Jordan v Community Housing Limited
[2024] TASSC 63
•12 November 2024
[2024] TASSC 63
| COURT: | SUPREME COURT OF TASMANIA |
| CITATION: | Jordan v Community Housing Limited [2024] TASSC 63 |
| PARTIES: | JORDAN, Lorraine |
| v | |
| COMMUNITY HOUSING LIMITED | |
| FILE NO: | 1145/2024 |
| DELIVERED ON: | 12 November 2024 |
| DELIVERED AT: | Hobart |
| HEARING DATE: | 29 October 2024 |
| JUDGMENT OF: | Marshall AJ |
| CATCHWORDS: |
Landlord and tenant – Residential tenancies legislation – Recovery of possession – Generally – Approved occupant denied continued occupation of premises by landlord following tenant's termination of lease – Whether a pre-existing lease agreement is required to constitute a "residential tenancy agreement" under s 10 of the Residential Tenancy Act 1997 (Tas) – No pre-existing lease agreement required provided necessary elements are satisfied – Landlord's adjustment of rent on basis of appellant's income as approved occupant constitutes grant of occupancy for value.
Aust Dig Landlord and Tenant [217]
Legislation:
Magistrates Court (Civil Division) Act 1992 s 28(2)
Residential Tenancy Act 1997 (Tas) ss 10, 11(1)(b), 16A, 57(3)-(4)
Cases:
Case v Frimont [2021] NSWCA 30
Director of Housing v Lefevre [2021] TASSC 33
REPRESENTATION:
Counsel:
Appellant: A Dinelli KC, S Molyneux Respondent: F Brimfield
Solicitors:
Appellant: Tenants' Union of Tasmania Respondent: Hall and Wilcox
| Judgment Number: | [2024] TASSC 63 |
| Number of paragraphs: | 33 |
Serial No 63/2024 File No 1145/2024
LORRAINE JORDAN v COMMUNITY HOUSING LIMITED
| REASONS FOR JUDGMENT | MARSHALL AJ 12 November 2024 |
1 This matter is an appeal from a decision of a magistrate, made on 30 April 2024, in which her Honour decided she had no jurisdiction to entertain an application by the appellant, purportedly made under s 57(3) of the Residential Tenancy Act 1997 ("the Act"). The appeal is brought under s 28(2) of the Magistrates Court (Civil Division) Act 1992. That section permits a party to a proceeding in respect of a minor civil claim, to appeal to this Court on the ground that the magistrate lacked or exceeded jurisdiction, or any other ground by leave. See Director of Housing v Lefevre [2021] TASSC 33 at [18] per Wood J.
2 Under s 57(3) of the Act, a party to a residential tenancy agreement may apply to the Magistrates Court for an order authorising that party to alter, add or remove any lock or security device. Under s 57(4) the Magistrates Court may make an order under s 57(3) if satisfied that it is reasonable to do so in the circumstances.
3 The reason for the application to the Magistrates Court under s 57(3) by the appellant was that on 29 September 2023, the appellant was locked out of her residential home by the respondent.
4 The reason for the lock out was that the respondent considered the appellant had no legal right to remain in that home. The home will be referred to in these reasons hereinafter as "the property". The respondent is treated as the owner of the property for practical purposes, pursuant to a residential management agreement under s 16A of the Act with Homes Tasmania.
Background Facts
5 In 2011, the appellant's son moved into the property. The appellant moved into the property (where her son remained) in September 2017. At that time, the appellant was recorded on a written document called "residential tenancy agreement" as an "approved occupant" at the property. On the formal written document described as a "residential tenancy agreement" the respondent was listed as the owner, the appellant's son as the tenant and the appellant as an approved occupant. The document was signed by the appellant's son on 19 June 2017. The document was dated 27 June 2017 and was expressed to apply until 26 December 2017. The appellant contended before the magistrate that being an approved occupant gave her the same status as a tenant, subject to the agreement, with the protection as provided by the Act. A different way of looking at her status as an occupant at the property was contended for by senior counsel at the appeal. The Court will deal with those contentions under the heading of "Consideration" in these reasons.
6 On 25 August 2023, the appellant's son informed the respondent that he was moving out of the property in 14 days. He moved out of the property on 8 September 2023. The appellant remained in the property believing she had a legal right to remain and assumed the legal entitlement to remain as a person who has the right to occupy residential premises under a residential tenancy agreement. When the appellant was locked out of the property by the respondent on 29 September 2023, she then applied to the Magistrates Court for the removal of the locks.
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7 The lawyer for the appellant submitted to the magistrate that s 10 of the Act had the effect that a residential agreement existed between the appellant and the respondent as at September 2017. Under s 10, a residential tenancy agreement exists where right of occupancy of residential premises is granted by the owner of the premises to a person for value:-
"(a) whether or not the right is a right of exclusive occupation; or (b) whether the agreement is expressed or implied; or (c) whether the agreement is oral or in writing, or partly oral and partly in writing; or (d) whether or not the agreement is for a specific period."
8 The critical part of s 10, on which the magistrate focused was:
"Where a right of occupancy of residential premises is granted by the owner of the
premises to a person for value."
9 The lawyer for the appellant informed the magistrate that the appellant's son paid rent fortnightly. That sum paid was calculated taking into account his income, and the value of the appellant's disability support pension.
10 The representative for the respondent submitted that the sole tenant at the property was the appellant's son, pursuant to a written residential agreement which came to an end when the appellant's son gave notice to vacate the property, then vacated it. The residential tenancy agreement was signed by the appellant's son and not the appellant. The representative for the respondent informed the magistrate that approved occupants at properties are approved to live at the property only for the duration of the tenancy of the named tenant. It is notable that the signed residential tenancy agreement contained no such annotation.
11 The magistrate made interim orders which had the effect of allowing the appellant back into the property and remaining there, pending a ruling as to whether the appellant had standing to make her application under s 57(3) of the Act.
12 On 30 April 2024, the magistrate gave her ruling on that matter. She held that she had no jurisdiction to deal with the application, effectively ruling that the appellant did not have the standing to make such an application. She formally dismissed the application in a published decision made that day.
13 In that decision, the magistrate observed that the residential tenancy agreement between the appellant's son and the respondent was extended on 25 June 2018 and 27 June 2019, and in each document, the appellant was noted as "approved occupant".
14 At [8] of her reasons for decision, the magistrate said:
"On a number of occasions [the respondent] conducted a Rent Review, the most recent being in June 2023. [The appellant's] income on a disability support pension was taken into account, along with the income of [the appellant's son] as household income. Her income required that she pay 31% of the pension as rent …."
It should be noted that there was no evidence of actual payment by the appellant to the respondent. However, her disability support pension was taken into account in order for the respondent to set the level of the rent. Counsel for the appellant, without objection, informed this Court on the appeal that the appellant paid the extra amount added to the level of rent caused by her occupancy of the premises to her son who in turn paid the total rent to the respondent.
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15 At [32], the magistrate said:
"There is, in my view, an important distinction between approval of occupancy and a
right of occupancy."
16 At [38], the magistrate said:
"…the approval to occupy the premises attaches to the original lease. It is approval only for the tenant to have another person occupy, that does not create a right of occupancy, that would create a residential tenancy."
17 Pending the resolution of this appeal, the appellant has occupied the property.
Legislative framework
18 The material provisions of s 10 of the Act are set out in [7] above. The parties are agreed that four main elements are thereby contained. The first is that a right of occupancy is granted. The second is that the right is in respect of residential property. The third is the right is granted by the owner. The fourth is that the grant of the right is for value.
Consideration
19 The parties disagree about a fundamental matter relevant to the appeal. That fundamental matter concerns whether there is a need for an agreement at common law to be entered into between the appellant and the respondent for the appellant to be considered a party to a residential tenancy agreement as defined under the Act.
20 Counsel for the appellant submit that the term "residential tenancy agreement" is a legislative construct. The argument runs as follows. Section 10 does not depend on a prior agreement or formal written agreement of any kind. It lays down the criteria which must be satisfied for a residential tenancy agreement to exist in any given fact situation. First, there must be a situation where a right of occupancy has been granted by the owner of the premises to a person. Counsel for the appellant say that this first aspect is satisfied because the respondent, as owner of the property, (subject to s 16A) granted the appellant the right to occupy the premises in 2017 as "an approved occupant" in a formal document called "residential tenancy agreement".
21 Second, counsel for the appellant submit that the right of occupancy was granted for value. In support of that submission, counsel observed that prior to the applicant being allowed to have a right of occupancy at the premises by the respondent, a lesser amount was paid by her son. From the time the appellant was allowed to occupy the property, the respondent received increased rent, which took into account 31% of the disability support pension received by the appellant. In ordinary terms, this arrangement involved the situation where "there was something in it" for the respondent. The respondent received higher rent due to the appellant's occupancy. Therefore, so counsel submitted, the right of occupancy was granted for value being a benefit indirectly received (via her son) as a consequence of the appellant's occupancy of the premises.
22 There is much force in these submissions. It is immediately apparent, on the plain wording of the opening words to s 10 that a residential tenancy agreement will exist where a right of occupancy is given for value. There is no requirement for a formal document setting out the terms of any such residential tenancy agreement. So much is made clear by s 10(1)(b), which says that, in effect, the agreement (being a residential tenancy agreement referred to in the opening words of s 10(1)), is still a residential tenancy agreement whether it is expressed or implied, or whether it is in writing or otherwise. In other words, if a representative of the respondent was minded to give oral approval to a person to occupy residential premises for value to the respondent, there would still be a residential tenancy agreement as defined in the opening words of s 10(1). Section 10(1)(b) and (c) show this to be so.
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Section 10(1)(a) allows a residential tenancy agreement, as defined in the opening words of s 10(1), to still exist despite the fact that someone else lives at the property. Under s 10(1)(d) whether a residential tenancy agreement is for a fixed term or otherwise does not mean it loses the character of a residential tenancy agreement as defined by the opening words of s 10(1). Under s 10(3) the provisions of the Act form part of the residential tenancy agreement.
23 The wording of s 10 of the Act can be contrasted with similar provisions in the States of New South Wales and Western Australia. Section 13 of the Residential Tenancies Act 2010 New South Wales, is headed "Agreements that are residential tenancy agreements". Contrast that with the heading to s 10 of the Act, which is "Residential tenancy agreement". The submission that the New South Wales provision requires the prior existence of an agreement, which can qualify to be called a residential tenancy agreement, rather than the concept of a residential tenancy agreement being a separate statutory construct, is made out by the wording of s 13(1) of the New South Wales Act, which provides:
"A residential tenancy agreement is an agreement under which a person gives to another person for value a right of occupation at residential premises for the purpose of use as a residence."
24 The New South Wales provision requires first that there be an agreement and, if it is one where a person grants to another person a right of occupation at residential premises for the purpose of use as a residence, and does so for value, there will be a residential tenancy agreement. One can readily contrast the words "an agreement under which" in the New South Wales Act, s 13(1) with the words "a residential tenancy agreement exists where …" in s 10(1) of the local act.
25 Counsel for the respondent submitted that the New South Wales and Tasmanian provisions are materially identical, and that for an agreement to exist, there must be valuable consideration passing, and also an intention to create legal relations leading to a contractually binding agreement between occupant and an owner. So much flows from the New South Wales cases cited by counsel for the respondent. The outcome of those cases is unsurprising given that the New South Wales provision assumes the existence of an agreement under which a grant to a person for value of a right of occupancy occurs as a pre-condition before a residential tenancy agreement can exist.
26 As Leeming JA (with whom Basten and Gleeson JJA agreed) said in Case v Frimont [2021]
NSWCA 30 at [28]:
"… there must still be an agreement and I agree that an arrangement where members of the family share the household of a terminally ill man in order to care for him is a poor candidate for imputing an intention to create legal relations."
The search for an intention to create legal relations is a fundamental aspect of discovering whether there is an agreement which can fit within the definition of a residential tenancy agreement. Contrast the Tasmanian act, which defines something as a residential tenancy agreement without the need to qualify under contract law as an agreement at all. All that is needed is the existence of a right of occupancy for value. The reference in pars (b), (c), (d) in s 10(1) of the Act to the word "agreement" must be understood in context as a reference to the words "a residential tenancy agreement". For example, s 10(1)(b) must be read in context as saying a residential tenancy agreement exists where right of occupancy of residential premises is granted by the owner of the premises to a person for value where the agreement is express or implied. It does not, by use of the word "agreement" in par (b) give the word "agreement" some broader meaning than the meaning of residential tenancy agreement.
27 Section 3 of the Residential Tenancies Act 1987 (WA) defines "residential tenancy agreement" to mean "any agreement, whether or not in writing or whether expressed or implied, under which any person for valuable consideration grants to any other person a right to occupy, whether exclusively or otherwise, any residential premises, or part of residential premises, for the purpose of residence."
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28 Where the New South Wales act differs from the Tasmanian act is the requirement of the prior existence of an agreement. However, the Western Australian act expressly refers to what is inherent in the New South Wales legislation, that is an agreement for valuable consideration. Both pieces of legislation can be contrasted with the Tasmanian act, which creates a legislative construct that does not require a prior agreement, or the existence of valuable consideration, just a right of occupancy for value. When the appellant was listed by the respondent as an approved occupant, and the rent received by the respondent increased as a result of the appellant's presence as an occupant of the property, the "for value" aspect of the residential tenancy agreement was satisfied from that time. A residential tenancy agreement under the Act was thereby created at the time at which the appellant became an occupant at the property and rent was adjusted to reflect her occupancy. The existence of a separate residential agreement between the appellant's son and the respondent, and its later termination, did not affect the currency and continuation of the residential tenancy agreement to which the appellant was a party, and upon which she relied, to give her standing to make her application under s 57(3) of the Act to the magistrate.
29 Under s 11 of the Act, where a date is not specified in a residential tenancy agreement for its termination, it continues until a date agreed upon by both parties. See s 11(1)(b) of the Act. There has been no agreement between the appellant and the respondent for a date on which the residential tenancy agreement created by them in 2017 was to terminate. Consequently, it continues to exist and did exist at the time the appellant made her application under s 57(3) of the Act. Section 10(3) makes the benefits and obligations of the Act part of the residential tenancy agreement, including the right to make an application under s 57(3).
30 The 2017 "residential tenancy agreement schedule" signed by the appellant's son on 19 June 2017, in which the appellant was listed as an approved occupant, was dated 27 June 2017. It was expressed to apply until 26 December 2017. A residential tenancy agreement under the Act was created by the appellant and the respondent in September 2017, by the respondent allowing her to occupy the premises in accordance with that schedule for value. The only way that residential tenancy agreement between the appellant and the respondent could be terminated was under s 11(1)(b) of the Act, that is, by coming to an end at an agreed time.
31 Having regard to the foregoing, the Court is of the view that when the appellant applied under s 57(3) of the Act to the magistrate, she had standing to do so as a party to a residential tenancy agreement as defined under s 10 between her and the respondent. The magistrate, however, did not have the benefit of the full submissions on that topic, which were received by the Court and therefore no criticism of her Honour's decision is intended at all in the Court coming to a different view. Based on the material that was put to the magistrate, it is entirely understandable why her Honour came to the view that she reached.
Disposition
32 Under s 28(2)(a) of the Magistrates Court (Civil Division) Act, an appeal to this Court is permitted on either or both of the grounds that the magistrate lacked or exceeded jurisdiction, or denied a party natural justice. The magistrate did neither. She declined to exercise jurisdiction. She did not engage in an act outside her jurisdiction. However, leave should be granted to the appellant to argue a ground in addition to the one set out in s 28(2)(a) as a consequence of s 28(2)(b). The ground raised before the Court was effectively that the magistrate wrongly declined to exercise jurisdiction. As that question involved important considerations regarding the proper construction of the Act, leave to appeal on that ground is granted, and the appeal is allowed for the reasons expressed above.
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33 The order of the Court is as follows:
(1) The appellant is granted leave, pursuant to s 28(2)(b) of the Magistrates Court (Civil Division) Act 1992 to appeal to the Court on the ground the magistrate wrongly declined to exercise jurisdiction under s 57(3) of the Residential Tenancy Act 1997. (2) The appeal is allowed. (3) The parties file and serve written submissions within fourteen (14) days of the publication of these reasons on the question of other appropriate orders which should be made to give effect to these reasons for judgment.
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