Posted on January 30, 2018 by 1

A dwelling house or a boarding house? That is the question.

The Land and Environment Court has recently  considered whether land was being used for the purpose of a boarding house as opposed to a dwelling house. The issues considered in the case did not raise new principles of law but serve as a reminder of the types of features the Court consider when characterising development as a boarding house.

Appeal against a conviction for using land unlawfully for a boarding house

Randwick City Council (‘Council‘) issued to Mr Xiaohui Sun a penalty infringement notice for the offence of contravening s76A(1)(a) of the Environmental Planning and Assessment Act 1979 (‘EPA Act‘) by carrying out development for the purpose of a boarding house without development consent.

Mr Sun elected to defend the matter in the Local Court and was convicted and fined and ordered to pay Council’s legal costs. He subsequently appealed the decision in the Land and Environment Court. The main issue in the appeal was whether the development carried out on the land was for the purpose of a boarding house as opposed to a dwelling house (in the nature of a share house arrangement), which did not require approval from Council.

Council’s case against Mr Sun

The Council contended that the Court should dismiss the appeal. It relied upon the following evidence to justify its position:

• photographs showing that makeshift partitions were erected in the building to create additional bedrooms – bedrooms had lockable (padlocked) doors and the garage was used as a bedroom.
• a sketch prepared by a Council officer when undertaking an inspection showing the layout of the building as evidence that the building had four bedrooms (excluding the garage bedroom), a sunroom, a communal toilet, kitchen and laundry but no living room.
• Mr Sun’s admissions that:
  • he usually found a person to move into a bedroom to replace an outgoing renter;
  • each renter paid him directly; and
  • he administered house rules in respect of the payment of a toilet paper levy, the payment of a fee for overnight guests and a cleaning roster.

Further, as accepted by Mr Sun, renters were permitted to stay for at least three months, which is a requirement of the definition of ‘boarding house’ in Randwick Local Environment Plan 2012.

Council also contended that a lease agreement between Mr Sun and 4 persons for a period of three months or more (purporting to show a shared house arrangement) could not be relied upon because there was no credible evidence to prove that a valid lease to the effect of the document ever existed and one of the renters was not on the purported lease agreement during the relevant time.

Submissions of Mr Sun

Mr Sun’s main argument was that the land was used as a dwelling house in the form of a share house arrangement. This was because:

• if the use was for a boarding house, a high turnover of lodgers occupying parts of the building for a limited period would have been expected;
• there was a lease agreement for a small group of residents;
• the direct payment of rent by each renter to him was consistent with the renters’ desire for a convenient means of payment;
• the arrangement for monies to be paid by renters for toilet paper was instigated by the renters;
• the fact that a renter was residing in the living room was a temporary situation that arose from the renter deciding not to move out.

Court’s consideration

Having regard to the following, the Court held that it was beyond reasonable doubt that Mr Sun carried out development for the purpose of a boarding house:

• the building was wholly let to lodgers (as their principal place of residence for 3 months or more) with share facilities and rooms for each lodger;
• the relationship between Mr Sun and the renters was consistent with that of a boarding house manager and lodger.  He directly managed the occupation of the building, he administered the house rules such as a cleaning roster and the rule that renters pay a fee for overnight guests; he paid the utility bills and was actively involved in finding a new renter to replace outgoing renters; and
• the internal modifications to the building – creating only lockable bedrooms and communal essential facilities – strongly suggested that it was a boarding house.

In the Court’s view,  “Mr Sun had far too much involvement and the renters had far too little independence with respect to the management of the house for it to be possible to characterise the purpose of use of the building as a dwelling house in the nature of a share house.”  (at [84])

The case is an example of the tension within planning law between the ‘shared’ use of residential property and the more traditional use of such properties as dwelling houses and provides useful indicia for the former.

Read the Court’s full judgement here.

Should you wish to discuss this case, please contact Sue Puckeridge, Partner on 8235 9702 or by email, at sue.puckeridge@lindsaytaylorlawyers.com.au