VCAT Orders in Favor of Landlord Opposed by Tenant

Cathcart v Wang [2021] VSC 685 (28 October 2021)

Mr Wang applied for an order terminating the tenancy with Ms Cathcart.  The application was heard by telephone on 18 January 2021.  The member did not halt proceedings in order to call Ms Cathcart back when the phone connection dropped out but instead carried on apace.  A termination order was made in favor of Mr Wang.  Ms Cathcart applied for leave to appeal from orders of VCAT made at separate hearings. 

Facts:

On 31 October 2018, Melysa Maree Cathcart entered into a residential tenancy agreement in respect of a one-bedroom unit in Footscray.  The period of the tenancy was 12 months, ending on 30 October 2019.  The rent was $1,000 per month payable a month in advance.  The tenant paid a bond of $1,000.

For the purposes of the applications to VCAT, Mr Wang was treated as the landlord.  The landlord, on 9 November 2020, lodged an application for an order terminating the tenancy.  The claimed basis for the order included that the tenant had been engaging in intimidating behaviour towards other tenants in the apartment block in which the rented premises were situated.  On 18 December 2020, the VCAT dismissed the application on the basis that “the landlord has not proven the grounds of the application”.

On the same day of the hearing of the first application, the landlord lodged a second application for termination of the tenancy.  The claimed basis for the order was unpaid rent.  The application was heard by telephone on 18 January 2021.  The tenant’s mobile phone connection dropped out less than a minute into the hearing of her landlord’s application to have her residential tenancy terminated for unpaid rent.  The member, oblivious to the tenant’s absence at first but later thinking that she had hung up on him, did not halt proceedings in order to call her back but instead carried on apace. 

The member continued to receive viva voce evidence and submissions from the landlord’s agent, and made an order terminating the tenancy.  The VCAT concluded that the landlord has proven the grounds for the application.  Warnings were made to the tenant if she does not vacate the rented premises by 22 February 2021 the landlord may apply to VCAT for a possession order.   On 9 February 2021, the tenant filed an application for leave to appeal against the termination order.  

On 23 February 2021, in reliance on the termination order made on 18 January 2021, the landlord filed at VCAT an application for a possession order.  On 27 August 2021, a deputy president made an order for possession of the rented premises. 

Issues:

I. Whether or not there was denial of procedural fairness. 

II. Whether or not a possession order is contingent upon a termination order validly made under applicable provision.

III. Whether or not the proposed appeals are futile in view of, inter alia, tenant’s continuing unjustified failure to pay rent.

IV. Whether or not the Court should affirm VCAT’s orders.

Applicable law:

Residential Tenancies Act 1997 (Vic) Part 16 (“COVID-19 temporary measures”) s 550(1) - provided that it was a precondition to the exercise of the jurisdiction to make a possession order that “[VCAT] has made an order under [s] 549(1) terminating the tenancy agreement”. The order to which s 550(1) referred must be a valid order. 

Victorian Civil and Administrative Tribunal Act 1998 (Vic) ss 97, 98 - provides that the VCAT must act fairly and is bound by the rules of natural justice. 

Victorian Civil and Administrative Tribunal Act 1998 (Vic) ss 100, 102 - provides that it will be enough, for example, that the tribunal determines a matter on documentary evidence alone, despite a litigant’s insistence that viva voce evidence be given. 

Victorian Civil and Administrative Tribunal Act 1998 (Vic) s 148 - provides that a party to a proceeding may, with leave, appeal to this Court on a question of law from an order of the tribunal in the proceeding. 

Minister for Immigration v Bhardwaj [2002] HCA 11; (2002) 209 CLR 597 - provides that basic procedural fairness is an aspect of the rules of natural justice.

Osland v Secretary, Department of Justice [No 2] [2010] HCA 24; (2010) 241 CLR 320 - relied upon by the Court in holding that while it may seem sensible to attempt to cut the Gordian Knot here and now, this matter does not, in my view, fall within the limited circumstances in which this Court, on an appeal, may make substitutive orders. 

Markiewicz v Crnjac [2021] VSCA 290 at [13] - explained that an application to the Tribunal for an order for termination of a tenancy agreement was necessary and would only be made, where based on the failure to comply with a tenancy agreement, if the tenant could comply without suffering severe hardship. 

Osland v Secretary, Department of Justice [No 2] [2010] HCA 24; (2010) 241 CLR 320 - relied upon by the Court in holding that while it may seem sensible to attempt to cut the Gordian Knot here and now, this matter does not, in my view, fall within the limited circumstances in which this Court, on an appeal, may make substitutive orders. 

Leeda Projects Pty Ltd v Zeng [2020] VSCA 192; (2020) 61 VR 384 - where considerations of convenience would permit this Court to determine factual matters on uncontested evidence or primary facts already found by VCAT.

Analysis:

While the tenant, like the landlord, had sent some written materials to VCAT ahead of the hearing, she was denied a reasonable opportunity to hear and test, by cross-examination, the viva voce evidence of the agent, to give her own viva voce evidence, or to make submissions. The jurisdiction to make an order for possession of the rented premises required VCAT to have made a valid order “under” the relevant provision.  Since the termination order was made without jurisdiction, it was neither valid nor made “under” that provision.  By the time the hearing came on, the tenant owed almost four months’ rent, while her position was complicated by ill-advised decisions, the tenant still cut a rather sympathetic figure and could lay claim to severe hardship resulting from the pandemic.

Conclusion:

The hearing lacked basic procedural fairness, which is an aspect of the rules of natural justice.  VCAT’s decision involved jurisdictional error, lacks legal foundation and, in law, is no decision at all. Upon the setting aside of the termination order, the possession order must be set aside as well.  The Court is not persuaded that it should refuse leave to appeal or affirm VCAT’s orders.  The applications are granted.  The appeals are allowed.  The orders for termination and possession set aside.  The landlord’s applications for such orders are remitted to the VCAT for rehearing.