Shankar v Carter

[2025] NSWCATCD 5

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Shankar v Carter [2025] NSWCATCD 5

Hearing dates:

22 January 2025

Date of orders:

30 January 2025

Decision date:

30 January 2025

Jurisdiction:

Consumer and Commercial Division

Before:

P Gardner, General Member

Decision:

(1)      Peter Mitchell, Cheryl Beaumont and Sneh Lata Parkas are removed as respondents to the proceedings. They remain listed as interested parties.

(2)      The applicants' request for an adjournment is refused.

(3)      The application is dismissed for the reasons which accompany these orders.

(4)      The Registry is directed to serve a copy of these orders on the interested parties by email, to the email address set out on file.

(5)      Any application for costs by the respondent and/or the trustees is to be filed with the Registry and served on the applicant by email within 14 days of these orders.

(6)      Any reply by the applicant to an application for costs is to be filed with the Registry and served on the party making the costs application by email within 28 days of these orders.

(7)      The Tribunal is considering dispensing with a hearing and determine any application for costs on the basis of the written submissions and evidence provided.

(8)       Any costs application or reply to a costs application must:

(a)  Include all evidence and submissions (not exceeding 5 pages) in support of or in reply to the costs application; and

(b)  Set out objections, if any, to the determination of any costs application on the papers.

Catchwords:

PRACTICE AND PROCEDURE – Property subject to court ordered trust – Property vests in trustees – Landlord has no standing to commence proceedings

LEASES AND TENANCIES – Residential Tenancies Act 2010 (NSW) – Claim for post-tenancy charges

Legislation Cited:

Conveyancing Act 1919 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Residential Tenancies Act 2010 (NSW)

Residential Tenancies Regulation 2019 (NSW)

Cases Cited:

Ghazal v Masterton Homes Pty Ltd [2018] NSWCATAP 227

Okazaki v Dickerson [2019] NSWCATCD 64

Singh v Lekhwar [2022] NSWCATAP 158

Tip Fast Pty Ltd v Alexandria Landfill Pty Ltd [2002] NSWSC 299

Texts Cited:

Halsbury, Laws of Australia

Category:

Principal judgment

Parties:

Nand Shankar (First Applicant)
Kiran Shankar (Second Applicant)
Simon Carter (Respondent)

Representation:

Solicitors:
Self-represented (Applicants)
J Plumidis (Respondent)

File Number(s):

2024/00196058

Publication restriction:

Nil

Reasons for Decision

Introduction

1. This is a claim by a landlord for compensation in connection with post-tenancy charges, however the respondent has sought to have the application dismissed on the basis that the applicant lacks standing to commence or maintain the proceedings.

2. At conclusion of the hearing, I advised the parties that I was satisfied that the applicants lacked standing to commence and maintain these proceedings and would accordingly dismiss the application. These are the reasons for that decision.

Background

3. Mr Nand Shankar, Ms Kiran Shankar and Ms Sneh Lata Parkas (together, the Landlords) leased a premises in Blacktown (Premises) to tenants including the respondent, Mr Carter, through a written residential tenancy agreement entered into on 07-Aug-2020. In Apr-2024, Mr Carter gave vacant possession.

4. There are ongoing proceedings in the Supreme Court of NSW between the Landlords in relation to the Premises. Following an application by Ms Parkas, on 30-Oct-2023 in file number 2022/00386262, the Court made orders (NSWSC Orders) pursuant to s 66G of the Conveyancing Act 1919 (NSW) (Conveyancing Act). Those orders relevantly:

1. Appoint Mr Mitchell and Ms Beaumont as trustees for the Premises;

2. Vest the Premises in the trustees; and

3. Authorise the trustees to sell the Premises.

5. This tenancy is also the subject of related proceedings which have already been determined by the Tribunal. Including on 26-Nov-2024, in 2024/00106279, a differently constituted Tribunal made orders after hearing an application made by Mr Carter (Previous Tribunal Orders). Those orders provide that the Landlords were to pay Mr Carter $4056 immediately on publication of the orders. I note that Mr Carter did not have the benefit of legal advice or representation in connection with those earlier proceedings. Neither party appears to have raised the NSWSC Orders in the earlier Tribunal proceedings though it seems that the Landlords were on notice of the NSWSC Orders at the relevant time.

6. On 27-May-2024, the Mr Shankar commenced these proceedings by application to the Tribunal, without naming either of Ms Shankar or Ms Parkas as parties. Mr Shankar sought orders pursuant to s 187(1)(d) of the Residential Tenancies Act 2010 (NSW) (RT Act) for compensation of approximately $31,000 which is comprised of rent arrears and claims for damages said to arise from the Tenant’s breach of s 51(3) of the RT Act. As recorded in directions made on 18-Jun-2024, Mr Shankar has been put on notice that this amount exceeds the monetary limit of orders the Tribunal can make (see: s 187(4) of the RT Act and Cl 40 of the Residential Tenancies Regulation 2019 (NSW)). He has not made any application to have the proceedings transferred to another forum.

7. On 26-Aug-2024, Mr Carter lodged an application for miscellaneous matters (Interlocutory Application). During the hearing on 22-Jan-2025, Mr Plumidis confirmed that Mr Carter sought:

1. That the substantive application be dismissed for lack of standing/jurisdiction; and

2. An order for costs of the proceedings.

8. Mr Carter’s application, as it relates to orders for contempt and for compensation was withdrawn. I put the parties on notice that the Tribunal may lack power to grant the declaratory relief sought by Mr Carter. This issue was not raised further during the proceedings.

Procedural History

9. On 18-Jun-2024, this application was listed for conciliation and hearing in a group list. The parties were not able to reach an agreement and the Tribunal made directions for filing and service of evidence.

10. On 04-Sep-2024, the application was listed for a hearing, and the Tribunal made directions including:

1. Joining Ms Shankar, Ms Parkas, Mr Mitchell and Ms Beaumont as parties to the proceedings;

2. Requesting written submissions from the parties including on issues relating to continuation of the proceedings, transfer of the proceedings to another forum and, in the case of the applicant, whether he wishes to withdraw the proceedings.

11. On 05-Sep-2024 and 28-Nov-2024, Mr Carter and the trustees (respectively) provided written submissions.

12. The Landlords have not provided any written submissions in accordance with the 04-Sep-2024 directions.

Parties to the Proceedings

13. The 04-Sep-2024 the Tribunal joined Ms Shankar, Ms Parkas, Mr Mitchell and Ms Beaumont as respondents in the proceedings. Ms Shankar has confirmed that she consents to being joined as an applicant in the proceedings. Mr Mitchell and Ms Beaumont are clearly not intended to be joined in their personal capacity but in their capacity as trustees for the Premises.

14. At the hearing and after making submissions in respect of the Interlocutory Application, Mr Mitchell gave evidence that he had conferred with Ms Parkas’ legal representative and requested that each of Ms Beaumont, Ms Parkas and himself be removed as respondents.

15. The applicants have not sought any orders against any of Ms Parkas, Mr Mitchell or Ms Beaumont and, noting Mr Mitchell’s submissions and in the absence of compelling evidence to the contrary from the applicants:

1. I am not satisfied that Ms Parkas consents to the proceedings being brought/maintained; and

2. It’s clear that the trustees do not wish to incur the time, cost and expense of participating in or continuing the proceedings.

16. Accordingly, I consider it is appropriate to make orders pursuant to s 44 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) removing Mr Mitchell, Ms Beaumont and Ms Parkas as parties to the proceedings. I will direct that they remain listed as interested parties so that they receive a copy of these orders.

Hearing

17. On 22-Jan-2025, the application was listed for a further hearing. At this hearing, Mr and Ms Shankar appeared in person as did Mr Carter. Mr Carter’s legal representative, Mr Plumidis, appeared by AVL (having been granted leave both to represent Mr Carter and to appear by AVL on a prior occasion). Mr Mitchell appeared briefly at commencement of the proceedings to provide helpful submissions and to confirm the trustees’ position, which is summarised below. After I confirmed that I would grant Mr Mitchell’s request for the trustees and Ms Parkas to be removed as parties, I excused him from further participation in the proceedings.

18. All present were invited to provide submissions in relation to the Interlocutory Application. Where relevant, those submissions are summarised below.

Position of the Parties (and Interested Parties)

Mr Carter

19. As set out in submissions provided prior to the hearing on 04-Sep-2024, Mr Carter argues that Order 2(e) of the NSWSC Orders operates such that, on the making of those orders, the Premises vests in the trustees and by operation of s 117 of the Conveyancing Act, the trustees alone are entitled to exercise all rights in respect of the reversionary estate including the right to sue Mr Carter for an alleged breach of the residential tenancy agreement.

Trustees

20. Mr Mitchell put the position of the trustees in the following terms:

1. The trustees consider they are not properly party to the proceedings;

2. The trustees have had difficulty proceeding with the sale, which was yet to occur at the time of the hearing, and have had to bring a notice of motion to the courts to have Mr Shankar comply with his obligations pursuant to the NSWSC Orders;

3. Mr Shankar has been ordered to pay costs in respect of the trustees’ notice of motion;

4. Despite the NSWSC Orders, Mr Shankar has let the Premises to a third party who was, until recently, unaware of the prospective sale;

5. The trustees concur with the respondent’s submissions that the applicants lack standing to have commenced or maintain the proceedings on the basis that the NSWSC Orders vest the property in the trustees; and

6. The trustees have no interest in or intention to maintain these proceedings.

Ms Parkas

21. Ms Parkas position is not entirely clear though, on the basis of Mr Mitchell’s submissions made during the hearing, I accept that she does not wish to be named as party to these proceedings. No evidence has been provided to the contrary. In any event, nothing turns on Ms Parkas’ position.

Mr and Ms Shankar

22. Mr and Ms Shankar argued that:

1. The NSWSC Orders were not binding on them or did not have effect until after they received some form of formal notice or communication from the trustees, something which occurred after commencement of these proceedings in Aug-2024;

2. If they had not brought these proceedings, they may be sued by Ms Parkas;

3. If they cannot be sued as landlords, who could tenants bring claims against;

4. Dismissing the proceedings would be inconsistent with the Previous Tribunal Orders;

5. The NSWSC Orders may be varied in the future, including to remove the trustees; and

6. The trustees have an obligation to conduct these proceedings.

Adjournment Request

23. After hearing submissions from Mr Mitchell and on behalf of Mr Carter, Mr Shankar requested that the hearing be adjourned in order to allow him a further opportunity to seek legal advice. During the hearing, I indicated that this request was refused. These are the reasons for refusing Mr Shankar’s request.

24. Requests for adjournments are at the discretion of the Tribunal (see: s 51 of the NCAT Act) but should be considered on the basis of the published guideline, as well as the Tribunal’s guiding principle under s 36 of the NCAT Act. The Appeal Panel has considered the applicable principles in Ghazal v Masterton Homes Pty Ltd [2018] NSWCATAP 227 at [54] which are:

1. matters should almost always proceed on the date fixed for hearing, including for reasons of minimising the delay and cost of the proceedings and the impact of an adjournment on other litigants and the Tribunal;

2. an application for an adjournment should be seen as the exception rather than the ordinary course;

3. where the adjournment is caused, at least in part, by the delay of the party seeking the adjournment, or non-compliance by that party with an extant order of the Tribunal, adequate explanation is called for, and its absence weighs heavily, and sometimes decisively, against the grant of the adjournment; and

4. the effect of any adjournment on the opposing party must be considered.

25. Applying those principles here, the applicants have been on notice of the Interlocutory Application since Aug-2024. The relevant legal issues were discussed at length during the hearing on 04-Sep-2024 and the argument put by Mr Carter is materially unchanged.

26. Mr Shankar has not given any reasonable explanation as to why he did not seek legal advice at an earlier time, nor why the request for an adjournment was not raised prior to the hearing. The proceedings have already run for a significant length of time and in my view an additional delay is likely to cause some prejudice to Mr Carter, who has incurred costs in engaging legal counsel on a number of occasions. In my view, the applicants have also failed to comply with the 04-Sep-2024 directions. I consider that these considerations weigh against the granting of Mr Shankar’s request for an adjournment. His request for an adjournment is refused.

Relevant Law

27. Section 117 of the Conveyancing Act relevantly provides:

(1)  Rent reserved by a lease and the benefit of every covenant or provision therein contained having reference to the subject-matter thereof and on the lessee’s part to be observed or performed, and every condition of re-entry and other condition therein contained shall be annexed and incident to, and shall go with the reversionary estate in the land or in any part thereof immediately expectant on the term granted by the lease, notwithstanding severance of that reversionary estate, and shall be capable of being recovered, received, enforced, and taken advantage of by the person from time to time entitled, subject to the term, to the income of the whole or any part as the case may require of the land leased.

This subsection extends to a covenant to do some act relating to the land, notwithstanding that the subject-matter may not be in existence when the covenant is made.

28. This provision has been given some consideration by Young CJ in Eq in Tip Fast Pty Ltd v Alexandria Landfill Pty Ltd [2002] NSWSC 299 at [29] in which His Honour holds:

“... It now seems accepted by the courts that the operation of s 117 of the Conveyancing Act is to bar any action on the part of the former owner, the City Council and the assignor of the reversion, to sue for rent and to effect a statutory vesting of that action in the assignees of the reversion: see Re King [1963] Ch 459 per Upjohn and Diplock LJJ (Lord Denning strongly dissenting). The real dispute in the judgments is how far the 1881 and subsequent amendments vary the policy of the original statute of 1540: see also London and County (A & D) Ltd v Alfred Sportsman Ltd [1970] 2 All ER 600 ; [1971] Ch 764 and Ashmore Developments Pty Ltd v Eaton [1992] 2 Qd R 1 . Although that last mentioned case is a decision of an interstate full court which would normally be followed in this state, there is no decision in this State on the point. Lord Denning’s historical analysis in Re King makes compelling reading. He notes that s 117 originated from the problem caused by the dissolution of the monasteries whereby it was necessary to vest in the lords who had taken the monks’ property, the rights to sue the tenants.”

29. In a different context, the appointment of a trustee in bankruptcy, similar principles have been explored in Singh v Lekhwar [2022] NSWCATAP 158, in which the Appeal Panel records at [13] in respect of earlier directions:

“... It appears to be well-established that upon becoming a bankrupt a tenant’s interest in the property the subject of the tenancy vests in the trustee in bankruptcy and that, as a consequence, the tenant has no interest in proceedings brought against him for termination of the tenancy and possession of the property and has no standing to be heard in defence of such proceedings or to bring an appeal from orders about these matters; s 58 (1) (a) of the Bankruptcy Act 1966 (Cth); Nathan Elali (a bankrupt) v Mahrs and Anor [2013] NSWSC 1883 at [27]; National Australia Bank Ltd v Strik [2009] NSWSC 184 at [9]; Kostov v Amelie Housing (NCAT Appeal) [2019] NSWSC 16 at [7]-[14]; Integrated Securities No 3 Pty Ltd v Oceans 5 Ultimate Getaways Pty Ltd [2021] NSWSC 278 at [7]; see also Tadrosse v Ndaira [2015] NSWCATAP 84 at [10]-[13] and the reference to the decision of the High Court in Cummings v Claremont Petroleum NL (1996) 185 CLR 124 at 135-138 and Singh v Secretary, Department of Communities and Justice [2022] NSWSC 78 concerning the ability of a bankrupt to bring an appeal.”

30. The operation of s 117 of the Conveyancing Act is also explained by Member French in Okazaki v Dickerson [2019] NSWCATCD 64 at [13]:

“… [Section 117]… provides that all rights and obligations of the person holding the reversionary interest in the premises under the lease (being the landlord) pass to any successor in title (being the new owner). The current landlord is therefore able to assert the previous owners’ rights against the tenants because those rights passed to her upon her purchase of the premises.”

Consideration and Findings

31. Order 2 of the NSWSC Orders vests the Premises in the trustees. The effect of those orders is that the trustees hold legal rights to the Premises, but the Landlords retain a beneficial interest (see: Halsbury’s Laws of Australia at [430-1]). The purpose of the vesting order is to facilitate the trustees performing the functions conferred on them by the same orders (see: Halsbury’s Laws of Australia at [430-3500]).

32. I accept Mr Carter’s submissions that, on the making of the NSWSC Orders and by operation of s 117 of the Conveyancing Act, the applicants no longer had a legal right to commence proceedings against Mr Carter for a breach of the residential tenancy agreement. In my view, this is entirely consistent with the principles set out in Tip Fast Pty Ltd v Alexandria Landfill Pty Ltd. There is nothing in the text of s 117 which in my view requires a distinction to be drawn in a change in legal ownership as a result of a conveyance and a change in ownership as a result of the appointment of a trustee. Since making of the NSWSC Orders, the applicants have a beneficial interest in the Premises but not the requisite legal interest that is necessary to commence and maintain these proceedings.

33. While in a different context, I also consider that this is consistent with the principles set out in Singh v Lekhwar in relation to the rights and entitlements of a trustee in bankruptcy.

34. In reaching this conclusion, I have considered the arguments and submissions made by the applicants, but I do not accept those submissions. Mr Shankar’s approach to providing submissions was not entirely helpful, on occasion he would put hypothetical questions to the Tribunal. In respect of the arguments made by the applicants which I have been able to clearly identify and adopting the same numbering as at [22], I do not accept the applicants’ arguments that:

1. the NSWSC Orders were not binding on them until they received some form of notice or demand from the trustees. There is nothing in the orders which suggests their operation is to be suspended or deferred. If I were to accept this was the case, I am not persuaded that this argument has any utility for the applicants, who accept that they had some manner of formal communications with the trustees in around Aug-2024, and that they handed over keys to the property in around Dec-2024.

1. They risked being sued by Ms Parkas if they failed to commence these proceedings. No compelling basis for this argument has been advanced and, in any event, the applicants have never sought to enforce any right on behalf of Ms Parkas. They have not provided any evidence about her consent to the proceedings or wish for the proceedings to continue. The risk referred to is speculative.

2. As with (2), this is an entirely speculative risk and has no bearing on either the applicants’ standing to bring the proceedings or the respondent’s capacity to argue that same issue. To the extent that tenants had been on notice of the change in legal entitlement to deal with the property, tenants would be able to bring proceedings against the trustees, in their capacity as trustees of the property for the Landlords.

3. The Previous Tribunal Orders are not a matter for the presently constituted Tribunal. Each case turns on the facts and evidence that the parties put before the Tribunal. A different outcome may ensue if the parties do not bring to the attention of the Tribunal previous orders, in particular made by a superior court.

4. The NSWSC Orders are not interim orders or temporary in nature. They provide for a clear, final course of action in respect of the Premises. There is nothing before me which suggests that the applicants have appealed those orders, or have sought to have them set aside. On the basis of the evidence given by Mr Mitchell, the sale of the Premises is progressing. The NSWSC Orders are binding and, in the circumstances, I consider it inconsistent with s 36 of the NCAT Act to allow the applicants to indefinitely maintain the current proceedings on the basis of a mere possibility that the Supreme Court of NSW may make further, materially different orders in a dispute between the Landlords.

5. Nothing in the NSWSC Orders or any other principle of law advanced by the applicants during the hearing persuades me that the trustees have an obligation (as distinct from a right) to commence or maintain these or similar proceedings against Mr Carter. Further, it is sufficiently clear that the trustees have no desire to maintain the proceedings or commence separate proceedings against Mr Carter.

35. For the above reasons, the substantive application is dismissed. I will make directions in respect of any application for costs.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 19 May 2025