Croydon Park Apartments Pty Ltd v Wei

1. [1]

   HIS HONOUR: The plaintiff (Croydon Park Apartments Pty Ltd ACN 166243330) seeks leave to appeal a decision of an Appeal Panel (the “Appeal Panel”) of the NSW Civil & Administrative Tribunal (“NCAT”) and seeks that the orders and decision of the Appeal Panel be set aside. Further, the plaintiff seeks the reinstatement of the NCAT order made at first instance. The question is said to turn on the construction of the Retirement Villages Act 1999 (“the Act”) and whether service of an ordinary notice can terminate a periodic tenancy governed by the Act if followed by a suit for termination and possession.

Facts

1. [2]

   On 14 May 2015, the plaintiff, being the landlord for the premises at 12/1 Fabos Place, Croydon Park, gave the defendant notice. On 16 May 2015, the defendant (tenant) replied informing the plaintiff that she, the tenant, would not give vacant possession.

2. [3]

   A second notice was sent by the plaintiff (landlord) on 18 August 2015, indicating that the landlord intended to seek an order from NCAT, terminating the tenant’s residence contract.

3. [4]

   On 20 August 2015, the plaintiff sought an order for possession from NCAT and cited, as a reason for the order for possession, a breach by the defendant of the parties’ agreement. Reliance was also placed upon s 134 of the Act.

4. [5]

   On 18 February 2016, NCAT made orders for termination of the tenant’s occupancy and for the plaintiff to have and obtain possession of the premises. On 28 July 2016, the Appeal Panel of NCAT quashed those orders.

The Appeal Panel Decision

1. [6]

   The Appeal Panel allowed the appeal against the orders made at first instance, quashed orders one and two of the orders made by NCAT at first instance and, in lieu, ordered that the proceedings in NCAT be dismissed. No order issued as to the costs of the appeal.

2. [7]

   The Appeal Panel remarked that the facts were uncontentious and summarised the foregoing, together with the following facts:

3. [8]

   The Appeal Panel then recited a number of the provisions of the Act and extracted a number of terms of the Tenancy Agreement. The Tenancy Agreement contained certain standard terms and conditions. The decision of the Appeal Panel and also the recited terms of a Notice of Intention to Seek Termination were served, it was said, purportedly under the provisions of s 131 of the Act.

4. [9]

   The Appeal Panel confirmed the correctness of the finding of the decision at first instance that the Notice of 18 August 2015, being the Notice purportedly under s 131 of the Act complied with all formal requirements of s 131 of the Act. That finding is not in issue in these proceedings.

5. [10]

   The Appeal Panel then took the view that the Notice seemed “to assume a pre-existing breach of the terms of the Tenancy Agreement and this hypothesis was accepted by the Tribunal below”. The Appeal Panel also remarked that there was an inherent assumption in the decision of NCAT at first instance that the defendant’s occupancy and all rights could not be terminated except under the provisions of ss 132, 133, 134, 135, 136 and 136A of the Act.

6. [11]

   The Appeal Panel commented that if a resident contract could only be determined pursuant to the foregoing provisions of the Act, then it would be an odd result if that protection could be rendered otiose so easily by the device of serving a Notice to Vacate, which was then breached.

7. [12]

   The Appeal Panel described the first instance decision as one which allowed for the device to be successful. The Appeal Panel also summarised the plaintiff’s submission as one in which the Act “does not interfere with the contractual relationships between the parties which, notwithstanding the Act, is capable of being terminated” under the Residential Tenancy Act 2010 (“Tenancy Act”).

8. [13]

   Further, the plaintiff’s submissions before the Appeal Panel were that, as the Notice was issued pursuant to the contractual terms, it was valid and enforceable and a failure to provide vacant possession was a breach of the contract.

9. [14]

   The Appeal Panel also summarised the plaintiff’s submissions to the effect that s 199 of the Act does not apply to the tenancy, because the termination rights created by the terms of the contract are ancillary to the rights and obligations set out in the Act.

10. [15]

    Ultimately, referring to an extract from the Minister’s Second Reading Speech, the Appeal Panel were unpersuaded by the plaintiff’s submissions. In addition, the Appeal Panel determined that “where a Residential Tenancy Agreement relates to premises within a retirement village, it constitutes a residence contract within the Act, unless it falls within the exclusionary provisions of para (sic) (c) or (d) of the definition of resident right. There is no suggestion that such exclusion applied in this case.”

11. [16]

    The Appeal Panel concluded that Pt 9 of the Act left no room for the application of inconsistent contractual rights, reinforced by s 199 of the Act. The Appeal Panel concluded that a Notice to Vacate, purporting to terminate a contract, was invalid, unless given in accordance with Pt 9 of the Act.

12. [17]

    Over and above the foregoing, the Appeal Panel, relying on cl 31 of the Tenancy Agreement, did not allow the giving of notice in the manner suggested and concluded that, under the Tenancy Agreement, a residence contract was not terminated simply by a Notice to Vacate.

13. [18]

    The Appeal Panel allowed the appeal and issued the orders to which earlier reference has been made.

Appeal rights

1. [19]

   The plaintiff’s Summons seeks leave to appeal, presumably under the terms of s 83 of the Civil and Administrative Tribunal Act 2013 (“NCAT Act”), which provides:

2. [20]

   The fact, if it be a fact, that the appeal raises a question of law does not, in and of itself, grant a right of appeal. Rather, it grants a right to seek leave of the Court to appeal. As a consequence, the terms of s 83(1) of the NCAT Act presupposes that something other than, or more than, simply raising of a question of law is to be considered on the grant of leave.

3. [21]

   Nevertheless, the provision is one for the grant of leave, not the grant of special leave. The terms are technical terms, which have a different meaning.

4. [22]

   Special leave ordinarily requires that the matter raised be of such importance that an appeal should lie, while leave, simpliciter, requires no public importance.

5. [23]

   The defendant opposes the grant of leave. If leave be granted, the defendant opposes the appeal. Further, the defendant has filed a Notice of Contention, the terms of which do not need reciting. That Notice asserts the invalidity of the Notice to Terminate the Lease in the absence of a decision of and orders by NCAT under Pt 9 of the Act and submits that s 199 of the Act prohibits the plaintiff from contracting out of the Act.

Legislative Provisions

1. [24]

   It is necessary to recite or summarise some legislative provisions. The Act, by s 4, defines a ‘residence contract’ as “a contract that gives rise to a residence right”. The term “residence right” is defined in the following terms:

2. [25]

   As can be seen from the foregoing a “residence right” is a right to occupy residential premises, inter alia, in the form of the lease etc. “other than a residential tenancy agreement in the form prescribed under the” Tenancy Act that is entered into under Div 5 of Pt 10 or that contains a term to the effect that the Act does not apply to the residential premises.

3. [26]

   Part 9 of the Act deals with the termination of a residence contract the relevant definitions for which have been recited or summarised above.

4. [27]

   Section 139 of the act is in the following terms:

5. [28]

   It is not submitted that the Residential Agreement was an agreement under Div 5 of Pt 10 of the Act. Nor do the terms of the Residential Agreement exclude the operation of the Act. As a consequence the Act governs the terms of the Residential Agreement.

6. [29]

   If there were any inconsistency between the terms of the Act and the terms of the Tenancy Act, the Act is a specific provision that, in its terms, would override, in relation to the residential arrangements in a retirement village, the general provisions promulgated by the Tenancy Act. Moreover, the provisions of s 8(1)(b) of the Tenancy Act provide, expressly, that the Tenancy Act does not apply to “residence contracts within the meaning of the” Act.

7. [30]

   There is no inconsistency between the operation of the Act and the Tenancy Act, relevant to the issues in this matter.

Submissions of the Plaintiff and Consideration

1. [31]

   Essentially, the plaintiff contends that there is a complicated relationship between the operation of the Tenancy Act and the Act. That contention is unfounded.

2. [32]

   In circumstances where, as here, there is no exclusion of the terms of the Act under an agreement between the landlord and the tenant, and the residential agreement is not one made under Div 5 of Pt 10 of the Act, the rights of each of the parties are governed by the terms of the Act and not by the terms of the Tenancy Act.

3. [33]

   Moreover, as a consequence, none of the provisions of the Tenancy Act relevantly apply to the residential agreement between the plaintiff and the defendant. The only legislation that relevantly governs the provisions of that agreement is the provisions of the Act.

4. [34]

   As a consequence reliance upon the provisions of the Tenancy Act to show a breach or sufficient breach of the agreement is misconceived.

5. [35]

   Further s 134 of the Act permits an order terminating a residence contract where, it is submitted, there has been a breach of a periodic, residential tenancy agreement. Section 134 of the act is in the following terms:

6. [36]

   First, s 134 only grants a right to apply to NCAT for an order terminating the residence contract in relation to a resident “who breaches any village contract”. A “village contract” is defined to include a residence contract, which includes the residential agreement between the parties in these proceedings.

7. [37]

   Where an application has been made under the terms of s 134 of the Act, NCAT is given a discretion as to whether an order terminating the residence contract will be made, and, relevantly, may only do so in circumstances that “justify termination of the contract”.

8. [38]

   Thus, s 134 of the Act permits NCAT to issue an order terminating a residence contract, but does not require such an order.

9. [39]

   The Residential Agreement between the parties includes a clause, cl 31, Termination of Agreement, in the following terms:

10. [40]

    The breach to which the plaintiff refers and upon which the plaintiff relies is the breach by the defendant in not providing vacant possession when proper notice was given. However, the terms of cl 31 of the Residential Agreement requires vacant possession and all keys and operating devices to be returned only when “the Agreement terminates”. The Agreement does not terminate until an order is made by NCAT: see ss 129, 130, 131, 134 and 139 of the Act.

11. [41]

    In particular s 139 of the Act prohibits the recovery of possession of residential premises otherwise than in accordance with the Act. It is an offence to act in that manner, for which a penalty is prescribed.

12. [42]

    It is not a breach of the Residential Agreement as executed between the parties for vacant position not to have been given as and when required by the landlord (plaintiff). It is unnecessary to determine whether, following an order of NCAT for possession, it would be a breach of the Residential Agreement not to provide vacant possession.

13. [43]

    Even if it were, there would need to be a valid and enforceable order of NCAT. The breach to which the plaintiff points is one that precedes the application to NCAT.

14. [44]

    At least some of the issues arising in these proceedings were determined as a matter of principle by the Court of Appeal in Boele v Rinbac Pty Ltd (2014) 88 NSWLR 381; [2014] NSWCCA 451. In those proceedings it was not an issue that the residential agreement was a “residence contract” and, therefore, a “village contract”. That is not the situation in these proceedings.

15. [45]

    Nevertheless the circumstances that gave rise to the proceedings in Boele, supra, are significantly different from the circumstances in those proceedings. In Boele, supra, the breach was an antecedent breach of the Residential Agreement. In its reasons for judgment, the Court of Appeal made clear that the power to terminate a contract is conferred on NCAT, not the landlord or the tenant and the exercise of that power is discretionary.

16. [46]

    The Court of Appeal suggested that the Act established a two-stage process. Without any disrespect, I would prefer to refer to it as a three stage process. First, a party must apply to the tribunal and then the two-stage process, described by the Court of Appeal, starts to operate.

Conclusion

1. [47]

   The Court, as presently constituted, is prepared to accept (although there is some doubt) that the question raised by the plaintiff in this appeal is a question of law. The doubt arises from the proposition that the submissions proffered and the grounds raised seem, rather, to raise a mixed question of fact and law. Nevertheless, accepting that a question of law has been raised, the issue that the Court must first determine is whether leave to appeal should be granted.

2. [48]

   The submissions of the plaintiff on the interaction of the Act and the Tenancy Act are untenable. The uncontested facts give rise to only one conclusion, namely, that the Residential Agreement is a residence contract and governed by the terms of the Act; not by the terms of the Tenancy Act. Further, the alleged “breach” upon which the plaintiff relies is a breach that would render the terms of Pt 9 of the Act inoperable.

3. [49]

   The breach upon which the landlord must rely in order to seek and to obtain an order of NCAT is an antecedent breach to the residence contract. Since, under the terms of the Residential Agreement, vacant possession was required to be given only on the termination of the residency and, under the Act, residency was terminated only after an order of the tribunal, there existed no antecedent breach.

4. [50]

   The proposition of the plaintiff is untenable and leave to appeal should be refused.

5. [51]

   The Court makes the following order:

   1. (1)

      Leave to appeal refused;

   2. (2)

      The plaintiff pay the defendant’s costs of and incidental to the proceedings in this Court.