Eugene Svoboda v Ainslie Village Management Pty Limited [1986] ACTSC 59 (3 July 1986)

SUPREME COURT OF THE ACT

EUGENE SVOBODA v. AINSLIE VILLAGE MANAGEMENT PTY. LIMITED
S.C. No. 790 of 1986
Landlord and Tenant

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Gallop J.(1)

CATCHWORDS

Landlord and Tenant - whether relationship exists - test of exclusive possession - use of the term "rent"

HEARING

CANBERRA
3:7:1986

DECISION

On 16 May 1986 the applicant's motion was dismissed with costs. I now publish my reasons.

2. By writ of summons dated 12 May 1986 the applicant instituted proceedings for recovery of possession of Room H27 at Ainslie Village, Quick Street, Campbell, in the Australian Capital Territory. The orders sought in the applicant's Notice of Motion dated 13 May 1986, so far as relevant to this application, were:

1. That the defendant company, their servants and

agents and any person claiming possession of the
premises known as Room H27 Ainslie Village, Quick
Street, Campbell in the Australian Capital
Territory through them or any one or more of them
forthwith deliver up possession of the said
premises to EUGENE SVOBODA and for that purpose
deliver to the said EUGENE SVOBODA any keys
necessary for the making secure of all external
doors of the said premises and any keys to any
internal doors which may be locked.
2. That the defendant company or its servants or
agents or any person claiming possession through
them or any one or more of them be restrained
until further order from interfering with the
quiet enjoyment of the said premises by the said
EUGENE SVOBODA when possession of the same shall
have been delivered up to him.

3. The facts giving rise to the application are set out in the affidavits of the applicant sworn 12 and 15 May 1986 respectively. The applicant had been a resident of Ainslie Village from about 3 April 1983 until January 1984 and again from June 1984 until he was in effect evicted from his room pursuant to a notice of eviction dated 29 April 1986 requiring the applicant to vacate the room by 9 May 1986. Ainslie Village is a hostel housing some 250-300 residents in single room accommodation with provision of common facilities such as dining, washing, toilet facilities and loungeroom facilities.

4. It is not necessary to deal with the applicant's occupancy of a room at the Ainslie Village prior to June 1984. He was allocated Room H27 on his return to live at the Ainslie Village in June 1984 and from then on he paid an occupancy fee fortnightly in advance. The occupancy fee charged was one-fifth of the applicant's income. In addition he received meal vouchers to the value of $1.00 for every $1.00 he paid by way of occupancy fee in advance. The meal vouchers are subsidised by the Commonwealth and are separate from the occupancy fee. He also paid a key deposit of $2.50. The hostel is managed by Ainslie Village Management Pty Ltd.

5. Payment of the occupancy fee entitled the applicant to a key to his room and the right to occupy that room alone. The management, however, retained a master key to each room, including the applicant's room, and reserved the right to inspect the rooms from time to time. Over the period of the applicant's occupancy of a room at Ainslie Village he had been served with about four notices of inspection and on each occasion the extent of notice was about three weeks. The applicant himself was responsible for cleaning his room. In addition to the occupancy of the room the applicant had the use of showers, toilets, dining room, television room, laundry and the grounds of Ainslie Village in common with all the other residents at the Village. Management permitted him to have visitors in his room and in common areas.

6. In January 1986 complaints were made to management about the applicant engaging in certain activities in part of the Ainslie Village known as J Block. He was warned by management by two letters dated 21 and 24 January 1986 respectively that any further occurrence of that nature would result in eviction proceedings against him. It was against that background that the notice of eviction dated 29 April 1986 was served upon the applicant. The reason stated for the eviction was "continual harassment and invasion of privacy toward other residents and threatening violence a hammer see letters 21-1-86 and 24-1-86". The applicant by his affidavit of 12 May 1986 (paragraph 19) has denied the allegations set out in the notice of eviction.

7. Following service of the notice of eviction upon the applicant, management changed the lock on the room formerly occupied by the applicant, effectively excluding him from using the room. The only other relevant fact is that the payments of the occupancy fee by the applicant to the respondent company were acknowledged by written receipts which referred to the payment received as "rent" for a period specified in the receipt.

8. The substance of the application was that there was a relationship of landlord and tenant between the respondent as landlord and the applicant as tenant and the provisions of the Landlord and Tenant Ordinance 1949 relating to the recovery of possession of prescribed premises under the Ordinance had not been complied with. I rejected the application because, in my view, there was no relationship of landlord and tenant between the parties so as to attract the provisions of the Landlord and Tenant Ordinance 1949.

9. The true test of a lease is whether exclusive possession is conferred upon the putative lessee (Radaich v. Smith [1959] HCA 45; (1959) 101 CLR 209 per McTiernan J. at 214). Another way to test the matter is to determine whether by the oral agreement the landlord has conferred upon the putative lessee a grant of an interest in the land (see per Taylor J. at 217). When one looks at the terms of the applicant's occupation of Room H27, one could not possibly come to the conclusion that the applicant was granted exclusive possession. Management retained a key to his room and reserved the right of inspection of the room whenever it felt inspection was necessary. The evidence is that management exercised that right of inspection about four times over a period of two years. The fact that notice of the intention to inspect was given by management is explicable as an act of courtesy rather than as a restriction on the right to inspect. Indeed the terms of the notice of inspection are quite peremptory. The form annexed to the first affidavit of the applicant reads:

"Room inspections will be carried out next week on
Thursday and Friday 27th and 28th of February. If you
have any cutlery or crockery in your room would you
please return it to the kitchen.

Thank you,

(signed) AINSLIE VILLAGE MANAGEMENT"

10. Counsel for the applicant laid some stress on the use of the word "rent" on the receipt for payment of the occupancy fee. He referred to the dicta of Manning J. in Psaltis v. Collins (1961) 78 WN(NSW) 424 at 428. His Honour expressed the opinion that in other than most exceptional cases the use by the parties of the word "rent" as describing the payment made for a right to occupy some part of a building is entitled to some weight. His Honour went on to observe in that case that the grant by the lessee of the right to occupy the bedroom exclusively, combined with the use of the word "rent", when viewed in the light of the fact that the transaction was clearly a business one in a strict sense, the parties being strangers and having no personal association whatever and not sharing the premises in a full sense, and having regard to the finding of the Magistrate that the lessee was granted exclusive occupation "as against the defendant" and to other circumstances mentioned, was sufficient to establish that there had been a subletting of the room in question.

11. The facts in the matter are starkly different to those in the present application and, having given weight to the use of the word "rent", I concluded that the relationship between the parties was not affected to any extent by the use of that word. It has been said over and over again that whether the relationship of landlord and tenant exists has to be determined on all the facts prevailing. The dominant facts prevailing in this application are that Ainslie Village consists of 250-300 single rooms with shared accommodation. The applicant was simply an inmate at the hostel with the right to occupy a single room and the use of other facilities. He had a key to that room but management retained a key and the right to inspect. Hence, management had access to all the rooms occupied by inmates. Management is in control, staff is engaged in maintaining the establishment and providing service for the inmates and there is a Board of Directors. In these respects the facts of the matter are not dissimilar from those reviewed by Sholl J. in Marshall v. Commonwealth Hostels Limited (1953) VLR 503 where his Honour held that no relationship of landlord and tenant existed.

12. Far from the applicant having established a relationship of landlord and tenant, in my view the evidence establishes that Ainslie Village is a Hostel and the inmates are licensees or lodgers. Accordingly I refused the orders sought.