Quick v Lam-Ly Pty Ltd
[2019] VSCA 157
•28 June 2019
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2019 0044
| JOHN SEBASTIAN QUICK | Applicant |
| v | |
| LAM-LY PTY LTD (ACN 084 484 300) (as trustee of the Ly Family Trust) | Respondent |
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| JUDGES: | NIALL JA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 24 June 2019 |
| DATE OF JUDGMENT: | 28 June 2019 |
| MEDIUM NEUTRAL CITATION: | [2019] VSCA 157 |
| JUDGMENT APPEALED FROM: | [2019] VSC 233 (Garde J) |
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RESIDENTIAL TENANCIES – Appeal of a decision of Victorian Civil and Administrative Tribunal – Notice to vacate – Non-payment of rent – Repudiation – Disclaimer – Termination by landlord – No error on a question of law – Application for leave to appeal refused – Pont v Connolly-Bishop [2018] NSWCATAP 160 considered – Residential Tenancies Act 1997 ss 39, 216, 219, 221, 225, 322, 330, 334, 342 – Victorian Civil and Administrative Tribunal Act 1998 s 148.
PRACTICE AND PROCEDURE – Leave to appeal –‘Real prospect of success’ test for leave to appeal in civil matters – Court may only grant leave where appeal has a ‘real’ as opposed to ‘fanciful’ chance of success – Supreme Court Act 1986 ss 14A, 14C.
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| APPEARANCES: | Counsel | Solicitors |
| For the Applicant | In person | |
| For the Respondent | Mr I W Upjohn QC with Mr J D S Barber | Novatsis & Alexander |
NIALL JA:
Introduction and summary
The applicant was a tenant of residential premises under a tenancy agreement governed by the Residential Tenancies Act1997 (‘the Act’). He sub-let the premises. The landlord issued a notice to vacate based on unauthorised sub-letting. The applicant issued a proceeding in the Victorian Civil and Administrative Tribunal (‘Tribunal’) seeking relief in relation to the notice and stopped paying rent. The landlord issued a notice to vacate based on the admitted non-payment of rent and then applied to the Tribunal for a possession order. The applicant claimed to be entitled to remain in the premises without paying rent on the basis of adverse possession and said that the tenancy agreement had been terminated by the landlord’s repudiation. The Tribunal made the possession order. A judge in the Supreme Court Trial Division dismissed an appeal from that order. In this Court, the applicant sought leave to appeal from that order.[1]
[1]The leave application has been referred to me for hearing under r 64.15(1) of the Supreme Court (General Civil Procedure) Rules 2015.
In my view, there is no reason to doubt the correctness of the decision of the judge. An appeal would enjoy no prosects of success and, accordingly, I would refuse leave to appeal.
The facts
On 30 September 2014, the applicant and his former partner entered into a 12 month residential tenancy agreement (as tenants) with the respondent (as landlord) for the premises at 29 Morrah Street, Parkville (‘the premises’) (‘2014 tenancy agreement’). The agreement was signed by the applicant, his ex-partner and the property manager of the agent.
On 11 July 2018, the applicant signed a second residential tenancy agreement to lease the premises as sole tenant (‘the tenancy agreement’). The tenancy agreement was in the required form, however it contained a number of handwritten alterations to the effect that the sections were modified by the 2014 tenancy agreement, a collateral agreement that had been made in October 2014 and by use. These handwritten alterations were initialled by the tenant, but not by the agent.
In circumstances that I will shortly explain, the applicant stopped paying rent from 29 November 2018, and has not paid rent since.
On 14 December 2018, the agent gave the applicant a notice to vacate, based on the applicant’s failure to pay rent (‘the notice’). The notice required the applicant to vacate the premises on 4 January 2019.
The agent commenced proceedings for a possession order in the Tribunal, based on the non-payment of rent under s 246 of the Act.
On 8 January 2019, the Tribunal made an order for possession.
Relevant provisions of the Act
Before turning to consider the grounds of appeal, it is convenient to set out the relevant provisions of the Act.
Section 39 of the Act provides in relation to rent:
For the purposes of this Act, rent under a tenancy agreement accrues from day to day and, subject to section 242, is recoverable or refundable accordingly.
Part 6 of the Act deals with the termination of residential tenancies and the relevant provisions provide as follows:
216 Termination of tenancy agreement
Despite any Act or law to the contrary, a tenancy agreement does not terminate and must not be terminated except in accordance with this Division or Part 7 or 8.
218 Termination by consent
(1)A tenancy agreement terminates if the tenant vacates the rented premises with the consent of the landlord.
(2) The consent, once given, is irrevocable.
219 Termination after notice to vacate
(1)A tenancy agreement terminates if the landlord or the tenant gives a notice to vacate or a notice of intention to vacate the rented premises under this Division and—
(a)the tenant vacates the rented premises on or after the termination date specified in the notice;
…
221 Termination where premises are sub-let
A tenancy agreement terminates if—
(a)the tenant is not in possession of the rented premises because the tenant has sub-let them; and
(b)the landlord or tenant gives a notice to vacate or a notice of intention to vacate the rented premises under this Division; and
(c)the period (if any) between the date on which the notice is given and the termination date specified in the notice has expired.
225 Termination by disclaimer
A tenancy agreement may terminate by disclaimer (for example, on repudiation of the agreement by the tenant accepted by the landlord).
Section 246 authorises the landlord to give the tenant a notice to vacate if the tenant owes at least 14 days rent to the landlord. Section 253 authorises the landlord to give the tenant a notice to vacate if the tenant has sub-let the whole or any part of the premises without the landlord’s consent.
Part 6 div 4 regulates the giving of notices under the Act and requires that a notice be addressed to the tenant, signed by the person giving the notice or that person’s agent and in the prescribed form.[2] Section 320 provides that if a person is, or becomes, entitled to give two or more notices to vacate, the invalidity of any of the notices does not affect the validity of any other notice and each valid notice has full force and effect.
[2]Act s 319.
Part 7 div 1 deals with applications for possession orders. Section 330 provides that the Tribunal must make a possession order requiring a tenant to vacate on the day specified in the order if the Tribunal is satisfied:
(a)in the case of an application where notice to vacate has been given, that—
(i)the landlord … was entitled to give the notice; and
(ii) the notice has not been withdrawn.
Section 342 gives a tenancy agreement extended effect, even if a possession order has been made. It provides:
If a possession order is made under this Division, the tenancy agreement terminates at the end of the day before the day on which possession of the rented premises is delivered up to the landlord.
Section 344 provides that a person who claims to be entitled to possession of premises may apply to the Tribunal for a possession order if the premises had been rented under a tenancy agreement at any time within the 12 month period before the date of application and the applicant alleges the premises are occupied solely by a person (not being a tenant under a tenancy agreement) who entered into or remained in occupation without licence or consent.
The Tribunal’s decision
At the hearing before the Tribunal on 8 January 2019, the applicant did not dispute that the rent was 14 days overdue on the date the notice was given, but contended that he was not obliged to pay rent at all.
The applicant sought to defend the claim for possession on the basis that the landlord had repudiated the tenancy agreement, and he had accepted the repudiation; the common law of repudiation supplemented the provisions of the Act; and the result was that he was entitled to remain in adverse possession without payment of rent.
In order to explain the factual underpinning of the case before the Tribunal, it is necessary to recount a few additional facts.
(a)In November 2018, following an inspection of the premises, the landlord’s agent served a notice to vacate on the applicant, on the basis that he had been sub-letting the premises without its consent (‘the first notice’). The first notice was given under s 253 of the Act.
(b)The first notice was sent by registered post, received by the applicant on 20 November 2018 and required the applicant to vacate the premises on 7 December 2018.
(c)In response, on 26 November 2018, the applicant filed draft points of claim with the Tribunal, in which he claimed that he was ‘inclined to accept the notice as a repudiation of our contractual agreement’, and also said that he was not liable for rent after 15 November 2018. The applicant did not pay the application fee and sought fee relief, which was denied. As a consequence, the application stalled.
I note that, at the hearing, the agent for the landlord told the Tribunal that the first notice had been an ‘administrative error’ and that the tenancy agreement did not prohibit sub-letting.
In the course of the hearing, the Member told the applicant that the Act governed the terms of the tenancy agreement, not the common law, and that the tenancy agreement could only be terminated under the Act. The applicant maintained his reliance on the landlord’s repudiation in accordance with contractual principles.
Notwithstanding his contention that the tenancy agreement was at an end, the applicant told the Tribunal that he was still in possession of the premises and had left personal belongings there. When asked by the Member for the basis upon which he remained in occupation of the premises, the applicant said that he was entitled to remain in ‘adverse possession’, which he explained was ‘occupying against the interests of the owner having claimed damages’.
The Tribunal rejected the applicant’s arguments. In oral reasons for decision, the Tribunal held that the termination of residential tenancies is dealt with according to the provisions of the Act; the tenancy agreement had not been terminated by the applicant in a manner authorised by the Act; the respondent had not withdrawn the obligation to pay rent under the tenancy agreement; the respondent had given the applicant notice to vacate for rental arrears in accordance with the requirements of the Act; and the respondent was entitled to possession under s 246 of the Act.
Accordingly, the Tribunal ordered the applicant to vacate the premises by 8 February 2019, and gave consequential relief to the respondent.
Decision of the primary judge
The grounds of appeal before the judge were discursively expressed. As summarised by the judge, the three questions of law were:
(a)whether the applicant’s prior acceptance of the owner’s repudiation of the tenancy agreement was a valid defence to rent arrears;
(b)whether the monthly rent was in arrears, having regard to the service of the first notice and the tenant’s claim for damages; and
(c) whether possession should have been granted by the Tribunal.[3]
[3]Quick v Lam-Ly Pty Ltd [2019] VSC 233 [22] (‘Reasons’).
By his grounds of appeal, the applicant attempted to establish that he had a valid defence to the application for possession because the Tribunal misunderstood the effect of s 216 of the Act and wrongly held that common law repudiation did not apply to residential tenancies.
The judge noted that the conditions of the possession order were satisfied and rejected the applicant’s attempt to outflank the application by arguing that the tenancy agreement had come to an end by his acceptance of the landlord’s repudiation.
The judge held that the common law principles of repudiation, on which the applicant relied, were irrelevant, given the application of the statutory provisions which stated that a residential tenancy agreement can only be brought to an end in accordance with the Act.
The judge also considered whether the tenancy agreement had come to an end by the landlord’s disclaimer under s 225 of the Act, even though this had not been raised before the Tribunal. On an assumption favourable to the applicant that the landlord could disclaim the tenancy agreement, the judge held that the facts did not establish disclaimer or repudiation of the tenancy agreement.[4] His Honour said that the landlord sought to uphold rather than repudiate its rights under the tenancy agreement and to act in conformity with it.[5]
[4]Ibid [60].
[5]Ibid.
Grounds of appeal
In his application for leave to appeal and written case, the applicant identified 11 grounds of appeal in relation to his proceeding in the Trial Division, and six grounds of appeal in relation to the hearing before the Tribunal. The proposed grounds of appeal were in a narrative form and are not repeated below in full. However, they included the following main headings:
As against S ECI 2019 00405 Hearing and Order of 12th April 2019 and Procedural Aspects:
S0. An ad-hoc re-creation of Pont[6] with respect to the common law which may rise to the level of misfeasance or more.
[6]The applicant’s reference to Pont is to Pont v Connolly-Bishop [2018] NSWCATAP 160 (‘Pont’).
S1. Failure to admit a valid legal defense.
S2. Omission without consideration of a valid legal defense.
S3. Failure to heed relevant common law.
S4. Breach of natural justice and procedural fairness as alleged.
S5. Improper failure to grant adjournment and/or discovery and/or procedural relief as against Respondent’s submission of affidavits of 22nd March 2019.
S6. Erroneous and partial admission and adoption of fact not before the tribunal without consideration of contrary evidence and in violation of plain rules of the law of evidence. Erroneous Construction of ‘Question of Law’ on Appeal.
S7. Erroneous consideration of New South Wales law (without consideration of relevant Superior Authority).
S8. Therefore, an erroneous Order of Possession Granted.
S9. Therefore, an erroneous award of legal costs.
S10. Therefore, a corollary erroneous calculation of landlord’s compensation for rent arrears.
As against R2018/44699/00 Hearing of 8th January 2019
V1. Failure to admit a valid defense.
V2. Failure to heed relevant section of statute.
V3. Failure to heed the common law of repudiation.
V4. Therefore, an erroneous Order of Possession Granted.
V5. Therefore, an erroneous calculation of landlord’s compensation.
V6. Breach of natural justice (added before hearing of appeal).
Applicant’s submissions
In his written case, the applicant made a number of submissions, including that the judge failed to apply and consider relevant authorities;[7] there was a ‘rather grave mishandling of the law’;[8] the judge incorrectly dismissed his case for repudiation and disclaimer against the respondent; he was denied natural justice and procedural fairness, on the basis that he had been unable to provide further factual submissions and affidavits, as well as the listing and timetabling of the matter; and the judge’s statements to the effect that his Honour could only have regard to the material and evidence that was before the Tribunal, were incorrect.
[7]Including W G Clark (Properties) Ltd v Dupre Properties Ltd [1992] Ch 297 (‘Dupre’); Re Willmott Forests Ltd (2012) 36 VR 472 (‘Re Willmott’); Willmott Growers Group Inc v Wilmott Forests Ltd (2013) 251 CLR 592 (‘Willmott Growers’).
[8]The applicant referred to the judge’s consideration of Pont [2018] NSWCATAP 160.
The crux of the applicant’s argument was as follows:
I assert that following receipt of the Notice to Vacate of 16-11-2018 it was and remains my right to accept the breach of the covenant of non-derogation / abrogation from the grant of exclusive possession (Wilmott [2013] HCA 51 [8]) and the corresponding (at least contingent) disclaimer of the right to receive rent and the right to continue to receive rent under the lease agreement as-was as giving rise to a corresponding common law right as in Dupre to disclaim e.g. at least a part of my lease agreement via a legal claim without, pending a resolution to my claim and the administration of justice thereby, disclaiming my underlying leasehold-demise! This allows the question of ‘unequivocal acceptance of repudiation’ to be put to one side in favor of a more-critical analysis of who is disclaiming what and when.[9]
[9]Emphasis in original.
Accordingly, the applicant contended that, by reason of repudiation or disclaimer of the tenancy agreement by the respondent, he had a right to possession with respect to the premises, and was not required to pay rent.
In oral submissions, the applicant developed four additional points in support of his application for leave to appeal. First, he said the judge had considered facts beyond those before the Tribunal, in circumstances where he had told the parties that he would not do so.[10] Secondly, he said that possession cannot be granted on an erroneous basis and the Tribunal did not consider the factual circumstances surrounding the first notice. Thirdly, he submitted that the tenancy agreement had been repudiated and disclaimed pursuant to s 225 of the Act, and came to an end on 26 November 2018 when he had applied to the Tribunal for relief in relation to the first notice. Finally, he submitted that possession can only be given under a valid notice to vacate and the notice did not meet that requirement.
[10]The applicant pointed to [7] and [13] of the Reasons.
Respondent’s submissions
The respondent submitted that the application for leave to appeal disclosed no arguable ground of appeal, and that the judge’s reasons were untainted by error.
Leave to appeal principles
Pursuant to s 14A of the Supreme Court Act 1986 (‘Supreme Court Act’), a person cannot bring a civil appeal without leave. The Court of Appeal may grant an application for leave to appeal only if it is satisfied that the appeal has a real prospect of success.[11] A real prospect means a prospect other than one properly described as ‘fanciful’.[12]
[11]Supreme Court Act s 14C.
[12]Kennedy v Shire of Campaspe [2015] VSCA 47 [12].
An order of the Tribunal may be appealed on a question of law only.[13] In Osland v Secretary to the Department of Justice [No 2],[14] French CJ, Gummow and Bell J said:
The Court of Appeal, in the exercise of its jurisdiction under s 148 of the VCAT Act, may make substitutive orders where only one conclusion is open on the correct application of the law to the facts found by the Tribunal. Such a case arises when no other conclusion could reasonably be entertained. In that event, the Court can make the order that the Tribunal should have made. The language of s 148(7) is also wide enough to allow the Court of Appeal to make substitutive orders in other circumstances. But its powers must … be exercised having regard to the limited nature of the appeal. Absent such restraint, a question of law would open the door to an appeal by way of rehearing. Where there is a factual matter that has to be determined as a consequence of the appeal, it may be that it is able conveniently to be determined by the Court of Appeal upon uncontested evidence or primary facts already found by the Tribunal. When the outstanding issue involves the formation of an opinion which is, as in this case, based upon considerations of public interest, then it should in the ordinary case be remitted to the body established for the purpose of making that essentially factual, evaluative and ministerial judgment.[15]
[13]Victorian Civil and Administrative Tribunal Act 1998 s 148(1) (‘VCAT Act’).
[14](2010) 241 CLR 320.
[15]Ibid 332–3 [20] (citations omitted).
Consideration
Repudiation and disclaimer
It might be observed that the applicant’s argument that the tenancy agreement had been terminated by his acceptance of the landlord’s repudiation did not provide a promising foundation to resist a possession order, given that he remained in possession and had stopped paying rent.
The Tribunal correctly rejected the applicant’s submission that the tenancy agreement had been brought to an end by common law principles of repudiation, because s 216 of the Act provides that, despite any Act or law to the contrary, a tenancy agreement does not terminate and must not be terminated except in accordance with the relevant provisions of the Act.[16] The applicant’s argument based on common law contractual principles was untenable in light of s 216.
[16]Reasons [43].
There are two insuperable obstacles in the way of the applicant’s case on disclaimer. First, it was not raised before the Tribunal. Second, as the judge found, the landlord did not disclaim the lease.
Before the Tribunal, the applicant put his case squarely on a contention that he had accepted a repudiation of the tenancy agreement, rather than relying on the concept of disclaimer. This is revealed by the following exchange between the applicant and the Member:
MrQuick: Member I do not understand that you’re telling me that the statute governs residential tenancies. I think we are in very clear disagreement about whether a landlord can repudiate a lease agreement and a tenant can accept under the common law.
Member: So, what is the effect of what you say is repudiation?
Mr Quick: It means that there is no longer a lease agreement if it, if repudiation has been legitimately accepted. If one party engages in conduct which says they’re not willing to honour the agreement. Right, ‘leave because you’re sub-letting illegally’. I’m not sub-letting illegally but ‘leave because you’re sub-letting illegally’.
Member: But you didn’t leave.
MrQuick: Yes but I can accept that as repudiation of the agreement. I’m entitled to, it’s my right to say ...
Member: So on what basis?
Mr Quick: They’re saying we don’t want the contract.
Member: Yes so on what basis?
Mr Quick: You’re honouring I’m honouring.
Member: On what basis are you occupying the premises?
MrQuick: Adversely? Adverse possession. It means that I’m occupying against the interests of the owner having claimed damages.
Member: So you’re occupying but you’re not paying rent.
MrQuick: I did not pay rent on the 29th, and I stipulated damages on the 26th so in, in any rate, I’ve stipulated damages much, much greater than the rent.
The Tribunal was not invited to find that the landlord disclaimed its title to the estate or interest and that the applicant accepted the act of disclaimer. The applicant was unrepresented before the Tribunal and some leeway must be accorded in order to determine what issues were fairly raised for the Tribunal to determine. Nevertheless, I am not persuaded that disclaimer was fairly raised. The applicant made a number of developed submissions on the impact of repudiation under the general law and relied on a number of cases, including Loughran v Hasham (Building and Property)[17] and Shevill v Builders Licensing Board,[18] as supporting his proposition that residential tenancies are subordinate to the general common law of contracts. He made no reference to disclaimer.
[17][2017] VCAT 2067.
[18](1982) 149 CLR 620.
Whether the respondent did in fact disclaim the tenancy agreement and whether this act of disclaimer was accepted by the applicant are, at least in part, questions of fact that were not determined by the Tribunal. An act of disclaimer is not synonymous with a repudiation of a lease, but rather it amounts to a denial of the very existence of the estate that the disclaiming party would otherwise hold. It is readily applicable to a tenant and is a recognised basis of forfeiture.[19] It usually entails the tenant denying the title of the landlord and, therefore, the existence of the lease.[20] It requires the party disclaiming to directly repudiate the relationship of landlord and tenant, in effect by saying ‘I am no longer your tenant’.[21] In that context, there is a term implied by law that a lessor has a right to determine the lease by re-entry where there has been a disclaimer of the lessor’s title.[22] That requires unambiguous conduct that is prejudicial to the lessor’s estate.
[19]Robert Brooking and Alex Chernov, Tenancy Law and Practice Victoria (Butterworths, 1972) 218 [180].
[20]Australian Safeway Stores Pty Ltd v Toorak Village Development Pty Ltd [1974] VR 268, 274.
[21]Re Teller Home Furnishers Pty Ltd [1967] VR 313, 317.
[22]Dupre [1992] Ch 297.
There was no occasion for the Tribunal to determine those questions and it is too late for the applicant to raise them on an appeal on a question of law.
Further, had s 225 been raised, the respondent might have met the case on a number of bases, each of which may involve facts and none of which were determined by the Tribunal. The fact that the respondent to an appeal could have met a new point by evidence or by running the proceeding differently, is generally fatal to an applicant relying on a new point for the first time in an appeal. In the present case, the new point may have been addressed by the three responses below.
First, if s 225 does apply to disclaimer by a landlord, and the disclaimer is accepted by the tenant, it must surely operate where the tenant is no longer in possession or at least claims no right of possession as against the landlord. That would explain why s 225 does not itself contemplate a notice to vacate. The fact that the applicant remained in possession of the premises was entirely inconsistent with him accepting the landlord’s putative disclaimer of the tenancy agreement. The tenancy agreement was the only basis upon which the applicant could have had any legal entitlement to be in possession of the property.
Secondly, if s 225 could apply in circumstances where the tenant remains in possession, it would not obviously follow that the landlord could not rely on other provisions of the Act to obtain a possession order. Section 320 contemplates that there may be multiple and independent bases for bringing a tenancy agreement to an end, and that reliance on one does not foreclose reliance on another.
Thirdly, had disclaimer been raised, the landlord could have applied for an order under s 344 for possession of the premises on the basis that there was, on this hypothesis, no longer a tenancy agreement and the occupier had no authority to remain in possession.
The applicant’s contention, advanced before the Tribunal and repeated before the judge, that he was entitled to adverse possession and was not required to pay rent was entirely devoid of merit. That remains true even if, as the applicant claimed, the initial notice was unjustified or given in bad faith. First, the first notice was ineffective on its own to terminate the tenancy agreement; secondly, it was withdrawn by the time the Tribunal heard and determined the application for a possession order for non-payment of rent; and, thirdly, the claim against the landlord did not provide any authority for the applicant to remain in possession of the premises.
It follows that there was no error of law by the Tribunal in not dealing with disclaimer.
The decision of the New South Wales Civil and Administrative Tribunal Appeal Panel (‘Appeal Panel’) in Pont,[23] on which the applicant relied, is of no assistance to him. That was a case under the Residential Tenancies Act2010 (NSW) (‘NSW Act’), involving a sub-lease between a tenant (in effect as landlord) and sub-tenant (as tenant). One of the issues was whether the sub-tenant could rely on s 44(3) of the NSW Act, which allowed for an application for relief against excessive rent where there had been a reduction in the goods or services provided with the premises. Such an application had to be made ‘before the end of a tenancy’. The tenancy could only end in accordance with the NSW Act[24] and the issue was whether that had occurred before the application for rent reduction.
[23][2018] NSWCATAP 160.
[24]NSW Act s 81(1).
In that case, the Tribunal at first instance had found that the six month residential tenancy agreement between the parties ended when the tenant repudiated the agreement and the sub-tenant accepted the repudiation and vacated the premises.[25] The issue then arose as to whether the tenancy had ended under one of the statutory grounds of termination provided for in the NSW Act. Relevantly, one of the statutory grounds, found in s 81(4)(g) of the NSW Act, mirrors s 225 of the Act.
[25]Pont [2018] NSWCATAP 160 [44].
The Appeal Panel held that a tenant’s acceptance of repudiation by the landlord is an example of disclaimer. In that case, the Appeal Panel found that the sub-tenant had accepted the repudiation by advising the tenant that she would vacate the premises. This occurred before the application for rent reduction.
The applicant submitted that the judge misunderstood Pont because he held that the repudiation was constituted by the head tenant’s direction that part of the premises could not be used by the sub-tenant. The applicant submitted that the relevant act of repudiation was the notification of intention to terminate the head tenancy agreement.
I agree that the act of repudiation found by the Appeal Panel, and the Tribunal below, in Pont was not, as the judge held, ‘the head tenant’s direction that the storeroom and attached bathroom could not be used by the sub-tenant of the bedroom’.[26] Rather, it was the notification of the head tenant’s intention to terminate the head tenancy agreement that constituted a repudiation of the sub-tenancy agreement.[27]
[26]Reasons [56].
[27]Pont [2018] NSWCATAP 160 [8], [17], [44]–[45].
In my view, Pont does not assist the applicant. It is not clear whether the notice in Pont was equivalent to a notice to vacate under the Act.
I am prepared to accept, as did the judge, that a tenant can disclaim a tenancy agreement under s 225 in response to repudiation of the agreement by the landlord. However, that does not assist in determining whether the conduct of the landlord in a particular case amounts to a repudiation, nor does it explain how the tenant can, on the one hand, purport to disclaim the tenancy agreement and, on the other, remain in possession. In Pont, the acceptance by the sub-tenant arose because she agreed to vacate the premises in response to the notice. That did not occur in this case.
The judge held that, on the facts before the Tribunal, there was no disclaimer, whether unilateral or bilateral, by the owner.[28]
[28]Reasons [61].
In this case, and assuming many things in favour of the applicant,[29] the judge correctly held that the service of the notice for unauthorised sub-letting did not constitute a disclaimer of the tenancy agreement by the landlord. In order to disclaim a tenancy agreement, the act of disclaimer must be clear and unambiguous.[30] It must be accepted that a tenancy agreement is a species of contract, and contractual principles in relation to termination and breach apply to tenancy agreements.[31] However, a disclaimer has some specific characteristics — it constitutes an unambiguous denial of the existence of the estate or interest, which the counterparty accepts to bring the tenancy agreement to an end.
[29]Including that he can rely on s 225 of the Act and that it applied to disclaimer by a landlord.
[30]Dupre [1992] Ch 297, 303.
[31]Willmott Growers (2013) 251 CLR 592, 604 [39] (French CJ, Hayne and Kiefel JJ).
The giving of the first notice was an exercise of a statutory, not a contractual, power; was itself incapable of bringing the tenancy agreement to an end; and did not evidence a refusal by the respondent to comply with its obligations under the tenancy agreement. Rather, it was a statutory precondition for the termination of the tenancy agreement which could occur if the applicant vacated the premises as contemplated by s 219(a) of the Act, or the agreement was terminated in accordance with ss 334 or 342. The respondent, as landlord, did not control either of those matters.
The respondent, by serving the first notice, even if it was given in bad faith, was not denying the existence of the estate or interest in land, but was putting in place steps to have it terminated by the Tribunal.
There was no arguable error in the judge’s conclusion that there was no disclaimer on the part of the respondent and there was no foundation for the applicant’s reliance on s 225 of the Act.
Material not before the Tribunal
The applicant submitted that the judge erred in having regard to material outside of the material before the Tribunal. In support of this submission, the applicant referred to paragraphs 7 and 13 of the judge’s reasons for decision. In the first of those two paragraphs, the judge noted that there had been an inspection of the premises on 15 November 2018 and the persons present did not know the tenant. That led to the decision to serve the first notice to vacate, on the basis of authorised sub-letting of the premises. Paragraph 13 recounted that the agent had reviewed the first notice on its expiration and decided that it should be withdrawn in light of the applicant’s handwritten alterations to the tenancy agreement and uncertainty as to what had been agreed.
In my view, the facts set out in the two paragraphs identified by the applicant can, in substance, be drawn from the transcript of the hearing before the Tribunal. In any event, those matters were simply matters of background. As already explained, the precise circumstances in which the first notice was given were not material to the Tribunal’s possession order based on non-payment of rent.
Calculation of arrears
The applicant submitted that he was not obliged to pay rent after the service of the first notice because the landlord was seeking that the premises be vacated on 7 December 2018.
The judge rejected that claim on the basis that the obligation to pay rent was expressed both in the Act and under the tenancy agreement in an unconditional manner, and did not depend on compliance with the landlord’s covenants.[32] The judge held that the service of the first notice did not provide a legal basis for rent to be withheld. There is no reason to disturb the Tribunal’s finding of fact that rent had been outstanding for at least 14 days.
[32]Reasons [63].
Accordingly, there was no error in the conclusions of the judge and Tribunal regarding payment of rent.
Procedural fairness
There was no error in the Tribunal failing to adjourn the hearing of the possession order or to consolidate the application with the applicant’s application in respect of the first notice. That was because, at that time, the first notice had been withdrawn and the application in respect of it had stalled on the basis of non-payment of the filing fee. An application for a fee waiver had been refused and review of that decision had not been completed. In any event, there was no injustice in not having the two applications heard at the same time.
The applicant submitted that s 29 of the Supreme Court Act applied to the Tribunal, with the effect that the Tribunal was obliged to hear and determine, as far as possible, all matters in dispute between the parties finally and completely and avoid a multiplicity of proceedings. There is no merit in that submission. Section 29 applies to every court exercising jurisdiction in Victoria.[33] The Tribunal is not a court for the purposes of the Act.
[33]Act s 29(1).
Further, in circumstances where the applicant accepted that he had not paid rent and claimed ‘adverse possession’ against the landlord — a claim that was demonstrably without merit — there was no injustice in proceeding to hear and determine the landlord’s application for possession.
There was no denial of procedural fairness by the judge. The applicant was represented by counsel and he had every opportunity to present arguments seeking to establish an error of law on the part of the Tribunal.
Disposition
Given that the basis of the applicant’s claimed entitlement to remain in possession was untenable and that, on his own case, he claimed no entitlement under the tenancy agreement, there was no coherent basis for him to resist the possession order.
The judge was correct in his conclusion that there was no legal error in the Tribunal’s determination that the conditions for the making of a possession order on the basis of the notice to vacate for non-payment of rent were satisfied.
I would refuse the application for leave to appeal.
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