The gap in NCAT’s jurisdiction and what it means for tenancy

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Information sheet prepared by Grant Arbuthnot, Tenants Union of NSW, January 2018. Last updated March 2022.

Background

It was recently found that NCAT (the NSW Civil and Administrative Tribunal) does not have jurisdiction for matters where the parties are resident in different states of Australia.

This is due to a NSW Court of Appeal decision known as Burns & Corbett. The full reference is Burns v Corbett; Gaynor v Burns [2017] NSWCA 3 (3 February 2017).

The Court of Appeal found that although Commonwealth judicial power may be delegated to state courts, it may not be exercised by non-courts, like NCAT.

Matters between residents of different states are in the original jurisdiction of the High Court of Australia per section 75 of the Australian Constitution. This marks them out as matters of Commonwealth judicial power and so are strictly controlled by the Constitution.

Some points of clarification

This issue relates to residents in different states, not territories. So, NCAT still has jurisdiction if a party resides in the ACT or NT.
A party living overseas makes no difference. NCAT still has jurisdiction if a party resides overseas.
Corporations as parties make no difference. It does not matter where a corporation is registered. NCAT still has jurisdiction if a party is a corporation.

Examples

NCAT has dismissed interstate landlords’ applications for orders about rent arrears, including eviction applications, and
NCAT has dismissed tenants’ applications for their bonds where they have moved from NSW to another state.

What does this mean?

First, don’t panic!

Your residential tenancy agreement is still a valid contract, and
The Residential Tenancies Act 2010 still applies
You don’t have to go to the High Court.

Eviction

NCAT lacking jurisdiction does not permit informal eviction. It is still an offence to enter premises to take possession from a tenant without a Tribunal or Court order (section 120 of the Residential Tenancies Act 2010).

Rent arrears

As the tenancy agreement is still valid, not paying the rent is a breach of contract. Negotiate with the landlord or agent, as usual.

Taking the matter to the Local Court

It is possible to sue on a contract in the Local Court up to an amount of $100 000.00. And, the Residential Tenancies Act (section 168) also mentions court orders about payment of rental bonds. But see ‘Interim measure’ below.

What will happen next?

Burns & Corbett is now subject to appeal proceedings in the High Court. The matter has been heard (6/12/17), the decision is reserved.

Interim Measure (work around)

NSW has enacted an interim measure to allow courts to hear matters dismissed by NCAT per Burns & Corbett. It allows recommencing in the Local or District Court without paying further fees. Magistrates and Judges will have discretion about costs, the rules of evidence and representation by non-lawyers. See Part 3A of the NCAT Act.

What should you do if you are affected?

First, get advice

For tenants – click on Contact us for contact details of your local Tenants Advice and Advocacy Service.

Second, participate

Engage in the court processes.

Third, negotiate

Seek the assistance of a Community Justice Centre (CJC). CJCs offer free mediation services. With advice and mediation, disputing parties may achieve practical results. See cjc.justice.nsw.gov.au

Update, 16 February 2018

This week, the NCAT Appeal Panel decided that the Tribunal (NCAT) is a court of record and a court of a state for the purposes of the Australian Constitution. See Johnson v Dibbin; Gatsby v Gatsby [2018] NSWCATAP 45.

There are now four Burns & Corbett vectors:

Burns & Corbett in the NSW Court of Appeal,
Burns & Corbett in the High Court – pending/reserved,
The work around – Justice Legislation Amendment Act 2017, and
Johnson, Dibbin, Gatsby at NCATAP.

No. 4 allows the Tribunal to avoid the use of No. 3.

It is reasonable to expect NCAT members will consider themselves bound by No.4. The Appeal Panel is immediately above them in their particular part of the justice hierarchy.

We expect that NCAT will deal with cases where parties live in different states.

We wait the decision at No.2 and enjoy speculation on appeal proceedings re No. 4.

Update, 1 May 2018

On 18 April 2018 the High Court dismissed 2 above. The decision and a summary are available at www.hcourt.gov.au. This means that the NSW Court of Appeal decision stands entire.

There is now a number 5 to add to the sequence. The NSW Court of Appeal has heard an appeal of the NCAT Appeal Panel decision in Johnson, Dibbin & Gatsby. This decision is reserved.

The High Court does not regard NCAT as a court. So, 3 The work around may be in use again shortly.

Update, 7 November 2018

Recap the Burns & Corbett vectors:

Burns & Corbett in the NSW Court of Appeal,
Burns & Corbett in the High Court
The work around – Justice Legislation Amendment Act 2017,
Johnson, Dibbin, Gatsby at NCATAP and
Attorney General for NSW v Gatsby in the NSW Court of Appeal.

On 6 November 2018 the NSW Court of Appeal handed down its judgement in 5 above. The Court has answered three questions:

Whether the Court had jurisdiction to determine the appeal? YES
Whether the Tribunal was exercising judicial power under in terminating a tenancy for breach of agreement? YES
Whether the Tribunal is a “court of a State”? Per the Constitution (s77iii) and the Judiciary Act (s39(2) (Cth). NO

The third answer means that the work around (3 above) will have to be used until a better solution is found.