Rosa v The Bolivarian Republic of Venezuela (No. 2)

[2020] ACAT 17

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

ROSA & ANOR v THE BOLIVARIAN REPUBLIC OF VENEZUELA (No. 2) (Civil Dispute) [2020] ACAT 17

XD 127/2020

Catchwords:               CIVIL DISPUTE – jurisdictional issue raised by the Tribunal – claim for unpaid rent under a lease of residential premises used for the purposes of a chancellery – lease purporting to be a residential tenancy agreement – whether the lease was a lease of premises to which section 12 of the Leases (Commercial and Retail) Act 2008 applies – whether the Magistrates Court has exclusive jurisdiction in the matter – held not to be a lease of premises to which the Leases (Commercial and Retail) Act 2008 applies – Tribunal has jurisdiction to determine the application – turns on its own facts

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

Leases (Commercial and Retail) Act 2001 ss 7, 12, 17, 114

Residential Tenancies Act 1997

Subordinate
Legislation cited:        Leases (Commercial and Retail) Regulation 2002 s 3

Cases cited:Rosa & Anor v The Bolivarian Republic of Venezuela [2019] ACAT 123

Tribunal:  Senior Member M Orlov

Date of Orders:  13 March 2020

Date of Reasons for Decision:         13 March 2020

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 127/2020

BETWEEN:

JOSE ROSA

ISILDA ROSA

Applicants

AND:

THE BOLIVARIAN REPUBLIC OF VENEZUELA

Respondent

TRIBUNAL:     Senior Member M Orlov

DATE:13 March 2020

ORDER

The Tribunal orders that:

1.The applicants are to serve the application on the respondent in accordance with the Foreign States Immunity Act 1985.

………………………………..

Senior Member M Orlov

REASONS FOR DECISION

The issue for determination

1.The Tribunal has identified a jurisdictional issue that should be resolved before the present application is served on the respondent. The issue is whether the matter raised by the present application involves, in substance if not in form, a dispute about a matter in which the Magistrates Court has exclusive jurisdiction pursuant to sections 12, 17 and 114(1) of the Leases (Commercial and Retail) Act 2001 (Leases Act). If it does, the Tribunal does not have jurisdiction to determine the application and the application should be dismissed without requiring the respondent to deal with it.

2.For the reasons that follow I am satisfied that the matter raised by the present application is not a matter that arises under the Leases Act and that the Tribunal has jurisdiction to determine the application.

3.Accordingly, I direct that the application be served on the respondent.

Background to the present application

4.The applicants, Mr and Mrs Rosa, jointly own a residential property known as 7 Culgoa Circuit in O’Malley in the Australian Capital Territory. The property was rented for many years to the respondent, the Bolivarian Republic of Venezuela. It was used initially both as a diplomatic residence and chancellery. Later it was used exclusively as a chancellery. Since the inception of the arrangement, the parties customarily entered into fixed term agreements purporting to be residential tenancy agreements made under the Residential Tenancies Act 1997 (RT Act). The last fixed term agreement expired on 31 December 2016 after which the arrangement continued as a periodic tenancy from month to month. The respondent fell into arrears and the applicants ultimately terminated the agreement, took possession of the property and brought application RT 10/2018 in the residential tenancy jurisdiction of the Tribunal seeking recovery of unpaid rent.

5.However, in Rosa & Anor v The Bolivarian Republic of Venezuela [2019] ACAT 123 (Rosa No 1), the Tribunal determined that it did not have jurisdiction to hear the application under the RT Act because the property was not being used as a home or residence but rather, for many years and with the knowledge of the applicants, had been used exclusively as a chancellery.[1] As the Tribunal has a general civil jurisdiction under section 16 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act), including to determine contract or debt recovery claims of up to $25,000, the Tribunal then turned to consider whether it could or should transfer the matter to its civil jurisdiction, rather than require the applicants to start again.[2] The Tribunal considered the critical issue to be whether the application involved a matter under the Leases Act – specifically, whether the application involved a claim for unpaid rent under a ‘commercial lease’. The Tribunal raised the issue with the parties, but neither was in a position to make comprehensive submissions.[3] Ultimately the Tribunal considered that there was insufficient evidence or information to reach a conclusion as to the proper characterisation of the nature of the lease. As the Tribunal was satisfied that it did not have jurisdiction under the RT Act, but was not satisfied that the Tribunal had power to transfer the proceeding to the civil jurisdiction, or that it should do so as a matter of discretion, the Tribunal dismissed the application.

[1] [2019] ACAT 123 at [29]-[31]

[2] at [32]-[33]

[3] at [34]-[35]

6.The applicants now seek to pursue their claim for unpaid rent in respect to the Culgoa Circuit property by this application filed in the civil jurisdiction of the Tribunal.

7.The question that must be resolved before the present application can proceed is whether the claim for unpaid rent is, in substance although not in form, an application under the Leases Act, in respect of which the Magistrates Court has exclusive jurisdiction.

8.At an initial direction hearing at which only the applicants were present, the applicants agreed to provide the Tribunal with a copy of the territory lease for the property and indicated that they were content for the Tribunal to decide the matter on the papers.

Relevant provisions of the Leases Act

9.Section 12(1) of the Lease Act provides that the Act applies to a ‘lease’ of premises of the kinds mentioned in subsection (1)(a) to (k), namely:

(a)     retail premises other than large excluded premises;

(b)     premises located in the retail area of a shopping centre other than large excluded premises;

(c)     small commercial premises;

(d) premises under a lease to an association incorporated under the Associations Incorporation Act 1991, or an entity eligible to be incorporated under that Act, other than premises used for residential purposes;

(e)     premises under a lease to an unincorporated charitable entity, other than premises used for residential purposes;

(f)      premises under a lease that are used to provide a combination of business accommodation and secretarial services;

(g)     premises under a lease that are used as a child care centre;

(h)     premises under a lease that are used as a sports centre (other than premises covered by another paragraph);

(i)      premises under a lease that are used as an art gallery;

(j)      premises under a lease that are used as a gardening supply centre;

(k)     premises prescribed by regulation for this subsection.  

10.The Dictionary to the Leases Act defines ‘premises’ for a lease, as the premises covered by the lease.

11.‘Lease’ is defined in section 12(5) to include:

(a)     an agreement, whether in writing or not, that provides for the occupation of premises exclusively or otherwise, whether for a fixed term, periodically or at will; and

(b)     a sublease or licence.

12.Section 12(6) contains certain exceptions, none of which are relevant here.

Consideration

13.The periodic tenancy agreement that applied to the Culgoa Circuit property from 1 January 2017 meets the description of a ‘lease’ in section 12(5).[4] For consistency with the terminology used in the Leases Act, I will refer to the agreement as the ‘lease’ of the Culgoa Circuit property.

[4] Undated residential tenancy agreement giving exclusive possession of premises identified as Block 16 Section 15 O’Malley ACT and known as 7 Culgoa Circuit, O’Malley for a 12 Month term, commencing on 1 January 2016 and ending on 31 December 2016 and thereafter month to month.

14.The critical issue, therefore, is whether the “premises” the subject of the lease to the respondents meets the description of at least one of the kinds of premises mentioned in section 12(1)(a) to (k). If it does not, the Leases Act does not apply to the lease.

15.Subsections (1)(a), (b), (d), (e) and (g) to (j) of the Leases Act clearly do not apply. Reference to the Leases (Commercial and Retail) Regulation 2002 (Regulations) confirms that s 12(1)(k) also does not apply.[5] Section 12(1)(f) – namely, “premises under a lease that are used to provide a combination of business accommodation and secretarial services” – in my view refers to premises that are used as ‘serviced offices’ or provide like services. That is not the case here.

[5] Regulation 3 prescribes premises under a lease used as a service station or related purposes

16.The remaining possibility is ‘small commercial premises’ in section 12(1)(c).

17.The Dictionary in the Leases Act defines ‘small commercial premises’ to mean “commercial premises” with a lettable area of no more than 300m2. Section 7(1) provides that:

(1)     premises under a lease…are commercial premises if –

(a)the permitted use of the premises under the 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.

18.‘Commercial business’ is defined in section 7(3) to mean a business not involving the sale or hire of goods by retail or the supply of services by retail.

19.Was the lease of the Culgoa Circuit property a lease of ‘small commercial premises’? In my view it was not for the following reasons.

20.First, the ‘premises’ covered by the lease – initially under the fixed term agreement and subsequently under the periodic agreement that commenced on 1 January 2017 – comprised the whole of the land in Block 16 Section 15 O’Malley and everything erected on the land. If it was necessary to calculate the lettable area of the ‘premises’ under the lease, it would be necessary to do so by reference to the size of the block of land and not the useable floor space of the building or buildings erected on the land. Although there is no direct evidence about this, it is obvious simply from looking at the images of the property viewable on Google Earth that the block of land is very large and that constructed on it is a large L-shaped two-storey building that does not occupy all of the available land. Even in today’s real estate market a 300m2 block of land would be considered small. On no view could the property at 7 Culgoa Circuit be considered a small block of land. The area of the land in question, i.e. the lettable area of the ‘premises’, according to the ACT Government ACTmapi website[6] is 1915m².

[6]

21.Second, the permitted use of the premises under the lease was for residential purposes only. Clause 51 of the residential tenancy agreement provided a guarantee by the applicants “that there is no legal impediment to the use of the premises for residential purposes by the tenant”. Clause 69 provided that “unless otherwise agreed in writing, the tenant must only use the premises for residential purposes”. Although the fact that the premises were being used for the purpose of a chancellery was known to the applicants, there is no evidence that they agreed in writing for the premises to be used for that purpose. Further, as the permitted use under the territory lease was and remains for residential purposes only,[7] even if there had been such an agreement in writing, in my view the agreement would not have been effective to alter the lawfully permitted use of the premises in the absence of an amendment to the permitted use under the territory lease.

[7] Clause 1(f) of the territory lease granted on 29 July 1981

22.It follows that, for either or both of the abovementioned reasons, the premises covered by the lease to the respondent were not ‘small commercial premises’. That conclusion makes it unnecessary for me to decide whether the term ‘commercial business’ is apt to describe the ‘business’ of a chancellery. I express no view on that issue.

23.It follows also that the periodic tenancy agreement between the applicant and the respondent is not a lease to which the Leases Act applies.

24.Accordingly, the Tribunal has jurisdiction to determine the application.

…………………………

Senior Member M Orlov

HEARING DETAILS

FILE NUMBER:	XD 127/2020
PARTIES, APPLICANT:	Isilda Rosa and Jose Rosa
PARTIES, RESPONDENT:	The Bolivarian Republic of Venezuela
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member M Orlov
DATES OF HEARING:	12 February 2020