Commonwealth of Australia (As Represented BY the Department of Infrastructure and Regional Development) v Brizzolara

[2015] FCCA 1275

FEDERAL CIRCUIT COURT OF AUSTRALIA

COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) v BRIZZOLARA & ANOR [2015] FCCA 1275

Catchwords:
ADMINISTRATIVE LAW – Commonwealth tenancy dispute – interlocutory application – application to set aside consent orders made and entered by the Court – allegation that consent orders made in “the absence of the parties” and signed under economic duress – interlocutory application dismissed.

Legislation:

Residential Tenancies Act2010 (NSW), s.94(1)
Federal Court Rules 2011 (Cth), r.39.11
Federal Circuit Court Rules2001 (Cth), rr.1.05, 16.05

Rajunder Narain Rae v Bijai Govind Sing (1839) 2 Moo Ind App 181; 18 ER 269
State Rail Authority of New South Wales v Codelfa Construction Pty Ltd (No 2) (1982) 150 CLR 29
Wati v Minister for Immigration & Multicultural Affairs (1997) 78 FCR 543
Cameron v Cole (1944) 68 CLR 571
Australia Ltd v Brown (2003) 58 NSWLR 322
John Alexander’s Clubs Pty Limited v White City Tennis Club Limited (2010) 241 CLR 1
Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691
Crescendo Management v Westpac Banking Corporation (1988) 19 NSWLR 40

Applicant: COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT)

First Respondent: PAUL BRIZZOLARA

Second Respondent: SHAYNE BRIZZOLARA

File Number: SYG 663 of 2015

Judgment of: Judge Smith

Hearing date: 14 May 2015

Date of Last Submission: 14 May 2015

Delivered at: Sydney

Delivered on: 15 May 2015

REPRESENTATION

Counsel for the Applicant: Mr J. Doyle & Ms A. Mitchelmore

Solicitors for the Applicant: Australian Government Solicitor

Counsel for the Respondents: Mr P. King

ORDERS

1. The interlocutory application filed by the respondents on 14 May 2015 be dismissed.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 663 of 2015

COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT)

Applicant

And

PAUL BRIZZOLARA

First Respondent

SHAYNE BRIZZOLARA

Second Respondent

REASONS FOR JUDGMENT

1. The applicant (“Commonwealth”) is the registered proprietor of the land situated at 25 Winston Close Badgerys Creek NSW 2555 comprising folio identifier Lot 1 in DP 838361 (“the property”). Mr and Mrs Brizzolara were tenants of the property under a residential tenancy agreement entered into with the Commonwealth. By application dated 12 March 2015 the Commonwealth sought an order under s.94(1) of the Residential Tenancies Act2010 (NSW) that the residential tenancy agreement between it and the Brizzolaras be terminated and an order that the Brizzolaras give vacant possession of the property on or before 15 June 2015.

2. The parties signed consent orders in the proceedings on 18 and 19 March 2015. Those orders were sent to the Court and orders were made in accordance with those consent orders on 27 March 2015. The orders were entered on 30 March 2015.

3. The Brizzolaras have filed an interlocutory application in the same proceedings seeking, amongst other things, for an order setting aside the consent orders and any judgement against them. If that order is not made then it will be unnecessary to consider whether the other orders sought also should be made. Mr King, who appeared for the Brizzolaras, identified rule 16.05(2)(a) of the Federal Circuit Court Rules2001 (“Rules”) as the source of the Court’s power to make the orders sought.

4. Rule 16.05(2)(a) provides that the Court may vary or set aside a judgment or order after it has been entered if the order is made in the absence of a party. It seems a novel proposition to me that parties who consent to orders can nevertheless claim that those orders should be set aside because they were not physically present when the orders were made. That proposition appears to me to be inconsistent with the purpose of the rule. Lord Brougham explained in Rajunder Narain Rae v Bijai Govind Sing (1839) 2 Moo Ind App 181 at 220; 18 ER 269 at 284, that the "indulgence" to allow a case to be reheard:

   … is mainly owing to the natural desire prevailing to present irremediable injustice being done by a Court of the last resort, whereby some accident, without any blame, the party has not been heard, and an Order has been inadvertently made as if the party had been heard."

5. This passage was cited by Brennan J in State Rail Authority of New South Wales v Codelfa Construction Pty Ltd (No 2) (1982) 150 CLR 29 at 45 – 46 and, in turn by the Full Court of the Federal Court in Wati v Minister for Immigration & Multicultural Affairs (1997) 78 FCR 543 at 550.

6. In a different context, concerning similar principles, it was said that an order setting aside orders made in the absence of a party “lays the ghost of the simulacrum of a trial, and leaves the field open for a real trial” Cameron v Cole (1944) 68 CLR 571 at 589 per Rich J. See also at 590-591, and see BP Australia Ltd v Brown (2003) 58 NSWLR 322 at 347-348 [132]-[134] cited in John Alexander’s Clubs Pty Limited v White City Tennis Club Limited (2010) 241 CLR 1.

7. While neither party addressed me on these issues it is important to note them and, in my view, critical to understand precisely the basis upon which the consent orders were made in the first place. The Rules, in accordance with the objects of the Federal Circuit Court Act 1999, are aimed at assisting the Court to operate as informally as possible and to use streamlined processes. It was with those objects in mind that I allowed this application to continue by way of an application in the case in spite of apparent authority to the effect that such an application should be made by new action brought for that purpose: Spies v Commonwealth Bank of Australia (1991) 24 NSWLR 691 at 697 per Handley JA.

8. No doubt it was also in pursuit of those objects that the Rules do not contain detailed provisions in respect of every aspect of procedure that might occur in the Court. However, that situation is dealt with by r.1.05 which provides in the first place that if the rules are insufficient or inappropriate the Court may apply the Federal Court Rules 2011 in whole or in part modified or dispensed with as necessary and, in the second part, that the provisions of the Federal Court Rules set out in pt.2 of sch.3 apply with necessary changes to general federal proceedings (such as these). One of the Rules set out in p.2 of sch.3 to the Rules is r.39.11 of the Federal Court Rules. Rule 39.11 of the Federal Court Rules deals with consent orders and provides:

   (1)A Judge may make an order in accordance with the terms of a written consent of the parties by initialling or otherwise annotating the consent and placing it on the Court file.

   (2)The order must state that is made by consent.

   (3)The order has the same force and validity as an order made after a hearing by the Judge.

9. That was the procedure adopted in this case. It seems at least arguable to me that Mr King’s proposition is inconsistent with r.39.11 and that the power upon which he relied is simply not available in circumstances where orders have been made by consent in accordance with that rule.

10. However, the Commonwealth did not take this point and I do not find it necessary to determine it on a final basis. It appears to me that it is at least arguable that the circumstances in which the consent was obtained could effectively mean that there was no consent. In those circumstances, it could readily be said that the relevant party did not have an opportunity to be heard and so the order was made in his or her absence. This line of argument, however, is also apposite to the question whether or not the Court should exercise its discretion under r.16.05 once that discretion has been enlivened by proof of the absence of a party. Thus, it seems to me, this is the critical issue in the application and it does not matter whether it be decided in terms of the “jurisdictional fact” in r.16.05(2)(a) or in the exercise of the discretion. As the parties only addressed me in respect of the latter, I will make my decision by reference to the exercise of discretion.

11. Mr King argued that the Brizzolaras’ consent had been obtained under economic duress. He relied upon the judgment of McHugh JA in Crescendo Management v Westpac Banking Corporation (1988) 19 NSWLR 40. In that case his Honour said at 46:

    The proper approach in my opinion is to ask whether any applied pressure induced the victim to enter into the contract and then ask whether that pressure went beyond what the law is prepared to countenance as legitimate? Pressure will be illegitimate if it consists of unlawful threats or amounts to unconscionable conduct. But the categories are not closed. Even overwhelming pressure, not amounting to unconscionable or unlawful conduct, however, will not necessarily constitute economic duress.

12. Both of the Brizzolaras affirmed affidavits to support the interim application. In her affidavit of 12 May 2015, Mrs Brizzolara said that the orders were made by mistake in that “we thought the Commonwealth required the Orders for the purpose of dealing fairly with us. This has not been the case. We misapprehended the reason for the signing of the Orders.” She also said “we signed the orders under economic duress, believing we had no choice.”

13. In his affidavit of 10 May 2015, Mr Brizzolara said “I signed the orders under economic duress, believing I had no choice.” He also gave further details of the circumstances in which the orders were signed namely:

    5.The orders were signed in the following circumstances. When Shayne and I received the Court documents at about 6.30am one morning just prior to 18 March 2015 after they were handed to my daughter I went with the documents to see Pam who I knew to be our landlord for the Commonwealth Government.

    6.I took the consent orders to her and said ‘What is this about?’ She said ‘This is for the Government. You have to sign them so I can fax them off to the solicitors this very day’.

    7.I said ‘I am not going to sign it’. She said ‘You have to sign it. I will make sure you are put on a black list for housing unless you sign and you will also be kicked out on the 15^th June unless you sign. You will not get another rental.’

    8.I said ‘I do not have enough money to move’. She said ‘That’s not my problem’. I said ‘My wife won’t sign it but I will have to sign’.

    9.I had just come out of hospital at the time and needed tablets which I could not afford. Sick with worry ad concern about what would happen if did not sign the consent orders I signed the consent orders.

14. The other evidence before me includes an affidavit by Stephen Goodwin, a licenced process server, sworn on 18 March 2015. Mr Goodwin says that he delivered letters dated 13 March 2015 to each of the Brizzolaras on Saturday, 14 March 2015 along with the application, the applicant’s genuine step statement, two affidavits and draft consent orders. The letter dated 13 March 2015, which was also tendered separately, indicated that the proceedings were listed for the first Court date at 9:30am on Friday, 20 March 2015 and also included the following:

    Consent orders

    8.As outlined in the letter to you dated 27 February 2015, if you agree to give vacant possession of your property by 15 June 2015 you can sign consent orders to bring the proceedings to an end.

    9.A copy of the consent orders is enclosed should you wish to sign them. If you sign the consent orders, you should understand that you are agreeing to a Court order to vacate your property and hand over vacant possession by 15 June 2015.

    10.You will be able to resolve the proceedings by sending us a signed copy of the consent orders from now up until the proceedings are finally determined by the Court.

    Next steps

    11.You should read the documents carefully and may wish to seek legal advice by consulting a solicitor. We can answer any questions you may have about the process, but are unable to give you legal advice.

    12.Alternatively, the Tenants Advice and Advocacy Service (TAAS) provide free, independent information, advice and advocacy to tenants in NSW. TAAS is located at 317 Queen Street, Campbelltown. The telephone number for TAAS is 1800 251 101.

    13.If you sign and return the consent orders to us by Thursday, 19 March 2015, it will not be necessary for you or your legal representative to attend Court. Consent orders can be sent to Donna Boyce, Australian Government Solicitor, GPO Box 2727, Sydney, NSW 2001.

    14.Otherwise, it is important that either you or your legal representative attend Court at 9.30am on Friday 20 March 2015.

    (Emphasis in original)

15. It seems odd to me, without further explanation, that a person who had received a letter in the above terms would nevertheless go and see a real estate agent or property manager in connection with legal proceedings. It seems more than odd to me and I do not accept, that even if such a person were to see a property manager, that that manager would make statements so entirely inconsistent with the tenor of the letter. For instance, there is no rational basis in any objective evidence before me as to why the property manager would say in respect of the consent orders “you have to sign them so I can fax them off to the solicitors this very day”.

16. Such a statement is so far at odds with the letter served upon the Brizzolaras that I find that it did not occur. Indeed, I am not satisfied that any of the conversations deposed to by Mr Brizzolara took place. Another reason for which I do not accept Mr Brizzolara’s evidence, although this is of less concern, is his evidence that his wife would not sign but that he would have to. This evidence flies in the face of the facts that not only were the consent orders signed by both Mr and Mrs Brizzolara but that Mrs Brizzolara did not deny that she signed them. In that respect I note that her affidavit had the following paragraph which had a line drawn through it and initialled: “I did not sign the consent, only my husband Paul signed the consent without my knowledge.”

Conclusion

1. For those reasons, I find that there was no pressure applied by the Commonwealth to the Brizzolaras in respect of signing the consent orders and that, in spite of their bald assertion to the contrary, they were under no economic duress in the sense required to justify an order setting aside those consent orders. Their application to set aside the consent orders is refused.

2. As I have noted, although the Brizzolaras also sought further orders, it is unnecessary to deal with them.

I certify that the preceding eighteen (18) paragraphs are a true copy of the reasons for judgment of Judge Smith

Associate: 

Date: 15 May 2015