The Young WOMEN'S Christian Association of Canberra v Carne (Residential Tenancies)

[2017] ACAT 15

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

THE YOUNG WOMEN’S CHRISTIAN ASSOCIATION OF CANBERRA v CARNE (Residential Tenancies) [2017] ACAT 15

RT 1108/2016

Catchwords:RESIDENTIAL TENANCIES – whether the agreement was an occupancy agreement or residential tenancy agreement – supported accommodation – whether the respondent was a boarder or a lodger

Legislation cited:     Residential Tenancies Act 1997 ss 6A, 6B, 6C, 6D, 6E, 6F, 71C, 71E, 36, 126

Cases cited:Bangura & Fan [2013] ACAT 38

Commissioner and Social Housing v Johnson [2014] ACAT 57
Community Housing Canberra trading as CHC Affordable Housing v Connell [2013] ACAT 68
John Noble v Centacare [2003] ACTSC 37; 150 ACTR 12; 176 FLR 346
Wiser v Havelock Housing Association Inc [2014] ATCSC 138

Tribunal:                  Senior Member J Lennard

Date of Orders:  8 February 2017

Date of Reasons for Decision:        8 March 2017

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL      )         RT 1108/2016

BETWEEN:

THE YOUNG WOMEN’S CHRISTIAN ASSOCIATION OF CANBERRA

Applicant

AND:

ANDREW CARNE

Respondent

TRIBUNAL:Senior Member J Lennard

DATE:8 February 2017

ORDER

The Tribunal orders that:

1.The application for Termination and Possession is dismissed.

……………Signed…………..

Senior Member J Lennard

REASONS FOR DECISION

1.      This is an application for a termination and possession order in relation to premises in Evatt in the Australian Capital Territory. I made an order on 8 February 2017 dismissing the application. I gave oral reasons on that date. This is an edited version of those reasons.

2. The parties entered into an agreement in relation to the premises on 22 September 2016. A copy of that agreement was in evidence before the tribunal. That agreement is headed ‘Occupancy Agreement Supported Accommodation’. It is a term of that agreement that the parties agree that this is an occupancy agreement within the meaning of Part 5A of the Residential Tenancies Act 1997 (the RT Act).

3.      The applicant provides specialist crisis and transitional supported accommodation pursuant to a services funding agreement between the applicant and the Australian Capital Territory. The respondent, with his wife and daughter, first occupied the premises in July 2015. On 9 October 2016, the respondent’s wife and daughter vacated the premises. The respondent remains in occupation of the premises. The current agreement between the parties is the last in a series of short-term agreements which have been entered into since the respondent and his family first took possession of the premises.

4.      The occupancy agreement contains many terms which are similar to those found in the standard residential tenancy terms but also includes a number of terms which, in the applicant’s words, “provide more control to the applicant”. Those additional terms require the respondent to actively seek long-term housing; to move out of the premises when he is no longer eligible for the services provided by the applicant; and to take part in the applicant’s case management program. The clauses dealing with termination of the agreement provide for various periods of notice in particular circumstances. The applicant served a notice to vacate upon the respondent on 26 October 2016. That notice was served with four weeks’ notice on the grounds that the applicant had determined that it was no longer appropriate for the occupant to occupy the supported accommodation pursuant to the agreement.

5. The respondent made submissions that the application for termination and possession should be dismissed on the grounds that the agreement between the parties was properly characterised as a residential tenancy agreement pursuant to section 6A of the RT Act. Once an agreement is properly characterised as a residential tenancy agreement, then under the RT Act, the standard residential tenancy terms are the terms of the agreement and the provisions of the RT Act apply. If this was the case then the notice to vacate served on 26 October 2016, which does not comply with the requirements of the RT Act in relation to residential tenancy agreements, would be invalid, that is ineffective, and the application should be dismissed.

The relevant law

6AWhat is a residential tenancy agreement?

(1)An agreement is a residential tenancy agreement if, under the agreement—

(a)a person gives someone else (the tenant) a right to occupy stated premises; and

(b)the premises are for the tenant to use as a home (whether or not together with other people); and

(c)the right is given for value.

(2)The agreement may be—

(a)express or implied; or

(b)in writing, oral, or partly in writing and partly oral.

(3)The right to occupy may be—

(a)exclusive or not exclusive; and

(b)given with a right to use facilities, furniture or goods.

(4)This section is subject to the following sections:

·    section 6D (Certain kinds of agreements not residential tenancy agreements)

·    section 6E (Certain people given right of occupation not tenants)

·    section 6F (Certain kinds of premises mean no residential tenancy agreement).

6ECertain people given right of occupation not tenants

(1)A residential tenancy agreement does not include an agreement for the right to occupy premises if the person given the right of occupation is—

(a)a party to an agreement entered into honestly for the sale or purchase of the premises; or

(b)a boarder or lodger; or

(c)a person prescribed by regulation.

(2)This section is subject to the following sections:

·    section 6B (Residential tenancy agreement if agreement written and says it is residential tenancy agreement)

·    section 6C (Residential tenancy agreement if agreement part of employment).

71CWhat is an occupancy agreement?

(1)An agreement is an occupancy agreement if—

(a)a person (the grantor) gives someone else (the occupant) a right to occupy stated premises; and

(b)the premises are for the occupant to use as a home (whether or not with other people); and

(c)the right is given for value; and

(d)the agreement is not a residential tenancy agreement.

(2)The agreement may be—

(a)express or implied; or

(b)in writing, oral, or partly in writing and partly oral.

NoteAfter 6 weeks, the occupancy agreement should be in writing (see s 71E (c)).

(3)The right to occupy may be—

(a)exclusive or not;

(b)given with a right to use facilities, furniture or goods.

(4)The person given the right to occupy the premises may be—

(a)a boarder or lodger; or

(b)someone prescribed by regulation for this section.

NoteThis Act does not apply to nursing homes, hostels for aged or disabled people or other prescribed premises (see s 4).

The issue before the tribunal

6.      Essentially the tribunal must decide whether the agreement is a residential tenancy agreement, or an occupancy agreement.

7.      The tribunal cannot decide this by merely examining the agreement and its terms and determining the intention of the parties. The tribunal’s role is not to examine agreements and determine that those agreements are either occupancy agreements or residential tenancy agreements. The characterisation of agreement may not be determined merely by examining its terms.

8.      The approach to be adopted by the Tribunal has been examined in a number of cases. The parties referred to these cases in their written and oral submissions at the previous hearings.

9.      The Supreme Court of the ACT examined the question of whether an agreement was a residential tenancy agreement, or an occupancy agreement in the matter of Wiser v Havelock Housing Association Inc [2014] ACTSC 138. It is noted that this was an application for leave to appeal, and while these matters were considered by His Honour no clear characterisation of the agreement in question was made. I take the following points from Wiser.

(a)It will be readily observed that the definitions of residential tenancy agreement and occupancy agreement in the RTA are virtually identical. Each is an agreement, by virtue of which a person is given a right to occupy stated premises. Each agreement provides for the premises to be used as a home, whether or not with other people. In each case, the right to occupy is given for value. In addition, the common law touchstone for determining whether an agreement created a tenancy, or a licence has effectively been swept away, as the definitions of residential tenancy agreement and occupancy agreement both provide that the right to occupy may be exclusive or not exclusive. [at 29]

(b)Exclusive possession is no longer determinative of the nature of the right to occupy premises – what is determinative is whether any agreement provides for a right to occupy stated premises for a stated term, whether that be a fixed term or periodic. [at 35] The agreement of a term is a fundamental requirement for an agreement to be a residential tenancy agreement. In some circumstances, periodic tenancy may be inferred from the intervals of rent payment, but it must be observed that persons occupying as licensees, or as boarders or lodgers, will also commonly pay an occupation fee at fixed intervals. [at 36]

(c)It is clear that the parties chose to cast their agreement in terms of an occupancy agreement rather than a residential tenancy agreement, although this by itself, would not be determinative. [at 37][1]

[1] Burns J noted that the agreement in Wiser did not give a right of continuing occupation of any particular room within Havelock House and that Mr Wiser may be required to change rooms during the period of the agreement. Burns J noticed that this right on the part of the respondent was utterly inconsistent with a purported residential tenancy agreement

10.    In Community Housing Canberra trading as CHC Affordable Housing v Connell [2013] ACAT 68, a matter with similar but not identical facts, the provider of accommodation provides community and affordable housing to people in the ACT and provides supporting tenancy participation programs and support to facilitate long-term tenure to persons who would be otherwise facing homelessness. The parties had entered into a residential occupancy agreement and the occupant/tenant had been issued with a notice to vacate pursuant to that agreement. I take the following points from Connell:

(a)The first question to be resolved is whether the agreement between the parties is a residential tenancy agreement, or an occupancy agreement. If the agreement is a residential tenancy agreement, then any notice to vacate must comply with the prescribed terms and any term inconsistent with the prescribed terms is void. [at 21]

(b)An occupancy agreement as defined by section 71C(1) and a residential tenancy agreement as defined by section 6A(1) have the same features, save that an agreement will only be an occupancy agreement if it is not a residential tenancy agreement. [at 24]

(c)There is no requirement in the definition provided by section 6A of the RT Act that the parties share a common intention to create a residential tenancy agreement as such. It is enough that there is a common intention to enter into an agreement. [at 25 to 26]

(d)The issue is whether the parties had a common intention to enter into an agreement where a person was to be given the right to occupy the property, as a home and for value. [at 27]

(e)The question of whether a person was given exclusive possession of the premises is no bar to the agreement being a residential tenancy agreement. Section 6A(3) allows that a residential tenancy agreement may be provided with an exclusive or non-exclusive right to occupy premises, and may be given with a right to use facilities, furniture or goods. [after paragraph 28]

(f)Where parties signed an agreement entitled ‘occupancy agreement’ that title alone does not give the agreement the character of an occupancy agreement. [Compare with section 6B which provides that where an agreement is reduced to writing and expressly states that it is a residential tenancy agreement, the agreement is deemed to be a residential tenancy agreement.]. [at 28]

(g)The correct approach to interpretation of the legal character of the agreement, is as explained by ACAT in Bangora & Fan [2013] ACAT 38 – “the first question to be asked is whether an agreement between parties does or does not answer the description of a residential tenancy agreement. Only if the answer is in the negative is the further question asked as to whether the agreement satisfies the definition of an occupancy agreement.”

(h)In undertaking that enquiry, one must have regard not only to the written document and also to the evidence of the parties as to the intended and actual operation of the agreement. The agreement between the parties is not necessarily confined to what is reduced to writing and signed by the parties, although this will usually be the best evidence of what the agreement comprises. An agreement may be written, oral or both and may be express or implied. [at 30]

11. The regulatory provisions in the RT Act differ significantly between residential tenancy agreements and occupancy agreements – the standard residential terms provide a greater degree of certainty, more rights and better protection for tenants. The characterisation of the agreement is crucially important. If the agreement is a residential tenancy then the standard terms are incorporated and any inconsistent terms are void. This is usually relevant to rent increases, other charges and termination notices.

12.    In passing I note my agreement with Senior Member Anforth’s view as expressed in Bangora & Fan at [32] – the Act substantially confuses the relatively clear distinction between tenancies and lesser contractual licences at common law.

13.    In Commissioner and Social Housing v Johnson [2014] ACAT 57, Senior Member Anforth took a similar approach to that in Bangora v Fan but came to a different conclusion – seemingly upon policy grounds. I concur with his concerns as noted at [28] – the danger to the role of the Commissioner and other temporary, crisis or supported accommodation providers if people allocated temporary or crisis accommodation are elevated to the status of permanent tenants under a residential tenancy agreement is that the  availability of the housing stock for temporary or crisis accommodation programs will quickly evaporate. This is not a desirable outcome. However ACAT cannot make a decision based on desirable or otherwise policy outcomes, or on what we think we know was really what the legislature intended, even though the Act says otherwise. I take the following points from Johnson:

(a)Merely calling an agreement an occupancy agreement is not definitive or determinative of its true character [at 16]

(b)If the agreement can be fairly characterised as a residential tenancy agreement then there is no need to determine whether it may also be characterised as an occupancy agreement. [at 16]

(c)The true character must be determined objectively by reference to the express or implied communications between the parties and the terms of the agreement itself. [at 17]

(d)It is difficult to reconcile an examination of the communications between the parties and the terms of the agreement as the first step, but that seems to be what Senior Member Anforth did in Johnson – the arrangement was unusual and not in the usual course of the Commissioner’s accommodation provision. Senior Member Anforth looked to aspects of the agreement to determine that it was an occupancy agreement. There is no consideration of the characterisation of the agreement in terms of section 6A. I respectfully depart from that order of examination. It is not the proper role of ACAT to look only at the terms of the agreement and make a choice between tenancy or occupancy.

14.    I have therefore determined that the appropriate approach is as follows:

(a) To examine the agreement to determine whether it falls within the definition of a residential tenancy agreement in accordance with section 6A of the RT Act;

(b) if the agreement does fall within the definition of a residential tenancy agreement then the Tribunal should have regard to the exceptions that are set out in the RT Act – section 6E is the relevant section in this matter.

(c) If the agreement falls within the exception contained in section 6E, then the Tribunal should have regard to the provisions dealing with occupancy agreements to determine whether the agreement is an occupancy agreement.

(d)     In relation to all three steps, but particularly steps (b) and (c) the communications between the parties and the terms of the agreement may be taken into account.

The evidence before ACAT

The agreement

15.  The agreement contained the following information:

(a)     Occupancy Agreement Supported Accommodation – recital that the parties agree that this is an occupancy agreement. Clauses 1 & 2 parties agree this is an occupancy agreement.

(b)     No bond is payable.

(c)     Premises are to be used as a principle residence.

(d)     Clause 20 in this agreement, ‘rent and charges’ includes rent, a board and lodging charge, a service contribution, a utilities contribution and any other periodic charge associated with the occupancy.

(e)     Other clauses use the term rent, rent records and income-related rent.

(f)      The occupant is responsible for arranging the connection of the payment for the consumption of electricity, gas and telephone at the premises.

(g)     Fixed term of 16 September 2016 to 15 December 2016.

(h)     Many terms in accordance with standard residential terms – obligations upon YWCA as to cleanliness, condition of premises and repairs, urgent repairs; obligations upon Mr Carne as to taking care of the premises, not making alterations, or adding fixtures, use of the premises for illegal purposes and not to interfere with quite enjoyment of the neighbours, prohibition on subletting, liability for damages.

(i) Access to premises in accordance with the RT Act – notice required.

(j)      Termination clauses – these are significantly different to the standard terms and these are somewhat favourable to the occupant in allowing one days’ notice, but most favourable to the grantor. Clause 77(c) is the relevant clause and provides that the grantor may serve on the occupant notice to vacate on four weeks notice if the grantor  genuinely determines that it is no longer appropriate for the occupant to occupy the SHS accommodation granted to the occupant under this occupancy agreement.

16.    Special requirements and ‘Service Rules’ are part of the agreement. No copy of the service rules are before the Tribunal. I note the requirement to participate in the case management program, regular meetings with housing support officer and the requirement to actively demonstrate that the occupant is seeking long-term housing.

Is Mr Carne a boarder or lodger?

17. The applicant made submissions that the Tribunal must turn its mind to whether the respondent is a lodger pursuant to section 6E(1)(b) of the RT Act. The submissions referred the Tribunal to the following issues:

(a)The Tribunal should have regard to the evidence of the parties’ conduct as to the intended and actual operation of the agreement.

(b)The agreement is labelled ‘Occupancy Agreement Supported Accommodation’, the parties agree that it is an occupancy agreement; therefore the parties intended that it should be an occupancy agreement – but I note that by itself, this would not be determinative.

(c)Control of the premises – the relationship between the applicant and the respondent is significantly different to the standard lessor/tenant relationship, that is, support services. The applicant referred to John Noble v Centacare [2003] ACTSC 37. The control exercised by Centacare over the boarders and lodgers in their supported accommodation far exceeds the control that may have been exercised by the YWCA in this case. The degree of control exercised over the residential premises seems to have exceeded that normally imposed by a tenancy agreement and to have been attributable to the special needs of residents of the village and, perhaps, to the need to protect others from conduct attributable to the conditions from [which] some of the residents suffered. [at 45] There is no evidence that Mr Carne could not do as he wishes within the premises. The requirements of the Service Rules do not prevent him from living as he chooses and treating the premises as his home. The YWCA does not retain any control or dominion over the premises, as was the case in Noble, but rather requires the respondent to participate in case management meetings.

18.    The respondent made submissions that an analysis of the way in which the agreement worked in practice demonstrates that the agreement closely resembles an arm’s length tenancy. The applicant does not control or retain any control or dominion over the premises with access to the premises being limited to the provisions set out in the occupancy agreement terms. Even taking into account the broader inspection powers, the agreement does not give the applicant any right to access the property at will. The respondent further submits that the applicant cannot be said to have exercised authority or control over the premises or household issues in such a way as to indicate an owner/lodger arrangement. In both the agreement and in practice the respondent enjoyed exclusive possession of the property. The applicant did not retain any part of the property to itself, nor did the applicant maintain a presence on the property. As such, the necessary defining element of the owner/lodger relationship – maintenance of control over the premises and on how life is lived in the premises is absent.

19. The tribunal accepts that the applicant drafted the agreement with a view to providing to itself the right to give notices to terminate the agreement in particular circumstances not provided for within the standard terms or the RT Act and on shorter periods of notice that are provided for within the standard terms or the RT Act. However, if an agreement is a residential tenancy agreement then the standard terms apply and the parties may vary those terms in accordance with the provisions of the RT Act. Terms which are inconsistent with the standard residential terms may be endorsed by the tribunal. [section 10]. The notice period required for termination on various grounds is contained within the standard residential terms. The subjective intention of the applicant to enter into an occupancy agreement cannot by itself determine the character of the agreement.

20.    The Tribunal also accepts that the respondent may be, in taking this action, asserting rights to which he had not put his mind at the time of entering into the agreement and which directly contradict the terms of the agreement he did enter into. Nevertheless, the tenant now has the advantage of legal advice, and is entitled to assert before this Tribunal that the agreement he entered into, ought to be characterised as a residential tenancy agreement and that his rights and obligations arising under that agreement are enforceable.

Other matters considered

21. The RT Act contemplates that agreements entered into for the provision of crisis accommodation will be residential tenancy agreements.

22. Section 36 deals with termination of residential tenancy agreements, it provides at (k) for the termination of agreements for crisis accommodation—if the lessor—

(i)     gives the tenant 4 weeks notice to terminate the agreement; and

(ii)     has given the tenant information about alternative accommodation; and

(iii)     needs the premises to use as crisis accommodation for someone other than the tenant;

23. Section 126 of the RT Act provides:

126Declared crisis accommodation provider

(1)The Minister may declare an entity to be a crisis accommodation provider in relation to stated accommodation (crisis accommodation).

(2)However, the Minister must not make the declaration in relation to accommodation unless satisfied that the entity—

(a)provides, or intends to provide, the accommodation as emergency accommodation for people in crisis; and

(b)provides, or intends to provide, information to people accommodated in the accommodation, whether on or before termination, about alternative accommodation and, if appropriate, other services.

(3)A declaration is a notifiable instrument.

NoteA notifiable instrument must be notified under the Legislation Act.

24.    There is no evidence before the Tribunal that the applicant was a declared crisis accommodation provider at the time of the issuing of the notice to vacate. I note however that on 24 January 2017 the Attorney-General for the ACT made the following declaration: “I declare that YWCA Canberra is a crisis accommodation provider in relation to all accommodation in the Australian Capital Territory used by YWCA Canberra for crisis accommodation.”[2]

[2] Notifiable Instrument NI2017-33

25. I note that the issues thrown up by this and similar matters have the potential to cause confusion and uncertainty for persons occupying premises provided by charities and community groups, but refer to section 6E(1)(c) which refers to a person prescribed by regulation. The formulation of a regulation prescribing persons receiving assistance under nominated programs would remove the substantial confusion. I also refer to section 126 regarding declared crisis accommodation providers. The declaration of a provider as a declared crisis accommodation provider would also remove some confusion.

26.    It is unacceptable for the Tribunal to be called upon to determine on a case by case basis whether the accommodation provided by various charities and special purpose, emergency or supported accommodation providers is subject to a residential tenancy agreement or an occupancy agreement - based upon an examination of the facts and a determination of the subjective intention of the parties. This would lead to an even more substantial confusion. The solution is in the hands of the relevant minister and I urge them to use their regulation making power to provide certainty in this important area.

27.    Does the agreement fit the definition of residential tenancy agreement?

(a)the agreement gives the respondent the right to occupy stated premises;

(b)the premises are to use as a home (whether or not together with other people);

(c)the right is given for value;

(d)the agreement is express and in writing;

(e)the right to occupy may have some exclusive and some not exclusive elements; and

(f)none of the exceptions apply.

Order

28.    Following the approach outlined above, I find that the agreement is a residential tenancy agreement. Therefore the notice to vacate is inoperative and the application for termination and possession is dismissed.

………………………………..

Senior Member J Lennard

HEARING DETAILS

FILE NUMBER:	RT 1108/2016
PARTIES, APPLICANT:	YWCA Canberra
PARTIES, RESPONDENT:	Andrew Carne
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Griffin Legal
SOLICITORS FOR RESPONDENT	Tenants Union ACT
TRIBUNAL MEMBERS:	Senior Member J Lennard
DATES OF HEARING:	8 February 2017