Swan v Uecker
[2016] VSC 313
•10 June 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2016 01460
| CATHERINE SWAN | Applicant |
| v | |
| BARBARA UECKER | First Respondent |
| and | |
| MICHAEL GREAVES | Second Respondent |
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JUDGE: | CROFT J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 2 June 2016 |
DATE OF JUDGMENT: | 10 June 2016 |
CASE MAY BE CITED AS: | Swan v Uecker |
MEDIUM NEUTRAL CITATION: | [2016] VSC 313 |
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LANDLORD AND TENANT — Residential tenancies — Whether tenant assigned or sublet or purported to assign or sublet without the landlord’s consent by allowing “AirBnB guests” to stay in the premises — Residential Tenancies Act 1997, ss 244, 253, 263, 288, 314, 317ZF, 317ZG and 319.
LANDLORD AND TENANT – Lease or licence – Test – Right to exclusive possession – Matters relevant to test – Whether ability to make person leave after expiry of agreed period of stay is relevant – Whether principal place of residence is relevant – Whether exclusive possession granted – Lewis v Bell (1985) 1 NSWLR 731; Radaich v Smith (1959) 101 CLR 209; Street v Mountford [1985] 1 AC 809 discussed.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr J. Pizer QC with Ms K. Evans | Bleyer Lawyers Pty Ltd |
| For the Respondents | Mr W. Smith | Tenants Union Victoria Pty Ltd |
HIS HONOUR:
Introduction
This proceeding has been brought pursuant to s 148(1) of the Victorian Civil and Administrative Tribunal Act 1998 (“the VCAT Act”). The Applicant, Catherine Swan, is seeking to appeal from an order of the Victorian Civil and Administrative Tribunal (“the Tribunal” or “VCAT”) constituted by Member Campana made on 24 March 2016 in proceeding number R2016/4286.[1]
[1]Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016).
The Applicant owns a two bedroom apartment in Fitzroy Street, St Kilda (“the Apartment”). In August 2015, she leased the Apartment to the Respondents pursuant to a residential tenancy agreement for a term from 20 August 2015 to 19 August 2016 (“the Lease”). The Applicant sought an order for possession in VCAT on the basis that the Respondents had sublet the Apartment in breach of the provisions of the Lease.[2] The Applicant’s case was that the Respondents granted leases to third parties (“AirBnB guests”) who stayed in the Apartment. The Respondents conceded before the Tribunal that AirBnB guests stayed at the apartment for short term stays, booked through the AirBnB website.
[2]The Additional Terms of the Lease—a Residential Tenancy Agreement—provide:
VCAT dismissed the application on the basis that the Respondents had granted licences only to the AirBnB guests, but not leases. Consequently, the Tribunal found that they had not sublet the Apartment.
Broadly speaking, the substance of the legal issues before VCAT was the nature of the occupancy by the AirBnB guests and the consequences, if any, under the terms of the Lease.
In the interests of expedition and economy in terms of time and cost, this proceeding was heard as a combined or “rolled up” application for leave to appeal the Tribunal decision and, if leave were to be granted, the hearing of the appeal itself.
Principles applicable with respect to appeals
Section 148(1) of the VCAT Act provides:
A party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding—
(a)if the Tribunal was constituted for the purpose of making the order by the President or a Vice President, whether with or without others, to the Court of Appeal with leave of the Court of Appeal; or
(b)in any other case, to the Trial Division of the Supreme Court with leave of the Trial Division.
It follows from this provision that any appeal is dependent upon two important qualifications. First, that the appeal be on a question of law, and secondly, that the Court gives leave to appeal. The legislative policy underlying these provisions is that “VCAT decisions should not generally be disturbed where cases have been decided in that forum other than on questions of law and where there is something about the decision bearing upon the question of law which warrants a grant of leave to appeal.”[3] It follows that “[t]his Court is not entitled to enter into the fact finding exercise which the legislature has deliberately entrusted to a specialist tribunal.”[4]
[3]Commissioner of State Revenue v Frost (2011) 83 ATR 832 at 834 [5] citing Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335–6 and Myers v Medical Practitioners Board (Vic) (2007) 18 VR 48 at 55 [28].
[4]Boucher v Dandenong Ranges Steiner School Inc (2005) 145 LGERA 21, [15] citing Spurling v Development Underwriting (Vic) Pty Ltd [1973] VR 1 and Whitehorse City Council v Golden Ridge Investments Pty Ltd [2005] VSCA 198.
The leave requirement under s 148(1) of the VCAT Act is designed to maintain this position. As Pagone J said in Commissioner of State Revenue v Frost:[5]
The requirement for leave under s 148(1) of the VCAT Act “is a safeguard that the appeal is on a pure question of law and that the grounds supporting the question of law articulated for determination by the Court do found the subject matter of the appeal”.[6] It also confers a discretion about whether to grant leave[7] which an applicant must persuade the Court to exercise in its favour. What must be shown will depend upon the particular case bearing in mind the statutory criteria being a grant of leave and not special leave.[8] It will ordinarily be necessary (in addition to a clearly articulated question of law)[9] for an applicant to make out a prima facie case[10] and in an appropriate case it may be necessary for the applicant to show that the question upon which leave is sought has public or general importance.[11]
[5](2011) 83 ATR 832 at 833–4 [3].
[6]Commissioner of State Revenue v STIC Australia Pty Ltd (2010) 81 ATR 682 at 687 [10].
[7]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331; Al-Hakim v Monash University (Unreported, Victorian Supreme Court of Appeal, 28 March 2003); Myers v Medical Practitioners Board (Vic) (2007) 18 VR 48.
[8]See Morris v R (1987) 163 CLR 454 at 475.
[9]Osland v Secretary to the Department of Justice [No 2] (2010) 241 CLR 320 at 333 [21].
[10]Morris v R (1987) 163 CLR 454 at 475; Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335.
[11]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335–6; Commissioner of State Revenue v Challenger Property Nominees Pty Ltd (2006) 63 ATR 65 at 69 [20], 77 [65].
In considering an application of this nature, courts have been concerned to respect the role entrusted by the legislature to the particular tribunal and not, in effect, subvert this position by seeking out error. Thus, Kirby J in Roncevich v Repatriation Commission said:[12]
[12](2005) 222 CLR 115 at 136 [64].
Courts conducting this form of review have been repeatedly enjoined by this Court to avoid overly pernickety examination of the reasons.[13] The focus of attention is on the substance of the decision and whether it has addressed the “real issue” presented by the contest between the parties.
Similarly, in Vegas Nominees Pty Ltd v Werribee Sports & Community Club Inc, Ashley J said:[14]
This Court has said more than once that it should not examine briefly stated reasons by an expert Tribunal in an over-legalistic manner or by the over-zealous drawing of inferences in order to disclose some supposed error; although where unambiguous language is used, the user should be taken to mean what the words say. I should add that the Court is not entitled to interfere with the Tribunal’s decision unless it is satisfied that there was in fact a vitiating error of law. It is not enough for the appellant to show that the Tribunal’s reasons for its decision are so expressed as to suggest the possibility that it proceeded upon a wrong view of the law. In support of the several propositions that I have just stated I refer to Portland Properties Pty Ltd v Melbourne & Metropolitan Board of Works,[15] Michaelis Bayley (Vic) Pty Ltd v Melbourne & Metropolitan Board of Works[16] and Teston Investments Pty Ltd v Melbourne & Metropolitan Board of Works.[17]
Additionally, “[o]n appeal this Court must recognise the forensic realities of the way in which the case was put to the Tribunal. It is these realities to which a Tribunal must respond in its reasons.”[18]
[13]Minister for Immigration and Ethnic Affairs v Guo (1997) 191 CLR 559 at 575, 597. Cf Minister for Immigration and Multicultural Affairs v Yusuf (2001) 206 CLR 323 at 348 [74].
[14](Unreported, Supreme Court of Victoria, Ashley J, 21 December 1994) at 13.
[15](1971) 38 LGRA 6 at 18.
[16](1980) 44 LGRA 65 at 67–8.
[17](1985) 62 LGRA 346 at 349–50.
[18]The Gombac Group Pty Ltd v Vero Insurance Ltd [2005] VSC 442, [59].
More specifically, with respect to these proceedings, the Respondents contend that leave should not be granted because the questions of law asserted are not attended by sufficient doubt to justify the granting of leave and, secondly, that the justice of the case is such that leave should be refused.[19]
[19]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 336 [13] (as to sufficient doubt attending question of law) and 335 [8] and 337 [16] (as to the justice of the case).
Reference was made, particularly, to the following passage in the judgment of Phillips JA in Secretary to the Department of Premier and Cabinet v Hulls, where his Honour said:[20]
The discretion to grant leave, which is conferred by the statute in untrammelled terms, cannot be fettered, and should not be fettered, by judicial decision. From time to time a case will arise in which any preconceived guidelines will be found not wholly sufficient. In the end, whether leave is granted or not must always depend upon the justice of the case, as it appears to the court from whom leave is sought.
Moreover, reference is made by the Respondents to the observation of Warren CJ in Metricon Homes Pty Ltd v Softley that:[21]
Subsequent cases have indicated that there will be no substantial injustice, and hence a lesser likelihood of leave to appeal being granted, where the alleged errors relied upon have been overtaken by events or where the success of the appeal would have limited practical impact.
[20][1999] 3 VR 331 at 335 [8] (Respondents’ emphasis).
[21][2016] VSCA 60, [18] (Respondents’ emphasis).
The Respondents contend that this is a case where the success of the appeal will have limited practical impact as the Applicant will suffer no substantial injustice if leave to appeal is refused. The Lease, the subject of the dispute, is a 12 month lease which ends on 20 August 2016. It appears to be common ground between the parties that the Applicant will be entitled to an order for possession by 20 August 2016 due to the expiry of the term of the Lease. On 17 and 25 May 2016, subsequent to the order of the Tribunal, the Respondents were served by the Applicant with a Notice to Vacate pursuant to s 261 of the Residential Tenancies Act 1997 (“the Act”) to recover possession at the end of the Lease term.[22] No issue has been raised in these proceeding with respect to any effect or consequences of this Notice.
[22]Affidavit of Barbara Uecker sworn 25 May 2016.
In the alternative, the Respondents raise procedural matters in relation to the disposition of the appeal, arguing, in summary, that there is no utility in pursuing this appeal in this Court, having regard to the likely time of disposition; particularly if there were to be a remitter to VCAT and having regard to the time required for any decision on the remitter by VCAT. These submissions, of course, make some assumptions in relation to the outcome of the appeal and the speed with which the Court is able to deal with this matter. For the reasons which follow, these considerations are not relevant or persuasive with respect to the leave application, as I am of the opinion that the decision of the Tribunal is attended by sufficient doubt to justify the granting of leave, and because this Court is able to, and will, dispose of the substantive matters the subject of this appeal expeditiously and cost-effectively. It also follows that the issues raised with respect to the low cost, accessible and efficient processes and independence of VCAT as a tribunal delivering high quality dispute resolution—and the other matters to which I referred in this respect in Subway Systems Australia v Ireland—will not be impinged upon.[23]
[23][2013] VSC 550, [37]–[39].
In terms of costs, it is the case, as the Respondents contend, that the Residential Tenancies List in VCAT is a list in which costs are rarely awarded.[24] As the Respondents observe, they are now in a full cost jurisdiction, with all of the pressures and worries that litigation brings and even if the appeal is decided by this Court in their favour, there is the possibility that the Applicant will appeal to the Court of Appeal. Moreover, the Respondents say that they are likely to be entitled to a limited indemnity pursuant to s 4 of the Appeals Costs Act 1998, but there can be no certainty that, in the event that the appeal succeeds, the costs they are liable to pay will not exceed the limit provided. On this basis, the Respondents submit that this Court should take these matters into account when considering granting leave to appeal in circumstances where the appeal can only have a limited practical impact.
[24]Jason Pizer, Pizer’s Annotated VCAT Act (Thomson Reuters, 5th ed, 2015) [VCAT.109.400] 660–1.
In relation to costs, the position is that the hearing of the “rolled up” leave application and, if leave were granted, the appeal, means that little difference will occur in costs as the matters to be canvassed for the purpose of determining whether questions of law are or are not attended by sufficient doubt to justify the granting of leave will involve consideration of most, if not all, matters which would, in any event, be considered in the substantive appeal. For these reasons, the matters raised by the Respondents in this respect do not weigh heavily in the scale against the grant of leave to appeal.
Finally, the Respondents raise issues with respect to the overarching purpose provided for in sub-s 7(1) of the Civil Procedure Act 2010 and the imperative in sub-s 8(1) of that Act that the Court must seek to give effect to the overarching purpose in the exercise of its powers. Critically, the overarching purpose under this legislation “is to facilitate the just, efficient, timely and cost‑effective resolution of the real issues in dispute”. For the preceding reasons, I am of the opinion that the course adopted by the Court is entirely consistent with the overarching purpose and will result in the just, efficient, timely and cost-effective resolution of the real issues in dispute between the Applicant and the Respondents.
For the reasons which follow, I am satisfied that the Applicant has both established a question of law which warrants the grant of leave to appeal and, further, has been successful in this appeal. Were this simply an application for leave to appeal, I would, on the material to which reference has been made in these reasons, find that a sufficiently arguable case has been established on the part of the Applicant, as discussed in Secretary of the Department of Premier and Cabinet v Hulls.[25] Moreover, I am also satisfied that the application raises a question which has public importance.[26]
[25][1999] 3 VR 331.
[26]Secretary to the Department of Premier and Cabinet v Hulls [1999] 3 VR 331 at 335–6 [11].
Nature of appeal
The proposed Amended Notice of Appeal which is exhibited to an affidavit in support of Application for Leave to Appeal sworn by Vanessa Elizabeth Bleyer on 24 May 2016, identifies the relevant questions of law, the grounds of appeal and the orders sought in the following terms:[27]
[27]For the sake of convenience, Questions A, B and C identified in the proposed Amended Notice of Appeal are referred to in these reasons as Questions 1, 2 and 3 respectively.
Questions of Law
The questions of law upon which the appeal is brought are as follows:
A.Was there any evidence or other material before the Tribunal to support the finding that the tenants were able to access the rented premises during each Airbnb stay?
BWhen determining whether a person has exclusive possession of a premises, is it relevant to consider whether that person can be made to leave the premises if they stay longer than the period that has been agreed for them to stay?
C.When determining whether a person has exclusive possession of a premises, is it relevant to consider whether the premises is a person’s principal place of residence?
Grounds of Appeal
The grounds of appeal upon which the Appellant relies are as follows:
As to Question A:
1.The Tribunal found (at [25] of its Reasons) that the rented premises has been used either as a whole, or in part, by Airbnb guests.
2.The Tribunal also found (at [45(iv)] of its Reasons) that the Defendants were able to access the rented premises during each Airbnb stay.
3.Where the premises had been used as a whole, there was no evidence or other material before the Tribunal to support the finding that the tenants were able to access the rented premises during a stay of that kind.
4.It was therefore not open to the Tribunal to find that the tenants were able to access the rented premises during each Airbnb stay, and the Tribunal erred in law in making that finding.
As to Question B:
5.The Tribunal found (at [25) of its Reasons) that the rented premises has been used either as a whole, or in part, by Airbnb guests.
6.The Tribunal found (at [45] of its Reasons) that the Airbnb guests did not have exclusive possession of the rented premises.
7.In making that finding, the Tribunal expressly took into account (at [45(iv)] of its Reasons) the ability of the tenants to “make a guest who overstays leave the property”.
8.Whether the tenants were able to make an overstaying guest leave the rented premises is not relevant to the question whether the guest had exclusive possession of that premises, and the Tribunal erred in law in taking that matter into account.
As to Question C
9.The Tribunal found (at [25] of its Reasons) that the rented premises has been used either as a whole, or in part, by Airbnb guests.
10.The Tribunal found (at [45] of its Reasons) that the Airbnb guests did not have exclusive possession of the rented premises.
11.In making that finding, the Tribunal expressly took into account (at [45(iii)] of its Reasons) that the tenants retained “the rented premises as their principal residence before, during and after, each” stay by the Airbnb guests.
12.Whether the tenants retained the rented premises as their principal residence is not relevant to the question whether an Airbnb guest had exclusive possession of that premises, and the Tribunal erred in law in taking that matter into account.
Orders sought
The Appellant seeks orders that:
1.the appeal be allowed;
2.the Order be set aside;
3.the Appellant be granted a possession order under s 330 of the Residential Tenancies Act 1997;
4.alternatively to the Appellant being granted a possession order, the proceeding be remitted to a differently constituted Tribunal to be heard and determined again in accordance with law;
5.the Respondents pay the Appellant's costs of the appeal;
6.such further or other relief as to the Court seems just.
Factual matters
A few months after the Apartment was leased to the Respondents, the Applicant discovered that they were making the Apartment available to guests through AirBnB.
The AirBnB listings for the Apartment offered two distinct occupancy options. The first involved making the entire Apartment available for AirBnB guests at the rate of $200 per night, and the second involved making only one bedroom available for AirBnB guests at the rate of $102 per night. It is, however, only the AirBnB agreement for occupation of the entire Apartment that is relevant for the purposes of this appeal. The minimum stay under this agreement was three nights and the maximum five nights.
The AirBnB listing for the entire Apartment was as follows:
Guest Access
You will have use of the entire 2 bedroom apartment, its bathroom, kitchen, loungeroom and balcony.
Interaction with Guests
I will be available by phone for any guidance I can give and I won’t be far away if you need me to come with a key, etc.
…
House Rules
Since this is my home and I am leaving to allow you to have it all to yourself, I simply ask that you observe the normal courtesies such as being considerate about noise for the neighbours’s [sic] sake and being careful with my TV, stereo and kitchen amenities.
The AirBnB listing for the single bedroom option was as follows:
Guest Access
As my guest(s) you will have access to and be able to share with me my bright bathroom and my loungeroom with adjoining open air terrace. … Though my kitchen is not available for guests to cook in, I am happy to make room in the fridge for a few essentials, medications, etc. which you need to keep cold.
Interaction with Guests
As a fan of St Kilda, its surrounding suburbs and Melbourne in general, I look forward to helping guests get the most out of their time in the neighbourhood. I can guide you to my favourite eateries, tell you where the best coffee is, and help you find any other tourist information you might need.
…
House Rules
Since you are sharing my apartment with me, I simply ask that you observe the normal courtesies such as being considerate about noise and leaving the bathroom tidy after your showers.
….
In mid-January 2016, a Notice to Vacate was served on the Respondents under s 253(1) of the Act. This section provides that “A landlord may give a tenant a Notice to Vacate rented premises if the tenant has assigned or sublet or purported to assign or sublet the whole or any part of the premises without the landlord’s consent”.
The Respondents did not vacate the Apartment, and the Applicant applied to VCAT for an order for possession.
The hearing before the Tribunal was conducted on the basis that there were two sources of written terms governing the agreement between the Respondents and the AirBnB guests. The first was a document described as the “AirBnB Agreement” that was displayed on the AirBnB website. The second source of written terms was the advertisements placed on the AirBnB website that were viewed by prospective AirBnB guests before they made their reservations. As indicated, the prospective AirBnB guests had two occupancy options, namely, the whole Apartment or one bedroom of the Apartment.
VCAT found that the Apartment had been used either as a whole or in part by AirBnB guests.[28] The Tribunal also found that the Applicant did not consent to the Apartment being used in that way.[29]
[28]Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016) [25].
[29]Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016) [29].
The Applicant argued before the Tribunal that the effect of the agreement between the Respondents and the AirBnB guests was to grant to those individuals “exclusive possession” of the Apartment where they took the whole Apartment, rather than just one bedroom, for their occupancy. The Respondents argued the contrary, namely, that the agreement between them and the AirBnB guests did not mean that the latter were granted “exclusive possession” of the Apartment where the agreement was for the whole Apartment option.
The Tribunal’s reasons set out the provisions of the AirBnB agreement relied upon by the Respondents, the tenants, their arguments as to intention and conduct flowing from this agreement and, more generally, the Tribunal’s findings and reasoning. The relevant parts of these reasons are as follows:[30]
[30]Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016) [41]–[46] (Tribunal’s emphasis).
41. (a) The Airbnb agreement
The tenants rely on the wording of the Airbnb agreement which states –
“Guests agree that a confirmed reservation is merely a licence granted by the Host to the Guest to enter and use the listing for the limited duration of the confirmed reservation and in accordance with the Guest’s agreement with the Host. Guests further agree to leave the Accommodation no later than the checkout time that the Host specifies in the Listing or such other time as mutually agreed upon between the Host and Guest. If a Guest stays past the agreed checkout time without the Host’s consent, they no longer have a license to stay in the Listing and the Host is entitled to make the Guest leave.”
42. (b) The intention of the parties
The tenants submit that the wording of the Airbnb agreement is evidence of the intention of both themselves and the guests. They submit that the express use of the word “licence” supports the parties intention that the legal relationship between them was characteristic of a licence.
43. (c) The conduct of the parties
The tenants submit that the conduct of each Airbnb guest supports the existence of a licence. The tenants say that each stay was no longer than five days at a time and payments were made via the Airbnb online platform. The tenants maintain that on each occasion they acted as host and guests were not allowed to check-in before a certain time and were required to leave by a certain time on the exit date. The tenants say the rented premises has continued to be their principal place of residence since the commencement of the tenancy. They say at no stage have any of the guests considered the rented premises to be their principal place of residence.
44. (d) The legal consequences of the relationship
The tenants submit that under the terms of the Airbnb agreement, they maintained their right to revoke the licence and eject the guests. They say the agreement provides “the Host is entitled to make the Guest leave”.
45. Taking into account –
(i) the express words contained in the Airbnb agreement that the use of the rented premises by guests was a licence,
(ii) the short term stays by the guests, the payment platform, the terms of arrival and departure and the terms of use of the rented premises,
(iii) the tenants retention of the rented premises as their principal residence before, during and after, each of the Airbnb guests and
(iv) the ability of the tenants to access the rented premises during each Airbnb stay and make a guest who overstays leave the property;
I find that the Airbnb guests did not have [exclusive] possession of the rented premises.
46.Without an entitlement to exclusive possession, I am satisfied that the nature of the legal relationship between the tenants and Airbnb guests was not a tenancy. In my view, this was not a lease but a licence to occupy.
As can be seen from the Tribunal’s reasons, as a result of the finding that the AirBnB guests did not have exclusive possession of the Apartment, the Tribunal concluded that the nature of the legal relationship between the Respondents and those guests was a licence to occupy, rather than a lease.[31] The conclusion followed that the Respondents had not “sub-let their tenancy agreement with [Ms Swan]”.[32] On the basis of that conclusion, VCAT then found that the Notice to Vacate was invalid[33] and that there was, consequently, no basis for the application for a possession order.[34] In the result, the Tribunal ordered that the application for a possession order by the now Applicant be struck out (“the Order”).
[31]Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016) [46].
[32]Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016) [47].
[33]Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016) [48].
[34]Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016) [49].
The Applicant now seeks leave to appeal from the Order and, if leave is granted, that the appeal be allowed. In support of that position, the Applicant contends that the Tribunal made vitiating errors in respect of the three questions of law set out in the proposed Amended Notice of Appeal. As indicated previously, the Respondents contend that leave to appeal should be refused and, further, that in any event the appeal should not be allowed. On this basis, I turn now to the three questions of law raised by the Applicant in these proceedings.
Lease or licence?—The applicable test
Having regard to the matters raised by and the subject of submissions in the three questions posed by the Amended Notice of Appeal and the grounds relied upon in that Notice, it is helpful to preface the treatment of these questions with discussion of the authorities with respect to the characterisation, more generally, of leases and licences.
It is well accepted that, as a matter of law, the test to be applied to distinguish between a lease and a licence is whether or not what is granted is exclusive possession.[35] Thus, in Lewis v Bell,[36] Mahoney JA said:[37]
[35]Radaich v Smith (1959) 101 CLR 209; KJRR Pty Ltd v Commissioner of State Revenue [1999] VSCA 2; Lewis v Bell (1985) 1 NSWLR 731; Rental Bond Board v Bayman Development Pty Ltd (1985) BPR [97237]. See also Janusauskas v Director of Housing [2014] VSC 650, referred to in Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016) [37]–[38].
[36](1985) 1 NSWLR 731.
[37](1985) 1 NSWLR 731 at 734–5.
In the present case, it was accepted, or at least assumed, that the test is that of exclusive possession. That, in my opinion, is correct. It is the test which was adopted by at least the majority of their Honours in Radaich v Smith.[38] That that is, at least initially, the test, was affirmed by Mason J in Goldsworthy Mining Ltd v Federal Commissioner of .[39]
[38](1959) 101 CLR 209 at 214, 217–20, 223.
[39](1973) 128 CLR 199 at 212; affirmed (1975) 132 CLR 463.
It is not necessary to analyse the precise nature of the right to exclusive possession which is here in question. It is, for present purposes, sufficient to say that it involves that the lessee have the general right to exclude others, including the lessor, from the premises, subject at least to such specific provisions for entry as may be particularly provided for in the document: cf the rights reserved in the Glenwood Lumber case.[40]
[40]Glenwood Lumber Co Ltd v Phillips [1904] AC 405 at 408.
…
But there are cases in which it is not clear from the terms of the grant, construed in the light of the whole agreement and its context, what it is that is being granted by them. In such cases, it is necessary to determine what is granted by looking at other aspects of the transaction. Thus, a grant may not be in terms of “possession” but of something else. It may be the grant of a right to occupy premises;[41] the right to “carry on a business on” the premises;[42] or, as in the present case, the right “to use” the premises either generally or in a particular way. In such cases, the court must, by the process of construction, determine whether what is granted is mere occupation or use, or is possession in the relevant sense. And where what is granted is possession, it still, in principle, may remain to be decided whether what is granted is exclusive possession. But it is not necessary to consider, in this case, whether there can be a distinction between possession and exclusive possession and (if there can) what distinctions there may be between possession and exclusive possession in this context.
In deciding, in such cases, whether what has been granted is the right to exclusive possession, the court, in the process of construction, has in practice looked, inter alia, to two things: the nature of the rights which, in terms, have been granted; and the intention of the parties.
Party intention in this context is to be determined objectively on the basis of the terms of the particular agreement under consideration and having regard to surrounding circumstances to the extent that is permissible according to the ordinary rules of construction.[43] Reference is made by the Respondents to a number of passages in the judgment of Windeyer J in Radaich v Smith, particularly the following:[44]
Whether when one man is allowed to enter upon the land of another pursuant to a contract he does so as licensee or as tenant must, it has been said, “be in the last resort a question of intention”, per Lord Greene M.R. in Booker v Palmer (1942) 2 All ER 674, at p 676. But intention to do what? – Not to give the transaction one label rather than another. – Not to escape the legal consequences of one relationship by professing that it is another. Whether the transaction creates a lease or a licence depends upon intention, only in the sense that it depends upon the nature of the right which the parties intend the person entering upon the land shall have in relation to the land …
And how is it to be ascertained whether such an interest in land has been given? By seeing whether the grantee was given a legal right of exclusive possession of the land for a term or from year to year or for a life or lives. If he was, he is a tenant. And he cannot be other than a tenant, because a legal right of exclusive possession is a tenancy and the creation of such a right is a demise.
…
And the proper touchstone still is: did it give the so-called licensee a legal right to the exclusive possession of the premises during the term? The question must of course, be resolved by considering the terms of the deed. But they are to be read in relation to the relevant surrounding circumstances, in particular the nature of the premises; for this deed, like any other instrument, is to be interpreted having regard to its subject matter.
[41]Cf O'Keefe v Malone [1903] AC 365 at 377; Landale v Menzies (1909) 9 CLR 89 at 91, 100–1.
[42]Cf Radaich v Smith (1959) 101 CLR 209 at 210.
[43]See National Outdoor Advertising Pty Ltd v Wavon Pty Ltd (1988) 4 BPR 97,322.
[44](1959) 101 CLR 209 at 221–3 (Respondents’ emphasis).
On the basis of these and similar passages, the Respondents stress intention and the “legal right” to exclusive possession as being of critical importance, the latter leading into submissions with respect to the remedies available to tenants and licensees respectively as, as I understand the submissions, some indicia of the nature of the particular occupation. However, for the reasons which follow, I am of the opinion that this is rather to put the cart before the horse in that the first task is the proper characterisation of a particular legal relationship as a lease or a licence and issues with respect to the nature of available remedies naturally follow from that characterisation. In any event, these and similar passages, as far as they go to intention, do not, in my view, detract from the position I have indicated and would not, on any basis, countenance reference to self-serving subjective statements. The position with respect to intention is, as I have indicated, to be determined objectively having regard to the terms of the relevant agreement and the surrounding circumstances according to the general rules for the admission of extrinsic evidence,[45] rather than as an exception to those rules.
[45]See Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337.
As the House of Lords indicated in Street v Mountford, surrounding circumstances may be relevant to the issue of intention. Nevertheless, as is made clear by Lord Templeman, intention is—as would be expected on the application of the general principles for the admission of extrinsic evidence as articulated in Codelfa Construction—to be determined on the basis of surrounding circumstances, including the nature of the subject premises and the rights granted. In this respect, Lord Templeman said:[46]
[46][1985] AC 809 at 826–7 (with whom the other members of the House of Lords agreed).
My Lords, the only intention which is relevant is the intention demonstrated by the agreement to grant exclusive possession for a term at a rent. Sometimes it may be difficult to discover whether, on the true construction of an agreement, exclusive possession is conferred. Sometimes it may appear from the surrounding circumstances that there was no intention to create legal relationships. Sometimes it may appear from the surrounding circumstances that the right to exclusive possession is referable to a legal relationship other than a tenancy. Legal relationships to which the grant of exclusive possession might be referable and which would or might negative the grant of an estate or interest in the land include occupancy under a contract for the sale of the land, occupancy pursuant to a contract of employment or occupancy referable to the holding of an office. But where as in the present case the only circumstances are that residential accommodation is offered and accepted with exclusive possession for a term at a rent, the result is a tenancy.
The position was well summarised by Windeyer J sitting in the High Court of Australia in Radaich v Smith, where he said:[47]
What then is the fundamental right which a tenant has that distinguishes his position from that of a licensee? It is an interest in land as distinct from a personal permission to enter the land and use it for some stipulated purpose or purposes. And how is it to be ascertained whether such an interest in land has been given? By seeing whether the grantee was given a legal right of exclusive possession of the land for a term or from year to year or for a life or lives. If he was, he is a tenant. And he cannot be other than a tenant, because a legal right of exclusive possession is a tenancy and the creation of such a right is a demise. To say that a man who has, by agreement with a landlord, a right of exclusive possession of land for a term is not a tenant is simply to contradict the first proportion by the second. A right of exclusive possession is secured by the right of a lessee to maintain ejectment and, after his entry, trespass. A reservation to the landlord, either by contract or statute, of a limited right of entry, as for example to view or repair, is, of course, not inconsistent with the grant of exclusive possession. Subject to such reservations, a tenant for a term or from year to year or for a life or lives can exclude his landlord as well as strangers from the demised premises. All this is long-established law.[48]
My Lords, I gratefully adopt the logic and the language of Windeyer J.
[47](1959) 101 CLR 209 at 222.
[48]See W.R. Cole, The Law and Practice of Ejectment (C. Roworth & Sons, 1856) 72–3, 287, 458.
The position with respect to extrinsic evidence, as indicated, was reaffirmed in National Outdoor Advertising Pty Ltd v Wavon Pty Ltd by Young J:[49]
When looking to this question one must see whether exclusive possession as a legal concept has been granted to the person who claims to be lessee. In dealing with this question one does not merely look to see whether the magic words “exclusive possession” have been used in the document. But one looks at the whole of the document and, at least if the document is ambiguous, one looks to the surrounding circumstances as well. I discussed the authorities which led to this result in Chaka Holdings Pty Ltd v Sunsim Pty Ltd,[50] and it is unnecessary to repeat that analysis here. Indeed, it is clear from such cases as Radaich v Smith that members of the High Court did look at the surrounding circumstances, such as the fact that a milk bar business could only be carried on in reasonable convenience by persons having exclusive possession, when considering whether or not there was a lease or licence created by the document before them in that case.[51]
[49](1988) 4 BPR 97,322, at 9733–4.
[50](1987) NSW Conv R 55-367, 57290–300
[51](1959) 101 CLR 209.
The nature of the process of construction and “discernment” of relevant intention is also, in my view, further illustrated and explained very clearly in the speech of Lord Templeman in Street v Mountford, including the reference to the judgment of Blackburn J which is set out:[52]
[52][1985] 1 AC 809 at 817–8 (with whom the other members of the House of Lords agreed).
In the case of residential accommodation there is no difficulty in deciding whether the grant confers exclusive possession. An occupier of residential accommodation at a rent for a term is either a lodger or a tenant. The occupier is a lodger if the landlord provides attendance or services which require the landlord or his servants to exercise unrestricted access to and use of the premises. A lodger is entitled to live in the premises but cannot call the place his own. In Allan v Liverpool Overseers Blackburn J said:[53]
A lodger in a house, although he has the exclusive use of rooms in the house, in the sense that nobody else is to be there, and though his goods are stowed there, yet he is not in exclusive occupation in that sense, because the landlord is there for the purpose of being able, as landlords commonly do in the case of lodgings, to have his own servants to look after the house and the furniture, and has retained to himself the occupation, though he has agreed to give the exclusive enjoyment of the occupation to the lodger.
If on the other hand residential accommodation is granted for a term at a rent with exclusive possession, the landlord providing neither attendance nor services, the grant is a tenancy; any express reservation to the landlord of limited rights to enter and view the state of the premises and to repair and maintain the premises only serves to emphasise the fact that the grantee is entitled to exclusive possession and is a tenant. In the present case it is conceded that Mrs Mountford is entitled to exclusive possession and is not a lodger. Mr Street provided neither attendance nor services and only reserved the limited rights of inspection and maintenance and the like set forth in clause 3 of the agreement. On the traditional view of the matter, Mrs Mountford not being a lodger must be a tenant.
The point was made by the Respondents in submissions that the issue whether or not Mrs Mountford was entitled to exclusive possession was common ground in Street v Mountford. Nevertheless, that being so, it does not follow that the discussion of the principles applicable to characterise leases and licences and to distinguish between the two as discussed at the highest level in the House of Lords is not of significantly persuasive authority. This is particularly the case having regard to the speech of Lord Templeman having been agreed to by all the other members of the House of Lords.[54]
[53](1874) LR 9 QB 180 at 191–2.
[54]Namely, Lord Scarman, Lord Keith of Kinkel, Lord Bridge of Harwich and Lord Brightman.
The Respondents also made reference to the judgment of McHugh J in Western Australia v Ward, where his Honour said:[55]
502.Accordingly, a contract giving a person the legal right to exclusive possession of land or tenement for a determinate period, however short, is a lease.[56] When the cases talk of exclusive possession, they speak of legal possession. It is the right to legal possession that constitutes a lease. Indeed, it is a pity that the term “exclusive possession” was ever used, although its use dates back to about 1830. As Mr D W McMorland has pointed out:[57] “Between 1830 and 1950 a number of cases used the phrase ‘exclusive possession’ to indicate the distinguishing feature of a tenancy, but it is always quite clear that it is used in the sense of the legal right to sue in trespass.”
503.The adjective “exclusive” adds nothing to the concept of possession. As the editor of Salmond on Jurisprudence has pointed out,[58] “exclusiveness is of the essence of possession. Two adverse claims of exclusive use cannot both be effectually realised at the same time”. It is the legal right to possession, not the physical fact of exclusive “possession” or occupation, that is decisive. That is why a lessee can bring an action for ejectment although driven from the premises and why at common law the lessee could bring an action for ejectment although he or she had not yet entered upon the land. The legal right to possession before entry gave rise to an interesse termini that enabled the lessee to bring an action of ejectment and, after entry, an action for trespass to the land as well as ejectment.
504. In contrast, a licence to use land ordinarily confers only a personal right that is enforceable in contract but not by an action in trespass or ejectment. The right of the occupant to bring an action of ejectment and after entry an action in trespass for wrongful entry on the land has always been the mark of the lessee.[59] The lessee may bring such an action against a third party and even the lessor.[60] In contrast to the lessee, a licensee, whose occupation is wrongly terminated or interfered with, must sue in contract or for some tort other than trespass to the land. If wrongly ejected from the land, the licensee cannot maintain an action in ejectment. If ejected by the grantor, the licensee may be able to obtain an injunction restraining the grantor from breaching the personal contract. If ejected by a stranger, the licensee may have an action in trespass to the person or some other tort. But in neither case is the action of ejectment or trespass to land available to the licensee.
The Respondents made reference to this part of the judgment of McHugh J to emphasise the nature of the rights flowing from exclusive possession and, in the present context, to make the point that an action of ejectment would not have been what is contemplated by the parties to the AirBnB Agreement.[61] The reference by McHugh J to lease terms, however short, is of some significance in the present context.[62]
[55](2002) 213 CLR 1 at 222–3 [502]–[504] (Although McHugh J dissented in the final result in that case, there is no suggestion that any other members of the High Court disagreed with his Honour’s statement of principle with respect to exclusive possession and leases in the passage set out). See also Georgeski v Owners Corporation SP49833 [2004] NSWSC 1096, [41]-[42].
[56]Landale v Menzies (1909) 9 CLR 89 at 100–1.
[57]D.W. McMorland, “Lease or Licence?” in G.W. Hinde (ed), Studies in the Law of Landlord and Tenant: the Adams Memorial Essays (Butterworths, 1975) 11, 14.
[58]Patrick John Fitzgerald (ed), Salmond on Jurisprudence (Sweet & Maxwell, 12th ed, 1966) 287.
[59]Radaich v Smith (1959) 101 CLR 209 at 222.
[60]Radaich v Smith (1959) 101 CLR 209 at 222.
[61]See below [38]–[44].
[62]See para 502 of the judgment of McHugh J in Ward which is set out above.
Turning now to the relevant surrounding circumstances with particular reference to the present proceedings, it is helpful to make reference to the passage from the judgment of Tadgell JA in KJRR Pty Ltd v Commissioner of State Revenue to which the Respondents referred:[63]
The agreement described itself as a licence but the High Court decided that it fell to be classified as a lease in the light of the true nature of the grant, having regard not only to the written terms of the agreement but to the relevant surrounding circumstances, including in particular the nature of the premises and the purpose for which the grant was given and taken. In effect it was held, for it was obvious as a matter of common-sense, that the grantee could make use of the premises only if she had the exclusive right to use them as a shop.
Moreover, reference was also made to the judgment of Nettle JA in Genco v Salter:[64]
In case it matters, I doubt that a paying guest in short-term hotel style serviced apartment accommodation of two or three days’ duration would be a “lessee” or “tenant” within the meaning of the definition. The guest could not be regarded as a lessee or tenant (properly so called) unless present under an arrangement which conferred a right of exclusive possession. Usually, the owner of an hotel retains dominion over a hotel room or suite with right to enter for cleaning and other purposes and power to forbid the guest from allowing others to stay there. Depending on the facts, the same considerations would apply to a guest taking short term hotel style accommodation for a period of a few days in a serviced apartment.
[63][1999] 2 VR 174 at 177 [6] (Respondents’ emphasis).
[64][2013] VSCA 365, [28] (Respondents’ emphasis).
Against this background, the Respondents submit that the surrounding circumstances in this case are such that no legal right of exclusive possession was granted. They said that it is a matter of common sense that the AirBnB guests, staying only for a handful of days, had no need for the legal right to sue in trespass. The AirBnB guests are in a similar position, the Respondents contend, to an hotel guest. Moreover, it is said that if something “went wrong” during a short stay at the Apartment, the AirBnB guests would only require a remedy in contract against the Respondents. Additionally, it is contended that the overall construction of the AirBnB Agreement and having regard to the surrounding circumstances suggests that an AirBnB guest would expect their host to retain the responsibility and the right to eject third parties from the premises should a problem develop. Thus it is said that on the basis of a licence agreement, the contractual arrangement between the AirBnB guests and the Respondents would be interpreted as giving the AirBnB guests a right to damages against the Respondents because the Respondents did not give them what they bargained for. It is said that if the AirBnB guests were tenants, then they may not have a right against the Respondents in such circumstances.
Finally, it is said that there is an analogous position with hotels and hotel bookings in that guests in an hotel would not want to be in a position of having to bring proceedings to recover possession and to seek damages against the intruder—they want to be able to sue the hotel.
As foreshadowed, I am of the view that the method of characterisation of the nature of the AirBnB Agreement inherent in these submissions is misconceived. First, as the authorities indicate, the characterisation of an agreement such as the AirBnB Agreement as a lease or a licence depends upon the proper construction of that agreement—looking to substance and not form—and having regard to relevant surrounding circumstances. This is not a process that can be transcended by drawing broad analogies with, for example, a hotel or various species of serviced apartments. As was submitted by the Applicant, there is a broad spectrum of residential accommodation available ranging from the usual hotel room licensing arrangements through to long-term serviced apartment agreements which, on any view, would be taken to be leases. The question here is, where does the AirBnB Agreement in the present circumstances fall on this spectrum. That is only determinable, as I have indicated, applying the process of analysis which I have described.
Moreover, it is, as I have observed previously, to invert the process of characterisation to reason from what are said to be available remedies and thereby characterise the “creature” to be protected by such remedies. Apart from this approach being both inverted and circular, it also seeks to conflate practicality with the actual legal position determined according to the analysis I have indicated. Indeed, a moment’s reflection indicates the fallacy in this approach. It is also at odds with the reference of McHugh J in Western Australia v Ward to a lease having a period “however short”.[65]
[65](2002) 213 CLR 1 at 222–3 [502]. See above [36].
In the present circumstances, the “remedies” approach advanced by the Respondents, which I so label for convenience, is superficially attractive when short-term occupancies are being considered—such as a few days under an AirBnB agreement or under some other similar agreement. Short-term leases are, however, not eschewed by the common law, assuming the other ingredients indicative of a lease are to be found.[66] Moreover, short-term lease terms in possession are well accepted in the lease and sub-lease environment where, for example, reservation of the final day of the head lease term in the granting of a sub-lease is essential if the sub-lease is to take effect as such and not as an assignment. Thus, even the single day of possession retained by the head tenant is significant and recognised. It may be said that this position is merely the result of the application of legal principles. Whether that perspective is correct or not, it was made clear by Nettle JA quite recently, that leases could be created by express agreement—for days or even hours:[67]
Admittedly, the words “tenant” and “tenancy” are sometimes used in a looser sense than their legal meanings of lessee and lease. But I doubt that “tenant” is used in a loose sense in the definition of “sole-occupancy unit” for the purposes of Class. If anything, given the definition is expressed in terms of occupation to the exclusion of others, it rather implies that “tenant” is intended to have its ordinary legal meaning. Additionally, although it is possible to have a tenancy for days and possibly even for hours,[68] “tenant” in the definition of “sole-occupancy unit” falls to be construed in context and the context created by the definition of “sole-occupancy unit” suggests a person with an [sic] right to occupy the tenanted premises to the exclusion of others for more than just hours or days. It is also to be observed that, in this case, the Board found that the arrangement between Mr Salter and the guests who stayed in the subject apartments was one of licence as opposed to lease and therefore not a tenancy. That finding is not disputed.
[66]See Western Australia v Ward (2002) 213 CLR 1 at 222–3 [502] and Landale v Menzies (1909) 9 CLR 89 at 100–1; and, in any event, a ready example of a common short term lease is weekly tenancy, which has long been accepted.
[67]Genco v Salter [2013] VSCA 365, [29] (citations omitted).
[68]Boylan v Dublin Corporation [1949] IR 60, 73–4. Cf Kelly v Wallworth [1921] 2 IR 5 at 10.
Moreover, without conflating practicalities, one might ask where practical issues asserted by the Respondents stop? For example, a three month lease of residential premises—or any premises for that matter—would carry with it the right to take proceedings to protect possession—including a legal right to sue in trespass—whether or not that right was cost-effective or practical. As I have indicated, the practicality or otherwise of exercising such rights is not a matter that goes to the characterisation of the arrangement.
Additionally, I do not accept the Respondents’ analysis of rights available to AirBnB guests as tenants because I am of the view that it is clear—putting aside considerations of practicality which would, in any event, depend upon the period of occupation agreed for those guests—that a myriad of other remedies would possibly be available by way of injunctive relief, against the person from whom they derived their rights of occupation, together with a right to damages and possibly repudiatory damages for breach of covenant or contractual provisions.
As to third parties, clearly, injunctive and tortious relief may be available, depending on the circumstances. There may also be rights available as against the grantor of their occupation rights on the basis of a breach of the covenant for quiet enjoyment by “third parties” deriving title from such grantor or the persons over which the grantor had control.
Finally, in this context and in the context of the broader considerations flowing from the authorities which have been considered, I am of the view that the hotel room analogy is not appropriate in the present circumstances. The evidence and the provisions of the AirBnB Agreement indicate, in my view, that although the occupancy granted to the AirBnB guests was, in this case, for a relatively short time, the quality of that occupancy is not akin to that of a “lodger” or an hotel guest. Rather, it was the possession—exclusive possession—that would be expected of residential accommodation generally. In the present circumstances, it is no different from the nature of the occupancy—the exclusive possession—granted to the tenants, the Respondents, under the Lease from the Applicant. They have, by means of the AirBnB Agreement, effectively and practically passed that occupation, with all its qualities, to their AirBnB guests for the agreed period under the AirBnB Agreement.
Concluding this more general treatment of the nature of leases and licences in the context of these proceedings, reference is made to the summary of factors which the Respondents submit suggest that the AirBnB Agreement was more likely to be a licence than a lease.[69] None of these factors, in my view, suggests that the AirBnB Agreement was more likely to be a licence than a lease, both for the preceding reasons and for those which follow. As I have indicated, the form of the AirBnB Agreement and the language used must be construed according to ordinary principles of construction having regard to extrinsic circumstances which may be considered in light of those usual principles. Moreover, the process of construction focuses on substance and not form, and thus the matters raised in the first six of those factors do not assist the Respondents’ position.[70] Neither does the process whereby the AirBnB agreement is entered into via an online booking system affect the position. The website booking facility produces an agreement as a result of the booking — then ascertainment of the terms of the resulting agreement and the proper construction of that agreement is a matter for the application of ordinary, settled, principles of law. The same applies with respect to the process of payment—payment by cash, cheque or electronic funds transfer, for example, does not affect the character of what is paid for in circumstances such as this. Modern commercial law readily accommodates electronic transactions[71] and there is no basis for treating agreements such as AirBnB agreements—whether they are leases or licences in their particular circumstances—any differently. In the present circumstances, there is no suggestion that any formal requirements of the Act affect the position; but, rather, that s 9 of the Act may exclude its operation in these circumstances.
[69]See Outline of Submissions of the Defendants (27 May 2016) [65].
[70]See Outline of Submissions of the Defendants (27 May 2016) [65(a)]–[65(f)].
[71]See generally UNCITRAL Model Law on Electronic Commerce (General Assembly Resolution 51/162 of 16 December 1996).
The only other of those factors that merits particular comment which has not been addressed elsewhere in these reasons is the suggestion that it is significant that the AirBnB advertisement did not identify particular premises.[72] There is, however, no doubt as between the parties to the AirBnB Agreement as to which premises were the subject of that agreement. Indeed, identification of the premises is, in my view, in the present circumstances, a prime matter which could be resolved by reference to extrinsic circumstances.[73] In any event, if this point were of significance, then it would seem to impinge upon the existence or enforceability of the AirBnB Agreement on the basis of certainty of terms. If this were the case, it would be equally significant whether or not the AirBnB Agreement were characterised as a lease or a licence.
Question 1—Was there any evidence or other material before the Tribunal to support the finding that the tenants were able to access the rented premises during each Airbnb stay?
[72]See Outline of Submissions of the Defendants (27 May 2016) [65(h)].
[73]See Adrian J Bradbrook, Clyde E Croft and Robert S Hay, Commercial Tenancy Law (LexisNexis, 3rd ed, 2009) [1.5], [4.8].
VCAT found that the Respondents were able to access the Apartment during each AirBnB stay.[74] The first question in the Amended Notice of Appeal asks whether there was any evidence or other material before the Tribunal to support that finding. This is clearly a question of law.[75]
[74]Swan v Uecker (Residential Tenancies) [2016] VCAT 483 (24 March 2016) [45(iv)].
[75]See, eg, Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390 at [91]. It is clear that a finding of fact cannot be impugned unless it was not open to be made and, further, the finding was critical to VCAT’s ultimate conclusion: see, eg, He v Aloe & Co Pty Ltd (No 3) [2010] VSCA 158, [25].
The Respondents contend that the Applicant’s submissions in this respect were merely an attack on the fact-finding process in VCAT. It is, however, conceded that the Applicant correctly states that an error of law is committed if the Tribunal finds a fact that is not open on the evidence and if that fact is critical to VCAT’s ultimate conclusion.[76] In making these submissions, the Respondents also direct attention to sub-para 45(iv) of the Tribunal’s reasons.[77] In relation to this paragraph, the Respondents submit:[78]
44.Does she mean two things?: ie, that (1) the defendants had the ability to access the rented premises during each Airbnb stay and (2) the defendants had the ability to make a guest who overstays leave the property or does she mean one thing? - the ability of the defendants to access the rented premises during each Airbnb stay to make a guest who overstays leave the property.
45.It is submitted that the Member was only meaning one thing because it is more consistent with the analysis that precedes paragraph 45. Subparagraph 45(iv) is the last factor in paragraph 45 and therefore it makes sense that it relates to the last factor considered in the preceding paragraphs. The last factor considered in the preceding paragraphs (paragraph 44) is the fact that the AirBnB agreement says “the Host is entitled to make the Guest leave”.
Moreover, the Respondents submit that the Applicant has entered into the territory of engaging in an “overly pernickety” reading of the Tribunal’s reasons[79] and that it is certainly not clear that the Tribunal is saying that the Respondents had unfettered access to the apartment during each AirBnB stay. Additionally, it is said that it should be borne in mind that the Applicant has the onus of establishing on the evidence that a vitiating error of law occurred, and not a mere possibility that such an error did occur.
[76]Plaintiff’s Outline of Submissions (20 May 2016) [14] which makes reference to the authorities referred to in the footnote to the immediately preceding paragraph of these reasons.
[77]See above [27].
[78]Outline of Submissions of the Defendants (27 May 2016) [44]–[45].
[79]See above [8].
I do, however, reject the Respondents’ submissions as to the meaning to be ascribed to para 45(iv) of the Tribunal’s reasons. Moreover, I do not regard the process of seeking to understand that reasoning process—and the Applicant’s submissions in this respect—as being “overly pernickety” and outside the scope of the permitted appeal process from such a tribunal. In my view, para 45(iv) is clear in its language and structure. In my view, it identifies two time periods—the time period for the agreed AirBnB stay and the separate and following time period, namely, the time after the expiration of the agreed time or period of the AirBnB stay. Thus, the matters that the Tribunal has expressly taken into account in making findings as to the “legal consequences of the relationship”—the heading in the Tribunal’s reasons to the material, of which para 45 is central—are the ability of the Respondents, the tenants, to access the Apartment during the time of the AirBnB stay and the ability of the tenants to require the AirBnB guests to leave at the expiration of the agreed period of that stay.[80] As I observed during the course of the hearing of this appeal, the ability of a landlord or a licensor to require its tenant or licensee to depart at the expiration of the lease term or the term of the licence is the same—though the means of enforcing this position may differ. Consequently, in the present circumstances, the ability of the Respondents, the tenants, to require AirBnB guests to depart after the agreed period of occupation is not an indicia of the type of legal relationship that exists as between the Respondents, the tenants, and the AirBnB guests. In other words, it is irrelevant to the question of legal characterisation.
[80]Cf S v Crimes Compensation Tribunal [1998] 1 VR 83 at 90.
The Applicant submits that the answer to this question—Question 1—should be “no”. It is contended that the question should be answered in this way because there was no evidence or other material to support the finding by the Tribunal that the Respondents were able to access the Apartment when the entire Apartment had been made available for occupation by AirBnB guests. Moreover, I reject the position put by the Respondents that this was merely a finding of fact because, as has been observed, para 45(iv) is expressly contained within the Tribunal’s reasons with respect to the legal consequences of the relationship between the Respondents, the tenants, and the AirBnB guests. Additionally, it is clear from the various authorities discussed that the question whether or not a person is granted exclusive possession of a property is a matter of significance in the characterisation of that occupation, whichever view is ultimately taken with respect to that characterisation.[81]
[81]See especially above [30]–[37].
More particularly, in support of the Applicant’s position, there was nothing in the AirBnB Agreement to support the Tribunal’s finding that the Respondents, the tenants, had the ability to access the rented premises, the Apartment, during each AirBnB stay. The reference in that agreement to “licence” is no more than a label, and there are numerous authorities for the proposition that such a label, though it may have some relevance to characterisation, is not decisive and that the courts will look to the substance of the agreement thus labelled in order to characterise it as a lease or a licence.[82] In the context of the Tribunal’s finding in para 45(iv), the label “licence” does not of itself confer a right on the Respondents, the tenants, to access the Apartment when the entire Apartment has been made available to AirBnB guests. Rather, the effect of the Agreement, fully analysed, does, in my view, mean that those guests enjoyed exclusive possession of the Apartment during their stay. It would be entirely inconsistent with the nature and purpose of the AirBnB Agreement were it to be otherwise. This position is, in my view, also confirmed by the relevant AirBnB listing to which reference has been made—that is the listing for the occupation of the whole Apartment, not a single bedroom. The listing relevantly said that “I am leaving to allow you to have it all to yourself”.
[82]Wik Peoples v Queensland (1996) 187 CLR 1 at 152; Street v Mountford [1985] AC 809 at 819, 825; Bruton v London and Quadrant Housing Trust [2000] 1 AC 406 at 410–11, 413.
The Respondents did not lead any evidence in the Tribunal to support the ability to access finding. Their only evidence was, relevantly, as follows:[83]
[83]VCAT Transcript, 8–9.
MEMBER: Thank you. All right, Mr Greaves and Ms Uecker, what do you want to say about what you were doing at the property at that time? What have you been doing with the property? If someone stayed in the property, you have agreed that there was Airbnb. If someone stayed in the property at any given time, what would you do?
MS UECKER: Well, usually we are there. We live there. On - - -
MR GREAVES: Two, possibly three occasions - - -
MS UECKER: - - - three occasions when we were travelling or staying with friends, we had guests staying on their own in the property.
MEMBER: On 12 January, the advertisement that seems to be attached suggests that it is the entire property that is being rented out.
MS UECKER: No, there were two – may I explain? There are two listings. One is for one bedroom or for two bedrooms. But the way it works is that people enquire and ask is it available and then if we are not going away, if there is, for example, an enquiry for the whole apartment, this enquiry would be denied. We would say it’s not available.
MEMBER: Do you travel often?
MS UECKER: We love to travel and stay with friends, yes.
Neither did the Respondents make any written or oral submissions to the Tribunal in support of the ability to access finding.
Notwithstanding these matters, the Respondents submit that it was open to the Tribunal to conclude that the tenants retained the right to enter the Apartment because:[84]
[84]Outline of Submissions of the Defendants (27 May 2016) [48].
…
a.The fact that the AirBnB agreement says “the Host is entitled to make the Guest leave” presupposes the Host has retained possession. There is no mention of regaining possession in the AirBnB agreement.
b.The agreement does not explicitly give the AirBnB guests a “demise” or exclusive possession; and
c.The surrounding circumstances dictate that the defendants would still have access. It can be inferred that the tenant’s personal possessions were still in the apartment. These stays were short. It was open for the Tribunal member to find that if the defendants needed, for example, to access a document, or any of their personal possessions that they had left behind, the guests could not have stopped them doing so.
In my view, however, these matters do not detract from the position that there was no evidence or other material before the Tribunal to support its finding that the Respondents, the tenants, were able to access the Apartment during each AirBnB stay. Moreover, the issue raised with respect to a host being entitled to make the guest leave is, for the preceding reasons, a second element of para 45(iv) and does not provide any indicia one way or the other in the circumstances as to whether or not the occupation by the AirBnB guests was as tenants or licensees. True it is that the AirBnB Agreement does not use the word “demise” or expressly provide for exclusive possession. This is not surprising, it was an agreement devoid of legalese and legal terminology, but its use of more common language does not prevent the Tribunal or a court undertaking the proper process of construing its provisions according to their substance.
As to surrounding circumstances, it is mere speculation as to whether and to what extent the Respondents, the tenants, left their personal possessions in the Apartment. An example was raised by the Respondents in the course of the hearing postulating the position that might follow if the Respondents had left important documents in the Apartment, such as a driving licence. Common sense would dictate that, in these circumstances, a polite inquiry would be made of the AirBnB guests by the Respondents, the tenants, for permission to enter the Apartment to retrieve the relevant document or documents—and it is hardly likely that common courtesy and common sense would see that request denied. Moreover, if the AirBnB guests were to allow the tenants access, this would be with their permission and, in those circumstances, this would be quite consistent with the characterisation of their occupation as a lease, rather than a licence. There is, however, no evidence of any problems of access of this nature and, indeed, having regard to the evidence, that the tenants were, during the relevant AirBnB stay, away on holidays or staying with friends, the position would seem to be that no access would have been required.
Additionally, the point was made by the Applicant that, given the short period of the AirBnB occupation, problems of this kind were unlikely to occur. The evidence was that the Respondents, the tenants, retained keys to the Apartment—a position which is entirely unsurprising—and, as I observed during the hearing, it would be expected that any landlord or their agents would retain keys to the premises. Clearly, this fact alone is not decisive in terms of the characterisation of the nature of the AirBnB guests’ occupation.
Additionally, the Respondents’ offer in the AirBnB website material[85] to assist AirBnB guests with respect to the premises or surrounding attractions is not, in my view, as the Respondents would put it, only consistent with characterisation of the occupation as a licence. There is no doubt that the sensible landlord, caring for their premises and reversionary interest, will always seek to assist their tenant and will readily attend to repairs and difficulties with the leased premises—either under the terms of the lease, under statutory requirements or for commercial reasons.
[85]See above [20].
For these reasons, I am of the opinion that there was no evidence or other material to support the finding by the Tribunal that the Respondents were able to access the Apartment during each AirBnB stay. Moreover, this finding was critical to VCAT’s ultimate conclusion: namely, that the AirBnB guests did not have exclusive possession of the Apartment and that, as a consequence, there had been no sub-lease of the Apartment by the Respondents, the tenants. This was part of one of the—clearly cumulative—matters that VCAT “took into account” in ultimately concluding that the AirBnB guests did not have exclusive possession. In my view, it cannot be said that VCAT would necessarily have reached that conclusion had it not made the finding in relation to the Respondents’ ability to access the Apartment during each AirBnB stay.[86] Since that finding was critical to VCAT’s ultimate conclusion, the Tribunal committed a vitiating error of law in respect of the first question of law.
Question 2—When determining whether a person has exclusive possession of a premises, is it relevant to consider whether that person can be made to leave the premises if they stay longer than the period that has been agreed for them to stay?
[86]See, by analogy, Stead v State Government Insurance Commission (1986) 161 CLR 141.
The second question in the Amended Notice of Appeal asks whether, when determining whether a person has exclusive possession of premises, it is relevant to consider whether that person can be made to leave the premises if they stay longer than the period that has been agreed for them to stay. I accept that this is a question of law, because it asks whether the correct legal test—as to exclusive possession—was identified or applied.[87]
[87]See, eg, Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd (2014) 45 VR 771 at 783 [48], 770 [53], 805–6 [167]. Cf S v Crimes Compensation Tribunal [1998] 1 VR 83 at 90.
The AirBnB Agreement provides, in this respect, that:[88]
If a Guest stays past the agreed checkout time without the Host’s consent, they no longer have a license to stay in the Listing and the Host is entitled to make the Guest leave.
[88]See also above [27].
The Respondents contend that this is not the sort of term that typically appears in a lease with respect to a tenant yielding up possession to a landlord. In this respect, reference is made to the separate judgments of Taylor, Menzies and Windeyer JJ in Radaich v Smith to the effect that a significant indicator of a lease was that the tenant undertook upon the expiration or sooner determination of the lease immediately to “give up possession of the said building occupied by her for the purpose of the said business”.[89]
[89](1959) 101 CLR 209 at 216, 220–1, 224.
Reference is also made by the Respondents to the joint judgment of Gleeson CJ, Gaudron, Gummow and Hayne JJ in Western Australia v Ward, where their Honours said:[90]
The language of re-entry is aptly used in connection with a lease. It is, however, not apt to speak of re-entry in connection with licences or other interests any more than it is apt to speak of recovery of possession by the grantor of a contractual licence from the grantee.
[90](2002) 213 CLR 1 at 124 [172].
On this basis, the Respondents submit that it is therefore significant that the AirBnB Agreement does not use the language of re-entry or recovery of possession. Rather, it is said, it uses language that is consistent with the right of a licensor to make a licensee who overstays beyond the licence leave the property. Moreover, the Respondents submit that the language used in the AirBnB Agreement presupposes that the Respondents retained possession.
I accept the Respondents’ submission that it is entirely appropriate to look at the written terms of an agreement and to draw inferences about the type of rights those terms assume. In this respect I note the example provided where such an approach has been taken to interpret terms that state the conditions upon which a landlord may enter a premises as carrying the implication that exclusive possession has been granted.[91] I do not, however, otherwise accept the Respondents’ submissions in this respect for more general and more particular reasons, to which I now turn.
[91]Western Australia v Ward (2002) 213 CLR 1 at 226 [511]; Facchini v Bryson [1952] 1 TLR 1386 at 1389; Addiscombe Garden Estates Ltd v Crabbe [1958] 1 QB 513 at 523–5.
More generally, I am of the view that in characterising the effect of an agreement cast in commonplace terms, attention must be focused on substance, rather than the presence or absence of technical language which might commonly be found in more formal documents. The substance of the provisions to which the Respondents refer quite clearly indicates, in my view, that when the term, the period, of occupation by the AirBnB guests expires, those guests are to leave the Apartment. As I have already observed, this position would follow, whether or not the occupation is characterised as a lease or a licence. Thus, in substance, this provision is no different from that referred to by the judges in Radaich v Smith. In this respect, I particularly reject the Respondents’ submission that the language used in this provision of the AirBnB Agreement presupposes the Respondents retain possession. In my view, no such presupposition is inherent in the provisions of the AirBnB Agreement with respect to the position at “check out time”. Once the “check out time” has arrived, the term, the period, of occupation agreed has expired and whatever the nature of that occupation, the Respondents, the tenants, are entitled to possession of the Apartment and to require the guests to leave. It does not follow at all that the entitlement to possession of the tenants at this time—post check out time—indicates or requires any prior right to possession of the Apartment on their part.
More generally, at common law a landlord has the ability to make an overstaying tenant leave the property in the same way as a licensor can evict an overstaying licensee.[92] Consequently, at common law a person’s ability to make an overstaying guest leave does not tend in favour or against a finding of exclusive possession prior to that entitlement arising—the commencement of the overstaying period. Moreover, the fact that the Act requires a landlord to give a notice to vacate does not alter that conclusion.[93] Thus, if the AirBnB Agreement were subject to the Act, the provision in question would be invalid and the Respondents could not make the overstaying guest leave without first giving a notice to vacate.
[92]See, eg, Adrian J Bradbrook, Clyde E Croft and Robert S Hay, Commercial Tenancy Law (LexisNexis, 3rd ed, 2009) [2.5]–[2.6], [16.5].
[93]Noting that a contractual provision is invalid to the extent that it modifies a requirement of the Act: see s 27.
The Tribunal, in determining whether the AirBnB guests had exclusive possession of the Apartment, “took into account” the ability of the Respondents to make an overstaying guest leave the property. This is, in my view, clear from a reading of para 45(iv) of the Tribunal’s reasons—which should be read in the manner I have previously indicated. By taking into account the Respondents’ ability to make an overstaying guest leave the Apartment, the Tribunal appears to have assumed that the AirBnB Agreement was a licence, because, if it were a lease, the Respondents would not have had that ability without first giving a notice to vacate. In assuming that the AirBnB Agreement was a licence, the Tribunal did, in my opinion, impermissibly assume the answer to the very question it had to determine. For these reasons, whether the Respondents were able to make an overstaying guest leave the Apartment was not relevant to the question of whether that guest was in exclusive possession of the Apartment during their stay.
It follows that, by taking into account the Respondents’ ability to make an overstaying guest leave the Apartment, VCAT took an irrelevant matter into account. By taking a matter into account that was not relevant to the question whether the AirBnB guests were in exclusive possession during their stay, the Tribunal either identified the wrong legal test—as to exclusive possession—or applied the correct test wrongly. Either way, the Tribunal committed a vitiating error of law. Again, it cannot be said that the Tribunal would necessarily have reached the same ultimate conclusion as to exclusive possession if it had not made the finding in relation to the Respondents’ ability to make an overstaying guest leave the Apartment. Thus, as indicated, the error was therefore vitiating.[94]
Question 3—When determining whether a person has exclusive possession of a premises, is it relevant to consider whether the premises is a person’s principal place of residence?
[94]See, by analogy, Stead v State Government Insurance Commission (1986) 161 CLR 141.
The third question in the Amended Notice of Appeal asks whether, when determining whether a person has exclusive possession of premises, it is relevant to consider whether that premises is a person’s principal place of residence. I accept that the question is a question of law because it asks whether the correct legal test, as to exclusive possession, was identified or applied.[95]
[95]See, eg, Cosmopolitan Hotel (Vic) Pty Ltd v Crown Melbourne Ltd (2014) 45 VR 771 at [48], [53], [167]. Cf S v Crimes Compensation Tribunal [1998] 1 VR 83 at 90.
In para 45(iii) of VCAT’s reasons, Member Campana took into account:
the tenant’s retention of the rented premises as their principal residence before, during and after, each of the AirBnB guests …
Prior to making findings as to the legal consequences of the relationship between the Respondents and the AirBnB guests, the Tribunal addressed the matters which the Respondents had submitted were to be taken as relevant surrounding circumstances. For convenience and emphasis, I repeat what Member Campana said:
43. (c) The conduct of the parties
The tenants submit that the conduct of each Airbnb guest supports the existence of a licence. The tenants say that each stay was no longer than five days at a time and payments were made via the Airbnb online platform. The tenants maintain that on each occasion they acted as host and guests were not allowed to check-in before a certain time and were required to leave by a certain time on the exit date. The tenants say the rented premises has continued to be their principal place of residence since the commencement of the tenancy. They say at no stage have any of the guests considered the rented premises to be their principal place of residence.
The Respondents submit that the Tribunal was, here, taking into account the fact that the understanding between the Respondents, the tenants, and the AirBnB guests was that the AirBnB guests were to have short term use of the tenants’ home. It is said that the understanding was that the Respondents otherwise live at the premises. Moreover, the Respondents contend that this fact is relevant to whether or not exclusive possession was intended to be taken and given because it is a factor that suggests the Agreement would not give the AirBnB guests the right to exclude the Respondents from the premises.
In my view, the submissions of the Respondents in this respect should be rejected, and this question—Question 3—should be answered, “no”, for the reasons to which I now turn.
It is clear from the passages in VCAT’s reasons to which reference has been made that, when determining whether the AirBnB guests had exclusive possession of the Apartment, the Tribunal “took into account” the “retention” by the Respondents, the tenants, of the Apartment as their principal place of residence before, during and after each stay by an AirBnB guest. This matter is, however, not relevant to whether an AirBnB guest had exclusive possession of the Apartment. This is because a person may grant a lease in respect of their principal place of residence—for example, when going away on an overseas holiday—in the same way that they can grant a licence in respect of that property. It follows that the “retention” by the Respondents of the Apartment as their principal place of residence—even during an AirBnB stay—does not tend in favour or against a finding of exclusive possession. It is, in truth, entirely neutral on the question. Consequently, it is not a matter of any logical relevance to the question in issue.
For these reasons, by taking into account the “retention” by the Respondents of the Apartment as their principal place of residence, the Tribunal took into account a matter irrelevant to the question of whether the AirBnB guests were in exclusive possession during their stay. By so doing, the Tribunal either identified the wrong legal test, as to exclusive possession, or applied the correct legal test wrongly. Either way, VCAT committed a vitiating error of law. Again, it cannot be said that the Tribunal would necessarily have reached the same ultimate conclusion as to exclusive possession if it had not made the finding in relation to the Respondents’ “retention” of the Apartment as their principal place of residence. It follows, as indicated, that the error was consequently vitiating.[96]
[96]See, by analogy, Stead v State Government Insurance Commission (1986) 161 CLR 141.
Conclusions and the question of remitter
For the preceding reasons, I am of the opinion that the AirBnB Agreement for occupation of the whole of the Apartment is properly to be characterised as a lease between the Respondents, the tenants, and the AirBnB guests for the period of occupation agreed between them. It follows that their entering into this Agreement is, having regard to their own tenancy of the Apartment, a sub-lease. Consequently, the Respondents, the tenants, are in breach of the provisions of their lease of the Apartment, namely, cl 54 of the “Additional Terms” which does not permit sub-letting without the written authorisation from the landlord or the landlord’s agent.[97]
[97]Clause 54 is set out above at footnote n 2.
Issues have been raised as to the consequence of such a finding in the context of these proceedings.
The Applicant seeks orders by the Court resolving the substantive matters in issue in these proceedings, whereas the Respondents seek to have the matter remitted to VCAT for the following reasons:[98]
61.The plaintiff’s justification for doing so is that the term of the defendants’ lease of the premises will shortly expire on 20 August 2016.
62.First, it is difficult to see from a logical point of view how the fact that the plaintiff will shortly be entitled to possession because of the expiry of the term of the lease creates any sense of urgency for the Court to grant an order for possession. Why should the fact that a litigant is shortly due to receive the very thing she is asking the Court to give her justify an expedited approach? The very opposite should be the case. The looming expiry of the lease is a reason not to hear the case at all.
63.Second, the Court is restricted as a matter of law to exercise the powers conferred upon it by s 148(7) within the jurisdiction conferred upon it by s 148(1).[99] The use of the power given by s 148(7) should be used with regard to the limited nature of the appeal, and should not be allowed to open the door to an appeal by way of rehearing.[100] These powers should only be exercised when only one conclusion is open on the correct application of the law to the facts found by the Tribunal.[101] Even if all of the grounds of appeal are upheld, there are many other factors that suggest that the agreement between the defendants and the AirBnB guests was not a lease. See section G for a summary of those factors.
64.Third, the Court should entrust the specialist tribunal the task of weighing up the various factors that may tend towards the finding of a licence and the factors that tend towards a lease.
[98]Outline of Submissions of the Defendants (27 May 2016) [61]–[64].
[99]Osland v The Secretary of the Department of Justice (2010) CLR 320 at 332 [19].
[100]Osland v The Secretary of the Department of Justice (2010) CLR 320 at 333 [20].
[101]Osland v The Secretary of the Department of Justice (2010) CLR 320 at 332 [20].
The Applicant submits, on the other hand, that having regard to the pending expiry of the Lease—on 20 August 2016—a remitter to the Tribunal would only involve further costs and inconvenience. It is submitted that, in the circumstances, the most efficient means by which this dispute can be resolved is for the Court to finalise the matter, rather than remit it to VCAT.[102] On the basis of the position I have reached with respect to the characterisation of the occupation by the AirBnB guests—namely, that it was a lease—the Applicant submits that it follows that the Notice to Vacate was valid and that the application for a possession order should be granted. Moreover, this is a situation where I am in a position, without the need for more evidence—or further submissions (apart from in relation to the form of the possession order)—to decide the substantive issue the subject of these proceedings.
[102]Pursuant to s 148(7)(b) of the VCAT Act. See, eg, Hopkins v Hopkins [2014] VSC 319, [35].
In my opinion, this is an entirely appropriate situation in which the powers conferred by s 148(7) of the VCAT Act should, consistently with the overarching purpose of the Civil Procedure Act 2010, be exercised as I am of the opinion, for the preceding reasons, that only one conclusion is open on the correct application of the law to the facts found by the Tribunal.[103]
[103]See also Hopkins v Hopkins [2014] VSC 319, [35].
Finally, by way of conclusion, having regard to the public interest in these proceedings, it may be helpful to set out part of my concluding remarks at the hearing of this appeal:
First, this is not a case on the merits of AirBnB arrangements. Neither is it a case on whether or not AirBnB arrangements might be said to be “illegal”—either in some particular or some general, non-legal, sense. Rather it is a case, on appeal, which raises for determination—directly or indirectly—the legal character of this particular AirBnB arrangement and any consequences this characterisation may have in the context of the terms of the lease of the apartment concerned.
Secondly, the context provided by the terms of the particular apartment lease are important. Although this apartment lease is a residential lease, many commercial leases restrict the tenant from sub-leasing, assigning the lease, granting any licence to occupy all or part of the leased premises or otherwise parting with possession without the landlord’s prior consent. Broad terms such as this would prevent, for example, sub-letting or licensing without the landlord’s consent and would avoid the need—as in the present case—to characterise the nature of the same arrangement like the AirBnB arrangement for occupation of the whole of the leased premises as a sub-lease or a licence.
Orders
For the preceding reasons, the following orders will be made:
(1) Leave to appeal be granted.
(2) The appeal be allowed.
(3) The Order of the Tribunal be set aside.
(4)The Applicant be granted a possession order in a form which complies with the requirements of the Act.
I will hear the parties further in relation to the appropriate form of the possession order. I reserve the question of costs and will also hear the parties on this issue.
54. SUB-LETTING
Is not permitted. (Unless written authorisation from the landlord/agent). The Tenant acknowledges that the persons named on this agreement are the only permitted occupiers of the premises during the tenancy. The Tenancy Act provides 14 days notice to vacate if this occurs.
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