The recent case of Merl by her Tutor Helga Jenkins v Andrew Merl [2022] NSWSC 434 considered the validity of a lease which was only granted by one of a number of co-owners. The main issue in the case was whether a person who had a residential tenancy agreement signed by one co-owner had a valid lease.
The plaintiff claimed possession of the land, which was heard by the Duty Judge on an urgent basis as a contract for the sale of the land with vacant possession had been exchanged. The defendant resisted the claim for possession by contending that he was in lawful occupation of the land under a residential tenancy agreement entered into in December last year.
The Plaintiff submitted that under s 119 of the Residential Tenancies Act 2010, where the validity of the residential tenancy agreement is the sole substantive issue, the expression ‘a residential tenancy agreement’ in s 119 is to be understood as meaning a valid residential tenancy agreement duly made according to law. The Plaintiff argued that a lease granted by only one of two joint tenants was not valid. Counsel for the Defendant did not contest this statement of principle, nor suggest that s 119 of the Residential Tenancies Act created a bar to the plaintiff seeking her remedy.
The discussion by the Judge was obiter (and not legally binding) because the Court decided that the contract was void as there was no intention to enter into legal relations. However, Campbell J accepted submissions that a joint tenancy lease could only be validly granted by all co-owners.
The Court referred to the discussion in State of New South Wales v Koumdjiev [2005] NSWCA 247; 63 NSWLR 353 about the entitlement of co-owners to grant (or terminate) a licence. That case held that each tenant in common is entitled to possession and to the use and enjoyment of it in a proper manner, and that where there is a joint tenancy, the only lease that can be granted is one granted by both joint tenants.
Hence Campbell J held that if his findings were wrong and instead, the agreement was intended to create legal relations, then the purported residential tenancy agreement would still be ineffective because it was not granted by both the joint tenant owners. Accordingly, as the tenant had no title justifying his possession of the property, the owner was entitled to an order for possession.