Fabuliving Pty Ltd v Lucisano
[2020] VSC 369
•16 June 2020; Reasons provided 23 June 2020
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S ECI 2019 05345
| FABULIVING PTY LTD (ACN 630 732 124) | Plaintiff |
| v | |
| FRANCESCO LUCISANO | Defendant |
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JUDGE: | Kennedy J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 16 June 2020 |
DATE OF JUDGMENT: | 16 June 2020; Reasons provided 23 June 2020 |
CASE MAY BE CITED AS: | Fabuliving Pty Ltd v Lucisano |
MEDIUM NEUTRAL CITATION: | [2020] VSC 369 |
JUDGMENT APPEALED FROM: | Order of 20 January 2020 (Caporale JR) |
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LAND – Recovery of possession – Appeal from decision of Judicial Registrar - Dispute between operator of short-stay apartments and person who has ceased making payments – Protracted litigation in Victorian Civil and Administrative Tribunal - Whether summary procedure for recovery of land under Order 53 of Supreme Court (General Civil Procedure Rules) 2015 available or appropriate – Whether defendant had been a licensee or tenant - Unsatisfactory evidence - Appeal allowed - Proceeding to continue as if it had commenced as a writ with expedited trial date.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr T Robinson, a solicitor | Robinson Gill Lawyers |
| For the Defendant | Mr B Clemens, a solicitor | Clemens Haskin Legal |
HER HONOUR:
Introduction
By originating motion filed 26 November 2019, the plaintiff commenced an action for the recovery of land at 108/802 Elgar Road, Doncaster, Victoria, 3108 (Vol 11872 Fol 724) (the property) pursuant to Order 53 of the Supreme Court (General Civil Procedure) Rules 2015.
This application was referred to Judicial Registrar Caporale for hearing and determination.
The critical issue in dispute between the parties was whether the defendant had been ‘a licensee’ or, rather, a tenant. This was because the jurisdiction under Order 53 could only apply if the defendant had been a licensee.
The Judicial Registrar determined that the defendant had been a licensee based on certain orders made by the Victorian Civil and Administrative Tribunal (VCAT) of 11 June 2019. He thereby granted the plaintiff’s application to recover possession under Order 53.
The defendant filed a notice of appeal dated 2 February 2020, which appeal constitutes a hearing de novo.[1]
[1]Supreme Court (General Civil Procedure) Rules 2015 r 84.05(4).
Various matters were raised by both sides. However, the key issue at the hearing was whether the summary procedure for recovery of land under Order 53 was available or appropriate, and, if not, what orders should be made in relation to the proceeding.
On the day of the hearing I determined that the Order 53 procedure was not available, but that the matter should continue as if it had commenced by writ, and be set down for an expedited hearing. Given the associated urgency, I made orders on that day to ensure an early trial date, with reasons to be delivered subsequently. The reasons are now provided, below.
Factual narrative
A large part of the chronology in the case was not disputed though, as will be seen below, there was a deficiency in the evidence on certain key matters.
AWF Development Pty Ltd (AWF) is the registered proprietor of the property. The plaintiff, Fabuliving Pty Ltd (Fabuliving), leases the property from AWF.
The property is one of a block of apartments, known as the Ellia Doncaster Apartments, from which Fabuliving offers short-term stay accommodation on online websites such as Booking.com.
The defendant, Mr Lucisano, says that he resided at the Ellia apartments for almost three years, by arrangement with a different management, up to 2 December 2018. He was first accommodated at the apartments, by agreement with Fabuliving, from 21 February 2019. He commenced this arrangement by making a booking via Booking.com, and negotiating and paying a ‘weekly rental amount.’
On 1 May 2019, Mr Lucisano commenced staying in the property (i.e. apartment 108, particularly) which was organised via text message. According to Fabuliving, he was ‘accommodated by agreement with Fabuliving’ from 1 May 2019 to 17 May 2019.
It is unclear on what basis he continued to reside at the property thereafter. Fabuliving says that Mr Lucisano failed to pay it any amount for his accommodation ‘for the week of 20 May 2019’, and has paid no amount since. At that time, Fabuliving ‘was charging a weekly rate’ of $720, including GST, for the property. However, Mr Lucisano made a vague suggestion that he attempted to tender rent (though precisely when this occurred is also unclear).
In any event, Fabuliving says that Mr Lucisano was asked to leave the property at some point during the week commencing 20 May 2019, but he refused, and the parties fell into dispute.
Thereafter, a protracted course of litigation ensued in VCAT.
Thus, on 23 May 2019 by VCAT proceeding identified as 18070, Mr Lucisano obtained an interim restraining order preventing AWF, as the purported landlord, from obtaining possession or entering the property. In so doing, VCAT recorded that AWF and Mr Lucisano were parties to a tenancy agreement subject to the Residential Tenancies Act 1997 (Vic) (the RTA). The matter was then adjourned to 4 June 2019.
On 4 June 2019, the restraining order was dissolved following no appearance by Mr Lucisano. However, it appears that he did eventually appear later that day, at which time his application for review of the dismissal order was adjourned to 11 June 2019, with the restraining order remaining in effect until further order.
The 11 June agreement
On 11 June 2019, Ms Lu, the director of Fabuliving, says that the parties ‘agreed to resolve the various disputes in relation to the property, then on foot, on the basis that Mr Lucisano agreed to vacate the Property on or before 23 July 2019’ (the 11 June agreement). Fabuliving does not adduce any other evidence of this agreement, in particular, it produced no settlement agreement. However, it says that the 11 June agreement is reflected in the terms of an order of VCAT made on 11 June 2019. It further alleges that the 11 June agreement constituted a licence.
The orders of VCAT of 11 June 2019 record that it determined that the application for review was granted unopposed and the order dated 4 June 2019 was set aside. It also ordered that Fabuliving was added as a respondent to the proceeding. The orders further stated:
The Tribunal orders by CONSENT, in full and final settlement of all actions, claims and demands of any party:
1. The applicant agrees to vacate the premises on or before 23 July 2019.
2.The applicant shall not be required to pay any rent or license fee for occupation until 23 July 2019 and any arrears in rent or licence fee are waived.
3.The respondents and the servants and agents of them shall ensure that the applicant has quiet enjoyment of the premises.
4.The parties otherwise release each other from all actions, claims and demands.
5.The respondent shall immediately provide to the applicant two keys to provide entry to the premises and two fobs providing access to the main building entrance and to the garage.
6.Liberty to apply to all parties.
Mr Lucisano’s position on the settlement is somewhat unclear. He accepts that the parties agreed on a settlement after the matter was stood down on 11 June 2019, which provided him with a two-month rent free period. However, he suggests that, upon reconvening, Counsel provided the Member with terms of settlement with the additional feature that Fabuliving was added (which had not been discussed). Further that, ‘in addition’, the date marking the end of the rent-free period was ‘transmuted into’ the date he was to move out of the apartment. This is despite the fact that VCAT records that the orders (including the agreement to vacate by 23 July 2019) were made by consent.
In any event, Mr Lucisano says that Order 53 did not apply given he was a tenant with exclusive possession.
VCAT orders subsequent to the 11 June agreement
Mr Lucisano did not vacate the premises by 23 July 2019.
Further VCAT proceedings then ensued wherein Fabuliving sought possession, and Mr Lucisano sought injunctive relief.
Insofar as injunctive relief was concerned, on 25 September 2019 by VCAT proceeding identified as 32813, Mr Lucisano obtained an interim restraining order against AWF, as purported landlord, on the basis that AWF and he were parties to a tenancy agreement subject to the RTA. On 7 October 2019, this order was set aside following no appearance by Mr Lucisano. An application to review this order was later adjourned part heard on 30 October 2019 (at which time it was noted that Fabuliving was not a party to this proceeding). On 13 November 2019, the application was then dismissed for the reason recorded that ‘there is no tenancy agreement between the parties.’ An order of 20 December 2019 further clarified that AWF was the only respondent to this proceeding (not Fabuliving).
Insofar as possession was concerned, Fabuliving’s application for possession was first dismissed on 7 August 2019 by reason of a failure to give notice under the RTA. A further application for possession was withdrawn on 30 August 2019. However, on 3 October 2019, in VCAT proceeding identified as 32450, Fabuliving obtained a possession order against Mr Lucisano whereby VCAT ordered that he must vacate the rented premises by 3 October 2019. In so ordering, VCAT recorded that, by the terms of the 11 June 2019 orders, ‘the tenant’ was deemed to have given notice to vacate the ‘rented premises’ on or before 23 July 2019, and that he had not vacated the ‘rented premises.’ The order of possession of 3 October 2019 was also affirmed on 17 October 2019, at which time an application for review was dismissed. By orders made on 13 November 2019, a warrant of possession was ‘cancelled.’ However, no reason was given for this cancellation order in circumstances where the order for possession appeared to remain.
Proceedings before the Judicial Registrar
The Judicial Registrar has provided ex tempore notes of reasons for his decision. In those reasons he rejected Mr Lucisano’s suggestion that the proceeding should be referred to the trial division, and found that he could resolve any factual dispute ‘readily and fairly’ (at paragraph 10). He also rejected a submission that the court was prevented from dealing with the Order 53 application because the order for possession made by VCAT was still alive. He considered that it was clear from the orders made on 13 November 2019 that VCAT considered its role in the dispute ‘has come to an end’ (at paragraph 11).
After noting that there were competing submissions as to whether the 11 June agreement constituted a licence or a lease for the purposes of Order 53, the Judicial Registrar stated:
16.I have considered the terms of the agreement closely, as well as the many cases on this point. Despite the agreement providing for the quiet enjoyment of the apartment, it is not clear from the terms of the agreement if what is granted is exclusive possession. There was very little evidence, if any, on this issue. In the end, I have concluded that the 11 June agreement created a licence agreement between the parties and that Mr Lucisano had gone into occupation of apartment 108 on 11 June 2019 as a licensee and has remained in occupation without Fabuliving’s consent. Accordingly, the necessary prerequisite to an application under Order 53 has been satisfied.
He further went on and stated that Mr Lucisano was permitted to occupy the apartment on ‘conditions’ that he would vacate on or before 23 July 2019 and agreed not to continue litigation with Fabuliving. He found that the agreement thereby conferred only a ‘conditional possession’ on Mr Lucisano. He then stated:
21. These are the relevant surrounding circumstances referred to in such cases as Radaich v Smith[2] and although there are important aspects of the agreement that suggest a lease, I have concluded that it is no more than a licence agreement permitting Mr Lucisano to stay in the apartment and, in return, Mr Lucisano agreeing to do two things for Fabuliving, that is, agreeing to vacate by 23 July 2019 and not pursuing any further litigation against Fabuliving.
22. It is from these surrounding circumstances that I have also concluded that it was not the intention of either party to create a lease agreement between them.
[2](1959) 101 CLR 209.
He thereby made an order that Fabuliving recover possession.
A warrant of possession was subsequently obtained on 21 January 2020. However, this warrant has not been executed following the COVID-19 pandemic, and is now subject to an undertaking.
The result is that Mr Lucisano continues to remain in possession of the property.
Submissions
Although the notice of appeal identified alleged ‘errors’, both parties accepted that this was a de novo appeal, with neither directly addressing the alleged ‘grounds’ contained in the notice.
Plaintiff’s submissions
Fabuliving’s primary submission was that the parties ‘crystallised’ their relationship under the 11 June agreement, which created a license. However, very little analysis was advanced in support of this submission beyond the matters identified by the Judicial Registrar. These included that Mr Lucisano was not required to pay rent; the arrangement was conditional upon him leaving the premises; and that Fabuliving had waived its own rights against Mr Lucisano.
Fabuliving also suggested that an estoppel arose by reason of VCAT’s finding on 13 November 2019 that there was no tenancy agreement. While this related to a proceeding to which Fabuliving was not a party, this finding was a necessary and implicit foundation of the decision to cancel the warrant of possession (also made on 13 November 2019, and in a proceeding to which Fabuliving was a party).
Fabuliving also submitted that there was no estoppel by reason of the extant VCAT order for possession. Its primary submission was that this outstanding VCAT order was a ‘minor technicality’ and, consistent with the approach of the Judicial Registrar, that VCAT effectively ‘washed its hands’ of the matter on 13 November 2019. It claimed that there was also transcript to support such a construction, though it was not in evidence before the court. Such transcript allegedly supported that the orders of 13 November 2019 were meant to discharge the possession order, consistent with discharge of the warrant. A second submission, however, was that Fabuliving would file a notice of appeal to dismiss the possession order.
Fabuliving therefore submitted that the court ought to give possession under Order 53 as the Judicial Registrar had done, with the appeal dismissed. However, if the appeal was to be allowed, the proceeding should not be dismissed but ought to be determined urgently as if commenced by writ. In such circumstances Fabuliving’s solicitor clarified that any statement of claim would be simply based on the 11 June agreement.
Defendant’s submissions
Mr Lucisano submitted that he occupied the property as a tenant which matter had already been ventilated in VCAT. It followed that Order 53 was inapplicable.
In suggesting that the arrangement was a lease, Mr Lucisano alleged that he was given exclusive possession of the property which had its own independent certificate of title. Despite an absence of evidence, he submitted that the property was a two-bedroom self-contained apartment which was not serviced, and that the rental agreement he had reached was based on a minimum stay of 28 days with rent paid weekly in advance.
Mr Lucisano further submitted that VCAT had determined that there was a landlord and tenant relationship by reason of the orders made on 3 October 2019. Those orders also raised a res judicata or issue estoppel.
He submitted that if the court determined that the Order 53 procedure was inappropriate, then the proceeding ought to be dismissed to permit the case to ‘revert back’ to VCAT which had been seized of the matter.
Mr Lucisano’s solicitor, Mr Clemens, was asked to specifically address whether the defendant had any real substantive defence if the proceeding was to continue in this court, including as if it was commenced by writ. Mr Clemens - who had only recently filed a notice of appointment on 15 June 2020 - did not provide any satisfactory response, but did suggest that he would have to take further instructions, and that it was not a matter he had spent time considering.
Two key issues therefore arose: First, whether the Order 53 procedure was available or appropriate; and secondly, what should occur if it was not.
Whether Order 53 procedure appropriate
Order 53
Order 53 applies in limited circumstances, as follows:
53.01 Application of Order
(1)Subject to paragraph (2), this Order applies where the plaintiff claims the recovery of land which is occupied solely by a person or persons who entered into occupation or, having been a licensee or licensees, remained in occupation without the plaintiff’s licence or consent or that of any predecessor in title of the plaintiff.
(2)This Order does not apply where the land is occupied by a mortgagor or successor in title and the claim is made by the mortgagee or successor in title.
In Framlingham Aboriginal Trust v McGuiness (‘Framlingham’), Derham AsJ stated:[3]
The words of Rule 53.01(1) make it plain that the pre-requisites to the application of Order 53 are that the person or persons in occupation of the land are—
(a)a person or persons who entered into occupation without the plaintiff’s licence or consent or that of any predecessor in title of the plaintiff; or
(b)a person or persons who, having been a licensee or licensees, remained in occupation without the plaintiff’s licence or consent or that of any predecessor in title of the plaintiff.
[3][2014] VSC 241 (‘Framlingham’), [39] (emphasis added), cited in Chan v Chan [2020] VSCA 40 (‘Chan’), [54].
It was not disputed that Mr Lucisano had entered into occupation with consent of Fabuliving. The key issue, therefore, was whether the second limb of subsection (1) applied, i.e. whether Mr Lucisano had been a licensee who remained in occupation without Fabuliving’s licence or consent.
In the recent court of appeal decision in Chan v Chan,[4] the application of Order 53 was considered in relation to a dispute between a sister and brother, including whether the brother was a tenant at will or a licensee. The court examined the history, purpose and scope of Order 53, highlighting that the provision did not apply to those occupants who enter as tenants, or hold over after the tenancy has been terminated.[5]
[4][2020] VSCA 40.
[5]Ibid [54].
The court also set out the principles that govern Order 53 as helpfully summarised by Derham AsJ in Framlingham as follows:[6]
[6]Framlingham, above n 5, [41]-[42] (citations omitted), cited in Chan, above n 5, [55].
The authorities establish the following matters in relation to the operation of Order 53:
(a)It is intended to enable a speedy resolution in favour of the proprietor of land of a dispute whereby trespassers are keeping the proprietor out;
(b)It is intended to apply only in clear cases where there is no question to try;
(c)The existence of a factual dispute does not deny the applicability of Order 53 where it is possible to resolve the dispute readily and fairly;
(d)While an order for possession may be made notwithstanding that there is a factual dispute between the parties, such an order will only be appropriate if the Court is able to satisfy itself as to the material facts that bring the case within Order 53;
(e)The jurisdiction should be exercised with great care;
(f)Where an issue does emerge, the judge has discretion whether simply to dismiss the proceeding, to determine the issue or cause the issue to be subsequently tried. This includes giving directions as to the further conduct of the proceeding or ordering the proceeding to continue as if begun by writ pursuant to Rule 4.07 of the Rules; and
(g)Where the Court gives judgment for possession under Order 53, it may grant a stay of execution.
The power to give summary judgment for possession is similar in nature to the power to give summary final judgment under Rule 22.02 of the Rules. That power should be exercised with great care and should never be exercised unless it is clear that there is no question to be tried. The need for exceptional caution in exercising the power is the subject of numerous observations of courts in this country.
The court (in Chan) determined that there was an arguable case that the applicants enjoyed a tenancy at will and that this was therefore sufficient to displace the operation of Order 53. Given the question of whether they were tenants at will or licensees would require significant exploration of the facts, this further warranted the matter being sent off to trial (rather than being dealt with by a summary procedure).
Application to this case
Returning to the present case, the principles above suggest that the existence of a factual dispute does not necessarily deny the applicability of Order 53 where it is possible to resolve that issue readily and fairly.
In attempting, then, to resolve the issue of whether Mr Lucisano was given a leasehold interest or merely a licence, the test to be applied is whether or not Mr Lucisano was granted exclusive possession.[7]
[7]Swan v Uecker (2016) 50 VR 74, 85 [31]; Radaich v Smith (1959) 101 CLR 209.
In considering this issue, neither party properly addressed the status of Mr Lucisano immediately prior to 11 June 2019. Rather, the key submission of Fabuliving was that, irrespective of his earlier status, he became a licensee by reason of the 11 June agreement.
Consistent with the observations of Judicial Registrar Caporale, there is little evidence on this issue. Thus, there was no direct evidence as to the nature of Mr Lucisano’s rights of enjoyment (before or after 11 June 2019). There were not even any formal terms of settlement adduced into evidence.
I also do not consider that the matters raised by Fabuliving take the matter any further. Thus, the fact that the agreement was conditional was as consistent with the arrangement constituting a (conditional) tenancy as much as a licence. The waiver of ‘rent or license fee’ also does not shed light on whether Mr Lucisano was given rights of exclusive possession. The finding of VCAT (that there was not a tenancy) also appears directed to AWF. It cannot give rise to any issue estoppel in this court given Fabuliving was not a party to the VCAT proceeding identified as 32813.
Against this, there are a number of factors which suggest a lease arrangement. First, Mr Lucisano was expressly given ‘quiet enjoyment’ of the property, consistent with a right of exclusive possession. Secondly, the multiple VCAT proceedings, occurring within the Residential Tenancies list, are consistent with the existence of an (ongoing) lease relationship. Finally, the fact that the arrangement involved the grant of a ‘short stay’ is not fatal. Thus, in Swan v Uecker,[8] Croft J determined that a short-stay AirBnB rental constituted a lease given that the occupancy granted was ‘the possession – exclusive possession – that would be expected of residential accommodation’.[9]
[8](2016) 50 VR 74.
[9]Ibid 93 [46].
To these factors must be added the complication of the extant VCAT order for possession. Not only does this suggest the existence of a lease, it also raises a question as to the appropriateness of another order for possession in this case.
Overall, then, the available evidence suggested that Mr Lucisano was given exclusive possession consistent with a lease. At the very least, there was an arguable case that the 11 June agreement gave rise to a lease arrangement such that I was unable to be satisfied that Order 53 applied.
Appropriate exercise of discretion as to further conduct of proceeding
Given the apparent strength of Fabuliving’s rights to possession under the 11 June agreement, it was not appropriate to dismiss the proceeding, as was suggested by Mr Lucisano.
Given Fabuliving indicated that it ultimately sued on the basis of a simple settlement agreement, any further investigation as to whether this gave rise to a lease or licence arrangement (by way of further evidence or otherwise) also did not appear to be warranted.
In order to avoid further delay, I also gave consideration as to whether Fabuliving could proceed, instead, to summarily enforce the settlement agreement on the basis of a different procedure, pursuant to the ‘Roberts jurisdiction’.[10] However, Fabuliving did not raise such a suggestion. I was also not clearly satisfied that justice could be done[11] given Mr Lucisano was not given notice of such a course, and his solicitor (who was only recently appointed) suggested that instructions needed to be taken as to whether a defence was really available.
[10]Roberts v Gippsland Agriculture and Earthmoving Contracting Co Pty Ltd [1956] VLR 355, considered in Seachange Management Pty Ltd v Pital Business Pty Ltd (2009) 23 VR 396.
[11]Seachange Management Pty Ltd v Pital Business Pty Ltd (2009) 23 VR 396, 408 [40].
Overall, then, in the light of the protracted history, I determined that the matter should instead continue as if it had been commenced by writ. It will be determined as expeditiously as possible following service of pleadings which clearly outline the real issues in dispute, if any, between these parties.
It may well be that Mr Lucisano has no defence to this matter when properly pleaded. The orders made will therefore make provision for Fabuliving to move to judgment in default of a defence.
It is a matter for Fabuliving to resolve the outstanding issues raised by the existing VCAT possession order. It may be appropriate for Fabuliving to approach VCAT to have this issue resolved. However, Fabuliving also suggested it might file a notice of appeal to overturn this order under s 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic). The issue of further proceedings is not ideal. However, I have made a case management order incorporating the management of any such notice which, inter alia, must identify a point of law, and will also have to include an application for leave and an extension of time.[12]
[12]The Supreme Court website contains a form of notice of appeal which includes reference to these matters: type="1">
The following orders were made:
1. The appeal is allowed.
2. The costs of and incidental to the appeal are reserved.
3.The orders made on 20 January 2020 by Judicial Registrar Caporale are set aside.
4.Proceeding SECI 2019 05345, commenced by originating motion, continue as if it had been commenced by writ.
5.By 4:00pm on 26 June 2020, the respondent, as plaintiff, is to file and serve a statement of claim.
6.By 4:00 pm on 26 June 2020, the respondent, as plaintiff, is to file and serve any notice of appeal against the decision of the Victorian Civil and Administrative Tribunal granting possession to the plaintiff dated 3 October 2019, as affirmed on 17 October 2019. Any such appeal is to be heard together with any trial in this proceeding.
7.By 4:00pm on 10 July 2020, the defendant is to file and serve any defence. In the absence of any defence, the plaintiff may issue an application for judgment to be returnable on 31 July 2020 at 10:00am.
8.Subject to any contrary order of the trial judge, the trial of this proceeding be by way of affidavit.
9.By 4:00pm on 30 July 2020, the parties are to file and serve all affidavits to be relied on at trial. The parties should also advise the court, and each other, whether there is to be reliance on affidavits already filed in this proceeding. Further, the parties should advise the court, and each other, whether any deponent will be required for cross examination.
10.By 4:00pm on 7 August 2020, each party is to file and serve any affidavits in reply.
11.By 4:00pm on 13 August 2020, the parties are to file and serve outlines of written submissions.
12.The matter is listed for trial before Justice Kennedy on 18 August 2020, with an estimate of 2 days.
13. Liberty to apply is reserved.
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