Zhang v Duggal

[2019] NSWCATCD 82

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Zhang v Duggal [2019] NSWCATCD 82

Hearing dates:

15 August 2019

Decision date:

15 August 2019

Jurisdiction:

Consumer and Commercial Division

Before:

P French, General Member

Decision:

(1) The Residential Tenancy Agreement is terminated in accordance with section 86 of the Residential Tenancies Act 2010 as the landlord has served a termination notice as the landlord has entered into contract for sale of the residential premises.

(2) The Residential Tenancy Agreement is terminated on 20 August 2019 and possession is to be given to the landlord on the date of termination.

(3) The tenant shall pay the landlord a daily occupation fee at the rate of $78.57 per day from the day after the date of termination, namely 21 August 2019 until the date vacant possession is given to the landlord.

(4) Within 60 days of the date for possession of the premises specified in these orders the landlord may request the relisting of the application to determine the amount of the occupation fee owing.

Catchwords:

RESIDENTIAL TENANCY: application for orders for termination and possession on the ground of sale of the residential premises

Legislation Cited:

Residential Tenancies Act 2010

Category:

Principal judgment

Parties:

Xiaowei Zhang (the landlord)
Rohit Duggal (the tenant)

Representation:

Cheng Chia, Property Manager (for landlord)
Rohit Duggal (in person)

File Number(s):

RT 19/34810

Publication restriction:

Nil

REASONS FOR DECISION

1. These are reasons for a decision that was issued in this application on 15 August 2019. The application was listed and heard in a Group List which ran over time. At the end of the hearing some further consideration of the application and the parties’ evidence was required. It was therefore not possible to deliver oral reasons at the end of the hearing. As will emerge in the reasons that follow, the application had some urgency associated with it, so it was not appropriate to reserve the decision for the preparation of written reasons to accompany it. I therefore issued final orders later that day and indicated to the parties that short written reasons would follow in due course. These are those reasons.

2. Before the Tribunal was an application by Xiaowei Zhang (the landlord) for an order under section 86 of the Residential Tenancies Act 2010 (RT Act) that would terminate the residential tenancy agreement that subsisted between him and Rohit Duggal (the tenant) on the ground that the landlord had entered into a contract for the sale of the residential premises that required him to deliver up vacant possession of the premises to the purchaser on settlement of that sale.

3. The application was listed in a Group List for Conciliation and Hearing. Mr Cheng Chia, a Property Manager working with the landlord’s Managing Agent, attended the hearing on the landlord’s behalf. Mr Duggal attended the hearing in person. In accordance with the Tribunal’s usual practice where both parties are present in person, prior to the case being called, the parties were provided with the opportunity to attempt to resolve the dispute cooperatively. Those efforts were not successful.

4. This was a simple application for termination and possession orders. It did not require adjournment to a Special Fixture Hearing or the filing and exchange of evidence. As a consequence, when the parties returned to the hearing room following conciliation the Tribunal conducted a final hearing in relation to the application.

5. The landlord relied upon a bundle of documents which included a copy of the residential tenancy agreement, a copy of a contract for the sale of the residential premises and associated communications between the landlord’s (vendor’s) and purchaser’s solicitors, and the termination notice served on the tenant. These documents were admitted into evidence and marked Exhibit L1. The tenant did not rely upon any documentary evidence. Mr Chia and Mr Duggal both gave oral evidence to the Tribunal under a solemn promise to tell the truth.

6. The dispute arose from a residential tenancy agreement that was made on 16 November 2017. It was initially a fixed term agreement that was expressed to commence on 18 November 2017 and end on 17 May 2019, being a term of 18 months. Upon the expiry of the fixed term the tenancy continued on the basis of a periodic agreement. There is no issue in the proceedings that this agreement is a residential tenancy agreement to which the RT Act applies or that the Tribunal had jurisdiction to deal with the landlord’s application under the provisions of that Act.

7. By a Termination Notice dated 4 July 2019 served by hand to the tenant by the landlord’s agent on that date the landlord sought to terminate the residential tenancy agreement and recover possession of the premises on 3 August 2019. The Termination Notice is a standard form notice. The ground for termination specified in the notice is the “sale of the premises (landlord has entered into contract for sale dated 18 June 2019 requiring them to give vacant possession to the purchaser.” It is not in issue that the tenant failed to give up possession of the premises in accordance with that Notice. Nor has he done so up to the date of the hearing.

8. Section 86 of the RT Act provides that a landlord may give a termination notice on the ground that the landlord has entered into a contract for the sale of the residential premises under which the landlord is required to give vacant possession of the premises: section 86(1). The termination notice must specify a termination date that is not earlier than 30 days after the day on which the notice is given: section 86(2). A landlord must not give a termination notice under section 86 that specifies a termination date that is before the end of the fixed term if the residential tenancy agreement is a fixed term agreement: section 86(3). The Tribunal may, on the application by a landlord, make a termination order if it is satisfied that the landlord has entered into a contract for the sale of the residential premises that is proceeding under which the landlord is required to give vacant possession of the premises, and a termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice: section 86(4).

9. There is no issue that the preconditions to the exercise of the order making power conferred on the Tribunal by section 86(4) are satisfied in this case.

10. In this respect the landlord has submitted into evidence a copy of the contract for sale of the residential premises which is dated 18 June 2019 and associated correspondence, including requisitions made of him by the purchasers’ solicitor. The date for settlement of the sale is 21 August 2019. It is clear from this material that the purchasers have stipulated and the landlord (vendor) has warranted that on settlement of the sale the purchasers will have vacant possession of the premises. The purchasers have stipulated that a failure by the landlord (vendor) to deliver up vacant possession of the premises on the date of settlement would give rise to an immediate right to rescind the contract for sale. In his oral evidence to the Tribunal Mr Chia provided some context to these contractual obligations. It appears that the purchasers are moving from interstate and intended to take up occupation of the premises on the date of settlement. They would therefore suffer serious inconvenience and additional cost if they did not obtain possession of the premises on the date of settlement.

11. At the time the Termination Notice was served the tenancy was a periodic agreement, not a fixed term agreement. The landlord was therefore entitled to provide the tenant with 30 days’ notice of termination, and did so. The tenant has not vacated in accordance with that notice. There is no other issue as the validity of the termination notice or its method of service.

12. Section 86(4) confers discretion on the Tribunal to make a termination order; it is not mandatory that it does so (as compared with section 84 and 85 termination applications for example). Nevertheless, this discretion must be exercised judicially. In this respect, an applicant who has satisfied the preconditions required to obtain an order sought is generally entitled to that order. It must also be borne in mind that the landlord is the Registered Proprietor of the land on which the residential premises is situated. This is a superior estate to the tenant’s leasehold estate, and the leasehold estate must give way to the landlord’s superior estate according to law, absent disentitling conduct, which does not arise in this case. In his oral evidence the tenant did not did not quarrel over whether a termination order should be made. He accepted that the landlord was entitled to recover possession of the premises.

13. The tenant’s submission was, rather, that he needed more time to move out. In this respect he told the Tribunal that he had entered into a lease over another property which commenced on 29 August 2019. He stated that he could start to move out on that date but would still require a week to complete the move. He submitted that he had nowhere else to go in the interim. The tenant explained that he lived at the premises with his wife and two young children. He told the Tribunal that his wife is in the early stages of pregnancy and is experiencing periods during which she is unwell. He submitted he and his family would suffer serious hardship if a termination order was made that required him to deliver up immediate possession of the premises. He asked the Tribunal to order that he return possession on or about 5 September 2019, giving him a week to move into his new property after being given the keys.

14. To a degree both the landlord and the tenant are responsible for their own predicaments. The landlord has sought to maximise his income by continuing the tenancy up to a time that was close to the settlement of the sale of the premises. Had he commenced the process of recovering possession sooner he would have had a greater margin within which to manage his present vicissitudes. Nevertheless, Parliament has determined that a landlord is only required to provide a tenant with 30 days’ notice of termination in these circumstances and that is what the landlord did.

15. There is an issue as to when the tenant started looking for alternative properties. Mr Chia submitted that the tenant sat on his hands after receiving the termination notice and failed to look for alternative premises. Mr Chia submits that the evidence of this is that his agency only recently began to receive requests for references and copies of the tenant’s rent ledger. The tenant denied that he sat on his hands. He claimed that he commenced a property search immediately upon receiving the termination notice but only recently was able to secure a suitable property. He could not satisfactorily explain why reference checks only occurred recently.

16. There is no comfortable answer to the serious difficulty confronting the landlord and the tenant in these proceedings. Doing the best that I can for both parties I have determined that the tenant should be given extra time to move but only up to the day before settlement of the sale, being 20 August 2019. That will mean that the tenant will have had 47 days from the date of issue of the termination notice to find alternative premises. That is a substantial period of time, and there is no satisfactory evidence that there was any particular scarcity of properties available for rent which delayed the tenant’s move. From an objective point of view, it cannot be accepted that the tenant has nowhere else to go. There are various types of temporary accommodation and storage available that he can utilise, albeit at additional cost and inconvenience.

17. Any extension of time beyond 20 August 2019 would be too prejudicial to the landlord’s interests. If the premises is not vacant on 21 August 2019 the purchasers may rescind the contract for sale, and in any event, are likely to suffer serious inconvenience and hardship for which the landlord may be liable to compensate them.

18. For the foregoing reasons I made orders terminating the residential tenancy agreement and giving the landlord possession of the premises effective from 20 August 2019.

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

Registrar

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

Registrar

Decision last updated: 22 July 2021