Mikhail v Zoumboulakis
[2008] VSC 579
•10 December 2008
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
COMMON LAW DIVISION
No. 8599 of 2008
| KHAIRY SEDRAK MIKHAIL | Appellant |
| v | |
| J, P, M and T ZOUMBOULAKIS | Respondents |
---
JUDGE: | HOLLINGWORTH J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10 December 2008 | |
DATE OF JUDGMENT: | 10 December 2008 | |
CASE MAY BE CITED AS: | Mikhail v Zoumboulakis | |
MEDIUM NEUTRAL CITATION: | [2008] VSC 579 | |
---
Real property – Residential tenancy – Notice to vacate for purpose of repairs – Whether notice can be given only to one tenant in block containing five or more units – Residential Tenancies Act 1997 s 255(1)(a)
---
APPEARANCES: | Counsel | Solicitors |
| The Appellant (in person) | ||
| For the Respondents | Mr O Bigos | Russo & Russo |
HER HONOUR:
Introduction
The respondents own a block of units at 41 Davies Street, Brunswick. There are five units in the block. The appellant, Mr Mikhail, has been the tenant at unit No 2 for 21 years.
There have been various disputes between Mr Mikhail and the landlords over the past year, arising in part from the state of repair of his unit. The parties have served various notices on each other and issued several VCAT proceedings.
On 7 July 2008, the landlords served a further notice to vacate on Mr Mikhail. This is the only notice with which I am concerned in this appeal.
The July notice stated that the landlords intended to repair, renovate or reconstruct unit 2, which could not be done while Mr Mikhail was living there. It said that all necessary permits and consents had been obtained. Attached to the notice were four pages containing details of the proposed renovation works and plans. The notice required Mr Mikhail to vacate the unit by 8 September 2008.
Section 255 of the Residential Tenancies Act 1997 (“the Act”) allows a landlord to give a tenant notice to vacate rented premises, for the purpose of carrying out repairs, in certain circumstances. I will consider the precise terms of the section shortly.
Mr Mikhail believes that the landlords do not really intend to renovate unit 2, or that they could renovate the unit without him moving out, and that they are simply using the notice as a means of getting rid of him. Apparently, he is the only tenant in the block who has been given such a notice at present. He believes the notice was served as some sort of revenge for the fact that he has, in the past, challenged or criticised the state of repair of the unit.
On 1 August 2008, Mr Mikhail applied to VCAT, challenging the notice to vacate. On 11 August 2008, a member of VCAT declared the notice to be valid. Written reasons for decision were published on 1 September 2008.
The VCAT member was satisfied on the evidence that the landlords did intend to begin renovation work immediately after the termination date, as part of a larger project of renovation of the entire block over a two year period. She noted that they had already started renovating unit 1, after the previous tenant vacated it, and could not afford to renovate the whole block at once.
She accepted that the landlords had contacted all relevant authorities and had been advised that no permits or consents were required, because all the work was to be internal and not of a structural nature.
Even though Mr Mikhail had told the VCAT member that he would be happy to stay in the unit whilst the work was going on, the VCAT member was also satisfied that vacant possession was in fact required for the work to be properly carried out.
I realise that Mr Mikhail strongly disagrees with these findings by the VCAT member, but these are all findings of fact which were open to the member to make on the evidence, and are not capable of challenge in this appeal.
Mr Mikhail commenced this proceeding on 23 September 2008, seeking leave to appeal under s 148 of the Victorian Civil and Administrative Tribunal Act1998. In order to obtain leave, Mr Mikhail was required to demonstrate a possible error of law in the VCAT decision.
On 17 October 2008, a master of this court refused leave to appeal. By notice of appeal dated 22 October 2008, Mr Mikhail appealed the master’s decision. The notice of appeal came on before me in the Practice Court on 13 November 2008.
As it appeared to me that s 255(1)(a) was poorly drafted, and capable of several possible interpretations, I decided that it could not be said that an appeal concerning the proper construction of the sub-section was unarguable.[1] Accordingly, I granted leave to appeal, so that the matter could be properly argued. As Mr Mikhail is not represented by a lawyer, I also wanted to make sure he had the opportunity to fully prepare for the appeal and to put before the court any further material upon which he wished to rely. I allowed him to file an amended notice of appeal, dated 19 November 2008.
[1]However, the other proposed grounds of appeal were unarguable.
Section 255
Section 255 is headed “Repairs”. It is in the following terms:
(1) A landlord may give a tenant notice to vacate rented premises if –
(a)the landlord intends to repair, renovate or reconstruct the premises -
(i)in the case of a building owned by a landlord containing 5 or more rented premises, immediately after the last tenant vacates;
or
(ii)in any other case, immediately after the termination date;
(b)the landlord has obtained all necessary permits and consents to carry out the work; and
(c)the work cannot be properly carried out unless the tenant vacates the rented premises.
(2)The notice must specify a termination date that is not less than 60 days after the date on which the notice is given.
Sub-section (1)(b) only requires the landlord to obtain such permits and consents as are necessary to carry out the work. It does not mean, as Mr Mikhail argued, that a notice can only be given under s 255 if the work is of such a nature that permits and consents must be obtained. If, as the VCAT member found to be the case here, no permits or consents are required to carry out the work, a notice to vacate can be given, as long as the other requirements of s 255 are satisfied.
Sub-section (1)(c) is concerned with whether, determined objectively, the work can properly be carried out without the tenant vacating the premises. It is not concerned with the subjective belief of either the landlord or the tenant, as to whether the tenant needs to move out. Here, the VCAT member has determined that the work to unit 2 cannot properly be carried out unless Mr Mikhail vacates the premises.
Sub-section (2) requires that, irrespective of whether the notice is issued under sub-section (i) or (ii) of s 255(1)(a), it must specify a termination date which is not less than 60 days after the date on which the notice is given.
The difficult construction point, which is the subject of this appeal, arises in relation to sub-section (1)(a).
Mr Mikhail argues that s 255(1)(a) should be read as follows: If a landlord owns a building containing less than 5 rented premises, the landlord may give one or more notices to vacate, so as to repair, renovate or reconstruct one or more of them, at the same or different times. But if, as here, a landlord owns more than 5 premises, the landlord can only ever give notices to vacate to all of the tenants, and cannot repair, renovate or reconstruct any of the premises individually or sequentially.
On the other hand, the landlords argue that such a construction could not possibly have been intended. They argue that s 255(1)(a) should be read as follows:
(1) A landlord may give a tenant notice to vacate rented premises if –
(a)the landlord intends to repair, renovate or reconstruct the premises –
(i)in the case of a building owned by the landlord containing 5 or more rented premises which are all to be repaired, renovated or reconstructed at the same time, immediately after the last tenant vacates so that the building is completely vacant; or
(ii)in any other case, immediately after the termination date for those premises.
Section 255(1)(a) does not appear to have been the subject of prior judicial decision.
Section 255 replaced s 122 of the Residential Tenancies Act 1980, which provided:
Where rented premises under a tenancy agreement are immediately after the termination date –
(a) to be demolished;
(b)to be substantially repaired, renovated or reconstructed and the repair, renovation or reconstruction cannot be carried out practicably without vacant possession;
…
the landlord may give to the tenant notice to vacate the premises specifying a termination date that is not less than 60 days after the date on which the notice is given.
That earlier provision did not distinguish between rented premises in differently-sized buildings.
There is no extrinsic material which explains why sub-sections (i) and (ii) were inserted in the Act. There is no discussion of the two limbs of s 255(1)(a) in the parliamentary debates or the explanatory memorandum for the Residential Tenancies Bill, nor in the report to the Minister for Housing and the Minister for Fair Trading from the Residential Tenancies Legislation Review Committee (the Asher Report 1995), which led to the enactment of the Act.
Nor is assistance gained by looking at equivalent legislation in other states. The residential tenancies legislation in New South Wales[2], Queensland[3] and Western Australia[4] contains no specific provision dealing with the service of a notice to vacate for the purpose of carrying out repairs and the like. Although the South Australian[5] and ACT[6] legislation do contain such provisions, they do not distinguish between rented premises in differently-sized buildings.
[2]Residential Tenancies Act1987 (NSW).
[3]Residential Tenancies Act 1994 (Qld).
[4]Residential Tenancies Act 1987 (WA).
[5]Residential Tenancies Act 1995 (SA) s 81(1)(b).
[6]Residential Tenancies Act 1997 (ACT) s 96(1)(e).
Section 35(a) of the Interpretation of Legislation Act 1984 relevantly provides that a construction that would promote the purpose or object underlying an Act, whether or not that purpose or object is expressly stated in the Act, shall be preferred to a construction that would not promote that purpose or object.
Quite apart from that specific legislative direction, the modern common law approach to statutory construction requires a purposive, rather than a literal, approach.[7]
[7]See the discussion in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.
One of the main purposes of the Act, as set out in s 1(a) of the Act is: “To define the rights and duties of landlords and tenants of rented premises.” Both parties agree that the legislation attempts to strike an appropriate balance between the rights of landlords and tenants, without preferring one over the other.
Section 255 is located within part 6 (Termination), subdivision 4 (Notice by landlord, owner or mortgagee) of the Act. Sections 243 to 268, in subdivision 4, enable a notice to vacate to be given in a wide variety of circumstances, some for cause and some without cause. The relevant notice period varies, depending on the section.
Whichever way one construes s 255(1)(a), it leads to some unsatisfactory consequences. However, for the reasons which follow, I have come to the conclusion that parliament could not have intended to prevent landlords in large buildings from renovating units[8] in their buildings in the manner and order in which they choose.
[8]The parties sometimes referred to such premises as “units” and sometimes as “apartments”. Nothing turns on any difference between those two. I will simply refer to them as “units”.
Section 255 contemplates major work to the “rented premises”, as it can be invoked only if the works cannot be properly carried out unless the tenant vacates the rented premises: s 255(1)(c). But its operation is not confined to major works to the entire building. “Rented premises” means the premises let under a tenancy agreement to which the Act applies: s 3(1). In the case of a block of units, each rented unit is “rented premises.”
Major works can be, and often are, performed to some rented premises within a building, without affecting the rest of the building. Particularly, where the repair, renovation or reconstruction work is merely internal to the units, performing the work in stages, one unit at a time, may be able to be done without interfering with the rights of tenants in other units.
It may also be necessary or desirable for a landlord to repair, renovate or reconstruct just those parts of a building which are in a worse condition, rather than the entire building.
It may also be commercially sensible for a landlord to repair, renovate or reconstruct a building in stages, particularly if they need to rely on the rent from the remaining units to help to fund the renovations of other units.
Mr Mikhail points out, correctly, that s 67 of the Act imposes an obligation on landlords to provide quiet enjoyment to their tenants. He says that a substantial renovation of the type contemplated by s 255(1) would involve a lot of noise, and therefore be in breach of s 67. He says this supports his argument that, in the case of a block of more than 5 units, the renovations must all be carried out at once. There are several problems with this argument. Although such renovations may be noisy, they need not be so noisy as to interfere with other tenants’ rights of quiet enjoyment. And, if they do interfere with those rights, the affected tenants would have appropriate remedies under the Act. Finally, there is no reason to think that the noise from the renovation of 5 units would necessarily be greater than from 4 units; that is to say, the possibility of noise alone does not explain the existence of the two limbs.
If Mr Mikhail’s construction is correct:
(a) A landlord in “a building owned by a landlord containing 5 or more rented premises” could never rely on a s 255 notice to renovate a block of units in stages (say unit 1 before unit 2), but would have to renovate them all at once; and
(b) A landlord in “a building owned by a landlord containing 5 or more rented premises” could never rely on a s 255 notice to renovate just some of the units (say only 2), but would have to renovate all or none,
because the landlord could not satisfy the condition in s 255(1)(c), that “the work cannot be properly carried out unless the tenant vacates the rented premises”, as the works in scenarios (i) and (ii) do not require all of the tenants to vacate.
I agree with the landlords that parliament could not have intended to prevent landlords in large buildings from renovating units in their buildings in the manner and order in which they choose. The construction proposed by the landlords most closely accords with the presumed purpose of the Act, having regard to commercial and building considerations.
That said, it is still not clear to me why Parliament chose to include the reference to 5 units, as opposed to some other number greater than 1. This may be one of those cases where the legislature might wish to consider reviewing the provision and clarifying what is intended.
For those reasons, I propose to dismiss the appeal.
0
1
0