ROSA & ANOR v THE BOLIVARIAN REPUBLIC OF VENEZUELA (Residential Tenancies)

[2019] ACAT 123

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

ROSA & ANOR v THE BOLIVARIAN REPUBLIC OF VENEZUELA (Residential Tenancies) [2019] ACAT 123

RT 10/2018

Catchwords: RESIDENTIAL TENANCIES  – premises used as an embassy, not a personal residence – no jurisdiction under the Residential Tenancies Act 1997 whether the matter can be transferred to the tribunal’s civil jurisdiction – jurisdiction under the Leases (Commercial and Retail) Act 2001 – no jurisdiction

Legislation cited:     ACT Civil and Administrative Tribunal Act 2008 s 16

Leases (Commercial and Retail) Act 2001 ss 7, 144

Residential Tenancies Act 1997 ss 6A, 6B, 71B, Standard Terms 91, 96

Cases cited:   Errington & Anor v ACT Planning and Land Authority [2019] ACAT 47

Tribunal:     Senior Member H Robinson

Date of Orders: 24 December 2019

Date of Reasons for Decision:         24 December 2019AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL        )          RT 10/2019

BETWEEN:

JOSE ROSA

First Applicant

ISILDA ROSA

Second Applicant

AND:

THE BOLIVARIAN REPUBLIC OF VENEZUELA

Respondent

TRIBUNAL: Senior Member H Robinson

DATE:         24 December 2019

ORDER

The Tribunal orders that:

1.           The application is dismissed for want of jurisdiction.

………………………………..

Senior Member H Robinson

REASONS FOR DECISION

Parties

1.           The applicants, Mrs Isilda Rosa and Mr Jose Rosa, jointly own a property in Culgoa Circuit in O’Malley in the Australian Capital Territory (the Culgoa Property). The property is rented to the respondent, the Bolivarian Republic of Venezuela, for use as an embassy.

The issue

2.           The rental agreement between the parties (the lease) purports to be a residential tenancy agreement made under the Residential Tenancies Act 1997 (RT Act). The applicant seeks recovery of unpaid rent owed under the agreement. The respondent seeks to set off any monies owed by it against it by way of a claim for loss of quiet enjoyment and/or unlawful eviction.

Hearing

3.           The applicants represented themselves. Mrs Rosa gave oral evidence, and Mr Rosa gave oral evidence and was cross examined.

4.           The respondent was represented at the hearing by Mr Macken of counsel. The respondent relied on witness statements of Ms Amaranta Leon Salazar and Ms Usua Areene Pante Rubio. Both were called to give evidence and cross examined.

5.           This matter was run consecutively with matter RT 11/2018 (Adrian Rosa v Bolivarian Republic of Venezuela), which relates to a residence in Mialli Street (Mialli Property) owned by the applicants’ son. I have decided to issue separate judgements as a jurisdictional issue arose in this case that did not arise in RT 11/2018.

6.           The hearing was conducted on 5 August 2019, following which the Tribunal reserved its decision, with a timeframe to enable the parties to make further written submissions about the distribution of the bond. However, during the course of preparing these reasons, the Tribunal identified a possible jurisdictional issue. The matter was relisted on 11 December 2019, and the parties invited to make submissions on the issue. Mr Macken made brief oral submissions. Both parties declined to file further written submissions.

Background

5.           The undisputed facts, briefly stated, are as follows.

6.           The parties entered into the current lease, the subject of these proceedings on 1 January 2016. The fixed term period of that lease expired on 1 January 2017, and the lease purported to continue as a period tenancy after that date.

7. The relationship between the parties is a very lengthy one, with the respondent having leased the Culgoa Property for twelve to thirteen years. Notwithstanding the lengthy relationship between the parties, it was the custom for both to enter a new agreement at the end of each fixed-term period, rather than allowing the arrangement to become a periodic lease. Each agreement purported to be a residential tenancy agreement under the RT Act, and the current lease at least attaches the standard terms.

8.           While the Culgoa Property may at some stage have been used as a residence, for many years now it has been used exclusively as an embassy. I understand this to mean that it is used for consular purposes, including renewals of passports and assistance to Venezuelan nationals in Australia. Staff work in the building during the day. No one has lived at the Culgoa Street premises for many years.

9.           From early 2017 the respondent started to fall behind in rent, and by March 2017, the relationship between the parties began to deteriorate. It appears that around that time there was an argument or altercation between Mr Rosa and a third party with some association with the embassy. The AFP became involved and criminal proceedings were later brought in the ACT Magistrates Court against the third party.

10.         Following this, on 28 March 2017, Mr Rosa sent a letter to a representative of the respondent that stated relevantly, and in summary:

(a) Tt is a notice issued under clause 96(1)(6) of the Standard Terms.

(b) The lessors would not “renew” the leases for either property.

(c) Mr Rosa would take possession of the Culgoa Property and his son would take possession of the Mialli Property.

(d) The terminations “…are purely based on your attitude and it goes to provide that you should not be in your position even temporarily.”

(e) Rent and other expenses were owed, and these were set out in the documents.

(f) While it not expressly state a vacate date, it appeared to be 30 April 2017 (the Notice to Vacate).

11.         Clause 96(1) of the Standard Terms provides that:

96(1)          If there is a periodic tenancy, the lessor may serve on the tenant a  notice  to  vacate  for  the  following  periods  on  the  following grounds:

(a)     4 weeks notice if the lessor genuinely intends to live in the premises

12.         Mr and Mrs Rosa were both honest and forthright witnesses, and during the course of the hearing they gave frank evidence that suggested that the stated reason of wanting to move back into the premises was not the only basis for the termination. However, I do not need to consider this further, because the respondent did not vacate the premises, and no action was taken to evict them.

13.         The tenants’ apparent lack of action in vacating the property in accordance with the Notice to Vacate frustrated Mr Rosa. Accordingly, on 18 April 2017, that is one week before the Notice to Vacate was due to expire, he took steps to encourage the tenants to vacate:

I couldn’t see them, no sign of movement, no sign of telling me when they’re going to move out, and I then went and parked my truck inside my property and my bobcat on the others side. So a week premature I blocked the entrance to the embassy.

14. In other words, Mr Rosa entered upon Culgoa Property, without giving appropriate notice under the RT Act, and then unlawfully blocked the access to with two vehicles, a truck and a crawler. At some time on that same day, Mr Rosa also removed the fusebox, disconnecting the electricity from the premises for at least six hours and compromising the embassy’s ability to perform consular duties on that day. This caused significant disruption and nine appointments with visitors seeking passport renewals had to be cancelled and rescheduled. The AFP attended the next day and Mr Rosa removed his equipment at their request. The situation was resolved halfway through the following day.

15.         The notice period in the Notice to Vacate expired without the tenants vacating.  The lessors also took no further action. The lessors did not commence proceedings in this Tribunal for a termination and possession order. They continued to accept rent, albeit not regularly, and the parties continued for some time as if the residential tenancy were still on foot.

16.         Mrs Rosa sent another Notice to Remedy for the outstanding rent for both properties on 17 July 2017. The letter sets out the rental arrears and requests payment as well for water consumption and painting and gardening fees. The letter does not meet the formal requirements for a Notice to Remedy under clause 91 of the RT Agreement, but the respondent was clearly put on notice as to the dispute.

17.         On 11 or 12 September Mr Rosa again brought his truck and bobcat to the Culgoa Property, blocking the entrances. The evidence differs as to how long the vehicles were in place before they were removed.  The respondent says that the vehicles remained in situ until 21 September 2019, when removalists came to remove the respondents’ goods from the property, and these dates appear to be the best evidence available. Mr Rosa’s actions again prevented access into and out of the premises for a day. On this occasion, a child was present in the premises at the time and was distressed by the events.

18.         The respondents vacated the premises in mid to late September, the exact date being the subject of some dispute. A Notice to Remedy was issued in respect of the Culgoa Property on 26 September 2017, but it would appear that the tenants had vacated by this date.

The applicants’ claim

19.         The applicants claim unpaid rent in the sum of is $19,626.33. It is not in contest that this sum is outstanding.

The respondent’s claim

20.         The respondent seeks to set-off loss and damages suffered by reason of the interference with their quiet enjoyment of the rented premises. The respondent sought only set-off and did not seek an order be made for the payment of damages.

21.         The respondent claims a set-off for:

(a) Adjustment of the bond recovered – $4,615.00

(b) Overpayment of rent during the trespass period of 18-19 April 2017 – $420.50.

(c) Staff salary costs during the trespass and blockade of the embassy on 18-19 April 2017 – 5,759.87.

(d) Staff salary costs during the trespass and blockage of the premises on 11-21 September 2017 – $22,139.00.

(e) Staff salary costs during the trespass and blockage of the premises on 22 September-2 October 2017 – $22,139.00.

(f) Costs or removal or both the Culgoa Premise sand the residence – $6,840.00.

Jurisdiction

22.      The preliminary question that arises in this case (but not in RT 11/2017) is whether the Tribunal has the jurisdiction to determine the application before it.

23.      This question arises because the Culgoa Property was not being used as a home or a residence. Rather, it was used for business of the embassy.

24. This application is brought under the RT Act, and therefore, as starting point, it is necessary to consider whether the lease was a ‘residential tenancy agreement,’ or an ‘occupancy agreement,’ which are the only two kinds agreements that are governed by that Act.

25. The RT Act defines a ‘residential tenancy agreement’ as follows:

6A   What 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).

6B   Residential tenancy agreement if agreement written and says it is residential tenancy agreement

Despite section 6A (4), an agreement is a residential tenancy agreement if it—

(a)     complies with section 6A (1) to (3); and

(b)     is in writing; and

(c)     expressly states that it is a residential tenancy agreement.

26.      As should be evident from these terms, a key requirement of the residential tenancy agreement is that the premises be used “as a home.”  The definition of ‘occupancy agreement’ in section 71C is similar and includes that same requirement that the premises are “for the occupant to use as a home.”

27.      Was the embassy being used “as a home?”

28. There is no definition of ‘home’ in the RT Act. Turning to the ordinary meaning of the word, the Macquarie Dictionary defines the term to mean, relevantly:

noun 1.  a house, or other shelter that is the fixed residence of a person, a family, or a household.

2.  a place of one's domestic affections.

29.      Both parties agree that no one was living in the Culgoa premises.  The lessors were aware of this, and so there could be no suggestions of a mistake or misunderstanding, for the lessors having another purpose. The Culgoa property was not being used as a residence, nor was it being used for domestic purposes. As such, it cannot be said that the property was being “used as a home.”

30. Consequently, I am satisfied that the agreement between the parties was not a ‘residential tenancy agreement’ within the meaning of section 6A of the Act. I am also satisfied that the agreement is not an occupancy agreement, for the same reasons.

31. Accordingly, the Tribunal lacks the jurisdiction to determine this matter under the RT Act.

32.      This leads to the question as to whether the Tribunal can or should transfer this matter to its civil jurisdiction.

33. Under section 16 of the ACT Civil and Administrative Tribunal Act 2008, the Tribunal also has a general civil jurisdiction, including jurisdiction to hear contract and debt recovery claims of up to $25,000.00. The Tribunal can refer matters between its jurisdictions, and the simplest and most cost-effective means of dealing with this dispute would be to transfer it to the civil jurisdiction, if I can do so. At the very least, this would ensure that lengthy evidence does not need to be heard again.

34.      The difficulty, however, is that Tribunal does not have any jurisdiction in relation to a matter that falls under the Leases (Commercial and Retail) Act 2001 (the Commercial Leases Act). Under Part 14, section 144 of the Commercial Leases Act the Magistrates Court has exclusive jurisdiction to deal with ‘commercial leases’ as defined in that Act, including, it would appear, exclusive jurisdiction in relation to the recovery of unpaid rent. Consequently, if this matter involves unpaid rent under a “commercial lease,” the Tribunal could not hear and determined the matter. The claims for set off would also fall outside the Tribunal’s jurisdiction.

35. I raised the possibility of this matter falling within the scope of the Commercial Leases Act with both parties at the resumed hearing, but neither were in a position to make comprehensive submissions.

36. Section 7 of the Commercial Leases Act defines “commercial” as follows:

7 When are premises commercial or retail premises?

(1)   Premises under a lease or proposed lease are commercial premises if—

(a)     the permitted use of the premises under the lease or proposed lease is for commercial business; or

(b)      if there is nothing in the lease about the use the premises are to be put to—a commercial business may be carried on the premises under the territory lease for land that includes the premises.

…

(3)   In this section:

commercial business means a business not involving—

(a)     the sale or hire of goods by retail; or

(b)     the supply of services by retail.

37. There is no definition of “commercial” or “business” in the Commercial Leases Act, so it is appropriate to turn to the ordinary meaning of both words.

38.         The Macquarie Dictionary defines “commercial” to mean:

adjective 1.  of, or of the nature of, commerce.

2.  engaged in commerce.

3.  capable of returning a profit: a commercial project.

39.         “Commerce” means:

noun 1.  interchange of goods or commodities, especially on a large scale between different countries (foreign commerce) or between different parts of the same country (domestic commerce or internal commerce); trade; business.

40.         Turning to the term “business”, this is defined to mean:

noun 1.  one's occupation, profession, or trade.

2. Economics the sale of goods and services for the purpose of making a profit.

41. There is no suggestion, on the evidence before me, that the respondent is engaged in any activity designed to make a profit. It is, however, providing services, in the form of passports and assistance that may be of a quasi-commercial nature. It also seems arguable that the conduct of the ‘occupation’ of ambassador or a member of a diplomatic service may meet the definition of a ‘business’, although there is an open question as to whether it is commercial in nature. If so, then this lease may be covered by the Commercial Leases Act.

42. I could find no decided case about whether embassies fall under the Commercial Leases Act. The question of whether embassies are ‘commercial’ was touched on in Errington & Anor v ACT Planning and Land Authority [2019] ACAT 47, but was not decided.

43.      Ultimately, I do not have sufficient evidence or information to reach a conclusive position on how to characterise the lease. I am satisfied that the agreement is not a residential tenancy agreement or an occupancy agreement, and what else it may be characterised, whether a commercial lease, a licence, or something else, is beyond the scope of this application. 

44. In any case, the application has been brought under the RT Act, the relief sought is available under that Act, and the response and set-off reflect the RT Act. In order to proceed to hear the matter in the Tribunal’s civil jurisdiction, both parties would need to make significant amendments to their documentation. Allowing such amendments is unlikely to save any significant time when compared with re-commencing proceedings in the civil jurisdiction.

45.      Accordingly, I am not satisfied that I have the power to transfer these proceedings to the civil jurisdiction, and I would decline to do so in any case.

Conclusion

46.      The Tribunal is satisfied that it does not have jurisdiction to hear the application in its residential tenancy jurisdiction.  Accordingly, the application is dismissed.

………………………………..

Senior Member H Robinson

HEARING DETAILS

FILE NUMBER:

RT 10/2019

PARTIES, APPLICANT:

Jose Rosa

Isilda Rosa

PARTIES, RESPONDENT:

The Bolivarian Republic of Venezuela

COUNSEL APPEARING, APPLICANT

N/A

COUNSEL APPEARING, RESPONDENT

James Macken

SOLICITORS FOR APPLICANT

N/A

SOLICITORS FOR RESPONDENT

N/A

TRIBUNAL MEMBERS:

Senior Member H Robinson

DATES OF HEARING:

5 August 2019