Cathcart v Wang
[2021] VSC 685
•28 October 2021
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S ECI 2021 00424; S ECI 2021 03271
| Between: | |
| MELYSA MAREE CATHCART | Applicant |
| -and- | |
| YUN FEI WANG | Respondent |
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| JUDGE: | Croucher J |
| WHERE HELD: | Melbourne |
| DATE OF HEARING: | 19 October 2021 |
| DATE OF ORDERS: | 25 October 2021 |
| DATE OF PUBLICATION OF REASONS: | 28 October 2021 |
| CASE MAY BE CITED AS: | Cathcart v Wang |
| MEDIUM NEUTRAL CITATION: | [2021] VSC 685 |
| JUDGMENTS/ORDERS APPEALED: | Wang v Cathcart (VCAT orders of 18 January & 27 August 2021) |
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ADMINISTRATIVE LAW — Residential tenancy — Applications for leave to appeal from orders of VCAT made at separate hearings — Landlord applied for order terminating residential tenancy on basis of unpaid rent — Telephone hearing — Tenant’s line dropped out within minute of commencement of hearing — Unknowingly at first, but later believing tenant had hung up on him, member continued hearing without tenant, but with landlord’s agent still participating, and made termination order — Tenant rang VCAT back, twice, but did not get through in time to participate — Whether denial of procedural fairness — At subsequent hearing, deputy president made order for possession of rental premises — Whether possession order contingent upon termination order validly made under applicable provision — Whether proposed appeals futile in view of, inter alia, tenant’s continuing unjustified failure to pay rent — Whether Court should affirm VCAT’s orders; set them aside and make orders VCAT could have made; or set them aside and remit landlord’s applications to VCAT for rehearing — Applications granted — Appeals allowed — Orders for termination and possession set aside — Landlord’s applications for such orders remitted to VCAT for rehearing — Residential Tenancies Act 1997 (Vic), Part 16 (“COVID-19 temporary measures”); Victorian Civil and Administrative Tribunal Act 1998 (Vic), ss 97, 98, 100, 102, 120 & 148.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Self-represented | N.A. |
| For the Respondent | Self-represented (Mr J Verduci, McKenzie friend) | N.A. |
HIS HONOUR:
PART 1: OVERVIEW
A denial of procedural fairness
Telephone hearings have been allowed at VCAT since the tribunal’s inception.[1] These days, they are the rule, and in-person hearings are the exception. The COVID-19 pandemic has seen to that. Hopefully, normalcy will return soon. To be sure, phone hearings are a workable, albeit inferior, substitute for the real thing. But they are effective only if the required technology functions as it should, and only if those conducting the hearings are astute to detect and remedy any technological glitches that might deny participants a reasonable opportunity to hear and be heard.
[1]See s 100(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
In this case, technology failed. The presiding member eventually detected that something was amiss but, unfortunately, did nothing to remedy it. The result was a denial of procedural fairness in a serious matter. It happened in this way.
On 18 January 2021, a tenant’s mobile phone connection dropped out less than a minute into the hearing of her landlord’s application to have her residential tenancy terminated for unpaid rent. The member, oblivious to the tenant’s absence at first but later thinking that she had hung up on him, did not halt proceedings in order to call her back but instead carried on apace. He continued to receive viva voce evidence and submissions from the landlord’s agent, and made an order terminating the tenancy, all without the tenant on the line. Yet, when explaining why he declined to make a possession order in addition to the termination order, the member remarked that the tenant “must be given another opportunity to … [p]ut her case”.
After hearing and seeing the tenant give sworn evidence in the flesh in this Court, I am satisfied that she did not hang up at all. In fact, her connection just dropped out, as happens sometimes. The tenant could not ring the member back directly because his number was unidentified on her phone. So, instead, within minutes, she rang VCAT’s general number, twice. But, by the time she got through to anyone who could help her, it was too late: the hearing was over.
VCAT must act fairly and is bound by the rules of natural justice.[2] Usually, it must allow a party a reasonable opportunity to cross-examine witnesses, give or call evidence, and make submissions.[3] While the tenant, like the landlord, had sent some written materials to VCAT ahead of the hearing, she was denied a reasonable opportunity to hear and test, by cross-examination, the viva voce evidence of the agent, to give her own viva voce evidence, or to make submissions. Plainly, the hearing lacked basic procedural fairness, which is an aspect of the rules of natural justice.[4] As a result, VCAT’s decision involved jurisdictional error, lacks legal foundation and, in law, is no decision at all.[5]
[2]See ss 97 and 98(1)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
[3]See s 102(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic). But contrast ss 100(2) and (3) and 102(2) and (3)(a), which allow VCAT to conduct cases on documentary evidence alone.
[4]Minister for Immigration v Bhardwaj (2002) 209 CLR 597 at 611[40] (per Gaudron and Gummow JJ).
[5]Minister for Immigration v Bhardwaj (2002) 209 CLR 597 at 614-615[51] (per Gaudron and Gummow JJ).
Proposed orders
In my view, this denial of procedural fairness requires this Court to allow the tenant’s proposed appeal, set aside the termination order and remit the matter to VCAT.
There is also a knock-on effect. On 27 August 2021, a deputy president made an order for possession of the rented premises. The jurisdiction to make that order required VCAT to have made a valid order “under” the relevant provision.[6] But, because the termination order was made without jurisdiction, it was neither valid nor made “under” that provision. It follows that, upon the setting aside of the termination order, the possession order must be set aside as well.
[6]See ss 549(1) and 550(1) in Part 16 (now repealed) of the Residential Tenancies Act 1997 (Vic).
Competing considerations
Ordinarily, given the foregoing, I would have little or no hesitation in making these orders. But, here, there are competing considerations at play.
On the one hand, had the tenant been given a reasonable opportunity to do so, she would have challenged the landlord’s case and mounted her own positive case. For example, she would have sought to establish that, contrary to what the member was told, she received no rental reduction at all. Her positive case would have included evidence of her reduced capacity to pay rent due to her inability to obtain work because of the pandemic. Also, she would have told of her offers to enter a new lease and pay rent, of her health problems, and of the fact that eviction would render her homeless.
While, by the time the hearing came on, the tenant owed almost four months’ rent, these factors may have moved VCAT to make a different decision. At that time, because of the effects of the pandemic, the legislation governing the landlord’s application was more favourable to tenants than it had been previously.[7] While her position was complicated by ill-advised decisions, the tenant still cut a rather sympathetic figure and could lay claim to severe hardship resulting from the pandemic.
[7]See Part 16 (now repealed) of the Residential Tenancies Act 1997 (Vic). See further below.
On the other hand, the landlord submitted, in effect, that leave to appeal should be refused, or that VCAT’s orders should be affirmed, because it would be futile to do otherwise. He pointed to evidence that, as well as still owing the arrears alleged in January, the tenant has not paid any rent since then, and yet has lived in the premises all this time. Moreover, as we shall see, the tenant has persisted in justifications for continuing to decline to pay that are completely misconceived.
As compelling as the landlord’s case appears to be now, I must reject his submission. Among the reasons is that the parties’ cases at a rehearing may be materially different from the way they appear now. Another is that, in any event, the denial of procedural fairness here is so grave that it is as if the tenant had no hearing at all.
It was also submitted that, if the proposed appeals must be allowed, then, instead of remitting the case to VCAT, this Court should make orders that VCAT could have made or that are appropriate.[8] Again, however, while it may seem sensible to attempt to cut the Gordian Knot here and now, this matter does not, in my view, fall within the limited circumstances in which this Court, on an appeal, may make substitutive orders.[9] Instead, it will be for VCAT — a specialist tribunal with original jurisdiction in residential tenancy matters — to hear and determine the matter afresh.
[8]Pursuant to s 148(7)(b) and (d) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
[9]See, e.g., Osland v Secretary, Department of Justice [No 2] (2010) 241 CLR 320 at 332-333[20] (per French CJ, Gummow and Bell JJ).
My more detailed reasons for these conclusions and proposed orders follow.
PART 2: BACKGROUND
Residential tenancy agreement
On 31 October 2018, Melysa Maree Cathcart entered into a residential tenancy agreement in respect of a one-bedroom unit in Footscray. (At this stage, I should point out that the tenant prefers to be addressed by her given name, and not as Ms Cathcart. Unless the context requires otherwise, I shall continue to refer to her as the tenant.)
The period of the tenancy was 12 months, ending on 30 October 2019.[10] The rent was $1,000 per month payable a month in advance. The tenant paid a bond of $1,000.
[10]The tenancy became a month-to-month tenancy after the first 12 months passed (i.e., from November 2019), and was still such a tenancy on 18 January 2021, which was the date of the hearing of the application for a termination order (see s 230(2)(a) of the Residential Tenancies Act 1997 (Vic)).
According to the agreement, the landlord was described as three persons — Shi Tang, Cheng Yan Wu, and Yun Fei Wang. On the certificate of title to the rental property, those three individuals are recorded as the registered proprietors. For the purposes of the applications to VCAT, however, Mr Wang was treated as the landlord. Mr Wang is also the respondent in this Court. I was told that he was authorised to act on behalf of the other owners. I have proceeded on this basis. Unless the context requires otherwise, I shall continue to refer to Mr Wang as the landlord.
First application for termination order (intimidation)
While it does not appear that this information was before the member on the termination application on 18 January 2021, there was no dispute before me that the landlord, on 9 November 2020, lodged an application for an order terminating the tenancy. The claimed basis for the order included that the tenant had been engaging in intimidating behaviour towards other tenants in the apartment block in which the rented premises were situated.[11]
[11]The written application referred to ss 548 and 549(2)(c) in Part 16 (now repealed) of the Residential Tenancies Act 1997 (Vic). It does not appear that the behaviour alleged was caught by this provision.
The application was heard by VCAT on 18 December 2020. VCAT’s order records that that the application was dismissed on the basis that “the landlord has not proven the grounds of the application”.
PART 3: SECOND APLICATION FOR TERMINATION ORDER (UNPAID RENT)
Landlord lodges second application for termination order
On 18 December 2018, the same day that VCAT dismissed his first application, the landlord lodged a second application for termination of the tenancy. The claimed basis for the order was unpaid rent.[12]
[12]Pursuant to ss 548 and 549(2)(i) in Part 16 (now repealed) of the Residential Tenancies Act 1997 (Vic).
Hearing before VCAT (18 January 2021)
The application was heard by telephone on 18 January 2021.
In summary, the transcript of the hearing records the following events.
First, the presiding member rang the landlord’s estate agent. It is apparent that he rang on a landline at the agent’s business premises. After he was put through to Sylvia Uribe (the particular agent handling the matter at that hearing), the member told her that he tried to ring her mobile twice, but that it rang out each time. Perhaps a tad ironically, Ms Uribe explained that her mobile was not working.
Next, the member put Ms Uribe on hold and rang the tenant. The transcript then records the following:
Ms CATHCART: Hello.
MEMBER: Is that Ms Cathcart?
Ms CATHCART: It’s Melysa Maree.
MEMBER: Ms Cath — yes, Ms Cathcart. I’m Member [XY]. We’re having a hearing today about the property at - - -
Ms CATHCART: Okay. What’s your first name.
MEMBER: I don’t have a first name. I’m Member [XY], okay? But you can call me “Member” - - -
Ms CATHCART: Okay - - -
MEMBER: Or “Mr [XY]”, any of those things is good.
Ms CATHCART: What’s your first name?
MEMBER: It’s a matter — this is a — this is a Tribunal, Ms Cathcart, we don’t deal with first names - - -
Ms CATHCART: What’s your first name?
MEMBER: Okay, Ms Cathcart, could you just be quiet for a minute. I want to hear from Ms Uribe, please. Okay?
Ms CATHCART: I can’t — I can’t talk to you unless I know who you are (inaudible).
MEMBER: Okay, that’s fine, all right. I’m happy if you don’t want to talk to me. That’s all right. It’s up to you. Okay. All right. Now, Ms Uribe, why are we here?
Ms URIBE: Yes.
MEMBER: Yes, Ms Uribe?
Ms URIBE: Yes, I’m here.
MEMBER: Yes, okay, why are we here?
After that brief, but odd, exchange, Ms Uribe told the member that she was “here to try and get possession due to arrears”.
The member then swore Ms Uribe in and took evidence from her. Ms Uribe said that the tenancy commenced on 31 October 2018. The rent was $1,000 a month (or $230 weekly) and had been paid until 29 September 2020.
The member referred to the ledger before him. He observed that “the tenancy’s been going for a while” and asked whether something had happened recently. Ms Uribe said that the tenant had not responded to reminders, emails, or phone calls; that she was $4,000 in arrears; and that she “is claiming that she owns the property”. Ms Uribe said that, after the application was sent to her, the tenant emailed her and her director “asking if she [the tenant] could go … on a lease … [but] the landlord has replied with not approving”. Ms Uribe confirmed that it was a month-to-month tenancy, but that the landlord did not want another lease with the tenant. She said that no rent had been received since September and that the landlord “is dipping into his income payments”. The member said that he “[g]ot all of that”.
The member asked when the tenant fell into arrears — whether it was recently or a while ago. Ms Uribe said that it was “[b]ack in maybe … January 2020 when the rent was reduced”. She said that there was a rental adjustment from $1,000 down to $460, because of COVID-19, but that it continued for only a limited time. She said that the tenant’s last payment was of $500, in August 2020.
The member asked about the tenant’s source of income. Ms Uribe said she believed the tenant had worked, but not since March or April, when she notified the agent that she lost her job. She said she had been on Centrelink payments since. She added that “[w]e’ve been asking her for her Centrelink payments but we haven’t received anything … [a]bout that either”.
At that point in the hearing, the member asked the tenant whether she was on the line. The transcript does not record any response from the tenant. Instead, it records the member saying, “Mm, mm,” and then continuing with Ms Uribe’s evidence.
Ms Uribe went on to say that the rental reduction was for a period of three months. She seemed unsure from when that period ran but appeared to settle on May 2020.
Ms Uribe agreed with the member’s suggestion that the tenant would have been eligible at least for JobSeeker or JobKeeper.
Ms Uribe said that the landlord did not make an application to, or get any money from, “the assistance scheme”. She said that the tenant was meant to apply for rent relief, but that, on 20 October 2020, Consumer Affairs told the agent that they could not get in contact with the tenant and therefore would not approve rent relief for the landlord.
At this point, I shall return to the transcript, which records the following:
MEMBER: Right, Ms Cathcart, how does it all look from your point of view? Are you with us, Ms Cathcart? Mm, mm. I think perhaps Ms Cathcart’s hung up.
MS URIBE: I think, yeah. She would like for you to give [her] another call and for you to give your full name as she requested.
MEMBER: Yeah. I don’t think I want to do that.
MS URIBE: Yeah, absolutely.
MEMBER: All right. So, no, I’m not going to do that. I will make that order. I will make only a termination order. Okay?
MS URIBE: Okay.
The member went on to say that he was required to make the termination order for 28 days hence (i.e., 22 February 2021).
Then he said to Ms Uribe that she would have to make another application for possession at that time, “particularly in view of the circumstances of Ms Cathcart”. Significantly, the member then said this:
She must be given another opportunity to … [p]ut her case. She might be under a frame of mind. You might suggest that she might seek some advice somewhere … [i]f you ever speak to her. … So, anyway, be that as it may, that’s the order.
The member asked Ms Uribe if she would send a copy of the order to the tenant. Ms Uribe said she would. After exchanging the usual pleasantries with Ms Uribe, the member terminated the call.
Termination order
The relevant parts of the termination order are in these terms:
VCAT finds:
1. The landlord has applied for an order terminating the tenancy agreement on the basis of the matters specified in section 549(2)(i) of the Residential Tenancies Act 1997 (the Act).
2. The landlord has proven the grounds for the application.
3. The tenant’s failure to pay rent was not because of a COVID-19 reason.
4. Having regard to the matters in section 538 of the Act, and taking into account the interests of the landlord, tenant, any co-tenants or residents, neighbours or any other person who has been or may be affected by the acts of the tenant, and the impact of these orders on them, it is reasonable and proportionate to make a termination order.
5. The landlord is entitled to a termination order in the terms set out below.
VCAT orders and directs that:
The tenancy agreement will terminate on 22 February 2021.
Warning to tenant: If you do not vacate the rented premises by 22 February 2021 the landlord may apply to VCAT for a possession order.
PART 4: CHRONOLOGY OF SUBSEQUENT EVENTS
Introduction
I turn now to a chronology of some of the events that occurred in this Court following the making of the termination order on 18 January 2021 and before the making of the possession order on 27 August 2021.
Tenant files application for leave to appeal against termination order
On 9 February 2021, the tenant filed an application for leave to appeal[13] against the termination order.
[13]The notice is styled as a notice of appeal, as is the notice concerning the possession order. In substance, each notice is an application for leave to appeal (or a proposed notice of appeal), as it must be (see s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic)).
Stay of termination order, and discharge of stay
On 14 April 2021, a judicial registrar of this Court stayed the operation of the termination order until 30 April 2021.
On 28 April 2021, the judicial registrar continued the stay until further order on the condition that the tenant was to pay $500 into Court each fortnight, from 11 May 2021. (This is the amount of rent that, in the main, the tenant had been paying fortnightly from the commencement of the tenancy up until early-August 2020.) The funds were to be held pending further order.
On 21 July 2021, the judicial registrar discharged the stay. He did so because he was satisfied that, contrary to her claims, the tenant had not paid $15,000 to the landlord in satisfaction of the conditions of the stay. The judicial registrar rejected the tenant’s argument that there remained a debt due to her by the landlord (of about $600,000) and that the “payments” had been set off against that debt.
Landlord applies for summary dismissal of tenant’s application for leave to appeal
On 21 July 2021, the landlord applied to the judicial registrar for summary dismissal of the tenant’s application for leave to appeal against the termination order.[14]
[14]Pursuant to rule 4.08(8) of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2018 (Vic).
On 27 July 2021, the judicial registrar dismissed the landlord’s application. While the judicial registrar gave reasons for his decision, it is unnecessary to detail them here.
PART 5: APPLICATION FOR POSSESSION ORDER
Landlord lodges application for possession order
On 23 February 2021, in reliance on the termination order made on 18 January 2021, the landlord filed at VCAT an application for a possession order.
Hearing before VCAT (24 & 27 August 2021)
Introduction
The application for the possession order was heard by telephone on 24 and 27 August 2021.
A deputy president of VCAT presided at the hearing.
On this occasion, John Verduci was the estate agent who appeared for the landlord. Again, the tenant represented herself.
Deputy president’s reasons need not be summarised
Earlier, I indicated that I am of the view that the consequence of allowing the proposed appeal against the termination order is that the possession order must be set aside as well. As we shall see, in those circumstances, and given the way the case was argued in this Court, I have decided that it is unnecessary to determine the tenant’s other proposed grounds of appeal, including those concerning the possession order. For the same reasons, it becomes unnecessary to address the deputy reasons for his decision to make the possession order.
Other goings-on at hearing relevant to proposed appeal against termination order
That said, it is, I think, still necessary to point out parts of the evidence and other goings-on at the hearing before the deputy president. This is because these matters are potentially relevant to the tenant’s evidence in this Court about the events connected with the hearing of the application for the termination order and the complaint of procedural unfairness. They also go to the landlord’s submissions that to allow the proposed appeals would be futile and, alternatively, that, if the appeal were allowed, this Court should rehear the landlord’s applications and make substitutive orders.
Day 1: 24 August 2021
On the first day of the hearing, the following matters of note occurred.
After an introduction, the deputy president turned to Mr Verduci, who was sworn and gave evidence. Among other things, Mr Verduci said this:
a) The rent had been paid up to 29 September 2020 but there had been no payments since. The amount outstanding had grown to $11,000.
b) The stay imposed by the judicial registrar had been lifted because of the tenant’s failure to pay anything into Court, as required.
c) The landlord had applied to have the tenant’s application for leave to appeal to this Court dismissed. (It is clear from later discussion that the deputy president was aware that the landlord’s application for summary dismissal had been refused by the judicial registrar.)
d) The landlord had put the property up for auction because his family needed the money.
e) The landlord sent the tenant a notice to vacate by 31 August 2021 on the basis of a proposed sale of the premises. There was, however, no application on foot at VCAT for an order to vacate on that basis.
Next, Mr Wang spoke to the deputy president, without being sworn. He said that the tenant had not paid her rent for a year; that he could not pay the bills; that he was unwell; and that he needed to sell the property in order to pay medical bills and the costs associated with owning the property, such as rates and water (but there was no mortgage over the property).
The tenant gave evidence, which included the following:
a) She disputed that there was $11,000 in arrears, for several reasons:
(i) Her payment of rent was “well in advance” because the arrears claimed were more than offset by money owed to her by the landlord. The money was owed because the tenant had invoiced the landlord at $100 per minute for her time spent dealing with issues surrounding the tenancy, and that amount remained unpaid.
(ii) The tenant offered on multiple occasions to enter into a new rental agreement pursuant to which she would be happy to pay. She had offers of assistance from a church and other organisations for this purpose, but the landlord refused to enter into a new agreement.
(iii) The tenant “signed a treaty which freed [her] from [her] contract”.
b) The tenant said that, if the deputy president found that the tenant did owe rent of $11,000, she would not have the money to pay the amount owed.
c) She said that the finding (at the January hearing) that she was not affected by the pandemic was wrong. She said, “I wasn’t present … and so that finding was wrong because I didn’t get to talk to it. Nobody heard me. That’s why it’s in court.” The tenant had not worked since 28 January 2020. She went on to explain that she was unlikely to get a job teaching again because she had not taught for a long time and the job now required online skills (for online teaching).
d) The tenant said that she was being treated unfairly when the deputy president said that, in order to be efficient, he would not allow her to read her letters into the record but that he would read them instead.
e) When asked by the deputy president what she intended to do if an order for possession were made, the tenant said that she would “just live [in] the gutter like other homeless people”, sleep in her car, or commit suicide.
After the last remark, the deputy president expressed his concern. He told the tenant that he was thinking of contacting the police in order that she might be given a welfare check. He inquired whether the church she had spoken of might support her. The tenant, it appears, sought to assuage the deputy president’s concern by speaking of her access to medical assistance.
The deputy president adjourned the matter until 27 August 2021 in order to allow the tenant time in which to file further material.
Day 2: 27 August 2021
On the return of the matter, the deputy president indicated that he had received the tenant’s further materials in the interim.
He then asked Mr Verduci whether he wished to put anything further. Mr Verduci said he had nothing further to say, other than that the landlord wanted possession.
The deputy president then asked the same of the tenant. She said, in effect, that she still wanted to read out her letters. The deputy president said it was unnecessary for her to do so as he had considered all of the materials put before the tribunal.
He told the tenant that, on his calculations, the amount owing to that day was $10,916, and asked whether she had the capacity to pay that sum. The tenant said that she did not have the capacity to pay anything further, and that what she had paid already was in excess of the amount requested.
The deputy president raised the tenant’s (further) mention of suicide in her written materials, and his concern that a welfare check might be needed. The tenant said, among other things, that she was not interested (in a welfare check) and that she could choose what she did with her life.
The deputy president went on to explain that he would be making a possession order. The tenant then conducted herself poorly. She was rude and interrupted frequently.
The deputy president then tried to give his reasons for his decision. Again, the tenant kept interrupting. So disruptive was her behaviour that he placed her on mute. After reading more of his reasons, he “unmuted” the tenant, but had to place her on mute again when she continued to interrupt.
It appears that, at this point, the tenant hung up her phone. The deputy president was sufficiently concerned to call the registrar in order to organise assistance for the tenant, but then the tenant called back. She threatened to kill herself and claimed that the deputy president had not listened to her. After attempting to reason with her, but without success, he put her on mute again.
The deputy president resumed his reasons but broke off soon afterwards to say that the tenant had hung up again. In the meantime, he advised Mr Verduci that he had asked the registrar to call triple-zero.
At that point, the tenant called back again. Again, she would not listen when the deputy president explained that he should not be interrupted when giving his reasons. The tenant indicated she was having problems with her phone, although the deputy president noted that he could hear her. He put her on mute again and then continued with his reasons.
After a goodly period into those reasons, the deputy president observed that the tenant had hung up again but had rung back straight away. He put her on mute again and continued with his reasons.
After the tenant repeated this behaviour a couple more times, the deputy president sought to continue with her on the line. Again, she interrupted. He put her on mute again.
After a little longer, the deputy president observed that the tenant had left (or “dropped out”) and come back again. The tenant explained that someone had sent her a message on her phone, which, she believed, interfered with her connection. Again, however, she interrupted. Again, she was placed on mute and the deputy president continued with his reasons.
A short while later, it seems that the tenant hung up again and then rang back, but still she was disruptive and again was placed on mute.
After completing his reasons, the deputy president unmuted the tenant. Again, her behaviour was challenging and disruptive.
The deputy president explained that, as a result of the possession order he just made, the tenant had between 21 and 28 days to look for alternative accommodation.
A scrupulously fair hearing in trying circumstances
Before concluding this summary, I make the following remarks.
As the summary reveals, the tenant’s behaviour fell well short of what is expected of a participant in any hearing, whether before a tribunal or a court. Her conduct was disgraceful. She interrupted on numerous occasions; she refused to listen; she hung up and rang back, repeatedly; and she attacked the deputy president’s reasons, and unfairly so.
Yet, despite that behaviour, the deputy president remained calm and focussed on the task at hand. He explained matters with courtesy and clarity. He treated the tenant with dignity and showed Job-like patience. Whenever the tenant hung up and then called back, he allowed her to join in immediately, and he did so with equanimity.
Only as a last resort did he place the tenant on mute. On each occasion, his decision to do so was justified and necessary for the orderly conduct of the hearing.
The deputy president made every reasonable effort to afford the tenant procedural fairness. And he achieved that result. In my view, he conducted a scrupulously fair hearing in trying circumstances.
Possession order
The relevant parts of the possession order are in these terms:
VCAT finds:
1. On 18 January 2021 the landlord obtained a VCAT order that specified the tenancy agreement would terminate on 22 February 2021.
2. The tenant was still in possession of the premises after 22 February 2021.
3. Having regard to the matters in section 538 of the Act, and taking into account the interests of the landlord, tenant, any co-tenants or residents, neighbours or any other person who has been or may be affected by the acts of the tenant, and the impact of these orders on them, it is reasonable and proportionate to make a possession order.
4. The landlord is entitled to a possession order in the terms set out below.
VCAT orders and directs that:
1) The tenant must vacate the rented premises by 10 September 2021.
2) At the request of the person who obtained the possession order and on payment of the prescribed fee, after 10 September 2021 the principal registrar of VCAT must issue a warrant of possession to be executed within 14 days after the date of issue. This request may be made no later than 27 February 2022.
Warning to tenant:
If you fail to vacate the rented premises by 10 September 2021 the landlord can request the principal registrar of VCAT to issue a warrant of possession.
You may then be forcibly vacated from the rented premises by a police officer or an authorised person carrying out a warrant of possession.
Tenant files application for leave to appeal against possession order
The next day, on 28 August 2021, the tenant filed an application for leave to appeal against the possession order.
Stay of possession order
On 15 September 2021, the judicial registrar stayed the possession order until 21 October 2021. On that date, I ordered that the stay be extended until further order.
PART 5: FURTHER APPLICATION FOR POSSESSION (PROPOSED SALE OF PROPERTY)
At the hearing of these matters, after the tenant raised the issue, I was informed by Mr Verduci of the following:
a) In the previous week, on 12 October 2021, the landlord had made an application to VCAT for an order for possession based on a proposed sale of the property.[15]
[15]Pursuant to ss 91ZZB and 322(1) of the Residential Tenancies Act 1997 (Vic).
b) The application was dismissed for failure to prove service of the application on the tenant.
c) The VCAT member who heard the case indicated that, if it had come to it, instead of hearing the matter on the merits, he would have adjourned the application given the outstanding matters in this Court.
PART 6: APPLICATION FOR LEAVE TO APPEAL — TERMINATION ORDER
Introduction
I turn now to the application for leave to appeal against the termination order made on 18 January 2021. This application was heard together with the application for leave to appeal against the possession order made on 27 August 2021.
The hearing was conducted in person.
Tenant not legally represented
On these applications, as she had done at VCAT, the tenant appeared without legal representation.
The tenant is neither a legal practitioner nor legally trained. She worked most recently in teaching at a primary school.[16]
[16]A letter (dated 31 October 2019) from the principal of the school was annexed to one of the tenant’s affidavits. The letter confirmed that the tenant’s period of employment (which had commenced on 26 August 2019) would expire on 27 January 2020.
The tenant says she has a disability. The precise nature of her disability was not disclosed, although she did mention that she had difficulties with memory and concentration. Further, it became apparent during the hearing that the tenant has a tendency to become very fixed on ideas. At times — and this is consistent with her behaviour before the deputy president — she appeared to find it hard to listen. Often, she would continue to talk, despite being asked to stop, even when it was plain that was what being said to her was to her benefit or that what she was saying might be unhelpful to her cause. I endeavoured to make due allowance for these difficulties.
Happily, the tenant’s complaint was a simple one. She made it plain, both in writing and orally, that she was denied a reasonable opportunity to be heard. The point lost none of its force or clarity as a result of her being unrepresented.
McKenzie friend
Mr Wang also appeared without legal representation, as he had done at VCAT. He did, however, apply for leave for Mr Verduci to appear as his McKenzie friend.[17]
[17]See McKenzie v McKenzie [1970] 3 All ER 1034; [1970] 3 WLR 472; [1971] P 33.
In the preliminary stages of this application, the judicial registrar informed Mr Wang, through Mr Verduci, that he needed to appear personally or by a legal practitioner. The judicial registrar was right to do so.
That said, there are three factors, in combination, that moved me to grant Mr Wang’s application:
a) English is not Mr Wang’s first language. It was apparent from what he did say in this Court that he would have been unable adequately to represent himself. Indeed, it was Mr Verduci who had to make the application for Mr Wang to have a McKenzie friend.
b) There was no suggestion that Mr Wang is legally trained.
c) It is commonplace for estate agents to represent landlords at VCAT. Mr Verduci (or his employee, Ms Uribe) appeared for Mr Wang throughout the VCAT hearings and in the preliminary stages of the applications in this Court before the judicial registrar.
While it is unusual to grant such applications in this Court, there was nothing usual about this case. I considered that the particular circumstances warranted a departure from the usual practice.
Grounds of appeal and questions of law
The tenant drew her own documents in these applications, including her proposed notice of appeal. While they are easy enough to read and undoubtedly drafted with serious intent and great care, all of her documents are unduly long, quite discursive, and packed with irrelevancies and ill-informed and/or misconceived ideas.
The notice contains numerous purported questions of law and grounds of appeal. As might be expected, these complaints were not drafted as a skilled administrative lawyer might have drafted them.
Nevertheless, as I read the notice, at least five of the questions of law (those numbered 1, 5, 13, 14 and 15), and the first ground of appeal, all appear to raise, in one way or another, a complaint that the tenant was denied procedural fairness. And, as I have said, her complaint in that regard is simple and unmistakeable.
Section 148(1)(b) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (“the VCAT Act”) provides that a party to a proceeding may, with leave, appeal to this Court on a question of law from an order of the tribunal in the proceeding. The tenant’s complaint of a denial of procedural fairness raises a question of law for the purposes of s 148(1).
While the tenant at times during the hearing referred to matters that might be thought to touch upon some of the remaining points in the notice, the only complaint that I took to be pressed in oral argument was the complaint of procedural unfairness.
In any event, since that complaint must succeed, it is unnecessary to consider any of the other complaints in the notice. I say nothing more about them.
The tenant’s evidence in this Court
Evidence from tenant required
Ordinarily, evidence is not given on an application for leave to appeal, or an appeal, under s 148(1) of the VCAT Act. Exceptions include cases of fresh evidence.
Another exception is a case like the present where, of necessity, evidence may be required to establish the circumstances of the alleged denial of procedural fairness.
Ahead of the hearing in this Court, the tenant filed affidavit material in which she spoke of the events surrounding the hearing of 18 January 2021.
In my view, it was necessary for the tenant, in addition, to give sworn viva voce evidence at the hearing. This is not only because she was intending to rely on the affidavits, and therefore was liable to be cross-examined on them, but also because I wished to hear, and test, her account of key matters on which she relied.
I ruled that Mr Verduci was not entitled to cross-examine the tenant at large. Instead, he was instructed that, if he wished to cross-examine her at all, he was to confine his questions to (a) the tenant’s account of the circumstances surrounding the phone hearing on 18 January 2021; (b) her claims as to what she would have sought to put before VCAT at that hearing; and (c) her capacity or preparedness to pay the outstanding rent. Later in the hearing, it became apparent that, because of a misunderstanding, Mr Verduci had refrained from cross-examining on matters he was entitled to explore. Accordingly, I allowed him to ask those questions of the tenant at that time.
As the tenant was unrepresented, I had to lead her evidence. In effect, it turned out to be a mixture of examination-in-chief and cross-examination.
Tenant’s evidence of the phone call and subsequent events
In summary, the tenant’s evidence was to this effect.
As expected, the tenant received a call on her mobile phone for the purposes of the VCAT hearing on 18 January 2021. A screenshot the tenant took of her phone subsequently (a photocopy of which was exhibited to one of her affidavits) showed that the call commenced at 14:43 and lasted for 57 seconds.
The tenant did not dispute that the exchange between the member and her during the call was as is recorded in the transcript.
The tenant did not hang up on the member. Her phone connection dropped out, as it does sometimes.
Since the member’s call was from a blocked (or undisclosed) number, she could not ring him back directly. The screenshot referred to earlier showed an “incoming call” with “No Caller ID”.
So, instead, she rang VCAT’s general number, twice. When she rang, the tenant spoke to a woman and asked her what to do, but the woman did not know and put her onto another. One option she was given when she phoned was “discrimination”. Since this is what she thought was happening to her, she tried that area. At one stage — she was unsure whether this occurred on the first call or the second — a woman she spoke to hung up on her when she (the tenant) “got upset”. By the time the tenant ultimately got through to someone able to assist, she was told that “it’s too late, they’re making a judgment”.
Again, this account is supported by screenshots of her phone. The first call, at 14:48, was an outgoing call to VCAT for 21 minutes. The second, at 15:12, was an outgoing call to VCAT for 23 minutes.
Tenant’s evidence of what she would have put to VCAT
I asked the tenant what she would have said in response to the case against her had she been able to do so at the hearing. Her evidence was that she would have made the following points:
a) The tenant made offers to the landlord (through his agent) to enter into a new lease, but he refused and was not willing to negotiate.
b) For this purpose, she had been offered financial assistance by a church and by Consumer Affairs.
c) Two days prior to the hearing, the tenant told Mr Verduci that she had $4,000 “sitting there”. At that time, she did not dispute that she owed the money. She had the money there and simply wanted to make a new rental agreement, but the landlord would not agree. All she wanted was some security in her accommodation.
d) Contrary to Ms Uribe’s evidence on 18 January, there was no rental reduction at all. The tenant did not even know she was entitled to ask for a rental reduction at the time Ms Uribe spoke of, which was around the early part of 2020 and up to May. (The tenant added that Ms Uribe was not with the agent at that time.) Nor would she have asked for a rental reduction at that time because she thought she might be able to get work again.
e) Later, perhaps in January 2021, when trying to negotiate a new tenancy, and pursuant to the advice of Consumer Affairs, she did request a rent reduction. In fact, Consumer Affairs said they would pay $3,000 towards the rent if there were a new agreement in writing. And a church was prepared to pay $6,000 but only if the landlord would allow the tenant to stay on. But the landlord would not agree. And, at that time, without a new agreement (and, therefore, I took her to mean, the associated financial support), she would not be able to pay the rent.
f) The tenant said that a combination of factors explained why she had not paid rent from the end of September 2020 until the hearing of 18 January 2021:
(i) As just explained, the landlord had refused to negotiate a new tenancy agreement.
(ii) She believed that, as a result of the landlord’s failure to negotiate, there was no longer any contract.
(iii) The tenant had signed a treaty[18] that required her to review and perhaps renew all of her contracts.
[18]In her documents, the tenant described the treaty as the Treaty of the International Tribunal for Natural Justice.
(iv) The tenant was being abused by her neighbours, and the landlord was doing nothing about it. The landlord was also tardy in making repairs to a water leak in the unit.
(v) The tenant had not worked since her contract with a school had come to an end in late-January 2020. Thereafter, she was unable to get the usual casual teaching jobs she otherwise would have got, first, because February is usually quiet, and then because COVID-19 struck. This meant fewer jobs were available in that field and, even then, only those trained in digital technology for online learning, which the tenant is not, would be employed. She looked for a teaching job for most of 2020 but could not get one.
(vi) While the tenant started receiving Centrelink benefits, this provided less income than she had when working. The COVID-19 payment helped but that was reduced over time.
(vii) The rent was $1,000 per month but she aimed to pay $500 per fortnight, which was simpler for her and kept her ahead. That is why, according to the ledger, she was $970 ahead (although she thinks it should be $1,000) when she made the last payment in August 2020. This covered her until the end of September 2020.
(viii) The tenant had physical health problems that made it more difficult for her to find a job. She had spinal injuries as a result of being struck by a car when she was in her 20s (she is now in her 40s). A consequence of those injuries is that she is not meant to lift more than five kilograms and, as a result, employers will not take her on full-time.
(ix) In December 2020, the tenant’s regular counsellor moved away, and she had not had access to counselling since. In evidence that I found hard to follow, it seems that there was some sort of dispute about another counsellor. The tenant was quite distressed when giving this evidence.
The tenant’s evidence with respect to payment of outstanding rent
When asked whether she would pay the outstanding rent, the tenant maintained that she had paid it already. She repeated the nonsensical argument that, because her bill to the landlord for over $600,000 for her time spent in dealing with issues relating to the tenancy remained unpaid, she was entitled to treat that debt as offsetting the claimed rental.
The tenant went on to say that, if she did owe money, she would pay it. She also said, however, that she does not have any money at present.
Landlord did not give or lead any viva voce evidence in this Court
Mr Verduci was asked whether he wished to call any witnesses to give evidence in this Court. He did not.
Later in the hearing, however, during the course of Mr Verduci’s submissions, it was apparent that Mr Wang wished to say something. I did not require him to be sworn. In substance, I understood him to say the following things (which are similar to the points he made to the deputy president): the tenant has not paid her rent; he has a financial problem; he has a medical problem (a detached retina[19]); he cannot sleep with worry; and he has difficulties with his teeth. He said that he just wanted to sell the property quickly and forget everything.
[19]A medical report detailing Mr Wang’s condition was annexed to one of his affidavits before the Court.
Findings of fact
I turn to my findings.
Phone hearing at VCAT (18 January 2021)
At the outset, I note that Mr Verduci did not, in cross-examination, challenge the tenant’s account of the events surrounding the phone calls on 18 January 2021.
In fact, Mr Verduci expressly conceded that, despite the evidence of her repeatedly hanging up on the deputy president during the August hearing, the tenant should be given the benefit of the doubt in respect of the suggestion that she hung up on the member in the January hearing. I agree.
Moreover, as I indicated at the commencement of these reasons, I positively accept the tenant’s account of these events. Her evidence on this topic was given in a clear and convincing manner. She answered all questions and did not attempt to shirk any issue. She made appropriate concessions when she was unsure of details, but she remained firm on the key events.
I asked her directly whether she hung up on the member. She denied it. Her denial was convincing.
Her explanation of what in fact occurred was plausible and convincing too. Her phone connection simply dropped out, which it does every now and then. It is common experience that mobile phone connections drop out on occasions.[20]
[20]This, we all know, is one of the minor irritations of modern life. But I sometimes wonder how it is that, despite the technological (and engineering) triumph that saw Man rocket to the Moon and back, safely, in 1969, today, 52 years later, mobile connections are still often unreliable. Maybe Neil Armstrong and his chums should consider themselves lucky that their lives did not depend upon something as unreliable as mobile phone connections.
The tenant’s account of her calls to VCAT after the connection dropped out was also convincing. In addition, it was supported by the information on the screenshots from her phone.
Given that the call from the VCAT member lasted 57 seconds, it is likely that her line dropped out soon after the member turned to Ms Uribe. Since that call was commenced at 14:43, it would have been about 14:44 (or nearly 14:45) when the line dropped out. Allowing her time to realise the line was dead and to work out what to do next, that her first call was to VCAT at 14:48 suggests that the tenant acted reasonably promptly.
The duration and timing of the two calls to VCAT (21 minutes from 14:48, and 23 minutes from 15:12) is consistent with the tenant’s account of having difficulty getting through to someone who could help. When regard is had to the transcript as a guide to the total duration of the hearing, those times are also consistent with the hearing concluding by the time she was told it was over.
Things the tenant would have put to VCAT in January, if she’d had the chance
The tenant’s evidence of the things she would have put to VCAT was more discursive and disjointed. While that made it harder to follow, I still accept her evidence on these issues.
I hasten to say that it is impossible to agree with the conclusions she seeks to draw from many things. An example is her misconceived idea that she does not owe rent because of unpaid invoices (for her time) she has sent to the landlord. Equally, it appears that she believes these things to be true, unjustifiable though they are. But, on matters of fact — including what she would have said to VCAT — I accept her evidence.
Indeed, one of the more refreshing things about the tenant as a witness is that she gave no indication that, in any respect, she tried to tailor her evidence to suit her cause. On the contrary, there were times when she might easily have done so, but did not. For example, she might have attempted to exaggerate the impact of her reduced income and increased financial stress through unemployment, and make that the dominant reason for her actions, but she did not. Instead, she readily conceded that there were several reasons why she did not pay the rent and often focussed on the ones that could not sensibly assist her. In short, she impressed me as guileless, perhaps to a fault.
Consideration
Given those findings, there can be no argument but that the tenant was denied procedural fairness at the hearing of the application for the termination order.
The tenant was on the phone for no more than 57 seconds. On my estimation, nothing other than her Kafkaesque exchange with the member, and the introductory remarks of Ms Uribe (and perhaps her swearing-in too), could have occurred during that period. Thereafter, however, after the tenant’s line dropped out, the member, oblivious at first, forged ahead without her. He heard Ms Uribe’s viva voce evidence and her submissions. Then, after discovering that the tenant was not on the line, and despite Ms Uribe’s sensible suggestion that he should ring the tenant back, the member determined that he was “not going to do that”. And yet, straight after making the order, he went on to remark — incongruously, given what he had just said and done — that the tenant “must be given another opportunity to … [p]ut her case”.
Now, true it is that Ms Uribe mentioned a few things that, it seems, she understood to represent the tenant’s position — including that she no longer had a job and that the landlord had declined her request for a new tenancy. But this could not be, and was not, an adequate substitute for the case the tenant wished to put.
Moreover, on the tenant’s evidence before me, the agent was simply wrong to say that there had been a rent reduction, from $1,000 down to $460 for three months, because of COVID-19, for there was no rental reduction at all, ever. (As I understood it, Mr Verduci ultimately accepted that the tenant was correct about that.)
The upshot is that the tenant was denied a reasonable opportunity to hear and test, by cross-examination, the evidence of the landlord’s agent. She did not get to give her own sworn viva voce evidence. Nor was she allowed to make her own submissions. In short, she was not afforded anything even approaching procedural fairness.
But, while VCAT must act fairly and is bound by the rules of natural justice,[21] not every breach of the rules of procedural fairness will warrant the setting aside of orders resulting from a decision afflicted with this error. For example, the breach may be minor in the scheme of things.
[21]See ss 97 and 98(1)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
In some instances, it may be relevant that VCAT must have an eye to speed and efficiency. Indeed, the tribunal is commanded to conduct each proceeding with as little formality and technicality, and to determine each proceeding with as much speed, as is permitted by the requirements of the VCAT Act and a proper consideration of the matters before it.[22] Sometimes, in pursuit of these requirements, it will be enough, for example, that the tribunal determines a matter on documentary evidence alone, despite a litigant’s insistence that viva voce evidence be given.[23] Or a limit may be placed on the length of submissions, or on their content. Not every rabbit must be chased down every burrow. The time and resources available to conduct VCAT hearings (or any hearing, for that matter) are not infinite. No matter how important they may seem to a party, some points just cannot reasonably be entertained because, in the end, they cannot make any meaningful difference to the decision.
[22]See s 98(1)(d) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
[23]See ss 100(2) and (3) and 102(2) and (3)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), which allow VCAT to conduct cases on documentary evidence alone.
Sometimes, what might appear to be a lack of procedural fairness will, in truth, be no such thing because the affected party may be the author of his or her own misfortune. A party might deliberately hang up during a phone hearing, or switch off a computer in a Zoom hearing, or walk out of the hearing room in a huff during an in-person hearing. While each case will turn on its own facts, this Court would be slow to countenance the grave step of setting aside an otherwise error-free order when a party has behaved in that fashion but thought better of it later.
The tenant’s case, however, does not fall into any of those categories. At the hearing in issue, VCAT was required to afford the tenant a reasonable opportunity to hear and cross-examine the landlord’s agent, to give her own sworn viva voce evidence, and to make submissions.[24] As I explained a moment ago, sometimes, a fair hearing will not require those attributes.[25] But that was not this case, especially in circumstances where the landlord had been given those opportunities, and had acted on them, and where, as we have seen, the tenant had a case to put. Through no fault of hers, the tenant was denied these basic requirements of procedural fairness. The breach was not minor, but grave. It is as if the tenant had no hearing at all. As a result, VCAT’s decision involved jurisdictional error, lacks legal foundation and, in law, is no decision at all.[26]
[24]See s 102(1) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
[25]Again, see ss 100(2) and (3) and 102(2) and (3)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
[26]Minister for Immigration v Bhardwaj (2002) 209 CLR 597 at 614-615[51] (per Gaudron and Gummow JJ).
It follows that, subject to some competing considerations (including whether it would be futile to allow the proposed appeal), the termination order must be set aside and the landlord’s application for termination must be remitted to VCAT for rehearing. As I foreshadowed earlier, and as I shall explain in more detail shortly, I am satisfied that, having regard to those competing considerations, those orders should be made.
PART 7: APPLICATION FOR LEAVE TO APPEAL — POSSESSION ORDER
Introduction
Before moving to those competing considerations, I shall address, albeit briefly, the tenant’s application for leave to appeal against the possession order made on 27 August 2021.
Grounds of appeal and questions of law
The notice contains what are said to be nine questions of law and twelve grounds of appeal. As indicated earlier, however, in the circumstances of this case, it has become unnecessary to consider any of these complaints for the purposes of this application. Accordingly, I need say no more about them.
Setting aside the termination order means the possession order must fall too
Instead, I shall explain why it is that the possession order must be set aside without determination of any of those complaints.
At the time of the hearing before the deputy president, s 550(1) of the Residential Tenancies Act 1997 (Vic) (“the RTA”)[27] provided that it was a precondition to the exercise of the jurisdiction to make a possession order that “[VCAT] has made an order under [s] 549(1) terminating the tenancy agreement”. The order to which s 550(1) referred must be a valid order. The decision of 18 January 2021 to make the termination order followed a hearing attended by an absence of procedural fairness and, accordingly, involved jurisdictional error. It follows that the termination order was neither valid nor made “under” s 549(1). The deputy president relied upon that order to make the order for possession. In those circumstances, the possession order must be set aside, too.
PART 8: ARE THE PROPOSED ORDERS FUTILE?
[27]Section 550, and its related provisions, were contained in Part 16 (“COVID-19 temporary measures”) of the Residential Tenancies Act 1997 (Vic). While Part 16 was repealed from 29 March 2021, the transitional provisions meant that this part of the Act still applied to the determination of the application. On the transitional provisions concerning the repeal of Part 16, see Markiewicz v Crnjac [2021] VSCA 290 (judgment in which was handed down only today), and the discussion below.
Introduction
I turn now to consider, in more detail, Mr Verduci’s submission to the effect that leave to appeal should be refused, or that, if the appeal is to be allowed, VCAT’s orders should be affirmed[28] on the basis that it would be futile to do otherwise.
[28]Pursuant to s 148(7)(a) of the Victorian Civil and Administrative Tribunal Act 1998 (Vic).
Landlord’s submissions
Mr Verduci argued that, whatever may be said of the merits of her case as at January, the fact of the matter is that, since then, the tenant has paid no rent at all. Not one cent. Yet, all that time, the tenant has lived in the premises, rent-free. Further, the tenant’s stated justifications for failing to pay include views about the law which, while fervently held, are hopelessly misconceived. For example, the tenant, even now, still persists in the claim that the landlord owes her over $600,000 (at $100 a minute) for time spent dealing with issues surrounding the tenancy, and that this offsets any rent owing. Finally, in light of her approach thus far, and her evidence in this Court, there seems to be little prospect of her paying the rent owed or of her having the wherewithal to do so.
Thus, Mr Verduci submitted that, upon a rehearing of the application for termination, and even allowing fully for the matters past and present that might be put in the tenant’s favour, unless there were, say, a reasonable attempt in the meantime to pay the rent owing, the landlord must succeed.
Further, the landlord’s stated intention is that, even if the rent owing were paid, he still would make a fresh application for termination of the tenancy, but instead on the basis that the property is to be sold. The landlord has had enough. He is struggling with failing health and is receiving no rental income from the premises in the face of mounting bills. He wants the tenant out.
Tenant’s position
While she did not make submissions directly on the point, as I understood her, the tenant urged that the orders be set aside and that she at least should have a rehearing on the original applications.
Consideration
As compelling as the landlord’s plight appears to be, I am satisfied, for several reasons, that the orders must be set aside and that the applications must be reheard.
First, the denial of procedural fairness in the January hearing was so grave that it is as if the tenant had no hearing at all. Without more, I find it very hard to accept that an order of such significance to a person’s housing security could stand when obtained in those circumstances. There is, in my view, utility in a rehearing in circumstances such as these if for no other reason than to ensure that the tenant receives the hearing to which she was entitled. A rehearing also ensures that the interest of all in the proper administration of justice is vindicated.
Secondly, however, there is more to be said on the tenant’s side. On her evidence, which I accept, it appears that the tenant had an arguable case against termination at that time. The amount of rent outstanding was much lower back then. As I mentioned earlier, as I understood him, Mr Verduci conceded that no rental reduction was given to the tenant during 2020 or at all. There seems little doubt that the tenant was in dire straits as a result of the pandemic. She had no job, little prospect of getting another, and a reduced income. It appears that she made serious offers to enter a new tenancy, and that she had the offer of financial assistance to do so. But the landlord would not agree to a new tenancy. Instead, he brought an application to have the tenant evicted on the basis of her alleged, but unproved, intimidating behaviour. When he failed on that application, he brought the application based on unpaid rent. I am satisfied that it is reasonable to think that, had these matters been placed before VCAT, a different decision may have been made.
This is all the more likely in view of the state of the law applicable at that time. Part 16 of the RTA (which was headed “COVID-19 temporary measures”) was operative from 29 March 2020 to 28 March 2021. The stated purpose of Part 16 was to change, temporarily, the operation of the RTA in response to the COVID-19 pandemic.[29] As the Court of Appeal explained in Markiewicz v Crnjac[30] (a judgment which, serendipitously, was handed down only today):
[The provisions in Part 16 of the RTA] prohibited enforcement measures — termination and possession — if there was a breach for a COVID-19 reason. If there was a breach, but not for a COVID-19 reason, enforcement measures were restricted. An application to the Tribunal for an order for termination of a tenancy agreement was necessary and would only be made, where based on the failure to comply with a tenancy agreement, if the tenant could comply without suffering severe hardship … .
[29]See s 534(1) of the Residential Tenancies Act 1997 (Vic), which was within Part 16.
[30]Markiewicz v Crnjac [2021] VSCA 290 at [13] (per Emerton and Sifris JJA and Macauley AJA).
Under s 537, “COVID-19 reasons” included that the tenant was unable to pay rent because of illness (whether or not the illness was COVID-19 itself) or because it was not reasonably practicable to do so without suffering severe hardship. After referring to s 537 and some of its associated provisions, the Court went on to say that “Part 16 thereby made it impossible to evict a tenant with a COVID-19 reason for non-payment of rent”.[31]
[31]Markiewicz v Crnjac [2021] VSCA 290 at [19] (per Emerton and Sifris JJA and Macauley AJA).
Had the tenant been given the opportunity to raise at the January hearing at least some of the matters she mentioned in her evidence in this Court, any VCAT member hearing the application would have been obliged to give serious consideration to the question whether these provisions were engaged. If that is accepted, it is, I think, easier to see how a different result might have been reached.
Thirdly, however, the tenant’s chance, as it existed back then, to resist the termination application is now gone forever. This is because, by definition, the same factors that were in play in January, and the balance between them on the one hand and the case against her at that time on the other, can never exist again. Necessarily, things are different now. Indeed, the landlord’s submission relies heavily on subsequent events to show that the tenant’s position is hopeless now. True it is that the tenant may well have cruelled her own pitch by holding fast to her misconceived ideas and by failing to pay any rent at all in the interim.[32] But the fact that, through no fault of her own, she is forever denied the chance, as it existed in January, to resist the application is, in itself, a form of unfairness. While it is unnecessary to my ultimate decision, I think that that unfairness should be taken into account when considering the discretion whether to refuse leave to appeal or dismiss the proposed appeals and affirm VCAT’s orders.[33]
[32]Of course, that the circumstances have changed in this or any other way since 18 January 2021 does not mean that the tenant would be unable to resist the landlord’s application for termination on a rehearing.
[33]Given the events revealed by the transcript of the January hearing and the evidence given by the tenant in this Court, this may have been a suitable case for an application under s 120 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic). Had such an application been granted, and had the merits of the landlord’s original application for a termination order been heard again by VCAT in consequence, I daresay that the tenant’s applications to this Court would not have been necessary and that the whole case could have been determined much sooner.
Another aspect of the last point is this. While Part 16 of the RTA was repealed on 28 March 2021, there is in place a suite of transitional measures that have continued the operation of the protective provisions of Part 16, at least up until and including today (i.e., 25 October 2021).[34] There is a (possibly tricky) question as to whether Part 16, or some other provisions, would apply to the landlord’s applications on a rehearing. If the correct view turns out to be that Part 16 does not apply, but a less favourable regime does, that will be an unfairness that has befallen the tenant simply because of the denial of procedural fairness in January and the time taken to reach this Court in order to have the error corrected and the case reheard.
[34]See, e.g., the transitional provisions in the COVID-19 Omnibus (Emergency Measures) Transitional Regulations 2021 (Vic).
I should add that I do not consider it appropriate for me to offer a view on whether or not Part 16 might apply at any remitted application. Instead, the answer to that question will be a matter for VCAT upon any rehearing, if indeed the landlord pursues the applications. Happily, if it comes to it, the tribunal will have the benefit of the reasons in Markiewicz v Crnjac, for the Court in that matter considered those transitional provisions in great detail.
Fourthly, despite the landlord’s seemingly good case at the moment, I cannot assume or know whether, upon any rehearing of the termination and possession applications, the state of play will be as it appears right now. Any number of things might happen in the interim to affect the case one way or another. For a start, the evidence given at a rehearing may be materially different from that which is expected. For example, despite her stance thus far, prior to any rehearing, the tenant may well make a reasonable offer to pay the rent owing. In this regard, she did say in evidence that, if she did owe money, she would pay it. Well, it is plain, on the face of it, that she does owe over a year’s worth of rent. Maybe, just maybe, being told such a thing by this Court will cause her to reconsider her position. Perhaps she will come to realise that her arguments relating to the treaty and the $600,000 debt are wholly misconceived as well, and that they should be abandoned. But the point is not whether these possibilities may materialise. Instead, it is that the evidence cannot be known until it is given at any rehearing. And it will be a matter for VCAT to determine what to make of that evidence if and when it comes.
Finally, the same is true of the possible fate of any fresh application for termination based on a proposed sale of the property. While I can guess, I cannot know what the evidence might be. Again, if such an application is pursued, its determination will be for VCAT on the evidence before it at that time.
For these reasons, I cannot say that any rehearing of the applications would be a futile exercise. I am not persuaded that I should refuse leave to appeal or affirm VCAT’s orders. On the contrary, I am satisfied that it is necessary to set aside those orders and direct that the applications be reheard.
PART 9: REMITTAL TO VCAT OR SUBSTITUTIVE ORDERS BY THIS COURT?
I turn now to the question whether, pursuant to s 148(7)(b) and/or (d) of the VCAT Act, instead of remitting the matters to VCAT, I should make orders that VCAT could have made or that I think are appropriate.
Mr Verduci urged me do so. Perhaps surprisingly, so did the tenant, albeit she struck me as being uncertain about it.
I am satisfied, however, that it is for VCAT, and not this Court, to rehear any application the landlord might pursue.
Relevantly, s 148(7) of the VCAT Act provides as follows:
The Court of Appeal or the Trial Division, as the case requires, may make any of the following orders on an appeal—
(a) an order affirming, varying or setting aside the order of the Tribunal;
(b) an order that the Tribunal could have made in the proceeding;
(c)an order remitting the proceeding to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the court;
(d)any other order the court thinks appropriate.
This Court, in the exercise of its jurisdiction under s 148, may make substitutive orders where only one conclusion is open on the correct application of the law to the facts as found by VCAT.[35] But, in this case, it cannot be said that only one conclusion is open. First, as no reasons were given by the member, it is impossible to discern all of his findings of fact. For example, while the member’s order recorded his finding that “[t]he tenant’s failure to pay rent was not because of a COVID-19 reason”, without any reasons, the factual findings underpinning that conclusion cannot be identified. Second, and in any event, it is meaningless to speak of “the facts as found by VCAT” when, because of the absence of procedural fairness, any findings the member did make were made without hearing the tenant’s case. Thus, the findings of fact required for the purposes of reaching the conclusions necessary to make a substitutive order cannot be determined unless and until there is a rehearing.
[35]Osland v Secretary, Department of Justice [No 2] (2010) 241 CLR 320 at 332[20] (per French CJ, Gummow and Bell JJ).
Nor, for the same reasons, is this a case in which considerations of convenience would permit this Court to determine factual matters on uncontested evidence or primary facts already found by VCAT.[36]
[36]See, e.g., Leeda Projects Pty Ltd v Zeng (2020) 61 VR 384 at 433[197] (per McLeish JA; Tate JA agreeing at 386-387[3]).
This Court’s powers must be exercised having regard to the limited nature of the appeal provided for by s 148. Absent such restraint, an appeal on a question of law would open the door to an appeal by way of rehearing.[37] Yet that, in truth, is what I am being urged to do. In a matter like this, in order to have the requisite findings upon which a conclusion could be reached, it would be necessary to hear the whole case afresh. This would require the Court to take evidence (including viva voce evidence), receive submissions, make findings of fact, reach a decision on evaluative and discretionary matters, and make orders accordingly. By definition, that would be a complete rehearing. I do not accept that it is either permissible or appropriate for this Court to engage in a hearing of that nature in this case. Instead, that task is for VCAT on a remittal.
[37]Osland v Secretary, Department of Justice [No 2] (2010) 241 CLR 320 at 333[20] (per French CJ, Gummow and Bell JJ).
Moreover, VCAT, as a specialist tribunal in the area of residential tenancies, is better placed than this Court to rehear and determine these applications.
Finally, if, as foreshadowed by the landlord, a fresh application based on the proposed sale of the property were brought instead of, or as well as, the remitted applications, then only VCAT could hear that fresh application. This Court would have no jurisdiction to do so. This is yet another reason why the existing applications should not be determined by this Court but should be remitted to VCAT. In that way, all matters, whether remitted or fresh, may be managed and determined by that specialist tribunal.
PART 10: ORDERS
Substantive orders
Given my conclusions, I shall make the following orders:
1. In respect of VCAT’s orders (and related findings) of 18 January 2021 terminating the tenancy agreement between the applicant (“the tenant”) and the respondent (“the landlord”):
a) the application for leave to appeal is granted;
b) the appeal is treated as instituted and heard instanter and is allowed;
c) the orders (and related findings) are set aside; and
d) the landlord’s application for a termination order is remitted to VCAT, differently constituted, to be heard and decided again.
2. In respect of VCAT’s orders (and related findings) of 27 August 2021 that the tenant vacate the rented premises and that the landlord obtain possession:
a) the application for leave to appeal is granted;
b) the appeal is treated as instituted and heard instanter and is allowed;
c) the orders (and related findings) are set aside; and
d) the landlord’s application for a possession order is remitted to VCAT to be heard and decided again.
Remittal to VCAT and s 148(8) of the VCAT
Section 148(8) of the VCAT provides as follows:
If the court makes an order under subsection (7)(c), it must give directions as to whether or not the Tribunal is to be constituted for the rehearing by the same members who made the original order.
Given my finding that the hearing on 18 January 2021 lacked procedural fairness, I consider it appropriate that the application for termination should be remitted to VCAT, differently constituted, for rehearing.
On the other hand, while the tenant challenged the possession order on several grounds, given that I have made no finding of error per se with respect to the hearing on 24 and 27 August 2021, I do not consider that VCAT must be differently constituted for any rehearing of the possession application.
In those circumstances, while it will be a matter for VCAT, it may be thought that, because of his familiarity with the matter, there would be some sense in having the deputy president hear the termination application and, if necessary, the remitted possession application.
An in-person rehearing may be preferable
While, again, this will be a matter for VCAT, it may be wise to give consideration to conducting any rehearing of this matter in person. Given the events disclosed by the transcripts of the phone hearings at VCAT in January and August, and having regard to the in-person hearing before me last week, I think it is very likely that the tenant finds it much harder than most to participate effectively in a phone hearing. I think she would find an in-person hearing a good deal easier and less distressing.
No costs orders sought or made
Finally, at the hearing, I explained to both parties that, whatever the outcome of these applications, as neither party was represented by a legal practitioner, an order for costs would not usually be made. Both parties indicated that, irrespective of the result, there would be no application for costs. Nothing has changed in the interim.
Accordingly, there will be no order for costs.
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