13 of the RT Act as 'an agreement under which a person grants to [NAME] for value a right of occupation of residential premises for the purpose of use as a residence'.

For the reasons set out above, the apartment was residential premises within the definition of that term. As also noted above, it is clear from the terms of the Residential Tenancy Agreement that there was a grant for value of a right of occupation of the apartment for use as a residence.

4. Section 8 of the RT Act provides that certain agreements are agreements to which the RT Act does not apply. Relevantly, s 8(1)(h) of the RT Act provides: (1) This Act does not apply to the following agreements- ... (h) an agreement made for the purpose of giving a person the right to occupy residential premises for a period of not more than 3 months for the purpose of a holiday, 1. As the Residential Tenancy Agreement was made for the purpose of giving the respondent a right to occupy the apartment for a period of six months, s 8(1)(h) has no application.

2.

For the reasons set out above, the Residential Tenancy Agreement was a residential tenancy agreement as defined in s 3 of the RT Act.

3. Thus, the jurisdictional facts required to enliven the Tribunal's discretions under ss 47(5) and 187 of the RT Act existed on the evidence before the Tribunal. It follows that the prospects of success on an appeal are negligible.

Leave to Appeal 1. The principles governing an application for leave to appeal under the NCAT Act are well-established and are repeated in many decisions of the [NAME], often quoting Collins v Urban [2014] NSWCATAP 17. They are the same principles applied by the courts. It is sufficient to refer to Secretary, Department of Family and Community Services v Smith [2017] NSWCA 206; (2017) 95 NSWLR 297 where [NAME] ([NAME] and [NAME] agreeing) said at 604 [28] (citations omitted): Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted. Ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable. It is well established that it is not sufficient merely to show that the trial judge was arguably wrong.

1. Where, as here, the appeal is from a decision made in the Consumer and Commercial Division there is a further qualification to the possible grant of leave. Clause 12(1) of Sch 4 of the NCAT Act provides that the appellant must establish that it may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. As noted above, both the ground of appeal and the application for leave to appeal required that we consider whether the evidence supported the existence of the necessary jurisdictional facts. In light of our conclusion based on that evidence that the necessary jurisdictional facts existed, the Tribunal's conclusion to the same effect is not against the weight of evidence.

2. It follows that we are not satisfied that the Tribunal's decision is attended by sufficient doubt to warrant reconsideration or that the appellant may have suffered a substantial miscarriage of justice on any of the bases specified in cl 12(1) of Sch 4 to the NCAT Act. Thus, the prospects of success on the application for leave to appeal are negligible.

Conclusion on the application to extend time to file the Notice of Appeal 1. Taking into account the factors identified in [NAME] considered above, and in particular the negligible prospects of success on the appeal and the application for leave to appeal, we are not satisfied that the enforcement of the time limit for filing the Notice of Appeal would cause an injustice. We refuse to extend time. It follows that the appeal must be dismissed and the stay order lifted.

2. In view of the conclusions we have reached, it is not necessary that we consider other arguments raised by the respondent in her submissions based on estoppel, unconscionable conduct and misleading and deceptive conduct.

Orders 1. We make the following orders: 1. Leave to appeal is refused. 2. The appeal is dismissed. 3. The stay order made by the Tribunal on 18 August 2020 is lifted.

********** 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: 23 November 2020