Commissioner for Social Housing v the Estate of the Late Joy Hill and Anor (Residential Tenancies)

[2018] ACAT 73

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

COMMISSIONER FOR SOCIAL HOUSING v THE ESTATE OF THE LATE JOY HILL & ANOR (Residential Tenancies) [2018] ACAT 73

RT 637/2017

Catchwords:             RESIDENTIAL TENANCIES – application for termination and possession order – tenant deceased – how to serve a termination notice on a deceased tenant – how to determine whether an estate has ‘vacated’ the property – tenant’s son residing at premises as carer – son has no standing in relation to the estate and therefore no rights in relation to the tenancy – where the tenant had no will, and neither an executor or administrator has been appointed – whether on the death of a person, their real and personal property vests in the Public Trustee and Guardian until another representative is appointed for the estate

Legislation cited:     ACT Civil and Administrative Tribunal Act 2008 s 29

Administration and Probate Act 1929 s 38A, 49
Residential Tenancies Act 1997 ss 36, 49, 59, 83, standard term 98

Cases cited:               Abu-Arab v NSW Trustee & Guardian [2014] NSWSC 954

Andrews v Hogan [1952] HCA 37

Byers v Overton Investments Pty Limited [2001] FCA 760

Ex parte the Public Trustee; re Birch (1951) 51 SR (NSW) 345

GEL Custodians Pty Ltd v The Estate of the late Geoffrey Francis Wells [2013] NSWSC 973

Tribunal:                  Senior Member H Robinson

Date of Orders:  15 November 2017

Date of Reasons for Decision:         16 July 2018

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          RT 637/2018

BETWEEN:

COMMISSIONER FOR SOCIAL HOUSING

Applicant/Lessor

AND:

THE ESTATE OF THE LATE JOY HILL

Respondent/Tenant

JOHN HUMPHERSTON

Third Party

TRIBUNAL:Senior Member H Robinson

DATE:15 November 2017

ORDER

1.Mr John Humpherston is joined as a third party to the proceedings.

2.Defects in the Notice to Vacate as to address for service are waived as the Tribunal is satisfied there was no prejudice to the respondent.

Ex-Parte:

TERMINATION AND POSSESSION ORDER

3.The residential tenancy agreement is terminated at 5:00 pm on Wednesday 15 November 2017.

4.The tenant must vacate the premises on or before 5:00 pm on Wednesday 15 November 2017.

5.This termination and possession order has effect as a warrant for eviction.

6.All Officers of the Australian Federal Police are hereby authorised to take appropriate action to evict the tenant/s from the premises upon the giving of two days notice in accordance with subsection 40(1) of the Residential Tenancies Act 1997, with such assistance as is necessary and reasonable.

It is noted that pursuant to Regulation 4A(a) of the Residential Tenancies Regulation 1998 it is appropriate for a police officer to enter the premises (by force if necessary) and physically remove a person from the premises between 8 am and 6 pm from Monday to Thursday, other than on a public holiday.

7.The tenant is to pay to the lessor the sum of $9,224.94 being arrears of rent and rent payable to the date of termination of the residential tenancy agreement.

8.The tenant is to provide the Tribunal with his address for service of future notices and orders in these proceedings by 24 November 2017.

9.These orders are to be served on the tenant at Public Trustee and Guardian, PO Box 221 Civic Square ACT 2608 and by email to [email address].

10.Reasons will be published.

…………Signed…………..

Senior Member H Robinson

REASONS FOR DECISION

1.This was an application to terminate a residential tenancy agreement (agreement) following the death of the long-term tenant.  The application was opposed by the tenant’s son, who had resided in the property for many years, but who was not a tenant. It raised a question as to how to terminate a lease in a situation where there is no executor, no letters of administration, and no intention by the Public Trustee and Guardian (PTG) to become involved in the proceedings.

The hearing process

2.The matter was first listed in the termination and possession list on 24 August 2017. On that occasion, the Commissioner was represented by Mr Ostopowicz, and there was no appearance by any representative of the estate. A third party, the deceased tenant’s son, Mr Humpherston, sought leave to appear. He was represented on a duty basis by Dr Nursoo, of Canberra Community Law (CCL), who indicated that he may seek leave to be joined as a party. The matter was adjourned to 6 September 2017 to allow Mr Humpherston to seek legal advice, and the Commissioner to file written submissions on the status of the residential tenancy agreement and the ground upon which termination was sought.

3.The Commissioner later sought further time to file submissions, to 14 September 2017.

4.When the matter returned to the Tribunal on 21 September 2017, Mr Humpherston, again represented by CCL on a duty basis, sought a further adjournment so that he could file an application to be joined. The Tribunal directed that he do so within 14 days and adjourned the proceedings to 15 November 2017.

5.Mr Humpherston filed an application for leave to be joined on 21 September 2017. He sought leave on the basis that, under section 49 of the Administration and Probate Act 1929, he was a person entitled to take an issue in the estate, and also on the basis that, as a long term resident of the property, he was an ‘interested person’ within the meaning of section 29(5) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act).

6.The matter was heard on 15 November 2017. On that date, the Commissioner was represented by Ms Holley of the ACT Government Solicitor, and Mr Humpherston appeared in person. On this occasion the respondent was not represented. The Tribunal made an order joining Mr Humpherston as a party, but also made orders terminating the residential tenancy agreement pursuant to section 49 of the Residential Tenancies Act 1997 (RT Act). These are the written reasons for that decision.

Background

7.On 7 March 2000, the late Ms Hill entered into a tenancy agreement at 37 Sanderson Close, Flynn ACT (the property). The property is a three bedroom house.

8.At that time the other residents in the property were Ms Hill’s minor children, Mr Humpherston and Ms Emily Lawson.

9.It appears that the children both left the home for some time. However, Mr Humpherston resumed living at the property with Ms Hill as an authorised resident and carer in around August 2015.

10.On 7 April 2017 the applicant was advised by Mr Humpherston that Ms Hill died on 14 February 2017.

11.Around that time, Mr Humpherston attempted to complete a rental rebate form in his name for the property. The applicant advised Mr Humpherston that, as he was not a tenant of the property, he was not entitled to a rebate or to continue to occupy the premises. The applicant refused to allow Mr Humpherston to pay rent.

12.On 19 June 2017 Mr Humpherston contacted the applicant by way of telephone and advised that he was the executor of Ms Hill’s estate and would be looking into winding up the current tenancy and entering into a new tenancy in his name for the property.  

13.The last rent payment was received by the applicant on 16 February 2017 by a Centrelink deduction. At that time the account was $479.00 in credit.

14.On 10 July 2017 the applicant served upon “the executor of the estate of Ms Joy Hill” a notice to remedy for breach of the tenancy agreement, being failure to pay rent. This notice was served at the property, which was the last known address for the tenant.

15.On 20 July 2017 the applicant served upon “the executor of the estate of Ms Joy Hill” a notice to vacate as rent had not been paid.  This notice was also served at the property.

16.On 4 August 2017 the applicant filed an application for termination of the tenancy on two grounds:

(a)repudiation in accordance with section 36(i) of the RT Act; and

(b)failure to pay rent in accordance with section 49 of that Act.

17.On 4 August 2017 the Commissioner advised the PTG of the proceedings. The email from the Commissioner to the PTG, which was in evidence before the Tribunal, set out the nature of the proceedings and attached a full copy of the application and the annexures, including the notice to remedy and notice to vacate.

18.An officer of the PTG responded to the Commissioner by email later that afternoon in the following terms:

We are not administering the estate of the late Joy Hill and aside from your email … have no knowledge of the matter.

We do not intend to become involved in the proceedings.

19.At the hearing on 15 November 2018, Mr Ostopowicz advised the Tribunal that he had had direct conversations with the same officer of the PTG subsequent to that email, and that he had advised that officer of the hearing date. On each occasion the PTG declined to become involved.[1]

[1] Transcript of proceedings 15 November 2017 page 8, lines 18-24

20.The ACT Government Solicitor also wrote to the PTG and had received a response in similar terms.[2]

[2] Transcript of proceedings 15 November 2017 page 8, lines 26-30

21.The PTG’s position left Mr Humpherston in a difficult situation, as he had no standing in the relation to the estate, and hence no rights in relation to the tenancy, and the PTG clearly did not intend to appear on behalf of the estate either. As such, despite his standing being in some doubt, I allowed his application to be joined as a party so that he could at least be heard. Ultimately, however, he was not able to produce evidence or legal argument that could found any legal interest in the estate. He also could not provide any evidence that he had applied to be appointed as the executor or administrator of the estate, despite having been given a considerable period of time to make enquiries or commence those proceedings.

22.As at the hearing date, arrears of rent on the property were $9,224.94. The question for the Tribunal’s consideration was whether the requirements for a termination of tenancy for unpaid rent pursuant to section 49 of the RT Act were made out.

23.The Commissioner did not press the repudiation argument.

Failure to pay rent

24.Section 49 of the RT Act provides that:

49Failure to pay rent

(1)On application by a lessor, the ACAT may make a termination and possession order if—

(a)the tenant has failed to pay rent that has become payable under the residential tenancy agreement; and

(b)the lessor has served a termination notice on the tenant on the basis of the failure to pay rent; and

(c)the tenant has not vacated the premises in accordance with the notice.

25.The provisions raised two practical questions in this case – first, how to ‘serve a termination notice’ on a deceased tenant and, second, how whether the deceased tenant had ‘vacated’ the property.

26.In the ordinary course, serving legal process on a deceased person’s estate is not a difficult task. Section 38A of the Administration and Probate Act 1929 (Administration and Probate Act) states that on the death of a person, their real and personal property vests in the PTG “in the same way, and to the same extent, as the personal estate and effects of a deceased person formerly vested in the Ordinary in England”.[3] Section 38A has effect only until another representative is appointed for the estate. If the deceased person left a will, a grant of probate will authorise the executor to be the representative. If a person dies without a will, a person with an “interest in the estate” may apply for letters of administration, and if successful may be appointed to exercise the powers of the estate.[4] Legal process may then be served on the executor or administrator of the estate.

[3] Section 38A of the Administration and Probate Act 1929

[4] See Administration and Probate Act 1929

27.However where, as here, a person has no will, and neither an executor or administrator is appointed, the position appears to be that section 38A of the Administration and Probate Act remains in operation, and the estate remains vested in the PTG “in the same way, and to the same extent, as the personal estate and effects of a deceased person formerly vested in the Ordinary in England”.

28.The nature of the ‘the Ordinary’ is beyond the scope of this decision. It appears to have a lengthy history, but was, relevantly, a jurisdiction that permitted certain actions to be taken to deal with a deceased’s estate and, perhaps, to supervise executors and administrators.[5]

[5] See discussion in Ex parte the Public Trustee; re Birch (1951) 51 SR (NSW) 345, Street CJ; cited in Byers v Overton Investments Pty Limited [2001] FCA 760 at [11] to [13].

29.The effect of that vesting of rights in the PTG pursuant to section 38A of the Administration and Probate Act is not entirely clear. There has been judicial consideration of the obligations and powers of the PTG, or equivalent, in whom a deceased estate vests in the same way and to the same extent as formerly vested in the Ordinary in England.[6] Differing views have been expressed as to whether those powers extend to allow a public trustee to surrender a lease vested in him[7], but the weight of authority, including High Court authority[8], would indicate that it can.

[6] See for example: Andrews v Hogan [1952] HCA 37; GEL Custodians Pty Ltd v The Estate of the late Geoffrey Francis Wells [2013] NSWSC 973; and Abu-Arab v NSW Trustee & Guardian [2014] NSWSC 954

[7] I note that in the matter of Abu-Arab [2014] NSWSC 954 the most recent of the above decisions, Davis J held that the Public Trustee is legally capable of surrendering a lease vested in him

[8] Andrews v Hogan [1952] HCA 37

30.The position was usefully summarised by the Full Court of the Federal Court (Branson, North and Stone JJ) in Byers v Overton Investments Pty Ltd [2001] FCA 760 as follow:

16 In Andrews v Hogan [1952] HCA 37; (1952) 86 CLR 223 the High Court adopted a somewhat more expansive approach. The issue before the Court was whether a notice to quit was properly served on the Public Trustee in circumstances where the deceased tenant had appointed her sons as executors and sole beneficiaries but where probate had not yet been granted. The Public Trustee's response to the notice was to send a standard letter to the claimant's solicitors informing them that he had no interest in the premises to assert. The letter, as summarised by Dixon CJ at 229, pointed out that the WPA Act:

“did not vest the estate in him but merely declared that it should be deemed to be vested, that it was merely held during ‘the hiatus of possession’, that he was ‘merely the repository of the estate’, that he would not be a proper party in any contemplated proceedings and that he had no powers to exercise and no active duties to perform in connection with the estate.”

17 Despite the views of the Public Trustee, all of the members of the High Court held that the notice might properly be served upon him as the repository of the title to the estate; Dixon CJ at 232, McTiernan J at 237, Webb J at 241, Fullagar J at 245 and Kitto J at 255. Although it was not necessary for the Court to canvass in detail the obligations and duties of the Public Trustee under s 61, Fullagar J commented at 250,

“That he has some rights and powers would seem almost necessarily to follow, though it may very well be that he has no active duties.” [emphasis omitted]

18 One issue in Andrews v Hogan (supra) was whether the Public Trustee's letter effected a surrender of the lease. Fullagar J at 251, held that the letter did not amount to a surrender but made it clear that, in his opinion, this was not because the Public Trustee lacked capacity:

“I can only say that I am, with respect, unable to see any reason for denying to the Public Trustee the legal capacity to surrender a lease vested in him. I am well able to understand that he would be most unwilling to do any positive act which would amount to a surrender, or to do anything which might affect the rights of persons really interested in an estate vested in him. It is very unlikely that, without some very special reason, he would do any such thing. In the normal case his position is only temporary and provisional. But his position, while it subsists, is the position of a legal owner, and I can see no reason for saying that, while occupying that position, he is devoid of legal capacity.”

19 Following Andrews v Hogan (supra), it cannot be said that there is any definitive exposition of the power and capacity of the Public Trustee to deal with property deemed to be vested in him by s 61. It is clear, however, that while the Public Trustee is no mere empty vessel, there are limits to the Trustee's power and responsibility for such property; see Holloway v Public Trustee (1959) 59 SR (NSW) 308 (no obligation to pay rent), Re Hart [1963] NSWR 627 and Re Cameron; Cameron v Public Trustee [1982] WAR 55 (the Public Trustee should not be joined to litigious proceedings). It does not follow, however, that prior to probate the executor has the powers and capacity denied to the Public Trustee. In Andrews v Hogan (supra), the Chief Justice (at 234) quoted with approval the words of Bucknill LJ in Fred Long & Son Ltd v Burgess [1950] 1 KB 115 at 119 that there was no reason why the English equivalent of the Public Trustee, “should not have legal power to give directions about the property. If he cannot do so, no one can.”

31.It is arguable that the correct respondent to these proceedings was the PTG, rather than the estate - see GEL Custodians Pty Ltd v The Estate of the late Geoffrey Francis Wells[9] where Davies J of the NSW Supreme Court determined that, in a claim for possession of land in relation to a person who has died, where no grant of probate or administration has made in that person’s estate, the proper defendant to the proceedings is the NSW Trustee, pursuant to the similarly worded section 61 of the Probate and Administration Act 1898 (NSW).[10] However, this argument was not advanced at hearing, and I am not convinced there is any practical difference or legal consequence in this case.

[9] [2013] NSWSC 973

[10] See also Abu-Arab v NSW Trustee & Guardian [2014] NSWSC 954

32.In the circumstances, it appears that the effect of section 38A of the Administration and Probate Act is that ‘the estate of the Late Joy Hill’ has vested in the PTG ‘the estate’, through the PTG in which its interests have vested, was duly notified of the proceedings and elected to not be heard. In effect, the tenant may be taken to have submitted to any orders the Tribunal may make in the matter.

33.That said, notwithstanding the PTG’s submission to the Tribunal, the Commissioner still needed to establish that the requirements of section 49 of the RT Act had been met.

Section 49 (1)(a) – failure to pay rent payable under the residential tenancy agreement

34.Pursuant to the tenancy agreement between the parties, the tenant was required to pay rent in the amount of $393.40 per week. This amount was subject to any review and rebate duly applied for and granted pursuant to the Housing Assistance Act 2007.

35.The last rent payment was received by the Commissioner on 16 February 2017 by way of a Centrelink deduction. At that time the account was $479.00 in credit. As at the date of the hearing, the account was $9,224.94 in arrears.

36.Both the notice to remedy and the notice to vacate were served on the last known address of the tenant, being the address of the property. They were not served on the PTG.

37.Clause 98(2) of the standard residential tenancy terms, provided for in schedule 1 of the RT Act and implied into all residential tenancy agreements, provides that the tenant is to advise the lessor of the new address for service within two weeks of the change. The applicant submitted that the onus was on a representative of the estate to meet the statutory obligation in section 98(2), and update the estate’s address for service if it was out of date. This was not done.

38.While I accept that clause 98(2) requires a party to advise the other of a change in address, I do not think it is reasonable or permissible for a party to continue to serve notices on an address that it knows are not effective. I am not satisfied that the notices were in fact served on the tenant.

39.However, section 59 of the RT Act provides that the Tribunal may waive a defect in the service of the notice to vacate if the tenant does not vacate, provided doing so “does not, and is not likely to, place the tenant in a significantly worse position than the tenant would have been in had the notice been in, and served in, accordance with the standard residential tenancy terms.”[11]

[11] Section 59(2)

40.There is no disadvantage to the tenant is waiving the defects in the service of the notice in this case, as the estate has now received the relevant notices, and the application, and does not wish to participate in the proceedings. The estate continues to accrue rent arrears. Accordingly, I am prepared to waive the defect in the service of the notice to vacate pursuant to section 59.

41.Defects in the service of the notice to remedy may similarly be corrected pursuant to section 83(k).

42.The availability of the power to correct a notice under section 59, and the availability of a termination and possession notice under section 49, are both contingent upon the tenant not vacating the premises. An interesting, although somewhat esoteric, issue is how an ‘estate’ of a deceased person can be said to vacate a premises.

43.In this case, the Commissioner in effect argued that, because Mr Humpherston was still residing in the premises the Commissioner has not been provided with vacant possession by the estate. The argument was not really advanced beyond this premise, but the substance appears to be that Mr Humpherston was residing in the premise with the agreement of, or under a licence given by, the estate, and hence to the effect that they estate has not removed him from the premises, it has not vacated.

44.Mr Humpherston did not present any argument that was contrary to this. He appeared to accept that his only right to reside in the house was through his relationship with the deceased and the estate. In the circumstances, although the argument was somewhat unusual, I was satisfied that the requirements of section 49 were met.

45.Notwithstanding those requirements were met, the Tribunal still had a discretion in respect to whether to make a termination and possession order under section 49 of the RT Act. There were no relevant facts before the Tribunal that could reasonably persuade the Tribunal that the discretion should be exercised to refuse to make the order sought by the Commissioner. Mr Humpherston’s circumstances were very unfortunate (clearly, the premises was his childhood and current home), but they did not give rise to any right to reside in the property. It was not submitted that Mr Humpherston was in fact a tenant, and there is no capacity for the Tribunal to make an order transferring the estate’s rights in the tenancy to him. Nor in the time that elapsed between the tenant’s death and the final hearing had he taken any steps to seek probate or administration of the estate, or otherwise to seek to give legal effect to any property right that may relate to the property.

46.There was no evidence that the estate was able to repay the rental arrears, or make future payments of rent. There was no evidence that the PTG was minded to take any action on behalf of the estate, and the authorities make it clear that it is not obliged to pay the rent or take any action in relation to the lease at all.[12]  Mr Humpherston had not demonstrated any legal right to continue to occupy the premises. To leave arrangements as they were would be contrary to public policy and common sense.

[12] Abu-Arab v NSW Trustee & Guardian [2014] NSWSC 954

47.Accordingly, the Tribunal exercised its power to terminate the residential tenancy agreement pursuant to section 49 of the RT Act, and ordered that the Estate pay any outstanding arrears owing to the applicant.

………………………………..

Senior Member H Robinson

HEARING DETAILS

FILE NUMBER:	RT 637/2017
PARTIES, APPLICANT:	Commissioner for Social Housing
PARTIES, RESPONDENT:	No Appearance
PARTIES, THIRD PARTY	John Humpherston
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	ACT Government Solicitor
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member H Robinson
DATES OF HEARING:	15 November 2017