Morris v Bray (Residential Tenancies)
[2009] ACAT 3
•31 March 2009
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
MORRIS v BRAY (Residential Tenancies) [2009] ACAT 3
RT 20 of 2009
Catchwords: RESIDENTIAL TENANCIES – distinction between tenancy agreement, occupancy agreement and licence to occupy – bare licence – revocation of licence
RESIDENTIAL TENANCIES – jurisdiction of tribunal – civil disputes – trespass application – issues dealt with different from issues contained in original application
Domestic Relationships Act 1994 (ACT)
Residential Tenancies Act 1997 (ACT)
ACT Civil and Administrative Tribunal Act 2008 (ACT)
Magistrates Court Act 1930 (ACT)
Zeus and Ra Pty Ltd v Nicolaou [2003] VSCA 11 (28 February 2003)
Latec Investments Ltd v Hotel Terrigal Pty Ltd (In liq) (1965) 113 CLR 265Butt & Nygh (editors) Butterworths Australian Legal Dictionary, Butterworths LexisNexis, 1997
ACT Civil and Administrative Tribunal Bill 2008 (ACT) explanatory statement
Peter Butt, Land Law: 5th Edition (2006) Thomson Lawbook Co
Tribunal:Jann Lennard, Member
Date: 31 March 2009
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 20 of 2009
BRIAN MORRIS
(Applicant/Landlord)
AND
SALLY BRAY
(Respondent/Tenant)
ORDER
- That the respondent is to vacate the premises on or before 28 April 2009.
…………………………….
Jann Lennard, Member
31 March 2009
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) RT 20 of 2009
BRIAN MORRIS
(Applicant/Landlord)
AND
SALLY BRAY
(Respondent/Tenant)
REASONS FOR DECISION
BACKGROUND
The applicant is the registered owner of premises at 41 Blackall Street Barton, ACT. Mr Morris is the sole legal owner and he gave evidence, which was not challenged, that the premises were purchased as an investment property.
The respondent resides in the premises. The respondent has resided in the premises since April 2008.
The applicant and the respondent had been in a de facto relationship for 14 years, they have a 21 month old daughter. The evidence of the applicant was that he offered the premises as a temporary residence for the respondent and their daughter after their de facto relationship ended in April 2008. This temporary arrangement was to continue until she found somewhere else to live permanently. The respondent has not paid any rent or occupation fee to the applicant.
The applicant has served a notice to vacate upon the respondent. That notice gave 21 December 2008 as the vacation date. The notice to vacate was served in a form appropriate to a residential tenancy agreement, and the applicant asks the tribunal for a termination and possession order.
THE INITIAL HEARING – 3 FEBRUARY 2009
The respondent, who was, at both hearings, represented by Mr Paul Glass, solicitor, stated that there was no residential tenancy agreement and she resisted any attempt to ‘evict’ her on the grounds that she asserted a right to remain in the property based on the de facto relationship and an anticipated action under the Domestic Relationships Act 1994 (ACT).
A residential tenancy agreement is defined in s6 of the Residential Tenancies Act 1997 (ACT) to be an agreement under which:
· a person gives someone else (the tenant) a right to occupy stated premises; and
· the premises are for the tenant to use as a home…; and
· the right is given for value.
An occupancy agreement is defined in s71C of the Residential Tenancies Act to be an agreement which is not a residential tenancy agreement but where:
· a person (the grantor) gives someone else (the occupant) a right to occupy stated premises; and
· the premises are for the occupant to use as a home...; and
· the right is given for value
Both parties agreed that Mr Morris had expressly given Ms Bray the right to live in the premises as a residence for herself and their daughter, but that no value was given for the granting of this right.
At the initial hearing of this matter, on 3 February, the tribunal informed the parties that the tribunal was of the opinion that the agreement between the parties, as described, and not disputed, in evidence, gives rise not to a residential tenancy or an occupancy agreement, but to a licence to occupy the premises. Since the respondent has not paid rent, this is more likely than not, a bare licence. Such a licence is revocable.
10. The Butterworths Australian Legal Dictionary[1] defines licence as a permit to do something, which, without the licence would be unlawful. In relation to real property a licence is a permit to do something on or to occupy land, and may or may not include the payment of a monetary consideration.
[1] Butt and Nygh (editors) Butterworths Australian Legal Dictionary, Butterworths LexisNexis, 1997.
11. The Butterworths Australian Legal Dictionary defines bare licence as a licence to occupy land coupled with no other right or proprietary interest. A bare licence gives no right of exclusive possession and is revocable at any time at the will of the grantor. A bare licence prevents the licensee from being a trespasser. Once a licence is revoked by the grantor the licensee who refuses to leave and yield up possession of the land is committing an act of trespass, defined by the Butterworths Australian Legal Dictionary as a direct interference with another person’s right to exclusive possession of land without lawful justification.
12. Further the tribunal expressed the opinion that the matter could not be dealt with under the Residential Tenancies Act, but would fall under the civil jurisdiction of the ACT Civil and Administrative Tribunal (ACAT) as described in the ACT Civil and Administrative Tribunal Act 2008 (ACT) (ACAT Act).
13. The respondent, through Mr Glass, stressed that a claim to an interest in the property would be made under the Domestic Relationships Act. Such a claim would be made in the Supreme Court of the ACT. The tribunal was concerned to avoid pre-empting any decision of the Supreme Court.
14. The matter was adjourned to 2 March 2009 to allow Ms Bray time to commence her action in the Supreme Court. The tribunal urged Mr Morris to obtain legal advice. Further the tribunal urged the parties to consider negotiating a settlement of the issues between them.
THE SECOND HEARING – 2 MARCH 2009
15. At the hearing of 2 March 2009, the position of each party had not changed. The respondent indicated to the tribunal at the initial hearing on 3 February 2009 that she intended to make an application under the Domestic Relationships Act for an adjustment of property interests. At the second hearing of 2 March 2009, such an application had not been made. Mr Glass provided the tribunal with a copy of a letter addressed to Ask Funding, requesting approval for $150,000 loan to fund the anticipated proceedings in the Supreme Court
16. Since the evidence of each party clearly establishes that the relationship between the parties is not one of owner and tenant, or, owner and occupier under the Residential Tenancies Act, the tribunal looks to the ACAT Act. This Act provides that the tribunal may deal with applications in relation to civil disputes, including contracts and trespass. Where a property owner has by written notice revoked a licence and the licensee refuses to deliver up the property then the licensee is committing an act of trespass.
THE RELEVANT LAW: ACT CIVIL & ADMINISTRATIVE TRIBUNAL ACT 2008
17. Part 4 of the ACAT Act deals with the jurisdiction of ACAT to hear and determine applications in relation to civil disputes.
· Section 16 provides
In this Act:
civil dispute: means a dispute in relation to which a civil dispute application may be made.
civil dispute application: means an application that consists of 1 or more of the following applications:
…
(f) a trespass application
· Section 15 of the ACAT Act defines a trespass application to mean an application for relief for trespass to land.
· Section 17 provides that a person may make a civil dispute application to the tribunal.
· Section 18 of the ACAT Act limits the jurisdiction of the tribunal in relation to civil disputes generally to $10,000.
18. There is no claim for any monetary amount by way of damages or occupation fees. The application made by the owner of the premises was dated 30 December 2008 and was made under the Residential Tenancies Act to the Residential Tenancies Tribunal (RTT). At the date of the first hearing of this matter the RTT had been replaced by the ACAT. ACAT has jurisdiction to hear and determine matters under the Residential Tenancies Act. At the first hearing ACAT determined that the Residential Tenancies Act did not apply to the issues between the parties and the issues were more likely to fall under the civil disputes jurisdiction conferred on ACAT by the ACAT Act.
19. ACAT adjourned the matter as described above. Neither at the first hearing not the second hearing did either party make objection to ACAT considering an application brought to the RTT under the Residential Tenancies Act under its civil jurisdiction. The respondent made no objection or argument in relation to ACAT’s indication that a trespass had arisen from the revocation of the licence to occupy the premise.
20. ACAT was established by the consolidation of a number of existing ACT tribunals. In the explanatory statement to the ACT Civil and Administrative Tribunal Bill 2008 (ACT), the Attorney General stated that one of the benefits of the consolidation of a number of existing tribunals would be ‘enhancing justice through renewed focus on fast effective decision making’. Further, the objects of the Act include ensuring that ‘access to the tribunal is simple and inexpensive’ and that ‘applications are resolved as quickly as possible as is consistent with achieving justice’.
21. Therefore it seems appropriate for ACAT, having adjourned the matter for a short period to allow the parties to obtain legal advice and consider the issues raised in the civil jurisdiction, to deal with this matter under the provisions relating to civil disputes in the ACAT Act.
22. In Zeus and Ra Pty Ltd v Nicolaou [2003] VSCA 11 (28 February 2003), it was held that once a matter over which a tribunal had jurisdiction was properly before the tribunal, the tribunal could deal with the matter, even though the original application may not have, on its face, raised the matters eventually dealt with. In relation to the Victorian Civil and Administrative Tribunal, the court stated [at 79] that the tribunal is ‘entitled to inform itself on any matter as it sees fit, and must conduct proceedings with as little formality and technicality and with as much speed as a proper consideration of the matter before it permits’.
23. Section 23 of the ACAT Act provides that the tribunal may decide its own procedure in relation to the hearing of a particular matter. ‘The procedures of the tribunal must be as simple, quick, inexpensive and informal as is consistent with achieving justice.’ Section 26 provides that ‘the tribunal may inform itself in any way it considers appropriate in the circumstances’.
24. Thus, the tribunal determined to proceed with the matter under the civil jurisdiction conferred by the ACAT Act.
THE INTEREST OF THE PARTIES IN THE PREMISES
25. Mr Brian Morris is the legal owner of the premises. This is not disputed by the respondent.
26. Mr Morris stated at the second hearing that the premises were purchased by him as an investment property. The purchase occurred during the term of his de facto relationship with Ms Bray. The Unit is now for sale. Mr Morris has decided to sell the property to ‘retire some debt’. Mr Morris stated that the Unit was likely to attract a price of about $950,000 and it was subject to a mortgage for an amount slightly in excess of that price. Mr Morris filed copies of a statement for an account with the NAB, called the Barton Loan account. This revealed that monthly repayments of $7,542.05 were being made and that the total debt at November 2008 was $994. 943.80. Mr Morris indicated that he was struggling to find the repayments and had been in negotiations with the NAB.
27. Ms Sally Bray is residing in the premises. The evidence before the tribunal does not establish that Ms Bray has any legal interest in the property arising from an express or implied tenancy or occupancy agreement. Ms Bray did not assert any right to live in the premises based upon the rules of equity.
28. The undisputed evidence of Mr Morris was that he offered the premises as a residence for Ms Bray and their daughter, as a temporary measure. Ms Bray occupied the premises as a residence. This arrangement could best be characterised as a licence. A licence to occupy premises granted by the legal owner, makes lawful that which would otherwise be an act of trespass. A grantor may revoke a bare licence at any time. Mr Morris has by notice asked Ms Bray to vacate the premises, and upon her refusal to do so has commenced this matter. This action amounts to an express revocation of the licence.
29. In the letter addressed to Ask Funding Mr Glass states that:
The matter concerns an ACT de facto relationship of 16 years. The relevant legislation is the Domestic Relationships Act (1994).
…
We wish to assist our client to commence proceedings in the ACT Supreme Court seeking Orders for property settlement and including interim Orders, a sole occupancy Order enabling our client to reside in the Barton Property.
30. Thus it appears that the only ‘right’ to reside in the property which Ms Bray asserts is one which would arise under the application of the Domestic Relationships legislation. Section 25 of the Domestic Relationships Act provides for a range of orders available to the court. These include:
· orders for the transfer of property;
· the sale of property and the distribution of the proceeds of sale;
· the payment of a lump sum;
· or any other that the court considers is necessary to do justice.
Until such orders come into existence Ms Bray has only a right to bring an action and any property right would be a mere equity: Latec Investments Ltd v Hotel Terrigal Pty Ltd (In liq) (1965) 113 CLR 265. Such mere equity gives rise to no proprietary interest. See Peter Butt, Land Law: 5th Edition (2006) Thomson Lawbook Co at p1961.
31. The respondent submits that the premises are valued at $1,200,000. In the letter addressed to Ask Funding the respondent asserts that the applicant has a total net asset pool of between $30 million and $40 million. The applicant disputes this, in particular the value of NetSpeed Pty Ltd, which he says is subject to winding up procedures in the NSW Supreme Court.
OTHER FACTORS CONSIDERED BY ACAT
32. Any order made by the tribunal must seek to take into account all relevant factors and balance the interests of the parties:
· Mr Morris stressed to the tribunal that he was in grave financial difficulties and that he needed to sell the premises to assist in retiring debt. He stated that he was not in a position to continue with the mortgage repayments and it was possible that the mortgagee would exercise its power of sale. Thus the premises were not likely to be available to be the subject of any order made under the domestic relationships legislation.
· The bank account details and tax statement provided by Mr Morris reveal personal and corporate debts in excess of $4.5 million. Ms Bray stated that this did not give a complete picture and that Mr Morris had money on other bank accounts. No details or supporting documents were provided to ACAT. Nevertheless the tribunal formed the view that Mr Morris was experiencing financial difficulties and it was more likely than not that being able to sell the unit and thus be relieved of the obligation to make large monthly repayments in relation to a mortgage of property whose value was decreasing would remove some of those difficulties, and may contribute to the preservation of other financial resources and assets.
· Mr Morris stated that he had offered to allow Ms Bray and their daughter to live in another property which he owned, and he repeated this offer in the hearing. Thus Ms Bray and the daughter of the parties would not be homeless.
· The rights of Ms Bray under the domestic relationships legislation are not defeated or diminished by any order for ‘ejectment’. Her claims are able to be met by a variety of orders.
ORDERS AVAILABLE TO ACAT
33. Section 22(1) of the ACAT Act provides that in relation to civil dispute applications, the tribunal has the same jurisdiction and powers as the Magistrates Court has under the Magistrates Court Act 1930 (ACT), part 4.2:
258 Power of court to grant relief
(1) In any proceeding that the Magistrates Court has jurisdiction to hear and decide—
(a) the court may grant any relief, redress or remedy that the Supreme Court may grant in a similar action in that court, and for that purpose the Magistrates Court may make any order that the Supreme Court may make; and
(b) the court must give effect to any ground of defence, counterclaim or set-off, whether equitable or legal, in the same way and to the same extent that the Supreme Court would do.
34. The traditional remedy to take possession of land was ejectment. In all the circumstances it is appropriate to give the respondent a reasonable amount of time to vacate the premises.
ORDER
35. The tribunal therefore makes the following order: that the respondent is to vacate the premises on or before 28 April 2009.
J. Lennard
31 March 2009
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A FILE NO: RT09/20
APPLICANT: BRIAN MORRIS
RESPONDENT: SALLY BRAY
PARTY JOINED: N/A
COUNSEL APPEARING: APPLICANT:
RESPONDENT:
PARTY JOINED:
SOLICITORS: APPLICANT:
RESPONDENT: MR P GLASS
PARTY JOINED:
OTHER: APPLICANT: SELF
RESPONDENT: SELF
PARTY JOINED:
TRIBUNAL MEMBER/S: MS J LENNARD
DATE/S OF HEARING: 2 MARCH 2009 PLACE: CANBERRA
DATE/S OF DECISION: 31 MARCH 2009 PLACE: CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
0
2
0