Commissioner for Social Housing v Pesi (Appeal) - [2016] ACAT 100

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

COMMISSIONER FOR SOCIAL HOUSING v PESI (Appeal) [2016] ACAT 100
AA 40/2015 (RT 148/2014)
Catchwords: APPEAL – residential tenancies – rent arrears under a prior tenancy not recoverable as rent owing under a later tenancy – invalid notices to remedy and vacate consequent upon inclusion of rent owing under a prior tenancy – creation of a statutory tenancy immediately following automatic termination of the lease consequent upon breach of a conditional termination and possession order – creation of an implied tenancy consequent upon lessor’s acquiescence in ongoing tenancy – no error of law in decision under appeal – lessor’s rights upon tenant’s non-payment of instalment towards rent arrears after the expiry of a conditional termination in possession order

Legislation cited: Residential Tenancies Act 1997 (ACT) ss 8, 42A, 42B, 49,

ACT Civil and Administrative Tribunal Act 2008 (ACT) s 7

Cases cited: Commissioner for Social Housing v Moffatt [2015] ACTSC 4

Commissioner for Social Housing v Pesi [2015] ACAT 58
Christopher v Wright [1949] VLR 145

Tribunal:                   President G C McCarthy
  Senior Member G Lunney
  Member A Morris

Date of Orders: 1 September 2016
Date of Reasons for Decision: 1 September 2016

AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) AA 40/2015
(RT 148/2014)

BETWEEN:
COMMISSIONER FOR SOCIAL HOUSING
Applicant

AND:
WILLIAM PESI
Respondent

TRIBUNAL:             President G C McCarthy
  Senior Member G Lunney
  Member A Morris

DATE: 1 September 2016

ORDER

The Tribunal orders that:

The appeal is dismissed.
The decision to dismiss the application for a termination and possession order is confirmed.

………………………………..
President G C McCarthy
for and on behalf of the Tribunal

REASONS FOR DECISION

Introduction

This appeal concerns a residential tenancy agreement dated 19 October 2004 pursuant to which the applicant lessor, the Commissioner for Social Housing (the Commissioner) leased residential premises in Rivett to the respondent tenant, William Pesi (the tenant).
In these reasons for decision, the word ‘tribunal’ is used when referring to the tribunal that made the decision under appeal. The word ‘Tribunal’ is used when referring to the ACT Civil and Administrative Tribunal generally. The words ‘Appeal Tribunal’ are used when referring to the appeal tribunal that heard this appeal.
On 25 February 2014, the Commissioner applied under section 49 of the Residential Tenancies Act 1997 (the Act) for a termination and possession order (TPO).[1]
[1] Defined in the Dictionary to the Act as an order of the Tribunal terminating a residential tenancy agreement and granting vacant possession of the premises to the applicant for the order
On 3 September 2015 the tribunal dismissed the Commissioner’s application for a TPO.[2]
[2] Commissioner for Social Housing v Pesi [2015] ACAT 58
On 2 October 2015 the Commissioner appealed from the tribunal’s order. On 6 November 2015, the Tribunal granted leave to appeal out of time.
For the following reasons, the Appeal Tribunal has determined that the appeal should be dismissed and that the tribunal’s decision to dismiss the Commissioner’s application for a TPO should be confirmed.

Background

The tenant and his family have lived in the leased premises since entering into the tenancy agreement with the Commissioner on 19 October 2004. Rent was frequently in arrears over the term of the tenancy causing much previous litigation between the parties, as detailed in paragraph 1 of the tribunal’s reasons for decision.
The Appeal Tribunal picks up that litigation from 11 September 2012 when the Tribunal made a conditional termination and possession order (CTPO) pursuant to which the Tribunal ordered that the tenancy agreement would terminate unless the tenant complied with conditions that he pay $6,719.74 for outstanding rent payable by instalments of not less than $30.00 per fortnight; that the first instalment payment be made on 25 September 2012; and that the tenant pay ongoing rent in accordance with the tenancy agreement. The Tribunal ordered that if the tenant failed to comply with any of the conditions, the tenancy terminated at 12.00 noon on the day after the tenant’s failure to comply.
In accordance with section 42(2) and (3) of the Act, the order was stated to expire on 19 February 2013.
Under the CTPO, the tenant’s obligation to pay instalments of $30 per fortnight towards the outstanding rent would have continued long after expiry of the order. However the tenancy would not have automatically terminated if the tenant failed to make an instalment payment or a weekly rent payment after 19 February 2013. That is because, after that date, the order had expired.[3] All that could be said in relation to a non-payment after 19 February 2013 is that the Commissioner could take enforcement action in the Magistrates Court for non-payment of outstanding rent, as money due and owing, in accordance with the order and/or make a fresh application for a TPO with reliance upon the non-payment of rent.
[3] The expiry of the order did not mean, as the tenant contended before the original tribunal, that rent arrears were reset at ‘zero’ if the tenant did not breach the CTPO before its expiry
The Commissioner’s records indicate that the tenant made payments on 18 September 2012 of $200.00, 25 September 2012 of $150.00 and 28 September 2012 of $250.00. Further payments were made after that time in differing amounts and intervals. The payments were credited to the tenant’s account and the tenant remained in occupation.
The tribunal noted a difference between the amount of outstanding rent stated in the order of $6,719.74 and the Commissioner’s records at that time which showed arrears of $11,700.74.[4] This difference was not explained to the tribunal, nor to the Appeal Tribunal, and no amendment to the records appears to have been made despite the tribunal finding[5] that the rent schedule should be amended to show that as at 11 September 2012 the arrears were $6,719.74 as determined by an earlier appeal tribunal.
[4] Pesi at [4]
[5] Pesi at [4]
On 25 September 2012, the tenant breached the CTPO by failing to make payments required by that day.[6] Having regard to the Supreme Court’s decision in Moffatt[7] it was common ground that the consequence, in accordance with the CTPO, was that the tenancy terminated at noon the following day, 26 September 2012. In issue was the nature of the tenancy relationship thereafter.
[6] Pesi at [3]
[7] Commissioner for Social Housing v Moffatt [2015] ACTSC 4
On 21 December 2012, the Commissioner approved and processed an application for a rent rebate with effect from 9 September 2012.
On 5 August 2013, the Commissioner served a Notice to Remedy on the tenant requiring him to make a payment of $10,141.04 for arrears of rent. Consequent upon the tenant failing to make the payment, on 4 September 2013 the Commissioner served a Notice to Vacate upon the tenant, which stated arrears of rent of $10,062.54.
Consequent upon the tenant not vacating the premises, on 25 February 2014 the Commissioner filed an application for a TPO. This application became the subject of the decision now under appeal. At this time, the Commissioner’s records showed rent arrears of $9,565.94. Although the Commissioner had served a Notice to Vacate, the tenant continued to make intermittent payments towards rent between 4 September 2013 when the Notice to Vacate was served and 25 February 2014 when the application for a TPO was filed. The Commissioner’s records show that rent owing had also reduced as a result of the rent rebate granted with effect from 9 September 2012.
As a result of many procedural issues arising subsequent to the Commissioner filing the application for a TPO, the tribunal did not hear the application until 4 December 2014. After the hearing, the tribunal gave leave for the parties to file further written submissions consequent upon the Supreme Court’s decision in Moffatt[8] handed down on 30 January 2015. The Commissioner’s records show that the tenant continued to make rent payments, and that the amount owing to the Commissioner had reduced to $8,348.44 by the time the tribunal gave its decision on 3 September 2015.

The decision under appeal

[8] Commissioner for Social Housing v Moffatt [2015] ACTSC 4

In its reasons for decision, the tribunal calculated the amount owing at the date of the breach of the CTPO on 26 September 2012 as $7,169.74.[9] This was made up of $6,719.74 found to be owing under the CTPO plus $800.00 rent for the period from the date the order was made to the date of the breach, less $350.00 paid by the tenant during that period.
[9] Commissioner for Social Housing v Pesi [2015] ACAT 58 at [13]
At paragraph 14 of its reasons for decision, the tribunal commented as follows on the consequences of the Commissioner’s inaction following the tenant’s breach of the CTPO:
In circumstances where the lessor fails to make an application [for a warrant for eviction] pursuant to section 42A [of the Act], and the tenant remains in possession of the premises, it may be that a new tenancy arises by implication from the conduct of the parties. (emphasis added)
At paragraph 19, the tribunal stated that whether a new tenancy had arisen by implication from the conduct of the parties to a tenancy is a question of fact, to be determined on a case-by-case basis. The tribunal then noted a number of factual matters, for example correspondence between the parties, the demand and payment of rent and the lessor’s exercise (or not) of rights under a prior tenancy agreement, that would be relevant when determining whether a tenancy by implication had arisen.
At paragraph 25, the tribunal stated that there was nothing in the Act to support the Commissioner’s submission that a statutory tenancy arose immediately upon termination of the lease consequent upon the breach of the CTPO. The tribunal said:
To hold that a statutory tenancy arises immediately upon termination of the tenancy regulated by the conditional termination and possession order by the tenant’s breach of that order and that that statutory tenancy continues to regulate the relationship, is not consistent with the words or the intention of the Act. The chief difficulty is in determining the terms of such a tenancy. Either this is a tenancy subject to the Act and therefore containing the standard terms, or it is some other creature which contains only so many of those terms as suit the lessor, but allows the lessor to terminate by application to the ACAT, without the requirements of notices to remedy and vacate. There is no basis within the Act for such a statutory tenancy. The Act provides that a residential tenancy agreement must contain, and is taken to contain, terms to the effect of the standard residential tenancy terms mentioned in schedule 1.[10] Such terms include the requirements for service of notices to remedy and to vacate.
[10] See section 8 of the Residential Tenancies Act 1997
At paragraphs 26 - 28, the tribunal referred to the evidence leading to its conclusion that an implied lease had arisen after the termination of the earlier tenancy agreement consequent upon the tenant’s breach of the CTPO on 25 September 2012.
At paragraph 29, the tribunal accepted that an implied tenancy did not commence immediately following the breach, and that a period of time must be allowed for the Commissioner to have acted on the breach, rather than act instead in a manner consistent with the creation of a subsequent implied tenancy. It is implicit from paragraph 29 that the tribunal concluded that two months was sufficient time for the Commissioner to have acted on the breach had the Commissioner wished to do so, and that a commencement date for the implied tenancy should therefore be ‘set’ at 27 November 2012, being two months after the breach. It followed that rent was payable under the implied tenancy from that date.
At paragraph 30, the tribunal referred to a rent schedule provided by the Commissioner. The tribunal used the schedule to set the rent arrears under the implied tenancy at zero as at 27 November 2012, being the commencement date of the implied tenancy. The tribunal treated rent owing prior to that date as rent owing under the prior tenancy agreement. By this means, the tribunal calculated the rent arrears under the implied tenancy as at 5 August 2013 (being the date of the Notice to Remedy) to be $2,971.30, rather than $10,141.04 as stated in the notice.[11]
[11] The Appeal Tribunal understands that the amounts of rent arrears stated in the notice to remedy and the notice to vacate were calculated at a time prior to Moffatt in the belief that the original lease agreement continued to operate, notwithstanding a breach of a CTPO, so that the notices stated the entire amount owing
The tribunal then considered whether it could and should waive the defects concerning the amounts of rent arrears stated in the notices.[12] The tribunal concluded it could not do so which led to its decision to dismiss the application for a TPO. The tribunal’s reasons are contained in paragraphs 39 and 40 of its decision:
[12] Pesi at [34] – [38]
39In the present case the Tribunal notes:
(a)that the tenant has frequently failed to pay rent in accordance with the residential tenancy agreement;
(b)that no accurate rental schedule has been provided by the applicant, and so the amounts in relation to rent payable under the implied tenancy have been calculated by the Tribunal based on the information before it. This rental amount should be seen as an approximation;
(c)the Notice to Remedy served on 5 August 2013 contains an error with regard to the amount of rental arrears owed by the tenant;
(d)that error is by a factor of three: so the tenant is asked to remedy by paying $10,141.04 within seven days of the service of the notice whereas the arrears which have arisen under the implied tenancy are in the vicinity of $2,971.30;
(e)that error would have a significant impact upon the actions of the tenant: the tenant may have been able to take steps to remedy an amount of arrears less than $3000, but may have viewed the payment of an amount in excess of $10,000 as not possible; and
(f)an application for termination and possession made in circumstances in which the arrears owed are significant, may result in termination of the residential tenancy agreement and homelessness for the tenant and his family.
40The Tribunal has determined that it is not appropriate to correct the defect as to the quantum of arrears in either the Notice to Remedy or the Notice to Vacate. It is a pre-requisite for an application for termination and possession that the lessor has served valid notices in accordance with the requirements of the residential tenancy agreement and the Act. The Tribunal finds that the lessor’s Notice to Remedy and Notice to Vacate are defective, and therefore their (sic) application must fail.

Submissions of the Commissioner

The Commissioner’s application for appeal contended that the tribunal erred when making the following findings:
1. That the Act does not allow, or is inconsistent with, the creation of a statutory tenancy between the Commissioner and the tenant following termination of the prior tenancy agreement consequent upon the tenant’s breach of the CTPO.
2. The Commissioner’s failure to act ‘within a reasonably short period of time’ and to avail himself of the remedies provided under the Act for breach of a CTPO precluded a statute tenancy from arising.
3. That, as a matter of fact, an implied tenancy arose between the parties that commenced on 27 November 2012.
4. That the tenant owed the Commissioner $2,971.30 in rental arrears under the implied tenancy as at 5 August 2013 (the date of the Notice to Remedy).
All these grounds of appeal arose from the Commissioner’s position that where a tenant remains in occupation of residential premises following termination of a tenancy agreement consequent upon a breach of a CTPO condition, the tenant does so under a statutory tenancy that operates under the same terms as the former tenancy until an order is made by the Tribunal under section 42B of the Act. The Commissioner submitted that until an order under section 42B is made the rental arrears under the former tenancy agreement ‘carries over’ as owing under the statutory tenancy with the result that the amounts stated in the notices to remedy and vacate were materially accurate. The notices were therefore valid or any minor inaccuracy in the stated rental arrears could (and should) be waived under section 59 of the Act.
The Commissioner also contended that when finding that an implied tenancy had arisen, the tribunal failed to afford procedural fairness to the parties by relying on authorities (i.e. case law) that had not been relied on by either party and by not giving notice to the parties of its intention to rely on those authorities.

Submissions of the Tenant

The tenant’s submissions can be summarised as follows.
(a)The original tenancy agreement terminated on 26 September 2012 when the condition regarding payment contained in the CTPO was breached. On that date, all arrears of rent under the terminated lease became payable.
(b)Consequent upon the tenant’s breach of the CTPO, the Commissioner was able to apply to the Tribunal registrar under section 42A of the Act for a warrant for eviction of the tenant. From 26 September 2012, there was a period of time during which the tenant had a right as against the Commissioner not to be evicted pending the registrar deciding whether to issue a warrant and, if a warrant was issued, service of the warrant on the tenant. This period of time was not under a tenancy relationship.
(c)Although the abovementioned period might be referred to as a ‘statutory tenancy’, there is no indication in the Act that the legislature intended to introduce any previous jurisprudence regarding statutory tenancies into the Act as applicable to a tenant’s right of occupation during this period.
(d)The Commissioner does not make clear how arrears of rent from the terminated tenancy could attach to the subsequent tenancy, regardless of how that subsequent tenancy is described.
(e)Factual indicia were present, and noted by the tribunal in its reasons, which support the finding that there was an implied lease from 27 November 2012.
(f)There was no unfairness or breach of the rules of natural justice adverse to the Commissioner in the manner in which the tribunal proceeded.
(g)There were no rental arrears as at 5 August 2013 when the notice to vacate served, contrary to the finding of the tribunal,[13] because the tenant was in credit on his current rental account referenced to a new tenancy that commenced on 26 September 2012. For this reason, the notices to remedy and notices to vacate were invalid because there were no rent arrears to remedy.

Consideration

[13] Pesi at [30]

The appeal was from a single order to dismiss the Commissioner’s application for a TPO. The Commissioner’s application for appeal noted that the Commissioner had sought the TPO under section 49 of the Act on the ground of the tenant’s non-payment of rent and rent arrears, and accordingly the Commissioner sought orders that the appeal be granted; the TPO be granted; and the tenant pay the Commissioner all rent that has become payable immediately.
Neither party sought leave to rely on new evidence, although the Commissioner provided a chronology and a rent schedule which brought up to date the schedule that formed part of the evidence before the tribunal.

Statutory Tenancy - appeal ground 1

The Commissioner submitted that the tribunal erred, when not accepting that a statutory tenancy arose when the tenant remained in possession of the premises following automatic termination of the prior tenancy agreement.

The submission does not fairly represent the tribunal’s findings. Although the tribunal found “there is nothing in the Act to support the assertion that a statutory tenancy arises immediately upon termination resulting from a breach of a conditional termination and possession order”,[14] the tribunal went on to acknowledge by reference to Moffatt[15] that “the period of time which elapses between the termination of the tenancy and the application by the lessor for a warrant of eviction may be a ‘type of statutory tenancy’.”[16] When rejecting the general proposition that a statutory tenancy arises under the Act, subsequent to automatic termination of apply lease, the tribunal was doing no more than acknowledging the position pointed out in Moffatt that although the tenant’s right of occupation pending an order of the Tribunal to evict:
...can be described as a “statutory tenancy” ... there is also absolutely no indication that the legislature intended to pick up any of the jurisprudence on statutory tenancies, either from the United Kingdom or Australia.[17]
[14] Pesi at [22]
[15] Moffatt at [46]
[16] Pesi at [24]
[17] Moffatt at [46] quoted in Pesi at [23]
The Commissioner’s contention that the tribunal erred when finding that a statutory tenancy did not arise only illustrates why it is fraught to describe the window of time between automatic termination of a lease consequent upon breach of a CTPO and a lessor exercising its rights under the Act (in this case the period of two months) as a statutory tenancy.
In this case it is unnecessary to determine the relationship between the Commissioner and the tenant immediately following termination of the tenancy at noon on 26 September 2012 because, no matter how the relationship is described, the real issue was whether the rent arrears could carry over from one lease to the next following termination of the previous lease, as reflected in the amounts stated in the notices to remedy and vacate.
The Commissioner submitted that after termination of the old tenancy, arrears of rent attributable to that tenancy can be recovered under the statutory tenancy and that the creation of the statutory tenancy prevented the creation of a tenancy implied by conduct. However the submission does not explain the mechanism by which this could or does occur. As the tenant stated at paragraph 20 of his submissions:
Despite arguing for a common law understanding of the relationship between the parties, the appellant never clearly explains how the existence of any such “statutory tenancy” would allow for the arrears from the terminated tenancy to attach to the new tenancy when the language of the RTA is considered. Mossop [M] himself warns against such an assumption at [47] of Moffatt.
In this respect, Mossop M at paragraph 47 referred to section 56 of the Act, which provides a right to obtain compensation for lost rent - not ongoing payment of rent - when a tenant remains in occupation of premises after termination of a lease.
Counsel for the Commissioner had similar difficulty in explaining the mechanism when pressed during the appeal hearing.[18] When asked how “a debt under an old agreement could suddenly turn into unpaid rent under an existing agreement”, counsel for the Commissioner replied as follows:
But if one accept[s] that it is always rent owed then that difficulty, with respect, we say doesn’t arise because until it’s paid it is always a debt owed arising from a failure to pay rent under a residential tenancy agreement. I think that the tribunal below had some difficulty with that as well but as I say, until it’s paid it has the character, we say, of a debt that arose in connection with a failure to pay rent.
[18] Transcript of proceedings 6 May 2016, page 20, lines 24 - 33
It is the premise that money owed is ‘always rent’ that is the primary concern. The Appeal Tribunal has difficulty with the proposition that rent owing under one lease can be added as rent to rent payable under another lease. The proposition is inconsistent with section 15(1) of the Act, which provides:
In consideration for giving a tenant a right to occupy premises, a lessor may only require or accept rent or a bond.
In the Appeal Tribunal’s view, ‘rent’ is a reference to rent payable under the subject tenancy, not to a debt for rent that was due and owing under a previous tenancy.
That view is confirmed by section 49(4) of the Act, which provides for the making of a CTPO, instead of a TPO under section 49(1).
Section 49(4) states:
(4) Instead of making a termination and possession order under subsection (1), the ACAT may order ( conditional termination and possession order ) that if the tenant fails to pay the rent that has become payable, or future rent as it becomes payable, as required by the ACAT—
(a) the tenancy terminates at a stated hour on the day after the day when any rent becomes payable and is not paid; and
(b) the lessor becomes entitled to possession of the premises and all rent payable is payable immediately.
Breach of the condition under a CTPO relating to the payment of rent has the consequence that “the tenancy terminates” and “all rent payable is payable immediately”, which can only mean rent payable under the tenancy the subject of the CTPO, not rent payable under a tenancy arising from an earlier different lease.
Likewise, under section 49(1)(a), a TPO may issue when the tenant has failed to pay rent that has become payable ‘under the residential tenancy agreement’. These words do not include rent that may have accrued under an earlier agreement.
Furthermore, section 15(5) of the Act places a restriction on the process that the Commissioner advocated. It provides as follows:
This Act does not prevent the housing commissioner from requiring a tenant to agree to pay an outstanding amount owed by the tenant to the housing commissioner in relation to a previous tenancy in consideration for giving the tenant a right to occupy premises if the ACAT has, under section 10, endorsed the term of the residential tenancy agreement requiring the payment.
The Dictionary to the Legislation Act 2001 defines ‘housing commissioner’ as ‘the Commissioner for Social Housing appointed under the Housing Assistance Act 2007.’ There is no evidence that the process contemplated under section 15(5) had been considered or commenced. For the Commissioner simply to add rent owing under a previous agreement to rent owing under a later agreement is to ignore section 15(5).
The validity of the notices was the practical issue dealt with by the original tribunal. The Commissioner put forward the statutory tenancy as a vehicle to carry the arrears over to the tenancy relationship (however described) that followed the original lease. Where the arrears could not be carried over, the notices were necessarily invalid and the issue of precise calculation becomes irrelevant.
If the relationship following termination on 26 September 2012 was a bare right to remain in occupation pending the lessor obtaining a TPO and serving a warrant for eviction, then the issue of carry-over does not arise. If that bare right is to be termed a statutory tenancy, so be it, but it does not create an obligation to pay ‘rent’ for occupation during that period. Rather, the lessor has a right to obtain compensation of “an amount that would have been payable ... if the premises had been tenanted” during that period pursuant to section 56 of the Act.
The Appeal Tribunal recognises, as did Mossop M in Moffatt,[19] that an earlier terminated lease might ‘revive’ if, on application for a warrant under section 42A, the Tribunal had made ‘another’ CTPO under section 42B(4)(b) that was found to ‘attach’ to the lease which had earlier terminated. However that is not the situation here, and it is therefore unnecessary and inappropriate on this appeal to deal with that scenario.
[19] Moffatt at [68] – [69]
For these reasons, ground 1 of the appeal is dismissed.

Preclusion of Statutory Tenancy – appeal ground 2

The Commissioner contends, with reference to the Tribunal’s decision at paragraph 22, that the Tribunal erred when finding that the Commissioner’s failure to avail himself of a remedy under the Act ‘within a reasonably short period of time’ after the tenant’s breach of the CTPO precluded a statutory tenancy from arising.
With respect, this ground of appeal misrepresents the tribunal’s finding. The tribunal found that “a lessor’s failure to avail themselves of the remedy provided for within Act cannot give rise to a statutory tenancy.” The tribunal did not state that such a failure precludes the formation of a statutory tenancy.
For this reason, ground 2 is dismissed.

Implied Tenancy - appeal ground 3

The Commissioner’s submissions concerning ground 3 are detailed in the application for appeal as follows:
(a)Whether upon the breach of a conditional termination and possession order, properly construed, the operation of sections 49, 42, 42A, and 42B give rise to an implied tenancy.
(b)Whether ‘the effluxion of time and conduct inconsistent with an intention to seek a remedy for breach of a conditional termination and possession order’[20] give rise to an implied tenancy within the meaning of sections 6A and 7 of the RT Act.
[20] The quoted words are drawn in part from the tribunal's decision at paragraph 24
With respect, the structure of these questions is opaque. Those sections of the Act do not give rise to an implied tenancy. As the tribunal noted, and the Appeal Tribunal agrees, whether a tenancy has arisen by implication is a question of fact. The Commissioner’s appeal contentions find their simplest expression in paragraph 2(c) of the Commissioner’s submissions dated 11 January 2016:
The Tribunal erred in finding that an implied tenancy arose between the parties in this matter. (Pesi at [29].)
The submissions which follow paragraph 2(c) seem to address this ground and the Appeal Tribunal will deal with the allegation as presented. The Appeal Tribunal does however note that at paragraph 18 of the Commissioner’s further submissions, the Commissioner said:
The appellant accepts that, at a point in time following the breach of a CTPO where a tenant remains in possession of the premises, it may be possible for a residential tenancy agreement to be implied between the parties.
In written submissions, the Commissioner extensively canvassed the common law concerning the formation of an implied tenancy agreement and the indicia which indicate when that has occurred. By and large, the Appeal Tribunal accepts the general statements of principle put forward, but they do not demonstrate error on the part of the tribunal.
At paragraphs 14 – 21 of its decision, the tribunal made a careful examination of the law concerning implication of a tenancy, and at paragraphs 26 – 29 it took into account relevant indicia in arriving at its conclusion that implied tenancy had been created. There is no challenge to the factual findings, or for that matter the tribunal’s statements of principle concerning an implied tenancy.
However, in deference to the submissions of the Commissioner, the Appeal Tribunal addresses the key points raised.
First, the Commissioner submitted with reliance on Christopher v Wright[21] that payment and acceptance of rent is not by itself sufficient to create an implied tenancy. The Appeal Tribunal accepts that submission, but in this case the Commissioner accepted rent after termination of the previous lease. Additional indicators of an ongoing tenancy are detailed in paragraphs 26-28 of the tribunal’s reasons for decision.
[21] [1949] VLR 145 at [148]
Second, the Commissioner submitted there was no evidence that the Commissioner offered to commence a new tenancy agreement with the tenant in place of the ‘statutory tenancy’ that (in accordance with Moffatt at [46]) arose upon the automatic termination of the prior tenancy agreement. The Appeal Tribunal accepts that submission, but it does not displace or answer the significant evidence on to which the tribunal relied to find that an implied tenancy had been created by conduct of both parties subsequent to termination of the original tenancy agreement.
Third, the Commissioner submitted there was no evidence of an intention by either party to create new legal relations. The Appeal Tribunal has difficulty with this submission where there was clear evidence that the tenant wished to remain a tenant in the property and the Commissioner accepted the tenant’s payments while he remained in possession and processed his application for rental rebate with retrospective effect.
Fourth, the Commissioner submitted that for a tenancy to be implied each party must have agreed with sufficient certainty on the essential terms of the tenancy agreement. The Appeal Tribunal recognises that that may be so at common law, but it carries little significance under the Act because section 8 of the Act imports the standard residential tenancy terms into a tenancy agreement, subject to the Tribunal’s endorsement of any inconsistent term under section 10 of the Act. No such endorsement was sought or has occurred, and the standard residential tenancy terms contained all the essential terms of a tenancy agreement, and the implied tenancy in this case.
The Appeal Tribunal is satisfied that error has not been demonstrated. Ground 3 is dismissed.

Rent Arrears of $2,917.30 – appeal ground 4

The Commissioner contends that neither party made any reference to the arrears owed by the tenant as at 5 August 2013, and that there is no indication as to how the tribunal calculated that amount of rental arrears as at that date. Accordingly, the Commissioner submitted, the Tribunal erred because this finding of fact was not reasonably open to the Tribunal on the evidence before it.
With respect, the tribunal’s calculation of $2,917.30 as the amount owing as at 5 August 2013 is apparent. The tribunal had in evidence the rent ledger, which recorded the amount owing as at 4 August 2013 of $10,141.04. It also had the Commissioner’s notice to remedy which also alleges that amount owing as at 5 August 2013. The tribunal deducted from that sum the amount owing as at the termination of the prior agreement on 26 September 2012 ($7,169.74), as noted at paragraph 13 of the tribunal’s reasons for decision, to derive the amount owing as at 5 August 2013.
The Appeal Tribunal accepts however that the calculation was not correctly done. The tribunal proceeded on the basis that arrears should be ‘set at zero’ from 27 November 2012 when the implied tenancy commenced, as stated in paragraph 30 the Tribunal’s reasons. According to the rent ledger, the amount owing on that date was $14,330.74. The amount owing on 5 August 2013 was $10,141.04. Even if these figures are overstated for the reasons given in paragraph 12 above, the tenant still owed less on 5 August 2013 than he did on 27 November 2012, meaning the tenant was not in arrears of rent at all under the implied tenancy.
For this reason, the Appeal Tribunal accepts the tenant’s submission that the notices were invalid because there was never an arrears of rent under the implied lease for the tenant to remedy. The Appeal Tribunal accepts that this circumstance only arose from the Commissioner’s misunderstanding at the time the notices were issued that there was one ongoing lease agreement.[22] However, this misunderstanding does not validate the notices, nor does the tribunal’s error in its calculation mean the appeal should be allowed. Whether the notices overstated the amount in arrears by a ‘factor of three’,[23] as the tribunal found, or should never have been issued at all, once rent arrears as at the commencement of the implied tenancy on 27 November 2012 are set at zero, they were still invalid.
[22] Transcript of proceedings 6 May 2016, page 17 line 38 – page 39, line 11
[23] Pesi at [39]
For this reason, ground 4 is dismissed.

Procedural Fairness - appeal ground 5

The Commissioner submitted that in finding that an implied tenancy had arisen, the tribunal failed to afford procedural fairness by relying on authorities that had not been relied upon by either party; by not giving notice of its intention to rely on those authorities; and by determining that an implied tenancy had arisen ‘on the papers’.
The requirement to provide natural justice and procedural fairness finds expression in section 7(b) of the ACT Civil and Administrative Tribunal Act 2008.
The significance of a failure to afford procedural fairness is sometimes overstated. Complaint that the tribunal did not afford the Commissioner procedural fairness, by relying on authorities that the Commissioner was not given an opportunity to address, begs the question of what the Commissioner would have submitted had that opportunity been given.
At the Appeal Tribunal hearing, the Commissioner was given full opportunity to press the contention that the tribunal erred when finding that an implied tenancy had arisen. This included an opportunity to address the authorities relied upon by the original tribunal. In these circumstances, counsel for the Commissioner agreed (and properly so) that should the Appeal Tribunal dismiss the appeal, particularly on the issue of whether the tribunal erred when finding that an implied tenancy arose, any vice or substance to the procedural fairness complaint fell away because any lack of fairness was remedied in the course of the appeal hearing.
The tenant contended that the tribunal did not fail to afford procedural fairness as alleged in any event, but for the reasons stated in the previous paragraph it is unnecessary for the Appeal Tribunal to decide the question.

Conclusion

It is unnecessary to determine the nature of the relationship between a lessor and lessee in the immediate period following the breach of a CTPO because the so-called ‘statutory tenancy’ proposed by the Commissioner could not provide a vehicle to ‘carry-over’ rent arrears from the terminated tenancy agreement.
The notices to remedy and vacate served by the Commissioner prior to applying for a TPO were invalid because the amount said to be owing was all or mostly attributable to rent arrears under a lease between the parties which terminated on 26 September 2012.
The Commissioner accepts that the procedural unfairness issue is no longer relevant.

Order

For these reasons, the appeal will be dismissed and the decision of the original tribunal to dismiss the application for a TPO will be confirmed.

………………………………..
President G C McCarthy

for and on behalf of the Tribunal
HEARING DETAILS

FILE NUMBER:	AA 40/2015
PARTIES, APPLICANT:	Commissioner for Social Housing
PARTIES, RESPONDENT:	William Pesi
COUNSEL APPEARING, APPLICANT	Ms N Tarbet
COUNSEL APPEARING, RESPONDENT	Ms N Gould
SOLICITORS FOR APPLICANT	ACT Government Solicitor
SOLICITORS FOR RESPONDENT	Canberra Community Law
APPEAL TRIBUNAL MEMBERS:	President G McCarthy, Senior Member G Lunney, Member A Morris
DATES OF HEARING:	6 May 2016