No vaccine against natural justice: Gautham v Panwar [2021] VSC 157

By Alicia Hill, Principal and Lee Filkin, Law Clerk

The decision in Gautham v Panwar provides guidance as to the application of temporary measures put in place under the COVID-19 Omnibus (Emergency Measures) Act 2020 (Omnibus Act) in the context of residential tenancy disputes.

Background

Rawat (Landlord) was the owner of a house. He leased this property to Panwar (Tenant), who then made a verbal agreement with Gautham (Subtenant) on 16 February 2020 to sublease a room in the house.

On 2 June 2020, the Landlord sent a letter of eviction to the Subtenant, citing a failure to pay rent for the previous two months as the reason for eviction. The Subtenant wrote to the Landlord, referring to the Omnibus Act as a basis for avoiding eviction.

On 13 November 2020, the Landlord and Tenant applied to VCAT for a termination order pursuant to sections 548 and 549(2)(c) of the Residential Tenancies Act 1997 (Vic) (RT Act).

Both sections of the RT Act were enacted as temporary measures under section 46 of the Omnibus Act, which generally provided increased protections for residential tenants during the COVID-19 crisis. However, sections 548 and 549 of the RT Act comprise exceptions to these protections.

Section 548 allows a Landlord to apply to VCAT for an order terminating a tenancy agreement, and VCAT can only grant such an order if satisfied that:

  • one of the circumstances listed in section 549(2) of the RTA is made out; or
  • the tenant or the tenant’s visitor has, by act or omission, intentionally or recklessly caused serious damage to the premises, including to any safety equipment or to any common areas (under section 549(2)(a));
  • the tenant or the tenant’s visitor has, by act or omission, endangered the safety of occupiers of neighbouring premises, the landlord or the landlord’s agent, or a contractor (under section 549(2)(b));
  • that the tenant has used the rented premises, or permitted their use, for any purpose that is illegal at common law or under an Act (under section 549(2)(f));
  • the tenant has failed to comply with the tenant’s obligations under the tenancy agreement or the Act, including by not paying rent, in circumstances where the tenant could comply with the obligations without suffering severe hardship (under section 549(2)(i)); or
  • the tenant has assigned or sub-let or purported to assign or sub-let the whole or any part of the premises without the landlord’s consent (under section 549(2)(n)).
  • in the circumstances of the particular application, it is reasonable and proportionate having regard to section 538, to make the order taking into account the interests of, and the impact on, each of the following in making the order –
    • (i) The landlord or mortgagee in respect of the rented premises;
    • (ii) The tenant;
    • (iii) Any co-tenants or other residents;
    • (iv) Any neighbours or any other person who may be, or who has been, affected by the acts of the tenant.

Relevant matters under section 538 to which VCAT must also have regard in granting an order to terminate a tenancy agreement under section 549 include:

  • the nature, frequency and duration of the conduct of the tenant, resident or site tenant which led to the notice to vacate being given, including whether the conduct is a recurring breach of obligations under a tenancy agreement, residency right or site agreement;
  • whether the breach is trivial;
  • whether the breach was caused by the conduct of any person other than the tenant, resident or site tenant;
  • whether a family violence safety notice or equivalent intervention order has been made;
  • whether the breach was remedied as far as was practicable;
  • whether the tenant, resident or site tenant has, or will soon have, capacity to remedy the breach and comply with any obligations under the tenancy agreement, residency right or site agreement, as the case requires;
  • the effect of the conduct of the tenant, resident or site tenant on others as a tenant, resident or site tenant;
  • whether any other order or course of action was reasonably available instead of making the order sought;
  • as the case requires, the behaviour of the landlord, the landlord’s agent, the rooming house owner, the caravan park owner, the caravan owner or the site owner; and
  • any other matter VCAT considers relevant.

At hearing

In the Landlord and Tenant’s application it was alleged that the Subtenant had threatened the Tenant, causing him to vacate the premises for fear of his safety.

At the initial hearing of the application, a VCAT Member (Member) heard short oral evidence from each of the parties before ruling in favour of the Landlord and Tenant. The Member found that the Subtenant’s evidence was far less convincing than the Tenant’s, and it was accepted that the Tenant had been intimidated and threatened.

The Member ordered that the tenancy agreement be terminated, and possession of the property be granted to the Tenant in accordance with section 549(2)(c) of the RT Act. Verbal reasons were delivered by the Member at the time of judgment.

Although partly distorted due to technical errors in the virtual hearing, the Member’s reasoning was clear; it was considered that, having regard to the matters in section 538 of the RT Act and taking into account the interests of the Landlord, Tenant and any other person who has been or may be affected by the acts of the Subtenant, it was reasonable and proportionate to grant an order. The Subtenant appealed the VCAT decision.

On appeal

On appeal to the Supreme Court of Victoria, Ginnane J considered that the relevant grounds of appeal were the following issues:

  1. Jurisdictional error: whether the Member’s reference to the matters under section 538 of the RT Act is sufficient to satisfy the section 549(4) requirement of whether there was a valid reason for making a termination and possession order; and
  2. Natural justice: whether the Subtenant was refused the right to prove his innocence and denied the right to cross-examine witnesses.

Jurisdictional error

Ginnane J confirmed that the Member was obliged to consider the matters under section 538 of the RT Act if they were applicable to the facts of the proceeding, in accordance with the decision in Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24.

Ginnane J considered that a failure to mention relevant considerations as above does not necessarily mean the Member has failed to have regard to them; such a finding must be made by reference to the Member’s reasons as a whole within the particular context of the case.

However, upon analysis of the Member’s reasoning, Ginnane J was unable to infer that the Member had regard to the relevant considerations under section 538 of the RT Act.

The Member had considered the factual question of the intimidation and threats under section 549(2) but then subsequently failed to make other considerations required under section 538.

On this basis it was held that the Member had made a material error of law requiring the VCAT order to be set aside.

Natural Justice

Under section 102 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act), the Member was required to allow the Subtenant a ‘reasonable opportunity to call or give evidence, to examine, cross-examine or re-examine witnesses, and to make submissions to [VCAT].’

Before delivering his decision at trial, the Member confirmed that the parties had provided all evidence they thought was relevant and stated that he ‘will not engage in any further discussion on the nature of this case’. When the Subtenant sought to raise an issue at this point in relation to the allegations of aggressive behaviour against him, the Member stated that he was ‘not going to take any discussion of that sort’.

It was noted by Ginnane J that members of VCAT do not possess the same breadth of time to consider Residential Tenancy matters that judges do; however, His Honour held that insufficient time does not eradicate a party’s entitlement to natural justice.

It was also held that, in the particular circumstances of the case, the Member should have informed the Subtenant of his right to cross-examine witnesses whose evidence was adverse to him. The Subtenant was self-represented at trial and gave only brief evidence in chief. Ginnane J considered that because the case was brought under the emergency provisions of the Omnibus Act and concerned serious allegations against the Subtenant, some cross-examination should have been permitted.

It was acknowledged that ‘permitting cross-examination will lengthen the proceeding and may restrict the Member’s ability to hear other cases…but, if that is the result, it is a result required by law’ ). On this basis, the Subtenant’s appeal was allowed and the orders for termination and possession previously granted by VCAT were overturned.

Take aways

Although the Omnibus Act provides extensive protections for residential tenants during the COVID-19 crisis, there are exceptions to these protections.

Landlords should be aware of their entitlement to apply for termination and possession orders where their tenant has engaged in any of the conduct listed under section 549(2) of the RT Act. Likewise, tenants should be aware that the temporary protections granted to them by virtue of the Omnibus Act are not unassailable.

This case demonstrates that even in the context of COVID-19 emergency measures, where the time and resources of VCAT are often insufficient, strict adherence to both the law and the tenets of natural justice are required. Landlords and tenants alike should have reference to the foregoing decision if considering bringing an application for eviction.

If you have any questions regarding this decision or any matters raised by it, please contact Alicia Hill on (03) 8540 0292 or alicia.hill@mst.com.au