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Court Update: COVID-19 Legislation Amendment (Emergency Measures) Act 2020

Court Update: COVID-19 Legislation Amendment (Emergency Measures) Act 2020

Published on April 2, 2020 by Daniel O’Brien and Grace BrophyDaniel O’Brien and Grace Brophy

In the matter of Catalyst Provisional Lending Pty Ltd & Ors v Dick-Telfar & Anor [2020] NSWSC 324

The Act

As has been widely reported, the COVID-19 Legislation Amendment (Emergency Measures) Act 2020 (NSW) (the Act) was assented to on 25 March 2020. The Act gives the NSW Government the power to provide regulatory changes to both residential and retail tenancies. In that regard, the Act has made amendments, amongst others, to the Residential Tenancies Act 2010 by the insertion of section 229(1) which provides the relevant regulation making power:

Part 13 Response to COVID-19 pandemic

229 Regulation-making power

(1) The regulations under any relevant Act may provide for the following matters for the purposes of responding to the public health emergency caused by the COVID-19 pandemic—

(a) prohibiting the recovery of possession of premises by a landlord, owner or proprietor of premises from a tenant or resident of the premises under the relevant Act in particular circumstances,

(b) prohibiting the termination of a residential tenancy agreement, occupancy agreement or site agreement by a landlord, proprietor of premises or operator of a community under the relevant Act in particular circumstances,

(c) regulating or preventing the exercise or enforcement of another right of a landlord, proprietor of premises or operator of a community by the landlord, proprietor or operator under the relevant Act or an agreement relating to the premises,

(d) exempting a tenant, resident or home owner, or a class of tenants, residents or home owners, from the operation of a provision of the relevant Act or any agreement relating to premises.

Current Application of the Act

In the matter of Catalyst Provisional Lending Pty Ltd & Ors v Dick-Telfar & Anor [2020] NSWSC 324 which was before his Honour Justice Harrison on 31 March 2020, the defendants sought an order that a writ of possession issued to the plaintiffs on 19 February 2020 in respect of their property be stayed for a period of two weeks in anticipation of the NSW Government passing further legislation or making regulations that would avail the defendants having regard to the current COVID-19 pandemic.

The defendants submitted that, having regard to the rapid pace with which legal and social developments are presently occurring, there is at least a reasonable anticipation or expectation that the NSW Government may move to make further orders or regulations to protect the position of defaulting mortgagors such as the defendants. It was further submitted that the ability of the plaintiffs to recover possession from the tenants affected in this matter, in anticipation of a sale of the property, is likely to be entirely prohibited by any regulations of the sort contemplated by section 229 of the Residential Tenancies Act.

In refusing the stay application, his Honour stated that as the regulations had yet to be made pursuant to the Act or s229 of the Residential Tenancies Act, it remained “unclear in those circumstances…….whether the regulation-making power under the Residential Tenancies Act would or could extend to limit action by the plaintiffs to recover possession of the property from the defendants’ tenants.” His Honour further stated that “it does seem to be clear that any regulations that might be made under the Residential Tenancies Act would not extend to provide relief to the defendants.”

Way forward

Whilst the regulation-making powers are very broad including in relation to the power to prohibit the recovery of possession of premises and it is expected that this could lead to a prohibition on the eviction of tenants over a 6 month period (or such earlier date as determined by Parliament), uncertainty will remain as to the exact rights of tenants and landlords until regulations to the effect of those proposed by the Act are promulgated. In the meantime, as the decision in Catalyst demonstrates, the Courts may be reluctant to consider eviction matters on the basis of what the law may become in the next few days or weeks and will continue to apply the law as it currently exists. This is notwithstanding the unusual circumstances tenants and landlords find themselves in, the recent announcement of the Premier which indicated the NSW Government’s intention in relation to the regulations which included that the legislative scheme would have effect from the date of her announcement and the public policy issues concerning evicted tenants being forced to find alternative accommodation given the current COV-19 restrictions on movement.

On a practical note, through enquiries made with the  Office of the Sheriff of NSW, we understand that all evictions have been suspended indefinitely. Hopefully by that time, the NSW Government will provide some certainty on this issue by passing the proposed regulations.

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