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Benchmark - Real Estate Cases & Commentary
    •  Consumer, Trader and Tenancy Tribunal
        -  Representation
            >  Complexity of case

Complexity of case 

The tenants lodged an application with the CTTT seeking a declaration that their lease was a Residential Tenancy Agreement under the Residential Tenancies Act 2010. They also sought a declaration that the lease was void because it was inconsistent with that Act, a refund of rent and all other payments they had made to the landlord, and reimbursement for money they had spent on repairs to the property.

This case was unusual in that leave was granted for both parties to be legally represented before the Tribunal. The first reason for this was that the tenants were Vietnamese, and did not speak English as their first language. Further, one of the witnesses had to give evidence in Vietnamese through a translator. Another reason was that the matter involved a complex question of law – that is, whether the lease was a Residential Tenancy Agreement or a commercial lease, in which case it might fall under the Retail Leases Act 1994. The Tribunal therefore considered the case would run more smoothly if the parties were legally represented.

The leased premises were used partly as a commercial general store and partly as the residence of the tenants and members of their extended family. The premises consisted of a residential house with a shop that fronted a highway. The landlord not only owned the leased premises, but also owned the premises next door, which were much larger and had a BP service station. The tenants said that the principal purpose of the landlord was to run the service station and sell fuel on the neighbouring block.

The tenants argued that the Tribunal could consider the premises as split in two, so that even though there was only one lease, the lease over the residential part of the premises could be considered as a separate lease and a Residential Tenancy Agreement.

The Tribunal accepted this was sometimes the case. However, the Tribunal held that this was an issue which depended on the particular facts and circumstances of the case. The Tribunal noted it would have to consider a large range of relevant facts, and there was no general principle of law that would answer the question one way or the other.

The Tribunal noted that, under section 7(h) of the Residential Tenancies Act, the Act will not apply to a lease where the predominant use of the premises is for commercial purposes. The Tribunal emphasised that the words of the Act are “predominant use” not “predominant purpose”.

Therefore, it did not matter what the tenants had intended when they entered into the lease. The important question was how they actually used the property over the course of the tenancy.
In this case, the Tribunal held that the tenants had used the property for a predominantly commercial purpose. Therefore, the Act did not apply to the lease, and the Tribunal had no jurisdiction to consider the claim.

Lu & Vien v Doojoo Pty Ltd [2011] NSWCTTT 539