Dowker v Paoletti
[2015] SASCFC 43
•13 April 2015
SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
DOWKER & ANOR v PAOLETTI
[2015] SASCFC 43
Judgment of The Full Court
(The Honourable Chief Justice Kourakis, The Honourable Justice Stanley and The Honourable Justice Parker)
13 April 2015
LANDLORD AND TENANT - RESIDENTIAL TENANCIES LEGISLATION - RECOVERY OF POSSESSION - GENERALLY
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH JUDGE'S FINDINGS OF FACT
APPEAL AND NEW TRIAL - APPEAL - GENERAL PRINCIPLES - INTERFERENCE WITH DISCRETION OF COURT BELOW
Appeal from a judgment of the District Court making an order that the appellants give vacant possession of the respondent’s property. The Residential Tenancies Tribunal had made an order for vacant possession. On 14 August 2014, on appeal to the Administrative and Disciplinary Division of the District Court, the primary judge rescinded the Tribunal’s decision subject to the appellants observing the whole of the terms and conditions of the tenancy agreement. On 15 October 2015, on application by the respondent, the judge found that the appellants had failed to comply with the tenancy agreement in breach of his earlier orders. The judge discharged his earlier orders and ordered that vacant possession be given by 1 December 2014.
Whether the judge erred in finding that the appellants had failed to comply with the terms and conditions of the tenancy agreement. Whether the judge erred in discharging the orders made on 14 August 2014. Whether the judge erred in ordering that the appellants vacate the premises by 1 December 2014.
Held (Parker J; Kourakis CJ and Stanley J agreeing):
Appeal dismissed. There was a proper basis for the judge to find that the appellants had failed to comply with the tenancy agreement. The judge did not err in discharging the orders made on 14 August 2014. The judge did not err in the exercise of his discretion to order that the appellants vacate the premises by 1 December 2014.
Residential Tenancies Act 1995 s 95; District Court Act 1991 Pt 6 Div 2, s 42E, s 42F, referred to.
Dowker v Prime Property Group SA Pty Ltd [2014] SADC 152, considered.
DOWKER & ANOR v PAOLETTI
[2015] SASCFC 43Full Court: Kourakis CJ, Stanley and Parker JJ
KOURAKIS CJ: I would dismiss the appeal for the reasons given by Parker J.
STANLEY J: I have had the advantage of reading the draft reasons of Parker J. I agree with the orders he proposes and his reasons. I would hear the parties as to the date of discharge of the stay order made by Nicholson J on 12 December 2014.
PARKER J: This is an appeal from a judgment of the District Court making an order that the appellants give vacant possession of the respondent’s property at Lewiston. The matter had proceeded in the District Court on appeal from the Residential Tenancies Tribunal.
Background
The appellants, Margaret Dowker and Gregory Bennett, are tenants and live at the property. The respondent, Nick Paoletti, is the landlord.
Prior to 21 May 2013 the appellants had owned and lived at the property for some 14 years. It was subject to a first mortgage to the Commonwealth Bank. The appellants fell seriously into default under their loan agreement and the bank commenced steps to take possession of the property.
During the course of negotiations between the appellants and the bank, the bank offered to discharge their obligations if they vacated the property. In addition, the bank offered to pay them up to $23,000 to assist with removal and rental costs. That offer was made on 21 March 2013. Ultimately, the offer was not accepted. Whether or not the offer was still capable of acceptance as at 21 May 2013 is not clear.
As an alternative course, the bank agreed to permit the appellants to sell the property privately. On 21 May 2013 they sold the property to Mr Paoletti for $208,000. On 28 May 2013, the date of settlement, the parties agreed in writing to vary the contract for sale and purchase of the land. The contract addendum varied clause 9 relating to vacant possession so that it provided as follows:
Clause 9. Possession The Vendor shall grant to the Purchaser vacant possession of the Land and possession of the included property and any keys to the Land. The Purchaser shall grant to the Vendor a Tenancy Agreement for a minimum 12 month term with further extensions to the term of the agreement to be negotiated and granted provided all terms of the Tenancy Agreement are met and maintained by the Vendor.
The evidence of the appellants before the District Court was that Mr Paoletti led them to believe that he would grant an extension to the term of the tenancy agreement so that they could remain in possession of the property for at least 24 months. Their evidence was that if Mr Paoletti had not created that belief they would have accepted the bank’s offer instead of selling to him.
The parties entered into a tenancy agreement on 9 July 2013. Clause 28 of the agreement stated:
PETS
28. Pets Okay (Pets are not allowed to be in the house or any attached rooms)
At the time of sale there were about 20 dogs living at the property with free and full access to the house. It was in dispute before the District Court whether the appellants had initialled the page containing clause 28 and whether and to what extent Mr Paoletti knew of the dogs when he agreed to purchase the property and enter into the tenancy agreement. The appellants contended that they were led to believe by Mr Paoletti that he would not insist on strict compliance with clause 28.
Residential Tenancies Tribunal – order for vacant possession
In about mid 2014, Mr Paoletti gave the appellants notice that the term of the tenancy agreement would not be extended and they would be required to vacate the property at the end of the 12 month tenancy agreement. The appellants sought relief in the Residential Tenancies Tribunal. The Tribunal made an order under s 93 of the Residential Tenancies Act 1995 granting Mr Paoletti vacant possession of the property with effect from 11 July 2014. However, the Tribunal suspended the operation of the order for 45 days and extended the operation of the tenancy agreement until 18 August 2014.
The appellants and the Presiding Member of the Tribunal then exchanged considerable correspondence in relation to the appellants’ contention that they had agreed to sell the property on the basis that the tenancy agreement would be renewed. The Presiding Member advised the appellants by letter on 28 July 2014 that the Tribunal had jurisdiction to deal with tenancy disputes but could not deal with issues concerning the sale of the property.
Appeal to District Court
The appellants appealed to the Administrative and Disciplinary Division of the District Court under Part 6 Division 2 of the District Court Act 1991.[1] The appeal was heard on 14 August 2014. The Court received further evidence from the parties about the appellants’ alleged belief concerning the length of the tenancy and about pets. The judge found that there was “a prima facie case that the appellants could make out in a proceeding before a court about the land contract and the associated tenancy”.
[1] Dowker v Prime Property Group SA Pty Ltd [2014] SADC 152
The judge held that the Tribunal was correct in holding that it did not have jurisdiction to deal with those issues. However, because the Tribunal did not receive any evidence or give consideration to the issues, his Honour held that cogent reasons existed under s 42E of the District Court Act to depart from the Tribunal’s decision. The judge did not remit the matter to the Tribunal because of the limits upon its jurisdiction. Instead, his Honour exercised the Court’s power under s 42F to rescind the Tribunal’s decision and substitute another decision. The purpose of the substituted decision was to allow the appellants an opportunity to ventilate their complaint before a court of competent jurisdiction. In making orders, the judge noted the need to sufficiently protect the interests of both parties and not to protect the interests of one party to the detriment of the other.
Orders were made as follows:
1. I set aside the orders made by the Residential Tenancies Tribunal on 4 July 2014 for the tenants to give vacant possession of the whole of the land in certificate of title register book volume 5886 folio 255 more commonly known as 13 Aunger Road, LEWISTON SA 5501 but upon the following terms and conditions:
1.1That within 90 days of this day, if they are so advised, the tenants commence an action in any court in which the tenants seek such relief as they may be advised in respect of the terms of the contract of sale and purchase of that land made between them and dated the 21st day of May 2013 and any contract addendum to that contract and any tenancy agreement dated 9 July 2013.
1.2That within the said period of 90 days or any extension thereof the appellants as tenants shall observe the whole of the terms and conditions of the said tenancy agreement and for the avoidance of doubt the tenants are not allowed to keep any pets in any house or any attached rooms on those premises.
1.3In the event that the tenants fail to comply with sub paragraphs 1.1 and 1.2 of these orders, there be liberty to the landlord to apply at short notice and by email to my chambers through the Registry for the discharge of these orders.
1.4 I give liberty to all parties to apply including on short notice.
...
Decision under appeal
By application dated 30 September 2014, Mr Paoletti sought orders from the District Court for vacant possession of the property, for the house keys to be handed over and for payment of all outstanding monies. The application was heard by the same judge on 15 October 2014.
The application by Mr Paoletti raised three grounds relevant to this appeal:
1that there was evidence there had been dogs in the house after 14 August 2014 in breach of the judge’s orders;
2that the appellants had refused Mr Paoletti and/or his agents access to the premises, notwithstanding that proper notice was given under clause 11(d) of the tenancy agreement; and
3that rent was in arrears.
The judge received oral evidence from Mr Paoletti and documents that he tendered. His partner, Ms MacFarlane, also gave evidence.
Dogs
Three emails sent after 14 August 2014 by Ms Dowker to Mr Paoletti’s property manager had mentioned dogs being in the house. One of the messages had attached a photo of Ms Dowker in the house with about 10 dogs.
In her oral evidence Ms Dowker denied that the dogs still had access to the house. She asserted that any statement in the emails that there were dogs in the house was made in the past tense and referred to events prior to 14 August 2014. She also stated that the photo was an old photo.
The judge rejected those contentions. His Honour read the emails as being in the present tense and held that the context of the emails indicated that the photograph was contemporaneous. His Honour also considered that Ms Dowker’s denial of dogs being in the house had to be measured against her refusal to allow Mr Paoletti access to the home. His Honour found that there had been dogs in the house in breach of paragraph 1.2 of the orders made on 14 August 2014.
Access to premises
Clause 11(d) of the tenancy agreement entitled the landlord to inspect the premises upon giving the tenant between seven and fourteen days notice. The judge was satisfied that notice had been given by email sent by Mr Paoletti’s property manager to Ms Dowker on 26 August 2014. That email provided seven days notice of entry into the property between the hours of 8 am and 8 pm for an inspection and to investigate structural damage that may have been caused by sinking and/or movement of the house. Mr Paoletti also gave evidence that following the seven days notice coming into effect he had been to the premises about 20 times and on each occasion found the front gate padlocked and chained thereby denying him access.
Ms Dowker contended that there was no reason for an inspection as the sinking of the house was an old issue. The judge rejected that contention and held that the appellants had without proper basis denied access to Mr Paoletti. That constituted a breach of the tenancy agreement and the orders his Honour had made on 14 August 2014.
Arrears of rent
The tenancy agreement provided that rent of $250 per week was to be paid fortnightly in advance from 17 June 2013. Mr Paoletti gave evidence that he agreed to grant the appellants a two week rent holiday and that it would have been payable from in or about early July 2013. His evidence was that the rent of $500 had never been paid nor had water charges of $160.04 been paid. The appellants did not deny that $660.04 was due and had not been paid. The judge held that the failure to pay rent and outgoings was in breach of the appellants’ obligations under the tenancy agreement.
For the preceding reasons, the judge concluded that the appellants had failed to observe the whole of the terms and conditions of the tenancy agreement as required by paragraph 1.2 of the orders he had made on 14 August 2014.
His Honour determined that the orders made on 14 August 2014 should be discharged. That would have the effect of allowing the order of the Residential Tenancies Tribunal made on 4 July 2014 for vacant position to stand. His Honour noted that it would not affect the appellants’ right to bring proceedings against Mr Paoletti in a court of competent jurisdiction in relation to the sale and purchase of the property. So as to allow the appellants time to move out of the premises, the judge ordered that they give vacant possession on or before 1 December 2014.
The appeal
The appellants seek the following orders:
1a stay of the order requiring vacant possession by 1 December 2014;
2that the property sale, contract addendum and tenancy agreement be investigated;
3that the property be returned to the appellants;
4$50,000 in compensation for pain and suffering and the appellants’ rejection of the $23,000 offer from the bank; and
5that dogs be allowed inside the house.
The appellants have brought their appeal on the following grounds:
1the property was sold at a low price in exchange for a long term tenancy, and Mr Paoletti gave misleading and false representations as to his intentions;
2the appellants did not initial the page on the tenancy agreement containing clause 28 regarding pets in the house and the initials appearing on the copy of the agreement before the Residential Tenancies Tribunal were a forgery;
3Mr Paoletti lied and made false accusations under oath at both hearings on 14 August 2014 and 15 October 2014;
4the appellants have suffered due to threats and unprofessional behaviour by Mr Paoletti’s property managers;
5the appellants have lived constantly under threats of eviction; and
6the District Court’s reasons for ordering vacant possession were erroneous.
The issue to be decided in this appeal is whether the judge erred in discharging his orders made on 14 August 2014 and ordering that vacant possession be given by 1 December 2014. Of the orders sought by the appellants, only order 1 is relevant to that question. Orders 2 to 5 relate to any claim the appellants may wish to institute in another court of competent jurisdiction and are not relevant to this appeal. Grounds 1, 2, 4, and 5 are not relevant for the same reason. Only grounds 3 and 6 are relevant to the appeal.
In support of grounds 3 and 6, the appellants complained that the judge was not willing to listen to their explanations about whether the dogs were inside the house, whether rent was in arrears and whether they had denied Mr Paoletti access to the premises. They alleged that Mr Paoletti lied in evidence and they put forward their version of events. Their submissions did not go beyond an attempt to re-agitate the factual findings made by the judge.
Paragraph 1.2 of the orders made on 14 August 2014 required the appellants to comply with the whole of the terms and conditions of the tenancy agreement. So as to avoid doubt, the order expressly stated that dogs were not to be kept in the house.
I am satisfied that the judge did not err in finding that the appellants had failed to comply with paragraph 1.2 of the orders made on 14 August 2014. The appellants have failed to show any proper ground on which this Court could interfere with the findings of fact made by the judge. There was a proper basis for his Honour to find that dogs had been present in the house after 14 August 2014, that rent and water charges had not been paid and that the appellants had refused to allow the respondent access to the premises contrary to the terms of the tenancy agreement. In light of those findings I consider that the judge did not err in discharging the orders made on 14 August 2014.
While the appellants complained of the difficulties that they would face if they were required to move out in the short term, the judge did not err in the exercise of his discretion to order that they vacate the premises by 1 December 2014. I would dismiss the appeal.
A judge of this Court granted a stay of the order that the appellants vacate the premises by 1 December 2014 pending the resolution of this appeal. I would hear the parties concerning the date of discharge of that stay.