Australian Executor Trustees Ltd v Steak Plains Olive Farm Pty Ltd

Case •

[2014] NSWCATCD 143

•

13 August 2014

NSW Civil and Administrative Tribunal


New South Wales

Medium Neutral Citation: Australian Executor Trustees Ltd v Steak Plains Olive Farm Pty Ltd [2014] NSWCATCD 143
Hearing dates:18 June 2014
Decision date: 13 August 2014
Before: M Harrowell, Principal Member
Decision:

The Tribunal orders that:

1. The application to transfer these proceedings to the Supreme Court of New South Wales is dismissed.

2. The respondent pay the applicants costs of the application to transfer on an ordinary basis, such costs to be as agreed or assessed.

3. The proceedings be listed for directions for the purpose of fixing the proceedings for final hearing.

Catchwords: Relief against forfeiture, transfer of proceedings, equitable relief
Legislation Cited: Agricultural Tenancies Act 1990,
Retail Leases Act 1994,
Residential Tenancies Act 2010,
Civil and Administrative Tribunal Act 2013, Law Reform (Law and Equity) Act 1972
Cases Cited: Draybi Bros v Diab and Ors [2014] NSWCATCD 67
Bushby v Dixon Holmes du Pont Pty Ltd (2010) 78 NSWLR 111
Trust Company of Australia v Skiwing (2006) 66 NSWLR 77
State Rail Authority v Consumer Claims Tribunal and Ors (1988) 14 NSWLR 474
Mineaplenty Pty Ltd v Trek 31 Pty Ltd [2006] NSWSC 1203
Wynsix Hotels (Oxford St) Pty Ltd v Toomey [2004] NSWSC 236
Wardley Australia Ltd v Western Australia (1992) 175 CLR 514.
Texts Cited: Meagher Gummow and Lehane's Equity- Doctrines and Remedies [2002] 4th Edition
Category:Principal judgment
Parties: Australian Executor Trustees Ltd (applicant)
Steak Plains Olive Farm Pty Ltd (respondent)
Representation: IG Archibald
E Holmes
Sparke Helmore
Gadens
File Number(s):COM 14/9217
Publication restriction:Unrestricted

reasons for decision

Of the Introduction

  1. These proceedings relate to a dispute under the Agricultural Tenancies Act, 1990 (Act).

  1. The present application is an application by the respondent to transfer these proceedings to the Supreme Court of New South Wales because the respondent says that the Tribunal does not have jurisdiction to hear and determine a claim for relief against forfeiture.

  1. The applicant, the Australian Executors Trustees Ltd, is the registered proprietor of a property known as Steak Plains at Hillston. On this property is a substantial grove of olive trees. The property has been leased to the respondent, Steak Plains Olive Farm Pty Ltd pursuant to registered lease number AH673929B.

  1. The lease commencement date was 1 October 2012 with a term to expire on 30 September 2030. The parties also have entered into a Water Transfer Agreement enabling the respondent to draw water from a bore for the purpose of operating the property.

  1. The applicant seeks various orders pursuant to the Act including an order for possession for breaches of the lease and that the respondent pay to the applicant compensation for breaches of lease. The applicant says it is served a notice of default upon the respondent pursuant to the terms of the lease, inter alia relying upon alleged breaches by the respondent to control weeds, minimise fire hazards and otherwise operate the olive grove in accordance with the terms of the lease. The applicant says that the matters notified in the notice of default were not remedied and that an agreement entered into to pay various monies had also been breached in consequence of which the applicant says it terminated the lease by notice dated 4 December 2013, which notice required the respondent to vacate the property by 13 December 2013.

  1. The respondent denies the lease and related Water Transfer Agreement has been validly terminated and says it should, in any event, be granted relief against forfeiture. The claim for relief against forfeiture is found in paragraph 61 of the points of defence filed in the Tribunal. The particulars in support of the claim are as follows:

"(i) Prior to the Release being entered into, the Property was not been properly managed and (the applicant) intended to remove the olive trees from the Property;
(ii) the Lease commenced on 1 October 2012;
(iii) Pursuant to clause 2 of the Lease, (the respondent) was permitted to use the Property for the growing of olives;
(iv) Pursuant to clause 3.2 of the Lease, the term of the Lease is for 18 years and terminated on 30 September 2030;
(v) Pursuant to clause 4.1 (the respondent) was required to pay rent in the amount of $230,000 per year;
(vi) (The respondent) has invested significant further amount for the purpose of growing and harvesting olives on the Property;
(vii) There are currently unharvested olives on the Property;
(viii) (The Respondent) says it has been negotiating in good faith in the settlement of the dispute in the manner set out in particulars to paragraph 27 of the points of defence;
(ix) If amounts are determined to be owed to (the applicant) by (the respondent), (the respondent) is willing to pay all amounts owed;
(x) To the extent that an independent expert determines that (the respondent) has not complied with its maintenance obligations under the Lease, (the respondent) is willing to take all steps necessary to ensure that the Property is complaint with the terms of the Lease;
(xi) Since the commencement of the Lease, (the respondent) has made improvements to the Property;
(xii) The Property is now in better condition than when the Lease commenced;
(xiii) Pursuant to clause 10.2 of the Lease upon the Lease coming to an end the... (the respondent) is required to return the Property and "Existing Improvements" in the same operating and functional condition as they were in at the Commencement of Date; and
(xiv) (The respondent) is otherwise entitled to operate the Olive farm at the Property as it sees fit and in whatever way it believes best satisfies its commercial interests".

  1. The present proceedings were commenced by application lodged with the Tribunal on 12 February 2014. The respondent has not filed any cross application in the Tribunal seeking any orders under the Act. The application was first listed before the Tribunal on 20 February 2014 because the applicant sought urgent relief from the Tribunal. The Tribunal made directions for the filing of service of evidence and for the exchange of position papers with a view to the matter being referred to mediation. At this time the respondent advised the Tribunal that an application may be made to the Supreme Court to claim relief against forfeiture.

  1. The respondent did not comply with the directions made by the Tribunal and the proceedings were listed for a further directions hearing on 7 and 10 April 2014.

  1. Directions were made on 10 April 2014 for the filing of points of claim and points of defence as well as for the respondent to file its evidence. The Tribunal directed that the parties' experts meet for the purpose of preparing a joint report as to the state of the farm and whether or not the obligations of the respondent had been met under the Lease in relation to various agricultural activities required to be undertaken in connection with the maintenance and operation of the olive grove.

  1. As of 10 April 2014 the respondent had not filed any application in the Supreme Court seeking relief against forfeiture.

  1. A joint experts report was subsequently prepared in May 2014 and submitted to the Tribunal on 27 May 2014.

  1. The matter was fixed for final hearing to commence on 17 June 2014.

  1. By email dated 11 June 2014, the respondent lodged an application to transfer these proceedings to the Supreme Court of New South Wales pursuant to clause 6 (1) of Schedule 4 of the Civil and Administrative Tribunal Act, 2013 (NCAT Act). This application was made following a directions hearing on 3 June 2014 which the Tribunal required following receipt of a letter from the respondent's solicitors dated 30 May 2014 advising that the respondent's position was that the Tribunal did not appear to have power to grant relief against forfeiture.

  1. In consequence of the application to transfer, on 16 June 2014 the Tribunal determined to vacate the final hearing date and made orders to hear the application to transfer on 18 June 2014.

  1. By summons filed 13 June 2013 proceedings were commenced by the respondent in the Supreme Court of New South Wales seeking relief against forfeiture. The Tribunal was advised that the proceedings were listed for directions on 4 July 2014. The Tribunal was advised on 11 July 2014 that the summons has been adjourned to 1 August 2014. The summons seeks various relief including:

(i)   a declaration that the lease has not been validly terminated;

(ii)   a declaration the defendant is entitled to remain in possession of the property;

(iii)   an order that the plaintiff is entitled to relief against forfeiture of the lease; and

(iv)   damages.

  1. Essentially, there are two issues to be resolved in this application.

  1. Firstly, does the Tribunal have power to grant relief against forfeiture of an agricultural tenancy?

  1. Secondly, if there is no power to grant relief against forfeiture, does the Tribunal have jurisdiction under the Act to make a determination that a party in breach of an agricultural tenancy should be relieved against forfeiture of the tenancy and and, if so, does the Tribunal have power under the Act to make an appropriate order to give effect to such determination.

The Evidence and the hearing

  1. For the purpose of the application, the respondent provided a tender bundle consisting of 9 volumes which was marked Exhibit 1.

  1. These folders contain the points of claim, points of defence, points of reply, the application to transfer the proceedings to the Supreme Court and supporting affidavit, submissions from the parties and various evidence in connection with the dispute. The evidence included the joint expert report of May 2014 to which the Tribunal has referred to above.

  1. In addition to written submissions, counsel for each of the parties made oral submissions at the hearing on 18 June 2014 and subsequently further written submissions were provided to the Tribunal as identified below. The parties also made available to the Tribunal copies of various authorities relied upon.

The respondent's submissions in support of its application to transfer

  1. The respondent provided written submissions dated 10 June 2014 and 23 June 2014 as well as oral submissions at the hearing on 18 June 2014.

  1. The respondent contends that the Tribunal does not have power to grant relief against forfeiture. Relying on the decision of Brereton J in Mineaplenty Pty Ltd v Trek 31 Pty Ltd [2006] NSWSC 1203 at [66], the respondent submits that relief is granted in equity by way of an injunction.

  1. The respondent says that relief against forfeiture is not a defence. Rather it is an equitable remedy for which the Tribunal does not have jurisdiction to grant. In this regard the respondent refers to the Tribunal's decision in Draybi Bros v Diab and Ors [2014] NSWCATCD 67 and the decision of Rein J in Bushby v Dixon Holmes du Pont Pty Ltd (2010) 78 NSWLR 111 and the powers of the Tribunal by reason of the Law Reform (Law and Equity) Act, 1972. (Law Reform Act)

  1. The respondent submits that the Tribunal only has jurisdiction expressly granted to it by statute. In the present case that jurisdiction is conferred by the NCAT Act, 2013 and the Act. The respondent says that the order making power of the Tribunal is set out in section 21 of the Act and that none of the orders set out in that section include a power to grant relief against forfeiture.

  1. The respondents written submissions dated 10 June 2014 dealt with the order making power.

  1. The respondent said that in the present case the Tribunal's jurisdiction was governed entirely by the enabling legislation, namely, the Act. Jurisdiction is a broad term and refers to the scope of a court or tribunal's power to examine and determine facts, interpret and apply the law, make orders and declare judgement. Jurisdiction may be limited by geographic area, the type of parties who appear, the type of relief that can be sought, and the point to be decided. The respondent referred to the decision of the High Court in Wardley Australia Ltd v Western Australia (1992) 175 CLR 514.

  1. The respondents submitted that the Tribunal's jurisdiction was limited by the orders which it could make, set out in section 21 of the Act, being orders on application by the owner or tenant or in any proceedings under the Act. The Tribunal does not have unlimited power in how to determine the dispute. Rather, the power or jurisdiction is found in section 21 of the Act.

  1. The respondent acknowledged in oral submissions that subsection 21 (1) (a) is a curious provision. However, the respondent submitted it should not be interpreted in a manner that meant the Tribunal could make any order (including granting relief against forfeiture). The respondent submitted that such an interpretation would mean that those other order making powers found in subsections (b)-(j) would be unnecessary whereas the inclusion of the specific powers should lead to a more restrictive interpretation of subsection (a).

  1. The respondent also submits that the subsection should not be interpreted as granting a general order making power because of the language used. Rather, the respondent says that the subsection should be limited to providing the Tribunal power to make an order giving effect to a determination of the Tribunal which the Tribunal is otherwise empowered to make and that it was not intended that the Tribunal could make an order of any nature whatsoever. The respondent submits that such an interpretation is inconsistent with the scheme of the Act and is not a meaning that could reasonably be ascribed to the language used by the legislature.

  1. In summary, the respondent submits that:

(1) "the only sensible meaning of the subsection is that it empowers the Tribunal to make an order giving effect to a determination of the Tribunal in the manner in which the Tribunal is otherwise empowered to determine the matter, since otherwise the order making powers (in the other subsections) would allow the Tribunal to make the orders described therein other than an order to give effect to the resolution of an application under section 20 (1)"; and
(2) the subsection "gives the Tribunal the power to make orders giving effect to the specific orders the Tribunal is otherwise allowed to make in determining such an application".

  1. In relation to Section 21 (1) (c) the respondent says it is a power to restrain any action in breach of the terms of the tenancy agreement. However, the granting of an injunction to provide relief against forfeiture assumes a breach and is not an order to restrain a breach. Rather it restrains termination by the party not in default or compels that party to enter a new lease if the estate has been forfeited. Likewise, the respondent submits that the power found in section 21 (1) (d) is an order making power requiring an action in performance or the tenancy and relief against forfeiture is not an order of this type. Further, the respondent submits that the language of section 21 (2) suggests that the power to grant an order in the nature of an injunction or specific performance under the Act is limited to the circumstances set out in sections 21 (1) (c) or (d).

  1. The respondent says that while there is a power to order possession (section 21 (1) (i)) and a power to order compensation (section 21 (1) (f)), these powers do not provide the Tribunal with the power to grant relief against forfeiture.

  1. Finally, the respondent says that the power to make ancillary orders (section 21 (4)) is not otherwise a source of power, this section being limited to enabling the Tribunal to make orders which "necessarily facilitates the Tribunal's primary jurisdiction" or, as stated in oral submissions, is limited to orders ancillary to the orders the Tribunal has jurisdiction to make in section 21(1).

  1. As an alternative submission the respondent says that the granting of relief against forfeiture requires an application under section 20(1) "seeking relief against forfeiture brought by the tenant. This is because it could not be made in order to determine an application for within section 20 (1), which application is self-standing".

  1. In interpreting the scope of the power granted by the Act, the respondent also submits that the jurisdiction of the Tribunal must be contrasted with that given to it in the Retail Leases Act, 1994 (RLA), particularly the express power to grant relief against forfeiture provided in section 72 (1) (d) of that Act.

  1. In relation to the discretionary matters as to whether the proceedings should be transferred having regard to those parts of the dispute that are within the jurisdiction of the Tribunal, the respondent submits that it is undesirable to have 2 sets of proceedings and that if the applicant succeeds in relation to the termination/ breach issues in the Tribunal, it will still be necessary for the Supreme Court to determine the claim for relief against forfeiture. Therefore the balance of convenience favours transfer.

  1. As to delay, while it may be said there has been a delay in commencing proceedings in the Supreme Court, the application in the Tribunal was lodged on 12 February 2014 and points of claim were not filed by the applicant until April 2014. In these circumstances the delay has not been excessive and, in any event, in relation to the period from April until when the application to transfer was formally advised, an order for costs thrown away could be made in favour of the applicant, which order the respondent would not resist if made in respect of costs from 10 April 2014.

The applicant's submissions in opposition to the application to transfer

  1. The applicant provided written submissions dated 13 June 2014 and 24 June 2014 as well as oral submissions at the hearing of the application.

  1. The applicant submitted that the Tribunal has jurisdiction to make determinations of any dispute arising from, or relating to an agricultural tenancy: see section 20(1)(b). The Tribunal is an inferior court for the purpose of the Law Reform (Law and Equity) Act, 1972 and can deal with the substantive defence claiming an entitlement to relief against forfeiture under section 6 of that Act. The applicant relies on the decision of Rein J in Bushby.

  1. The applicant submitted that the 2012 amendments, and the grant of jurisdiction to the Tribunal was designed to give power to the Tribunal to deal with disputes "concerning rental arrears or evictions" and to allow parties who would formerly have been required to submit their disputes for hearing in a court "to apply to the Tribunal for dispute resolution and at a much lower cost". In this regard the applicant relied on the second reading speech.

  1. The applicant also points to one of the objects of the Act found in section 3 which is:

"(c) to provide a mechanism for settling disputes between parties to agricultural tenancies through applications to the Civil and Administrative Tribunal."

  1. The applicant says that section 21 (1) (a) gives to the Tribunal the power to make an order "giving effect to a determination that may be made by the Tribunal" and that section 21 (4) (b) gives a power to make "any ancillary order the Tribunal thinks appropriate". The applicant says that the present claim is within the jurisdiction of the Tribunal because the Tribunal has power to determine all disputes arising from or relating to a tenancy and that necessarily involves consideration of defences including a defence claiming an entitlement to relief against forfeiture. Therefore, the applicant submits that the grant of relief against forfeiture would be ancillary to the exercise of jurisdiction by the Tribunal.

  1. The applicant relies on sections 33 and 34 of the Interpretation Act, 1987, particularly that the Act should be interpreted in a manner that promotes the purpose or object underlying the Act and that regard should be had to the content of the second reading speech referred to above. The applicant submits that the amendments provided the Tribunal with power to determine disputes relating to evictions and it would be manifestly absurd or unreasonable for the Tribunal to have jurisdiction to determine an eviction claim, make an order terminating the tenancy and giving the owner possession of the farm but not being able to consider any defence by the tenant which would have the effect of providing the tenant with relief against forfeiture. Similarly it would be absurd or unreasonable to thereafter require a tenant to apply to the Supreme Court of New South Wales for a stay of the orders, particularly where the Supreme Court would be bound by factual findings in the Tribunal and issues relating to fresh evidence, res judicata and the like would arise.

  1. In relation to the decision of Rein J in Bushby and the provisions of sections 6 and 7 of the Law Reform Act, the applicant says that subsections 21 (1) (a), (d) and (2) enable the Tribunal to make orders "providing relief for the respondent which would have the effect of providing relief against forfeiture". As such, the applicant submitted that even if the Tribunal does not have power to grant relief against forfeiture, it nonetheless had jurisdiction to make determinations about the rights of the parties and was therefore able to give consideration to the issues raised by a defence asserting an entitlement to relief against forfeiture. In this regard the applicant relied on a passage from Equity - Doctrines and Remedies (2002), paragraph [2-245] where the authors, in considering the availability of a defence based on the principle in Walsh v Lonsdale (1882) 21 ChD 9 and the lack of power of the District Court of New South Wales to award specific performance in some circumstance said:

"It could be otherwise if the legislation governing the inferior court provided that although the court might not have jurisdiction actually to decree specific performance, it was to regulate the legal rights of the parties as if it had that jurisdiction and had exercised the after making the same enquiry and upon the same considerations as would have engaged the superior court in the particular case."

  1. In relation to the respondents submissions, in respect of the RLA and the absence of an express power to grant relief against forfeiture, the applicant says that there is no definition of an agricultural tenancy claim (cf section 70 of the RLA) and there is no corresponding power to that found in section 21 (2) of the Act. The applicant also contrasts the power under section 72 (2) of the RLA to make ancillary orders "for the purpose of enabling an order under this section to have full effect" with the more general power to make ancillary orders under section 21 (4), being a power to make "any ancillary order the Tribunal thinks appropriate".

  1. In summary, the applicant submits that the respondents defence claiming an entitlement to be relieved against forfeiture is a matter which the Tribunal is able to hear and determine and give effect to, the Tribunal being able to simply dismissed the applicant's claim for possession of the farm if the Tribunal is satisfied that relief against forfeiture would otherwise be granted.

  1. In relation to the question of delay and the issue of the Tribunal exercising its discretion, the applicant points to the following factors against transfer:

(1)   The applicant has acted expeditiously and spent money in pursuing its claims;

(2)   There is no reason why the respondent could not have taken earlier action when the notice of termination will serve;

(3)   Significant cost will be wasted if the proceedings are transferred.

(4)   The original notice of default had been served in September 2013 and the notice of termination had been served on for December 2013.

(5)   The claim for relief against forfeiture had not been raised until February 2014.

  1. If the proceedings were transferred, the applicant submits that costs should be payable by the respondent from 11 December 2013, the appropriate costs order being that the respondent pay to the applicant costs thrown away since 13 December 2013 and costs of the application.

Submissions in Reply by Respondent

  1. Finally, the Tribunal should briefly record the submissions of the respondent in reply.

  1. The respondent submitted that the mere fact that the claim for relief against forfeiture is responsive does not make such a claim a defence. The Tribunal is an inferior court.

  1. A course of action should not be adopted requiring determination of part of the dispute in the Tribunal (if the Tribunal's powers are limited) and part in the Supreme Court as the parties would be faced with additional costs.

Consideration

  1. The objects of the Act include the provision of a mechanism for settling disputes between parties to agricultural tenancies through applications to the Civil and Administrative Tribunal: see section 3 (b) of the Act.

  1. Section 20(1) provides that a party may apply to the Tribunal "for determination of any of the following;

(a)   a dispute relating to a right or obligation, conferred by this Act

(b)   a dispute arising from, or relating to, an agreement creating a tenancy or any other dispute (not being a dispute referred to in order (a)) arising from, or relating to, a tenancy;

  1. Subsection 20 (2) provides a time limit for the making of such an application.

  1. There is no express provision in the Act allowing the Tribunal to grant relief against forfeiture. However, there appears to be no dispute that there is an order making power of the Tribunal which allows the Tribunal to "provide a remedy in the nature of an injunction or order for specific performance in circumstances in which such a remedy would not otherwise be available" at least to a limited extent: see section 21 (2).

  1. The first question to be resolved is whether or not a grant of relief against forfeiture is an equitable remedy and/or is a matter that can be raised by way of equitable defence in proceedings in the Tribunal. This issue is to be resolved by considering the nature of a claim for relief against forfeiture and whether or not the Tribunal has jurisdiction to determine the claim and provided any necessary remedy.

  1. The Law Reform Act gives power to an "inferior court" to give effect to every ground of defence, equitable or legal as might or ought to be done in the like case by the Supreme Court of New South Wales: section 6. Section 7 provides that the Law Reform Act does not extend the jurisdiction of any court as regards the nature and extent of the relief available in the court but does give power to an inferior court to postpone the grant of any relief or grant relief on such terms and conditions as the nature of the case requires.

  1. Each of the parties referred to the decision of Rein J in Bushby as well as the decision of the Tribunal in Draybi.

  1. For the Tribunal to have jurisdiction to deal with an equitable claim or defence there must be an express power to do so. This power is conferred upon inferior courts pursuant to the Law Reform Act. Whether or not the Tribunal is an inferior court is to be determined in accordance with the principles set out by the Court of Appeal in Trust Company of Australia v Skiwing (2006) 66 NSWLR 77 and State Rail Authority v Consumer Claims Tribunal and Ors (1988) 14 NSWLR 474. As the Tribunal indicated Draybi at [105] and following, this issue is to be determined in the context of the relevant legislation and the indicia identified by the Court of Appeal in the cases referred to. In Skiwing, the Court of Appeal referred to the following features of the Administrative Decision Tribunal (ADT)

"26. Indicia in the ADT Act which operate in favour of the Tribunal being regarded as a "court of a State" (c/f Orellana-Fuentes supra at [39]-[40]) include:
  • The Tribunal exercises the judicial power of the State in the performance of a number of its statutory functions, including under the Retail Leases Act.
  • The President must be a judge and other judges may be appointed (s12(1)(a), s17(1) and s14).
  • Deputy Presidents and non-presidential judicial members must either have held judicial office or be legal practitioners of seven years standing (s12(1)(b) and (c) and s17(2)).
  • The Tribunal is expressed to have a "jurisdiction" (s37 and s38).
  • The Tribunal's procedure is expressed in terms of a "parties to proceedings" (s67 et seq).
  • The Tribunal may compel a person to attend to give evidence or produce documents (s84).
  • The Tribunal may examine witnesses and compel answers (s83).
  • The Tribunal may award costs (s88).
  • The Tribunal may make rules in relation to its practice and procedure (s90).
  • There is a right of appeal from an Appeal Panel of the Tribunal to the Supreme Court on a question of law (s119).
  • A legal practitioner or witness appearing at the Tribunal has the same protection and immunity as if appearing in the Supreme Court (s137).
  • An order for payment of money, other than penalty, upon certification by the Registrar, may be filed in a court and operates as a judgment of that court for a debt of that amount (s82).
  • A penalty ordered to be paid may be registered in a court as a judgment debt and is enforceable accordingly (s82A)".

(As to the last two bullet points, see Brandy v Human Rights and EqualOpportunity Commission [1995] HCA 10; (1995) 183 CLR 245.)

27. Indicia operating against the proposition that the Tribunal is a "court of a State" (c/f Orellana-Fuentes supra at [42]-[51]) include:
  • The Tribunal is not called a court.
  • The members of the Tribunal are appointed for a renewable term of three years (Sch 3 cl 2 and cl 8(1)(b)).
  • Non-judicial members do not have to have legal qualifications (s13(2) and s17(3) and c/f Orellana-Fuentes at [43]).
  • Non-presidential judicial members and non-judicial members are appointed by the Minister.
  • Judicial officers may be appointed to act as a member by the President (s14 and c/f Orellana-Fuentes at [42]).
  • A substantial proportion, indeed on the material before the Court the majority, of the proceedings in the Tribunal do not involve the exercise of judicial power.
  • In merits review cases, the Tribunal is required to give effect to government policy (s64).
  • A member, other than the President, may be removed by the Governor for incapacity, incompetence or misbehaviour (Sch 3 cl 8(2)).
  • A Divisional Head may be removed from that office by the Governor (s16(2)(a)).
  • The Tribunal must refer any issue of contempt to the Supreme Court (s131).
  • The Tribunal has no express power to prevent abuse of its process (c/f Batistatos v Newcastle City Council [2006] HCA 27).
  • The ADT Act contains no provision for enforcement of an order of the Tribunal, other than an order for payment of money under s82 and s82A. It appears that such orders can only be enforced by contempt proceedings in the Supreme Court.
  • Proceedings for an offence against the ADT Act are instituted in the Local Court (s143)."

  1. The features above in favour of concluding the ADT was a court are features of the Tribunal. Some of the matters listed as to why the ADT was not a court do not apply to the Tribunal. For example the Tribunal has power to impose a civil penalty for contravention of certain orders: see section 72 NCAT Act, and for contravention of other provisions of the NCAT Act: see section 77 NCAT Act. The Tribunal has power to deal with contempt in specified circumstances: section 73 NCAT Act. The Tribunal has an internal appeal procedure, limited rights of appeal from the Tribunal to a court and the Supreme Court of New South Wales may refuse to exercise its powers in connection with judicial review of a decision of the Tribunal where, in all the circumstances, adequate provision is made for review of the decisions by the Tribunal through an internal or external appeal process: see section 34 NCAT Act.

  1. In my opinion the features of the Tribunal identified above lead to the conclusion that the Civil and Administrative Tribunal is an inferior court for the purpose of the Law Reform Act and that the views expressed in Draybi at [105] and following apply.

  1. However, as an inferior court, the Tribunal does not generally have a power to grant an equitable remedy nor does it have a general jurisdiction to grant equitable relief: see section 7 of the Law Reform Act. Its power is limited under section 6 of the Law reform Act "to give effect to every ground of defence, legal and equitable".

  1. The question is whether or not a claim for relief against forfeiture is an equitable defence or whether it is a claim for equitable relief or an equitable remedy.

  1. In connection with leases, the power to grant relief against forfeiture is regulated by the provisions of section 129 of the Conveyancing Act, 1919. Power to grant relief under the Conveyancing Act is conferred upon the Supreme Court of New South Wales. Courts of Equity also have more general powers to relieve against a monetary penalty or a forfeiture of other proprietary interests: see Equity- Doctrines and Remedies at [18-005] and following.

  1. Under the Conveyancing Act a lease is defined to include "an original or derivative under-lease, also a grant at a fee farm rent, or securing a rent by condition, and an agreement for a lease where the lessee has become entitled to have his or her lease granted". In granting relief the Supreme Court may "grant the same on such terms (if any) as to costs, expenses, damages, compensation, penalty or otherwise, including the granting of an injunction to restrain any like breach in the future, as the Court in the circumstances of each case thinks fit": see section 129(2) Conveyancing Act. However, the Conveyancing Act does not prescribe the form of order by which relief is given.

  1. As was explained by Brereton J in Mineaplenty, relief was historically effected by the granting of a restraining injunction to prevent re-entry or by an order mandating the party who had forfeited an estate or interest to enter into a new agreement on the same terms. More recently, due to issues of stamp duty, it appears relief after re-entry has also been granted by restraining a landlord from taking action to remove any registered lease of real property from the land titles register: see Wynsix Hotels (Oxford St)Pty Ltd v Toomey [2004] NSWSC 236 at [88].

  1. In my opinion it is the grant of the remedy which effects the relief and the finding in consequence of a pleaded defence that there is an entitlement to relief is not sufficient. This is consistent with the views expressed by the authors of Equity-Doctrines and Remedies where they say at [2-245], page 72, 2002 edition "Therefore, if a defendant in a New South Wales inferior court asserts a "Walsh v Lonsdale defence", but specific performance is outside the jurisdictional limits, the correct procedure is a postponement of relief under s 7, pending an application by the defendant to the Supreme Court". That is the issue of an entitlement to relief against forfeiture can be raised in a defence which might give rise to an order for postponement, but there remains the need for the grant of the equitable remedy by a court having power to do so in order for relief to be given.

  1. In the present circumstances, there is a further question as to whether or not, in circumstances where a re-entry has not been effected and a defence has been established in connection with an entitlement to relief against forfeiture, an inferior court may permanently postpone the grant of remedy, in this case the making of an order for possession thereby giving relief.

  1. It seems to me that the answer is no. This is because section 7 of the Law Reform Act makes clear that the Law Reform Act "does not enlarge the jurisdiction of any court as regards the nature or extent of the relief available in that court". Rather, the power of postponement is limited to "the purpose of giving effect to sections 5 and 6" of the Law Reform Act. Section 6 only gives power to an inferior court to give "effect to every ground of defence, equitable or legal, in as full and ample a manner as might and ought be done in the like case in the Supreme Court". These sections do not allow the grant of the remedy in effect by permanently restraining a party from exercising a legal right to effect re-entry or take possession of property. Further, the withholding of a remedy by permanently postponing the order for possession, would not otherwise be sufficient to relieve against forfeiture as re-entry could still be effected unless restrained. This is to be compared to a defence of equitable estoppel which, if successful, denies an applicant a right which cannot otherwise be enforced without order or judgement.

  1. Accordingly, in my opinion the Tribunal has no power to grant an equitable remedy to relieve against forfeiture.

  1. However, that is not the end of the matter. As the authors in Equity- Doctrines and Remedies said at [2- 245], page 71 even if there is no express power in the Act to grant relief against forfeiture, the question is whether the Tribunal has jurisdiction to make an enquiry upon the same considerations that might be relevant to the grant of relief against forfeiture and power to make appropriate orders.

  1. The respondent submitted the Tribunal did not have such powers. The respondent analysed the terms of the Act and compared that legislation with the RLA.

  1. In the RLA, the Tribunal has jurisdiction to determine a "retail tenancy claim". These claims include a claim for relief against forfeiture: see section 70 (a) (vi). The Tribunal has an express power to make "an order granting a party to proceedings relief against forfeiture": see section 72 (1) (d).

  1. No such power is expressly given under the Act.

  1. However, the absence of an express power does not mean that the Tribunal cannot deal with a defence raising an entitlement to relief against forfeiture if:

(1)   the claim is within the Tribunal's jurisdiction to hear and determine; and

(2)   there is otherwise power to make orders to give effect to that determination.

  1. For example, under the Residential Tenancies Act, 2010 (RTA) the Tribunal may effectively relieve against forfeiture for non-payment of rent even where all arrears of rent have not been paid. While there is no express power in the RTA to grant relief against forfeiture, there is a discretion afforded to the Tribunal to decline to terminate a residential tenancy agreement and order possession. Matters relevant to the exercise of discretion include those set out in section 87(5) of the RTA. Indeed, such an order can be made even if all unpaid rent is not immediately paid by a defaulting tenant.

  1. Therefore, it is necessary to determine the extent of the jurisdiction granted to the Tribunal in connection with agricultural tenancy disputes and the order making powers given to it in order to ascertain whether or not the Tribunal otherwise has power to "regulate the legal rights of the parties as if it had that jurisdiction".

  1. Through applications to the Tribunal, the Act provides "a mechanism for settling disputes between parties to agricultural tenancies": see section 3 (c) of the Act. Pursuant to section 20 (1) an owner or tenant may apply to the Tribunal for determination of:

(a)   a dispute relating to a right or obligation, conferred by this Act,

(b)   a dispute arising from, or relating to, an agreement creating a tenancy or any other dispute (not being a dispute referred to in paragraph (a)) arising from, or relating to, a tenancy.

  1. There is no dispute between the parties that the present application relates to a tenancy within the meaning of the Act. Further, there is no dispute that the Tribunal has power to make an order terminating an agricultural tenancy or for possession: see section 21(1)(i).

  1. Section 21 provides that the granting of any remedy is discretionary.

  1. In any claim for possession, whether arising from non-payment of rent or for breach, there is often a dispute about whether or not the party in default should be relieved against forfeiture.

  1. There is no language in the Act which limits disputes to those arising as a question of law. Unlike the RLA, there is no definition of what "claims" can be the subject of an application to the Tribunal under the Act. Rather, parties may apply to the Tribunal for determination of "any ...dispute arising from, or relating to an agreement creating a tenancy or any other dispute... arising from, or relating to, a tenancy". While there is a time limitation for the making of an application, the nature of disputes that can be determined is not otherwise defined or limited, other than that they must "arise from or relate to a tenancy"..

  1. Prima facie, such disputes would include whether a party in breach is entitled to be relieved against forfeiture.

  1. However, that is not sufficient to enable the Tribunal to resolve a dispute in which relief against forfeiture is claimed. What is also necessary is for the Tribunal to have power to grant or withhold a remedy to give effect to any determination made. That remedy may be the same remedy as may be granted in a superior court or may be of a type which is of like nature or consequence. On the other hand, the absence of any power to grant or withhold an appropriate remedy may, on the proper construction of the Act, prevent the Tribunal from resolving the relevant dispute. In this regard, the respondent referred to the decision of the High Court in Wardley. At page 561 Toohey J said, in construing the powers of the Federal Court to grant an amendment:

"but the reasoning blurs notions of jurisdiction and power; importantly, it fails to accord due weight to limitation provisions expressed in the Act itself. "Jurisdiction", it has been said, means "the authority which a court has to decide matters that are litigated before it or to take cognisance of matters presented in a formal way or its decision". In the exercise of its jurisdiction, a court has powers expressly or impliedly conferred by the legislation governing it. ...".

  1. In the present case, the Tribunal has jurisdiction to determine disputes within the definition provided by section 20. However it is necessary to have regard to the order making powers to determine whether any controversy in which a party seeks to be relieved against forfeiture in an agricultural tenancy dispute can be finally resolved by order of the Tribunal.

  1. As set out above, the order making powers of the Tribunal in section 21 of the Act include a power to make the following orders:

(a)   an order giving effect to a determination that may be made by the Tribunal under this Act;

(c)   an order that restrains any action in breach of a term of a tenancy;

(d)   an order that requires an action in performance of a tenancy;

(g)   an order that an owner or tenant perform such works or take such steps as the order specifies to remedy a breach of a term of the tenancy.

In addition, subsection 21 (4) (b) allows the Tribunal to make "any ancillary order the Tribunal thinks appropriate".

  1. The respondent submitted that the order making power in subsection (a) should not be construed in a manner which would enable the Tribunal to determine a dispute concerning whether a party should be relieved against forfeiture. Rather, the respondent submitted that subsection (a) should be construed as a limited order making power confined to those orders found in subsections (b)-(j). This is because the respondents submitted that to give subsection (a) a wide interpretation would mean that all of the other subsections were unnecessary.

  1. In my opinion this interpretation of subsection 21(a) should be rejected for the following reasons:

(1)   In interpreting the provisions of the Act a construction that would promote the purpose or object is to be preferred to a construction that would not promote the purpose or object: see section 33 of the Interpretation Act, 1987.

(2)   The objects of the Act are to provide a mechanism for resolving disputes by the Tribunal: see section 3.

(3)   Matters for determination under the Act are both disputes relating to rights or obligations conferred by the Act and disputes arising from or relating to an agricultural tenancy agreement: see section 20 of the Act.

(4)   It is to "give effect to the determination" that the order making power is directed.

(5) On one view the orders in the other subsections may be thought to be of a type otherwise included within the terms of subsection (a). However, the particular form of the order is relevant not only to give effect to the determination but also to give a party the capacity to enforce a particular order. For example, unless an order for payment of money is made (as opposed to an order to the effect that one party owes another party $X) section 78 of the NCAT Act would not allow the issue of a certificate if enforcement proceedings in a court were necessary. Similarly, orders for possession could not be enforced. Accordingly, while there may be some overlap in the subject matter of the orders, there is no reason to read down the power in subsection (a).

(6)   The respondent submitted there was no use of the word "including" to suggest it was a broader power than those specified in the other subsections. However, the absence of this word does not mean that subsection (a) should be given a limited meaning, for example limited to orders of the type found in subsections (b)-(j). If this was the intention of the legislature then subsection (a) would have been the introductory words of subsection (1) rather than a separate source of order making power. On the other hand to construe subsection (a) as granting a power to make any "other" order giving effect to a determination under the Act is also to limit the general nature of the power given.

(7)   Further, to confine the power, (which otherwise is in wide terms that would allow the Tribunal to give effect to a determination of the dispute concerning the entitlement to relief against forfeiture) would effectively limit the capacity of the Tribunal to determine disputes arising from or relating to an agricultural tenancy. Again such an interpretation is contrary to the object expressed in section 3 of the Act and, by reason of section 33 of the Interpretation Act, it is not an interpretation to be preferred.

(8) The fact that the Legislature has not granted the Tribunal a general equitable jurisdiction is not a reason to interpret the power granted by statute as ineffective to enable resolution of the dispute. It is the jurisdiction given and the orders making power following exercise of the jurisdiction that must be considered. In this regard it should be remembered that the RLA allows the Tribunal to make "an order to relieve against forfeiture". The Tribunal is not granted general equitable jurisdiction, but rather a statutory power to do so. It exercises this power in connection with its jurisdiction to determine defined "retail tenancy claims" which include claims for relief against forfeiture. Such a basis for defining jurisdiction is also found in section 48A of the Home Building Act, 1989.

(9)   Under the Act, jurisdiction is granted by reference to the subject matter of the dispute, not by definition of "claims", that is jurisdiction is given under section 20(1)(b) to determine defined disputes, not defined claims. There is nothing in the language of the Act to expressly exclude from the definition of disputes arising from or relating to an agricultural tenancy, a dispute as to whether a party should be relieved against forfeiture.

(10)   Section 21(1)(a) is unambiguous. It allows an order to be made to give effect to a "determination under the Act". A determination under the Act includes determinations of applications under section 20 (1).

(11)   It is a general order making power and is not expressed in terms that limit its application to those powers found in subsections (b)-(j) or otherwise. This is to be compared with the general order making power under section 138 of the Strata Schemes Management Act,1996 (SSMA) which says:

138 General power of Adjudicator to make orders to settle disputes or rectify complaints
(1) An Adjudicator may make an order to settle a dispute or complaint about:
(a) an exercise of, or a failure to exercise, a function conferred or imposed by or under this Act or the by-laws in relation to a strata scheme, or
(b) the operation, administration or management of a strata scheme under this Act.

....

(3) An Adjudicator may not make an order under subsection (1) for the settlement of a dispute or complaint:
(a) dealt with in another section of this Chapter, or

...

(d) that includes the payment by a person to another person of damages.
Unlike the SSMA, the power in section 21(1)(a) of the Act is not confined.

(12)   The inclusion of section 24(4)(b) makes clear that section 21 (1)(a) is not an ancillary order making power.

(13) Further, the combination of powers in sections 21(1)(a) and 21(4)(b) would, by their terms, allow the Tribunal to make "an order to relieve against forfeiture" (similar to that found in the RLA) and make "any ancillary order the Tribunal thinks fit" to give effect to such order.

  1. As to the powers of the Tribunal to grant injunctions or order specific performance, the respondent submitted that a claim for relief against forfeiture required the Tribunal to grant a remedy by way of injunction or an order requiring the entry into a new agreement if re-entry has been effected and that subsection (2) limited the power to grant orders in the nature of injunctions or specific performance to circumstances where orders were made to restrain a breach or require specific performance of an existing agreement, not circumstances where an agricultural tenancy had been validly terminated at law by a party not in breach.

  1. The difficulty with this argument is that unlike subsection (c) which relates to an order that restrains "any action in breach of a term of a tenancy", subsection (d) is not so limited to requiring performance by a party who is otherwise in breach. Further, if this interpretation was correct, then the order making power in subsection (g), which is also in the nature of an order for specific performance and which requires a party in breach to "perform such work will take such steps as the order specifies to remedy a breach of a term of the tenancy", would not be necessary. Rather, subsection (d) is not limited and any "action in performance of a tenancy" can be the subject of an order. This could include an order requiring a party to perform a tenancy agreement notwithstanding termination had occurred and/or re-entry had been effected. Such an order would, in effect, relieve against any forfeiture if an entitlement was established in the Tribunal determining the dispute.

  1. By reason of these conclusions, the Tribunal is satisfied:

(1)   It has jurisdiction to determine a dispute about whether a party to an agricultural tenancy should be relieved against forfeiture; and

(2)   Has power to make orders under the Act to resolve a dispute in consequence of such a determination.

  1. Notwithstanding this conclusion, should the proceedings be transferred to the Supreme Court because the respondent has commenced proceedings seeking relief in the Court?

  1. The fact that a party asserting an entitlement to relief subsequently commences proceedings in a court does not deprive the Tribunal of jurisdiction. No provision of the Act suggests such consequence.

  1. An object of the Act is to provide a mechanism for settling disputes in the Tribunal. Section 36 of the NCAT Act provides the Tribunal is to apply the "guiding principle" in determining any application, namely to ensure the quick, cheap and just resolution of the real issues in dispute. Parties and their representatives have a duty to assist the Tribunal: section 36(3) NCAT Act.

  1. No submission was made that if the Tribunal has jurisdiction, it is not a convenient forum. No reason has been put forward as to why the applicant's choice of forum is otherwise inappropriate.

  1. Evidence has already been filed and any transfer to the Supreme Court will cause a waste of cost, in part due to the parties having to prepare evidence in a different form. The proceedings are otherwise at a stage where they are ready for final hearing, or could be made ready shortly.

  1. Accordingly the Tribunal is not satisfied an order to transfer the proceedings to the Supreme Court should be made and the application should be dismissed.

  1. As the respondent was unsuccessful, the respondent should pay the applicant's costs of the application as agreed or assessed on an ordinary basis.

  1. The matter is to be relisted for directions for the purpose of listing the matter for final hearing.

  1. The Tribunal makes the following orders:

(1)   The application to transfer these proceedings to the Supreme Court of New South Wales is dismissed.

(2)   The respondent pay the applicants costs of the application to transfer on an ordinary basis, such costs to be as agreed or assessed.

(3)   The proceedings be listed for directions for the purpose of fixing the proceedings for final hearing.

M Harrowell

Principal Member

Civil and Administrative Tribunal of New South Wales

13 August 2014

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.


Registrar

Decision last updated: 11 September 2014

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