Knight v Jarvis
[2017] VSC 758
•4 DECEMBER 2017 (revised 12 December 2017)
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2017 03878
| MICHAEL KNIGHT | Plaintiff |
| v | |
| SHARNA JARVIS | Defendant |
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JUDGE: | JOHN DIXON J |
WHERE HELD: | MELBOURNE |
DATE OF HEARING: | 4 DECEMBER 2017 |
DATE OF JUDGMENT: | 4 DECEMBER 2017 (revised 12 December 2017) |
CASE MAY BE CITED AS: | KNIGHT v JARVIS |
MEDIUM NEUTRAL CITATION: | [2017] VSC 758 |
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JUDICIAL REVIEW AND APPEALS – Application for leave to appeal from Victorian Civil and Administrative Tribunal – Whether Tribunal erred in failing to dismiss proceeding – Whether submission made that proceeding should be dismissed – No submission made – Leave to appeal refused - Residential Tenancies Act 1997 s 331 – Victorian Civil and Administrative Tribunal Act 1998 s 148.
STATUTE – Interpretation of statute – Whether further arrears accrued – Residential Tenancies Act 1997, s 331.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | In person | |
| For the Defendant | Mr A Silver | Kennedy Guy |
HIS HONOUR:
The plaintiff seeks leave to appeal the decision made by the VCAT on 19 September 2017 when it ordered that the defendant, as landlord, recover possession of premises at 8 Maroona Road Brighton, from the plaintiff as tenant, that the principal registrar issue a warrant for possession, and that the plaintiff pay the defendant arrears of rent of $15,745.09.
The error of law identified by the plaintiff, in his Originating Motion filed 26 September 2017, was said to have been made by the tribunal on an earlier occasion, namely 20 July, 2017, when the tribunal failed to dismiss the defendant’s application under s 331(3)(b)(i)-(ii) of the Residential Tenancies Act 1997 (‘the Act’). The error was said to have continuing effect through to the impugned decision of the tribunal on 19 September 2017.
At the hearing, the defendant submitted that the relevant order that is the subject of the appeal was an interlocutory order made on 20 July 2017 that the application be adjourned. The defendant submitted the originating motion was filed well outside the period of 28 days that is allowed by s 148(2)(a) of the Victorian Civil and Administrative Tribunal Act 1998.
The defendant submitted that the plaintiff required an extension of time. The Whether to extend time requires an analysis of the reason for the delay and the extent of any prejudice to the defendant. An extension will not ordinarily be granted unless the applicant furnishes the court with a good reason for delay and a reason for excusing it.
The plaintiff challenged the interlocutory order resulting in the adjournment of the application. He submitted that the tribunal was required by the terms of s 331(3) of the Act not to adjourn but to dismiss the application. It is necessary for the applicant to show that there is sufficient doubt about the correctness of the interlocutory order, on the question of whether time should be extended.
The chronology of events may be shortly stated.
(a) By a written lease dated 31 October 2016 the parties agreed to lease the premises to the plaintiff commencing on 16 February 2017 for a fixed term of 12 months at a monthly rent of $7,387 payable in advance by Bpay.
(b) The plaintiff failed to pay the rent due on 15 March 2017. On 3 April 2017, the defendant served a notice to vacate that stated the reason to be unpaid rent (s 246(1) of the Act) from 16 March 2017 and accruing on a daily basis.
(c) The plaintiff did not respond to the notice and the defendant applied for possession. That application was returnable on 29 May 2017.
(d) On 29 May 2017, the application was adjourned by consent. Neither a copy of the order nor the transcript of any hearing on 29 May 2017 was in evidence. The defendant stated that the hearing was adjourned by consent because the plaintiff paid in full all outstanding rental arrears. I accept that this is what occurred. It is confirmed by the tenant ledger.[1]
[1]Affidavit of Georgia O’Connor sworn 1 December 2017, Exhibit GOC-2.
(e) The plaintiff failed to pay the rent due on 15 June 2017.
(f) The defendant’s application for possession was relisted for 20 July 2017.
(g) On 19 July 2017, the plaintiff paid $14,666 to the defendant in respect of the arrears of rent. However, the defendant contended that the plaintiff was in breach of the agreement in that he did not pay the rent regularly in advance by Bpay. It seems that this payment did not include the rent payable in advance for the month commencing 16 July 2017. Later, on 17 August 2017, the tribunal found that the rent had only been paid to 15 July 2017 and only $0.35 was paid on account of the current month’s rent that was then due. This finding has not been challenged.
(h) The tenant ledger that I referred to earlier records the payments that have been made by the tenant under the tenancy agreement. There was some debate in submissions before me about the notation in the details column of credits such as, for example, a payment made on 7 February 2017 of rent for the period ending 15 February 2017 shows a credit of $108.35. The plaintiff submitted that these credit balances had to be taken into account in working out what payments had been paid towards rent when the matter came on before the tribunal on 20 July 2017. It is necessary to carefully reconcile this ledger having regard to the presence of other entries such as an invoice for fencing, and the irregular dates on which amounts were paid. I have undertaken that exercise.
(i) On 20 July 2017 there was 5 days arrears of rent (less $0.35) but the tenant was in breach of the agreement to pay the rent monthly in advance. Because the monthly rent was payable in advance and the pate for payment had passed, the tenant was in arrears in the sum of $7,386.65. However the landlord was unable to seek relief in respect of rental because it was less than 14 days in arrears.
(j) At the hearing on 20 July 2017, the defendant sought a further adjournment of the application for a period not exceeding 3 months and that order was made by the tribunal. The plaintiff stated in an affidavit, and maintained in oral submissions before me, that he requested that the matter be dismissed under s 331(3)(b) of the Act, but that statement is contradicted by the transcript which shows that he queried whether the application should be dismissed under that section and the Tribunal invited a submission from the plaintiff in support of that contention. However, no submission was made and the plaintiff consented to the order pronounced by the tribunal.
(k) On 31 July 2017, the defendant sought relisting of the application as rent was more than 14 days in arrears. The application was listed for 17 August 2017. The reference to rent in arrears is clearly to the payment that was due on 15 July 2017.
(l) The plaintiff’s application for an adjournment on the ground of illness was refused and the tribunal ordered that the plaintiff surrender possession of the premises on 17 August 2017, that the principal registrar issue a warrant for possession, and that the plaintiff pay the defendant arrears of rent of $7,872.37.
(m)On 24 August 2017, the plaintiff applied for a review of the orders made on 17 August 2017 and that hearing was scheduled for 5 September 2017, when the tribunal found that the plaintiff had a reasonable excuse for his non-attendance and it suspended the orders made on 17 August 2017 pending a further hearing. The plaintiff asserted that he again submitted that the application must be dismissed under s 331(3)(b) of the Act, however there is no transcript of the hearing to confirm that this submission was made or to disclose how it was dealt with.
(n) On 11 September 2017, with the rent in arrears to the extent of $14,774, the defendant sought a further hearing that was scheduled for 19 September 2017.
(o) At this hearing, the tribunal found that –
(i) The rent owed which was the subject of the landlord’s original application and the arrears of rent that had accrued since the order of 5 September 2017 had not been paid.
(ii) The landlord was entitled to possession.
(iii) The landlord was entitled to $15,745.09 of arrears of rent.
(iv)The bond is $6284.00.
(p) On these findings, the tribunal made the orders that I have noted above that are impugned in this application.
(q) On 26 September 2017 the plaintiff commenced this proceeding seeking leave to appeal.
(r) On 26 September 2017, the Tribunal ordered a stay of execution of the orders of 19 September 2017 and a further order prohibiting the parties from enforcing any of the orders made that day. Neither party has given evidence about this application, other than to produce the order. It is curious that the Tribunal was prepared to make this order without either an undertaking, or a condition of the order, that the plaintiff as tenant observe the terms of the rental agreement during the period of the stay.
(s) The plaintiff has not made any payment of rent since his payment settling the arrears of rent on 19 July 2017. The plaintiff now owes in excess of $29,000 in rental arrears. The lease agreement terminates on 15 February 2018.
The plaintiff’s submissions principally turn on s 331(3)(b) of the Act. That section reads –
331. Order to be dismissed or adjourned in certain circumstances
(1)The Tribunal may dismiss or adjourn an application for a possession order if—
(a) the application is supported with—
(i)in the case of rented premises, a notice to vacate given under section 246; or …
(b)the Tribunal considers that satisfactory arrangements have been or can be made to avoid financial loss to the landlord, rooming house owner, caravan park owner, caravan owner or site owner (as the case may be).
(2) An adjournment may be on any terms the Tribunal thinks fit.
(3) On the resumption of an adjourned hearing, the Tribunal—
(a)may make a possession order if the tenant or site tenant has continued to accrue arrears of rent during the adjournment period; and
(b)must dismiss the application if the tenant or site tenant—
(i)has paid all the arrears which were the subject of the original application; and
(ii)has accrued no further arrears of rent from the time of the application to the date of resumption of the adjourned hearing.
The plaintiff submitted that on 20 July 2017 he made a submission to the tribunal that pursuant to s 331(3)(b) of the Act, the resumption of the adjourned hearing must be dismissed by it because he had paid all the arrears which were the subject of the original application and has accrued no further arrears of rent from the time of the application to the date of resumption of the adjourned hearing. The plaintiff further submitted that evidence was adduced at the hearing to substantiate the facts supporting this submission, which facts were not disputed by the defendant.
Further, the plaintiff pointed to the transcript of the hearing on 20 July 2017 when the following exchange occurred.
Ms O’Connor: Michaels paid his rent now, but he was two months behind up-to-date.
Member: So is there anything owing at the moment?
Ms O’Connor: No, there is not. As of today there is not. So we just seeking another adjournment.
The plaintiff also directed my attention to paragraph 10 of the defendant’s affidavit where the defendant deposed as follows:
On 19 July 2017, the plaintiff made payment of $14,666 to the agent, effectively satisfy the amount of rent owed in arrears. However, as described in paragraph 4, the agreement requires the plaintiff to pay one month’s rent each calendar month in advance, meaning the plaintiff remained in breach of the agreement, despite payment of $14,666 being made.
As I have noted, contrary to the plaintiff’s submission, he did not make a request for dismissal of the application pursuant to s 331(3)(b) of the Act. The relevant evidence is as follows, bearing in mind the plaintiff had been sworn prior to commencing submissions.
Mr Knight: I think the question really is only under s 331(3)(b), whether the matter should just be dismissed.
Member: Well, if you want to make those submissions, you can make submissions to me about it.
Mr Knight: So Georgia, can you just clarify exactly from the agent what their intent are? Because there seems to be a bit of miscommunication going on.
Ms O’Connor: The rent’s constantly late, the owner wants the rent paid on time. I mean up until today you were two months behind.
Mr Knight: I understand that.
Ms O’Connor: The owner has bills and needs it to be paid. So we do not want to have to go through the process of serving your 14 day notice, and then an application for possession, when we can just go straight here for the possession when you are constantly late. Happy for the rent to come in on time, and the whole matter to be withdrawn and move forward.
Mr Knight: Okay. So the matter would be adjourned with a date to …
Member: There is no new date. If I adjourn it, there is no new date. It is up to the landlord to write in to the tribunal if the rent does not get paid, and ask for a new date. And if it is all paid within that three month period, then it will just go away.
Mr Knight: But if the landlord’s asking for an adjournment, then I am agreeable to that.
Member: I’ll do that. …
The plaintiff also submitted that because he is not a lawyer and is not experienced in the workings of VCAT, the member should have advised him of all his rights at the hearing in the light of the request for the matter to be dismissed pursuant to the Act.
Dealing with this point, I note that the plaintiff has not alleged error of law based in procedural unfairness, but it would be futile to do so. It is clear from the transcript that the plaintiff was aware of his rights under s 331(3)(b) of the Act. He clearly raised the issue. He was invited to make a submission but he chose not to do so. Rather, he consented to the adjournment.
It is not open for the plaintiff to now contend that he was denied procedural fairness. Had the plaintiff pressed the contention the Tribunal would necessarily have enquired into the state of the arrears of rent at that time. It would seem that the defendant failed to draw the tribunal’s attention to the non-payment on 15 July 2017 of the rent due in advance for the month of July.
As noted above, the tribunal examined this factual question on 17 August 2017 when it concluded that there was arrears of rent. I am satisfied, as stated above, that the rent was in arrears on 20 July 2017 and there was no proper factual basis for the plaintiff’s contention, if he had made it to the tribunal on that date, that the application must be dismissed. The plaintiff’s payment on 19 July 2017 compelled a finding that the tenant had paid all the arrears which were the subject of the original application, which finding would satisfy s 331(3)(b)(i) of the Act. However, the plaintiff was unable to satisfy the second limb of that subsection which requires that he had accrued no further arrears of rent from the time of the application to the date of resumption of the adjourned hearing.
There were 2 grounds for this conclusion. First, it was not in dispute that the plaintiff had accrued arrears of rent during the relevant period. The terms of the section must be carefully considered. It does not require that at the date of resumption of the adjourned hearing there be no rent arrears. The enquiry is focused on the conduct of the tenant during the relevant period. Remediation of the rental default is plainly a necessary requirement, but the tribunal could not be satisfied that the condition stated in s 331(3)(b)(ii) of the Act was satisfied.
Secondly, notwithstanding the statements made by the defendant’s representative before the tribunal, it was clear that the plaintiff was in default and that there was arrears of rent. Statements made by the defendant’s representative might be explained by the fact that the arrears, being less than 14 days rent, did not entitle the landlord to serve a notice to vacate under s 246 of the Act. However, it is unnecessary to speculate. The concept of rental arrears in s 331(3)(b)(ii) is not qualified by a requirement that it be for a period of 14 days or more.
It follows that had the plaintiff pressed a submission to the tribunal that the application must be dismissed, that submission ought properly to have been rejected.
I reject the plaintiff’s contention that the tribunal erred by not dismissing the application on 20 July 2017.
The plaintiff’s remaining contentions on this application are all based upon his primary submission of error on the part of the tribunal on 20 July 2017. Those grounds must also have no merit.
Leave to appeal pursuant to s 148 of the Victorian Civil and Administrative Tribunal Act 1998 is refused and the plaintiff’s originating motion is dismissed.
Having regard to that conclusion it is unnecessary to further consider the defendant’s contention that the application was out of time.
I make one further observation. On 26 September 2017, the plaintiff obtained a stay of the orders made by the court on 19 September 2017. That stay was granted without the tribunal either requiring an undertaking from the plaintiff, or giving a direction as part of its order, that the plaintiff observe and perform his obligations under the tenancy agreement. The plaintiff has, without explanation, not paid any rent to the defendant since the payment made on 19 July 2017. The acceptance by the plaintiff of the benefit of this order while refusing to honour the terms of the tenancy agreement constituted an abuse of that stay order. It has likely caused relevant prejudice to the defendant. It would have been open to the defendant to have applied to VCAT to have the stay lifted, but no doubt the parties were directing their attention towards this application that was essentially connected to the stay.
Such an issue could be avoided were VCAT to consider, as a matter of practice, including in stay orders of warrants for possession appropriate directions of the type I have outlined.
Orders
Leave to appeal is refused.
The plaintiff pay the defendants costs of and incidental to the appeal on the standard basis.
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