Chase v Chase - [2011] SADC 43

DISTRICT COURT OF SOUTH AUSTRALIA
(District Court Administrative Appeals Tribunal: Appeal Under Residential Tenancies Act 1995)
CHASE v CHASE
[2011] SADC 43
Judgment of His Honour Judge Tilmouth
6 April 2011
LANDLORD AND TENANT - CREATION OF RELATIONSHIP - DISTINCTION BETWEEN LEASE AND LICENCE - PARTICULAR ARRANGEMENTS - RIGHT TO OCCUPY RESIDENTIAL PREMISES: TENANT OR LODGER
Domestic arrangements for the occupation of a home between a son and his parents, held not to amount of a "residential tenancy", and was thus not one that could found the jurisdiction of the Residential Tenancies Trubinal to make an order for eviction.
Residential Tenancies Act 1995 (SA) s 3(1), s 83(3), s 93, s 110(1)(a), (b) and (c); District Court Act 1991 (SA) s 42G(2); Henningsen v Nolan (2004) 88 SASR 214; Ball & Huntley v Laffin (1929) 43 CLR 105; Lamdale v Menzies (1909) 9 CLR 89; Radio Theatres Pty Ltd v City of Cobourg [1948] VLR 84; Radaich v Smith (1959) 101 CLR 209; The State of Western Australia v Ward (2002) 213CLR 1; Somma v Hazlehurst [1978] 1 WLR 1014; Goldsworthy Mining Ltd v Commissioner of Taxation of the Commonwealth of Australia (1973) 128 CLR 199; KJRR Pty Ltd v Commissioner of State Revenue (Vic) [1999] 2 VR 174, referred to.

CHASE v CHASE
[2011] SADC 43
The proceedings

Murray Chase brings an appeal from a decision of the Residential Tenancies Tribunal given on 22 February 2011. The Tribunal made an order requiring him to give up possession of the residential premises at 10 Tracey Avenue Flinders Park, owned by his son the respondent, Michael Chase.
Background facts
This case has a protracted and most unusual history. The property has been in the family since about 1969. It was purchased in joint names by Mr Chase and his wife Kaye Chase, the respondent’s mother. After building a house thereon, they lived there as joint owners until approximately 10 years ago.
At that time, pursuant to an arrangement between the three of them the property was sold to their son Michael Chase. Subsequently a residential tenancy agreement for a fixed term of 12 months was executed with respect to the property on 30 June 2001, at a monthly rental of $780 per month. The term therefore expired on 29 June 2002. The tenancy agreement was in the standard form issued by the Department of Consumer and Business Affairs.
It appears as if this arrangement arose in the context of Michael Chase going through divorce proceedings and that a formal arrangement of this kind was somehow in his interest. By this time he was separated from his wife and began to live with his parents in the subject home. He moved out in early September 2001.
The appellant asserts and the respondent did not expressly refute it, that this state of affairs enabled his son “to arrange his finances in such a way as to minimise any child support payable by him and to provide us with additional capital”. It appears this situation continued without further formality for a number of years, at the same rental throughout.
The tenancy agreement contained a holding over provision. This read:
With the approval of the LANDLORD, the TENANT may occupy the premises after the end of the term of this AGREEMENT, subject to the conditions of this AGREEMENT, until a time mutually agreed to by both parties.
Even without this provision, the circumstances indicate a “holding over tenancy” was created on the same terms: Henningsen v Nolan,[1] the implied period almost certainly being periodically month by month, given that rent was payable monthly: Ball & Huntley v Laffin,[2] Moore v Dimond.[3]
[1] (2004) 88 SASR 214 at [25-26]
[2] (1878) 10 SALR 6 at 12
[3] (1929) 43 CLR 105 at 112-113
These facts generate considerable reservations as to whether it was ever intended a genuine residential tenancy should be erected, given the context. The objective circumstances suggest the formalities were no more than some kind of colourable arrangement established for entirely inter-family reasons. Even so, for present purposes I shall assume that an enforceable residential tenancy was affected and that it continued holding over.
Changed circumstances
This situation pertained on an informal basis until sometime in 2007, when arrangements became quite different. Once again for reasons that had to do with internal family affairs, the respondent son reached an agreement with his mother for the payment of some monies “to cover the costs of keeping the property”, he claims effectively by way of “board and lodgings” and that “it became an informal arrangement between the family members for boarding in the house I owned”.[4] His father the appellant was not privy to this, even though he and his wife remained in cohabitation of the subject home. His son explained this situation derives from issues he then had with Centrelink and capital gains tax. He told the court on 23 March 2011 that from 2007 he was:[5]
… no longer declaring the rent as income … because I didn’t want to have capital gains issues so I was no longer … claiming the costs off my tax … it became an informal arrangement between the family members for boarding in the house I owned.
[4] Transcript 23 March 2011 p 10 .3-.11.30
[5] Transcript p 11.21-.30
These particular arrangements between the parties, did not come to light during the hearing before the Tribunal. In addition it emerges that the respondent used the subject premises for storage purposes until sometime in 2006 and that his parents installed various items normally the responsibility of the landlord, such as air-conditioning, a skylight and a shower screen, as well as affecting some maintenance from time to time. These are suggestive of informal, flexible, exigency based arrangements between the family for the use of the property. Be that as it may, the arrangement changed more drastically in June 2010 when Kay Chase walked out on the appellant. He has remained in sole occupation ever since and no rent has been paid.
The respondent served on his father a notice of termination, filed with the Tribunal on 3 February 2011, dated 23 October 2010. This required him to deliver up vacant possession without specifying any ground of termination, by not later than 28 January 2011. That is to say it gave notice of no less than the 90 days required by s 83(3) of the Residential Tenancies Act 1995 (SA). Upon the appellant failing to vacate, his son brought an application also filed on 3 February 2011, seeking the order the Tribunal eventually made.
The decision of the Tribunal
In his application the respondent claimed the requisite residential tenancy commenced on 1 July 2003, that rent had been paid to 31 October 2010 and the weekly rental was $260, that is $1040 per month. The Tribunal upheld the notice, considered the agreement of June 2001 to be “unremarkable”, and observed there was nothing “to suggest that this was something other than a residential tenancy agreement as defined in the Act”.[6]
[6] Reasons 22 February 2011, p 1
The Tribunal also examined various documents submitted by the appellant, which it considered might be relevant “in determining the current application”. The Court has also examined the same documents. These allege personal loans, partly unpaid, to the respondent and various promises that the appellant and his wife would not be left “without a roof over our heads”, at least until they found “a suitable property to rent or buy”. There is also a letter dated 20 May 2007 seeking vacant possession. No action to enforce this was taken.
The Tribunal adjourned the hearing to examine the documents. Upon resuming the presiding member then told the parties that he was “not satisfied that anything in the documentation was relevant to determining the current application”. This was a somewhat irregular procedure.
The Residential Tenancies Tribunal found the fixed term agreement continued on a periodic basis, that the notice of termination ended the tenancy, and so it proceeded under s 93 of the Residential Tenancies Act to order the appellant to give up possession to the respondent. Section 93 provides:
93—Order for possession
(1) If a residential tenancy—
(a)is terminated by notice of termination under this Act or, in the case of a tenancy under which the South Australian Housing Trust is landlord, under the residential tenancy agreement; or
(b)is for a fixed term which expires and is not renewed, the landlord may apply to the Tribunal for an order for possession of the premises.
(2) If the Tribunal is satisfied that the tenancy has terminated or has been terminated, the Tribunal may make an order for possession of the premises.
Then it considered its power to suspend operation of the order on account of “severe hardship”, in the result doing so until 15 March 2011. Those orders were stayed by this court, pending resolution of the appeal.
The jurisdiction conferred under the Residential Tenancies Act
The jurisdiction of the Tribunal and hence this court, is limited to disputes in and about residential tenancy agreements. Such agreements are defined in s 3(1) of the Residential Tenancies Act to mean:
residential tenancy agreement means an agreement (other than a rooming house agreement) under which a person grants another person, for valuable consideration, a right (which may, but need not, be an exclusive right) to occupy premises for the purpose of residence;
These extend to agreements “collateral” to residential tenancies: s 24. So much is clear from references to such “collateral agreements” in s 110(1)(a), (b) and (c) of the Residential Tenancies Act.
The facts discussed above and in the papers submitted by the appellant, attest to the view that there was some kind of domestic arrangement falling outside of the Residential Tenancies Act. Whatever the understanding was, it could not have been on any view, one collateral to a residential tenancy agreement.
The informal, flexible and changing nature of the circumstances was such that since 2007, no residential tenancy was in effect at all. Assuming for the moment that the original agreement duly carried over for the duration on a monthly basis until then, it is quite clear that something quite different operated thereafter. There is no systematic evidence the original rent contemplated in 2001 continued to be paid after 2007 and the terms (if any) of their arrangements were too vague and uncertain to be enforceable. It is impossible in the incomplete state of the material before the court to identify any of the hallmarks of a residential tenancy.
It is however clear enough as things emerged during the course of the appeal, that the respondent was unable to prove the existence of a residential tenancy agreement as defined, was in existence as of late 2010 and early 2011. Indeed on the evidence the residential tenancy had clearly come to an end as of 2007, if not earlier. The existence of such an agreement was necessary in order to found the jurisdictional basis for the Tribunal to make the orders it purported to make under s 93 of the Residential Tenancies Act.
Not all agreements granting rights of occupancy to residential premises for valuable consideration fall within the definition of residential tenancies. There might be a myriad of domestic arrangements between families and friends over residences, where consideration of some kind is involved but not for one moment intended to attract the operation of the Residential Tenancies Act. This is fundamentally because there is no underlying relationship of landlord and tenant, so that no more than a licence to occupy is created.
At common law the distinction between tenancy and licence agreements, was that a tenancy granted the legal right of exclusive possession, whereas an occupational licence did not: Lamdale v Menzies,[7] Radio Theatres Pty Ltd v City of Cobourg,[8] Radaich v Smith,[9] and The State of Western Australia v Ward.[10] This was because upon the true intention of the parties, the agreement was to grant exclusive possession and hence an interest in the land: Somma v Hazlehurst,[11] Goldsworthy Mining Ltd v Commissioner of Taxation of the Commonwealth of Australia,[12] and KJRR Pty Ltd v Commissioner of State Revenue (Vic).[13] Residential tenancies are defined widely so as to embrace licences giving less than full rights of occupancy, no doubt to catch licence arrangements designed to avoid the operation of the Residential Tenancies Act. But this case is not a licence situation.
[7] (1909) 9 CLR 89 at 100-101 & 111
[8] [1948] VLR 84 at 86
[9] (1959) 101 CLR 209 at 214, 217-218, 220, 222-223
[10] (2002) 213 CLR 1 st [502-503] & [518]
[11] [1978] 1 WLR 1014
[12] (1973) 128 CLR 199 at 212, per Mason J
[13] [1999] 2 VR 174 at [5] & [12]
For example the current agreement would easily fall within one or more of those exceptions spelt out in s 5 of the Residential Tenancies Act such as:
·an agreement under which a person boards or lodges with another: s 5(1)(b);
·an agreement conferring a right to occupy residential premises under which no rent is payable: s 5(1)(d).
What then is the consequence of this conclusion? As of the date of bringing the application to the Tribunal, no “residential tenancy” was in existence. That being so, the notice of termination given by the respondent in October last year was ineffective to bring about termination, as that had been affected several years earlier, by mutual conduct. For that reason there was no jurisdiction under s 93 of the Residential Tenancies Act, to entertain the application for possession of the subject premises, as neither precondition to such an application was satisfied. The tenancy was not “terminated by notice of termination under this Act”: s 93(1)(a) and it was not a tenancy “for a fixed term which expires and is not renewed”: s 93(1)(b).
Conclusion and orders
This unbecoming family dispute is one quite unsuited for resolution in the Residential Tenancies Tribunal. The application to evict is a rather blunt instrument for resolving domestic discord. The claims made by the appellant, whatever their merit, are claims that a court of equity, or a court exercising jurisdiction under Part 17 of the Real Property Act 1886 (SA), or a court exercising matrimonial jurisdiction might better resolve.
It must follow that the order of the Residential Tenancies Tribunal of 22 February 2011 purportedly made under s 93 of the Residential Tenancies Act requiring the appellant to give up possession of the subject premises, should be quashed and the application by the respondent of 3 February 2011 dismissed: ss 41(2)(b) & (c) of the Residential Tenancies Act. There will be no order as to costs: s 42G(2) District Court Act 1991 (SA).