Lochrin v Jaiswal
[2018] ACAT 78
•1 August 2018
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
LOCHRIN v JAISWAL (Residential Tenancies) [2018] ACAT 78
RT 327/2018
Catchwords: RESIDENTIAL TENANCIES – when is a ‘flatmate’ arrangement a residential tenancy agreement, an occupancy agreement, or something else – whether the parties objectively determined to create a relationship in the form of a residential tenancy
Legislation cited: Residential Tenancies Act 1997 ss 5A, 6A, 6E, 8, 71C, 71E, 100, 128, Standard Terms 72, 94
Cases cited: Bangura & Fan [2013] ACAT 38
Community Housing Canberra trading as CHC Affordable Housing v Connell [2013] ACAT 68
The Young Women’s Christian Association of Canberra v Carne [2017] ACAT 15
List of
Texts/Papers cited: Anforth et al, Residential Tenancies Law and Practice New South Wales, (Federation Press, 7th ed)
Tribunal: Senior Member H Robinson
Date of Orders: 1 August 2018
Date of Reasons for Decision: 1 August 2018
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 327/2018
BETWEEN:
JANE LOCHRIN
Applicant
AND:
VANDANA JAISWAL
Respondent
TRIBUNAL:Senior Member H Robinson
DATE:1 August 2018
ORDER
The Tribunal declares that:
1.Having regard to the reasons below, I am satisfied that the applicant was an occupant, not a sub-tenant.
2.Accordingly, the matter is listed for further directions on Friday 10 August at 9:00am.
………………………………..
Senior Member H Robinson
REASONS FOR DECISION
1.When is a ‘flatmate’ arrangement a residential tenancy agreement, an occupancy agreement, or something else? This answer determines the rights of the parties to such an agreement, yet the question is often not asked until the relationship has broken down and respective rights and obligations become a source of conflict.
Background
2.The relevant facts of this matter were not seriously in dispute.
3.The respondent is the tenant of a two bedroom apartment. The applicant was, at the time of making this application, residing in one of the bedrooms, but has since vacated the property. The lessor is not a party to this proceeding (a fact that raises its own set of issues, considered briefly below).
4.Late in 2017, the respondent advertised for a flatmate on “flatmates.com.au” (the website). The applicant saw the advertisement, applied and, after an interview, was invited to enter into a shared accommodation arrangement with the respondent (the arrangement).
5.There was no written agreement. It was common ground between the parties that the terms of the arrangement could be found in the advertisement on the website, the subsequent brief discussions between the parties, and their conduct once the arrangement took effect. The applicant also contends that the arrangement is a residential tenancy, and hence is governed by the Standard Residential Tenancy Terms in Schedule 1 to the Residential Tenancies Act 1997 (RT Act)[1]. The respondent denies this.
[1] The Standard Terms being implied into all residential tenancy agreements pursuant to section 8(1)(a) of the RT Act
6.As the advertisement constitutes the main body of the agreement, it is useful to set out the relevant parts in full:
Room details:
Room type: private room
Bathroom: own bathroom
Furnishing: furnished
Available: now
Length of stay: Minimum 6 weeks
Gender: Anyone welcome
Charges for room:
Weekly rent: $350
Bond: 2 weeks rent
Bills: included in rent
Internet: Unlimited included in rent
Parking: Offstreet Parking
Beautiful light filled own bedroom with bathroom for single person for 380 (all bills included) and for a couple it’s 450 inclusive of gas + electricity + unlimited fast internet bills.
…
Quality inclusion are available such as granite benchtops, dishwasher, induction cook top [etc]…the flat comes furnished.
Your room has quality queen size bed with mattress. You get your own bathroom and private beautiful balcony.
I would prefer having single professionals however students are welcome.Flatmates:
I’m a female software developer by profession in my 30s. Vegetarian in food habits. Healthy lifestyle and a clean person. I’m easy going and a social individual who enjoys intelligent conversations over a cup of coffee or cocktails :). Only I live in the apartment. However please note that my parents are travelling from overseas to live with me for a few months. The apartment is spacious with 2 big balconies.Looking for – I am looking for someone laid back, similar working hours to myself, employed, non-smoker, CLEAN, respectful, I guess a little sociable but still appreciates their own time. The person should be honest, easy going, common sense and genuine respect for belongings and items!! Basically all that good stuff we want every flatmate to be. :)
7.The pre-contractual conversation between the parties was minimal. The respondent’s evidence was that she set out the terms of her “usual approach” to flatmate arrangements, and the applicant consented to them:
…before anyone comes to live there we have a verbal understanding if it’s okay, and … I just mentioned the weekly rent is $380, security deposit, one week’s rent, agree to vacate the property if I give notice of two weeks, and the person can leave the property giving me one week or two week’s notice.[2]
[2] Transcript of proceedings 15 May 2018, page 19, lines 32 to 36
8.No duration was agreed, but the respondent’s evidence was that the applicant told her she was looking to purchase property of her own in two or three months.[3] The applicant did not dispute this.
[3] Transcript of proceedings 15 May 2018, page 9, lines 40-45
9.The arrangement commenced on 27 December 2017. Upon moving into the premises, the applicant was given access to a furnished bedroom with private bathroom. The room had a door that opened into the common area and another that opened onto a private balcony. The door into the common area had no lock. The controls for the apartment’s air-conditioning system were in the applicant’s room, and the respondent would access the applicant’s room in order to change the temperature in the apartment, but otherwise did not enter.[4]
[4] Transcript of proceedings 15 May 2018 at 10-13
10.In addition to the bedroom, the applicant had access to the apartment’s common areas, including a living area with a television (albeit one that the applicant did not, on her evidence, ever use) and a kitchen where she cooked her own meals. The parties shared laundry facilities, including the washing machine.
11.The applicant had the use of a carspace and a fob that gave her access to the gym and other facilities within the complex.
12.Sometime after the applicant moved into the premises, the respondent’s parents also moved in. This had been foreshadowed in the website advertisement. The respondent’s parents shared her bedroom and bathroom. It was apparent from the applicant’s evidence that the apartment was, as a consequence, crowded, and tensions between the parties began to escalate, particularly in relation to the use of the kitchen.
13.The day to day living arrangements that evolved were described by the applicant as follows:
…Well, my use of the kitchen and Vandana's use of the kitchen was highly segregated. There was the use of oven and microwave was shared. There was a space set aside in the fridge, exactly half the fridge is mine, half is Vandana's and her family. I used my own crockery and even saucepan and washing-up detergent and brush and everything. Everything in the kitchen was my own. Even my draining rack was my own. So I had set spaces where I could store all of my own things and nobody touched that. I didn't touch anything in their cupboard, they didn't touch anything in my cupboard.
… We never shared any type of food, except for once I think I offered her a cherry tomato that someone had given me she'd grown herself and she accepted that.
… I make my own coffee. No, I don’t use the machine. There wasn’t a coffee machine. And I actually even boiled the water in the microwave. Actually sometimes I'd boil the water in the pan too. I had my own water filter, own crockery, own cutlery, a shelf in the laundry to keep my own detergents and cleaning equipment, my own mop, my own vacuum cleaner, my own computer. I wasn't actually given access to Netflix. It was advertised and I watched television on my computer, so that didn't affect me. My computer is set up in my bedroom. I spent all my time in my bedroom.
14.It is perhaps unsurprising that with four adults sharing a two bedroom apartment, there were tensions over access to the facilities. The use of the kitchen, for example, become the subject of a rostering arrangement:
…Vandana and I agreed that I would have exclusive use of the kitchen which would be left clean and clear for me between 7:30pm and 9:00pm. At other times her father would be able to use the kitchen but if I wanted to use it I could do so by giving him 15 minutes notice. An area of the benchtop to the left of the sink was also reserved for my exclusive use at all times.[5]
[5] Email from applicant to the Tenants Advice Service, 30 April 2018
15.These practices did not resolve the problems, and eventually, the respondent came to the conclusion that the arrangement was not working. On 13 March 2018 she gave the applicant a purported ‘notice to vacate’, asking that she vacate the premises within two weeks. The notice to vacate was sent by way of email and SMS message. The applicant later agreed to extend the notice period to four weeks, to 27 April 2018.
16.On 16 April 2018, the applicant applied to the Tribunal for declaration that she was a “lawful sub-tenant”, and accordingly that the purported notice to vacate was invalid. She suggested that, as a tenant who was not ‘at fault’, she was entitled to 26 weeks’ notice, as per clause 94 of the Standard Terms.
17.The matter was first heard before Senior Member Anforth on 27 April 2018. He referred the matter for a preliminary hearing on the status of the agreement between the parties.
18.On the evening of 27 April 2018 – that is, the evening after the hearing before Senior Member Anforth – there was a particularly acrimonious altercation between the applicant and the respondent and her father over the use of the kitchen. The applicant left the premises, and sought assistance from the police, but they declined to become involved. On 28 April 2017, the applicant partially vacated the premises, in that she removed her belongings from the apartment but continued to store her personal belongings in the garage area.
19.This preliminary hearing was conducted on 15 May 2017. As at that date, the applicant’s property remained in the garage area. Subsequent to the hearing, the respondent advised the Tribunal that the applicant had removed the remainder of her belongings.
20.At the preliminary hearing, the applicant indicated that, notwithstanding the cessation of the arrangement, she wished to press her application for a declaration that she was a sub-tenant. She indicated that she intended to amend her application to claim damages for unlawful eviction.
The preliminary hearing
21.The applicant was represented by Mr Christensen of Counsel. The respondent represented herself, accompanied by her father. The respondent did not appear to have a strong grasp on legal framework established by the RT Act, and accordingly the Tribunal has framed her argument so as to put it in a more legal context, as set out below.
The law
22.The only real issue in this proceeding is whether the arrangement between the parties can be characterised as a tenancy or an occupancy agreement.
23.The relevant provisions of the RT Act dealing with the differences between these concepts are as follows:
6AWhat is a residential tenancy agreement?
(1)An agreement is a residential tenancy agreement if, under the agreement—
(a)a person gives someone else (the tenant) a right to occupy stated premises; and
(b)the premises are for the tenant to use as a home (whether or not together with other people); and
(c)the right is given for value.
(2)The agreement may be—
(a)express or implied; or
(b)in writing, oral, or partly in writing and partly oral.
(3)The right to occupy may be—
(a)exclusive or not exclusive; and
(b)given with a right to use facilities, furniture or goods.
(4)This section is subject to the following sections:
· section 6D (Certain kinds of agreements not residential tenancy agreements)
· section 6E (Certain people given right of occupation not tenants)
· section 6F (Certain kinds of premises mean no residential tenancy agreement).
6ECertain people given right of occupation not tenants
(1)A residential tenancy agreement does not include an agreement for the right to occupy premises if the person given the right of occupation is—
(a)a party to an agreement entered into honestly for the sale or purchase of the premises; or
(b)a boarder or lodger; or
(c)a person prescribed by regulation.
(2)This section is subject to the following sections:
· section 6B (Residential tenancy agreement if agreement written and says it is residential tenancy agreement)
· section 6C (Residential tenancy agreement if agreement part of employment).
71CWhat is an occupancy agreement?
(1)An agreement is an occupancy agreement if—
(a)a person (the grantor) gives someone else (the occupant) a right to occupy stated premises; and
(b)the premises are for the occupant to use as a home (whether or not with other people); and
(c)the right is given for value; and
(d)the agreement is not a residential tenancy agreement.
(2)The agreement may be—
(a)express or implied; or
(b)in writing, oral, or partly in writing and partly oral.
Note After 6 weeks, the occupancy agreement should be in writing (see s 71E (c)).
(3)The right to occupy may be—
(a)exclusive or not;
(b)given with a right to use facilities, furniture or goods.
(4)The person given the right to occupy the premises may be—
(a)a boarder or lodger; or
(b)someone prescribed by regulation for this section.
NoteThis Act does not apply to nursing homes, hostels for aged or disabled people or other prescribed premises (see s 4).
24.The application of these definitions is considered below.
A sidenote
25.Before considering the main issue in this interim hearing, it is necessary to note the additional complications caused by section 128 of the RT Act and clause 72 of the Standard Terms. Read together, these terms provide that a sub-tenancy of premises entered into without the permission of the lessor is unenforceable. Any attempt to create a sub-tenancy without the consent of the lessor results not in a sub-lease, but in a bare licence.
26.The Tribunal did not have before it at the preliminary hearing sufficient evidence to decide whether the applicant had permission from her lessor to sub-lease the premises – neither party was prepared to make submissions on this issue and the lessor’s representatives were not parties and were not present. I observe that it is apparent from correspondence provided at hearing that the lessor was agreeable to another person living in the premises, with approval, but this is not necessarily the same thing as granting approval for a sub-tenancy. As such, the only issue that the Tribunal could resolve was whether the relationship can be characterised as an ‘occupancy’ or not - with the consequences of that decision to be considered at a later hearing.
Flatmate arrangements
27.The arrangement between the parties was an informal one. The parties entered into it without any real consideration of the RT Act. The Tribunal is now asked to fit the arrangements into the somewhat uncomfortable legislative framework by that Act.
28.The RT Act regulates residential tenancy agreements and occupancy agreements. It overrides many parts of the common law that governed those arrangements, but it does not deal with all issues and therefore is not a Code.[6] There are common law accommodation arrangements that fall outside the scope of the Act – the licence arrangement established by the operation of section 128 of the RT Act and clause 72 of the Standard Terms is one example.
[6] Bangura & Fan [2013] ACAT 38 at [30]
29.Having regard to the legal framework that governs domestic accommodation (ie. the RT Act and the common law), it seems that ‘flatmate’ arrangements may broadly fall into one of the following legal categories.
30.The first category is that of joint tenants.[7] Under this arrangement, the flatmates are all parties to the tenancy agreement with the lessor (which may be oral or implied, albeit in such cases the Standard Terms will apply). They are jointly and severally liable to the lessor under the lease and also have contractual duties to one another. The creation of a joint tenancy in this case would have necessitated the termination of the previous single tenancy and the creation of a new joint tenancy with the lessor’s concurrence. There was no suggestion by either party that this arrangement was a joint tenancy, so I do not need to consider this further.
[7] RT Act section 100
31.The second category is a head-tenant/sub-tenant arrangement. Under this framework, there are two tenancy agreements – the first between the lessor and the head-tenant, and a second between the head-tenant and one or more sub-tenants.[8] Under this arrangement, the head-tenant becomes, in effect, a lessor, with a lessor’s rights and obligations toward the sub-tenants. These obligations include the requirement to give appropriate notice prior to terminating the agreement. This is arrangement the applicant contends existed in this case.
[8] Permission of the lessor is a legal requirement
32.The third category is an ‘occupancy’. Occupancy agreements are provided for in Part 5A of the RT Act, and are clearly intended to be an alternative to a residential tenancy agreement. Unfortunately, the definitions for ‘occupancy agreement’ in section 71C of the RT Act and ‘residential tenancy agreement’ in section 6A are nearly identical, so it is not always a simple thing to determine which side of the line any agreement falls on. The definition of an occupant includes a ‘lodger’. The respondent, in effect, contends that the applicant was a lodger, rather than a sub-tenant.
33.A fourth category is that of a ‘bare licence’ to occupy. Under this arrangement, a flatmate is given a limited licence to stay in accommodation in circumstances that do not give rise to a residential tenancy or an occupancy. Given the broad definitions of residential tenancy agreement and occupancy agreement, cited above, this is most likely to arise where the relationship is transitory or temporary, where there is no payment or other consideration, or where there is no right to “occupy the premises as a home”. However, it can also arise where a purported sub-tenancy fails because of the operation of section 128 of the RT Act.
How can this arrangement be characterised?
34.The question to be resolved is whether the agreement between the parties can be characterised as a residential tenancy agreement or an occupancy agreement. If the agreement is a residential tenancy agreement, then any notice to vacate must comply with the prescribed terms and any term inconsistent with the prescribed terms is void.[9] If it is an occupancy agreement, then only ‘reasonable notice’ must be given (section 71E(1)(h)).
[9] Community Housing Canberra trading as CHC Affordable Housing v Connell [2013] ACAT 68 at [21]
35.The numerous tribunal cases that have considered the distinction between a residential tenancy agreement and occupancy agreements were most recently canvassed by Senior Member Lennard in The Young Women’s Christian Association of Canberra v Carne[10] (Carne). I adopt Senior Member Lennard’s observations in that case. I do not intend to repeat them here in full, other than to note the Tribunal’s concluding comments, set out in paragraph 14:
14.I have therefore determined that the appropriate approach is as follows:
(a)To examine the agreement to determine whether it falls within the definition of a residential tenancy agreement in accordance with section 6A of the RT Act;
(b)if the agreement does fall within the definition of a residential tenancy agreement then the Tribunal should have regard to the exceptions that are set out in the RT Act – section 6E is the relevant section in this matter.
(c)If the agreement falls within the exception contained in section 6E, then the Tribunal should have regard to the provisions dealing with occupancy agreements to determine whether the agreement is an occupancy agreement.
(d)In relation to all three steps, but particularly steps (b) and (c) the communications between the parties and the terms of the agreement may be taken into account.
[10] [2017] ACAT 15
36.Applying the Carne approach to this case, the first question is whether the agreement between the applicant and the respondent meets the definition of a ‘residential tenancy agreement’ as defined in section 6A of the RT Act. This requires an examination of the terms of the agreement. As noted above there was no written agreement, but the RT Act clearly provides that residential tenancy and occupancy agreements may be implied or oral[11]. The terms of this agreement may be found in the advertisement and in the evidence of the conversations between the parties and their conduct when performing the agreement, as set out above.
[11] 6A(2)(a) and (b) and 71C(2)(a) and (b)
37.The first indicia of a residential tenancy agreement[12] is the “right to occupy the stated premises”. The right need not be exclusive. To ‘occupy’ a premises is to be resident in it.[13] This test is clearly met in this case, with the applicant having a right to occupy the bedroom, ensuite bathroom and balcony areas.[14]
[12] Section 6A(1)(a) of the RT Act
[13] Macquarie Dictionary
[14] The applicant’s lawyer agreed that, at best, she had a licence to use the common areas – there was no suggestion that the tenancy went beyond the bedroom, ensuite and balcony
38.The second indicia of a residential tenancy agreement is a right to occupy the premises “to use as a home (whether or not together with other people).” [15] This criteria is presumably designed to distinguish a lease or occupancy arrangement from a more temporary or transient arrangement, such as a short stay in self-contained accommodation. It was not seriously in dispute that the applicant was entitled to use the premises ‘as a home’ during the course of the arrangement.
[15] Section 6A(1)(b)
39.The third indicia of a residential tenancy agreement is that the right was given ‘for value’.[16] This may be contrasted with allowing a person, such as a guest or relative, to reside in a premises for free. This indicia is met in the present case, as the applicant paid rent of $380 a week.
[16] Section 6A(1)(c) of the RT Act
40.On balance, therefore, I am satisfied that the agreement meets the definition of a residential tenancy agreement in section 6A(1)(c). That, however, is only the first phase of the consideration process.
41.Section 6A(4) of the RT Act then provides that certain agreements that may otherwise meet the definition of residential tenancy agreement are in fact not residential tenancy agreements, but are something different. This includes agreements that fall within the scope of section 6E – entitled “Certain people given right of occupation not tenants”.
42.Section 6E provides, relevantly, that a residential tenancy agreement does not include an “agreement for the right to occupy premises” if the person is a “boarder or a lodger”. If, under the terms of the arrangement, the applicant is a “boarder or a lodger”, then the agreement is for an occupancy, not a tenancy.
43.In Community Housing Canberra t/as CHC Affordable Housing v Connell [2013] ACT 68 (Connell), Member Daniel, as she then was, offered the following observation in relation to the terms boarder and lodger:
The terms boarder and lodger are not defined in the RTA, however each has an accepted meaning at common law. The Butterworths Australian Legal Dictionary defines a boarder as a person who lives in the house of another and receives food and lodging in return for payment of a fixed regular sum of money: Norblett & Mansfield v Manley [1952] SASR 155. The term lodger is defined as a person who occupies a room or rooms in a house which is generally under the control of the owner or lessee of the house, or his or her representative. A lodger is similar to a boarder in legal status, but is not provided with food by the person in control of the house: Porter v Busch [1974] 1 NSWLR 593.
44.The applicant was not provided with food and therefore clearly cannot be said to have been a ‘boarder’, but she may meet the definition of a ‘lodger’. But what is a lodger?
45.In Connell, Member Daniel went on to describe a lodger arrangement as follows:
34. In Walker v Puvesi Pty Ltd (NSW RTT 86/000006) a lodger was defined as:
a person who has been granted the right, for value, to occupy residential premises (as defined by the act) for the purpose of their use as a residence, without having being given the right to exclusive possession of such premises, although he or she may have been given the enjoyment of exclusive use of a part, but in circumstances where the owner remains in possession and occupation (either personally or by his servant), and retains the character of Master of the house and with the owner exercising control and dominion over the whole.
35. While the phrases “master of the house” and “dominion” are considered out of date, the concept of the grantor maintaining control of the premises and how life is lived in the premises remains a necessary defining element of the owner/lodger relationship:
[t]o decide if a particular relationship is one of lodger and owner, in effect one is deciding how closely it resembles that of a person renting a room in a household dominated by another person (or, indeed, a family). Or, to start at the other end, how closely it resembles an arms length tenancy arrangement where, by and large, and subject to a number of relatively commonsensical requirements about maintenance of the property, quiet enjoyment, and of course payment of rent, a tenant is free to act as she wishes in the rented premises (Jericho v Carillon Ave P/L [2005] NSWCTTT 514 at [33]).
46.Other authorities indicate, consistent with the Tribunal’s comments in Connell, that the ‘primary test’ is the degree of control the landlord continues to exercise.[17]
[17] Anforth et al, Residential Tenancies Law and Practice New South Wales, (Federation Press, 7th ed) at 2.3.8
47.For his part, Mr Christensen contended that the applicant not a lodger because:
We say the authorities are very clear that if you've got exclusive possession you must have a tenancy. Now, obviously in some of the student things with the sharing of meals and things like that, that may change it but that possibly - I haven't thought through that properly, but I mean certainly if there's any form - and certainly my advice to anyone who wants to make it clear there's an occupancy agreement is one of the sure ways of making that clear is to provide some services.
… a boarding or a lodging arrangement, you would either have to have an explicit, “This is a boarder-lodger,” or occupancy agreement, and that's legitimate under the Act. In boarding houses they provide facilities or services, such as, “We'll wash your towels,” or whatever, and we say that is very much a case that turns it into a boarder-lodger arrangement as opposed to an actual tenancy.
…
Ultimately, we say, it's the fact that reality of exclusive possession, that all the cases - most of them, I admit, before the Residential Tenancies Act came into force - that make it a residential tenancy - but I mean, lots of boarding house type cases and share house type cases where they have housekeepers or people moving in, or they provide tea and coffee, I mean, clearly a lodger wouldn't apply. Now, I never get this right. I think a lodger, traditionally they provide meals. That clearly takes it outside a residential tenancy.
48.With due respect to Mr Christensen, I am not satisfied that a key distinction between a boarder or lodger style occupancy and a tenancy is the “provision of services”, although the provision of such services may be a relevant consideration. I do, however, accept that exclusive possession is indicative, if not determinative, of a tenancy. The concept of exclusive possession is reflected in the very definition of a ‘lease’ – for example, Butterworth’s Concise Australian Legal Dictionary defines ‘lease’ as:
A right to exclusive possession of land given by one person (lessor or landlord) to another person (lessee or tenant) usually in return for rent.
49.However, I am not satisfied that the facts of this case demonstrate that the applicant actually had the kind of ‘exclusive possession’ Mr Christensen suggests is indicative of a tenancy. The most persuasive evidence of this lack of exclusivity is that the respondent could, and did, enter the applicant’s room, even in her absence, in order to adjust the air-conditioning, but there are other factors too.
50.This is not a case where rooms within a property are leased out by an absentee landlord (as in Connell or Carne). The respondent was looking for a flatmate who was ‘social and honest’ and who shared her lifestyle because she would continue to live in the premises. She does not appear to have been a very demanding flatmate, and the evidence does not disclose many occasions when she exercised a lot of ‘control’ (at least prior to the disputation with the applicant, when tensions escalated and the agreed rostering arrangements were put in place), but the language of the advertisement makes it clear she was looking for a person who would complement and cooperate with her lifestyle. She advised the applicant that her parents would share the premises from time to time, a matter over which the flatmate would have little control. There were house rules, albeit they were negotiated ones. These are all elements of the arrangement that were contrary to the ‘exclusive possession’ and ‘quiet enjoyment’ indicative of a tenancy.
51.The respondent’s continuing control of the premises is, in my view, the key consideration in this case. The issue of control goes to the rights of the parties and not necessarily to how those rights were in fact exercised. The tenant of a property is contractually bound to the lessor for compliance with the terms of the tenancy agreement, including taking care of premises. A boarder or occupant, by contrast, has no contract with the lessor. It is both the right and duty of the tenant to ensure that any occupants they bring upon the premises do not cause a breach of the tenancy agreement. Whether the tenant chooses to actually exercise their rights in relation to their occupants is another thing, but this does not deny the existence of the right and duty in the tenant to do so. The power to control the premises is the important indicia, and that power continued to lie with the respondent.
52.In this case, the applicant was told before the commencement of her residency that the respondent’s parents would be arriving in Australia and would be living in the apartment as well. The applicant apparently acquiesced in this arrangement, although it later caused friction. If the applicant was truly a sub-tenant of the premises then she had an exclusive right to her bedroom and an agreed contractual license to the common property. In these circumstances it would be beyond the power of the respondent to unilaterally determine that her parents would move in and share the common property. The fact that the respondent could and did unilaterally determine this issue indicates the controlling role of the respondent and subservient status of the applicant. It indicates a fundamental lack of certainty in respect of the extent of the premises over which the applicant could and did assert the rights of a sub-tenant.
53.There are two other factors that also weigh against finding this arrangement is a residential tenancy: intention and policy.
54.Section 6A of the RT Act does not require that the parties intend to create a residential tenancy – it is a definition that captures a factual circumstance. However, tenancies are a species of contract (as well as an estate in land)[18]. For this reason, an important consideration in determining whether a tenancy has been created is the intention of the parties, objectively determined, to create a relationship in the form of a residential tenancy.[19] That is to say, the parties must have had some intention to create a contractual arrangement that would satisfy the legislative requirements of a residential tenancy agreement.
[18] Anforth et al, Residential Tenancies Law and Practice New South Wales, (Federation Press, 7th ed) at [2.13.13]
[19] Anforth et al, Residential Tenancies Law and Practice New South Wales, (Federation Press, 7th ed) at [2.13.2]
55.For a contract to be enforceable, it must be possible to find the essential terms of a tenancy objectively agreed with certainty.[20] The essential terms are:
(a)the identity of the parties;
(b)the identity of the premises in question;
(c)the duration of the tenancy (even if that duration is ongoing or periodic);
(d)the rent; and
(e)the commencement date.
[20] Anforth et al, Residential Tenancies Law and Practice New South Wales, (Federation Press, 7th ed) at [2.13.3]
56.In the present case, there was no agreed term of the tenancy. The only evidence of duration was that the respondent indicated her probable intention to stay for a few months. The parties explicitly agreed that either party could terminate the agreement of two weeks’ notice (with the applicant possibly entitled to leave on one). This does not constitute an objective agreement for a fixed term tenancy. At best, it may indicative a periodic sub-tenancy, but even then the reserved power to the respondent to give two weeks’ notice to the respondent and the power of the applicant to give one weeks’ notice to the applicant, is inconsistent with the an intention to create a periodic tenancy under the RT Act. The circumstances of the arrangement suggest a transitory arrangement, and perhaps even a trial arrangement, for a period of two weeks. There was not sufficient certainty about the duration of the arrangement to constitute a tenancy.
57.In any case, having regard to the words of the advertisement, the objective intention of the applicant was, on any view, a desire to create a lodger arrangement of the kind described in Connell. Nothing in the rest of the terms suggests an objective intention to create any other kind of arrangement.
58.Which leads to the final point – that of policy. To suggest that a short-term arrangement of this kind could, as a matter of law, be characterised as ‘sub-tenancy’ defies common sense. The respondent did not intend that the applicant would be a sub-tenant, with the rights (and the responsibilities) that entails. The expectation of privacy and exclusivity that accompanies a tenancy is simply not consistent with the living arrangements established in this case. To impose such an arrangement in these circumstances would create an absurdity. It would entangle both the applicant and the respondent in a mesh of mutual obligation that could never been contemplated by either of them at the commencement of this arrangement. One serious manifestation of that absurdity would be the obligation on the respondent to give the applicant a 26 week notice in circumstances of mutual incompatibility, such as the present.
59.The imposition of a sub-tenancy may also create a situation where actions of the purported sub-tenant, over which the head-tenant has not control, then expose the head-tenant to breach at the hands of the lessor.
60.When people who are veritable strangers come to live in close proximity, sharing personal space, the risk of conflict is inevitable. The conflict may escalate to the level that people dread doing home, or even fear doing so. There must be some civil means to intervene in such circumstances for the sake of safety and order. If an occupant is lightly inferred to be a sub-tenant as opposed to an occupant then the available means for resolving these disputes are reduced. Posit, for example, that the police had in fact intervened at the behest of the applicant and removed the present respondent and her parents from the apartment. This would have immediately put the respondent in the position where she was still bound to her contract with the lessor, but was deprived of the capacity to exercise her duty and powers as a tenant (including but not limited to paying rent). Given such practical risks, the existence of a sub-tenancy should only be inferred in the clearest of circumstances. The circumstances of this case do not meet that test.
61.Accordingly, having regard to the above, I am satisfied that the applicant was an occupant, not a sub-tenant and I make that declaration accordingly.
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Senior Member H Robinson
HEARING DETAILS
FILE NUMBER:
RT 327/2018
PARTIES, APPLICANT:
Jane Lochrin
PARTIES, RESPONDENT:
Vandana Jaiswal
COUNSEL APPEARING, APPLICANT
Mr Christensen
COUNSEL APPEARING, RESPONDENT
N/A
SOLICITORS FOR APPLICANT
N/A
SOLICITORS FOR RESPONDENT
N/A
TRIBUNAL MEMBERS:
Senior Member H Robinson
DATES OF HEARING:
15 May 2018
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