Commonwealth of Australia (As Represented By the Department of Infrastructure and Regional Development) v Butt
[2015] FCCA 3256
•11 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) v BUTT & ANOR | [2015] FCCA 3256 |
| Catchwords: CONSTITUTIONAL LAW – Jurisdiction of the Federal Circuit Court of Australia – judicial power – improper restraint on judicial power – acquisition of property other than on just terms – whether there was a “matter” – whether legislative instrument was unlawful. PRACTICE & PROCEDURE – Whether proceedings were properly constituted. |
| Legislation: Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015 (Cth) ss.7, 8 |
| Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Foster [2015] FCCA 2663 Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Hevers & Anor (No.3) [2015] FCCA 1814 Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Rigney & Anor (No.3) [2015] FCCA 3133 Sidhu v Van Dyke (2014) 251 CLR 505 |
| Applicant: | COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
| First Respondent: | STEPHEN BUTT |
| Second Respondent: | PATRICIA BUTT |
| File Number: | SYG 635 of 2015 |
| Judgment of: | Judge Smith |
| Hearing dates: | 18 May 2015, 21-24 July 2015 & 13 August 2015 |
| Date of Last Submission: | 28 August 2015 |
| Delivered at: | Sydney |
| Delivered on: | 11 December 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr J. Doyle, Mr D.W. Rayment & Ms A. Mitchelmore |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the Respondents: | Mr P. King |
DECLARATIONS
The licence agreement between the applicant and the respondents dated 20 January 2012 in relation to Part Lot 1 in Folio Identifier PT 1/838361 (Formerly 19/D/1951) (“Land”) was terminated with effect from 15 June 2015.
ORDERS
The residential tenancy agreement between the applicant and the respondent in relation to the premises situated at 650 Badgerys Creek Road, Badgerys Creek NSW 2555 comprising part of folio identifier Lot 1 DP 838361 (“Premises”) be terminated forthwith.
Vacant possession of the premises be given to the applicant on or before 18 December 2015.
The order for vacant possession of the Premises be suspended to 9 February 2016.
Vacant possession of the Land be given to the applicant forthwith.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 635 of 2015
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
Applicant
And
| STEPHEN BUTT |
First Respondent
| PATRICIA BUTT |
Second Respondent
REASONS FOR JUDGMENT
Introduction
The respondents, Mr and Mrs Butt, have lived in Badgerys Creek since 1994. Originally, they lived on a property at 2160 Elizabeth Drive, Badgerys Creek NSW 2555 but when the house on that property became infested with termites they moved to 650 Badgerys Creek Road, Badgerys Creek NSW 2555 (“Premises”) where they currently reside with their daughter. They are tenants of the Commonwealth which is the registered proprietor of the land on which both the Premises and the Butt’s former home are situated. The Butts also have a licence with the Commonwealth which enables them to use part of the land on which the former home was situated for the purpose of grazing horses.
The Commonwealth now wishes to develop the land at Badgerys Creek for the purposes of an airport. In order to do so it seeks orders, amongst other things, terminating the residential tenancy agreement with the Butts and a declaration that the licence agreement with the Butts has been terminated.
The Butts resist the orders sought by the Commonwealth on a number of alternative bases. The first is that the law relied upon by the Commonwealth for the determination of the dispute between the parties does not apply because the properties are predominantly used for non-residential purposes. Secondly, the Court does not have jurisdiction to make the orders because the legislation purporting to grant the Court jurisdiction is unconstitutional. Thirdly, the determination of the law to be applied by the Court was beyond the power granted by the relevant statute. Fourthly, the proceedings were not properly constituted because there is one co-tenant who has not been joined to the proceeding. Fifthly, the Court should refuse to exercise its jurisdiction to terminate the agreement because of the Butts’ long-standing possession of the properties and the lack of evidence to show the Commonwealth’s need for possession of the properties.
In their response filed on 27 May 2015, the Butts also raise a number of other points that can be dealt with briefly:
a)They reserve the right to contend that they, with their daughter, hold land in adverse possession to the Commonwealth, being the land surrounding their former home. As no such contention was ever made it is unnecessary to consider this matter further.
b)They make three pleading points:
i)the applicant has failed to allege properly or at all and/or to particularise any right to possession of the lands the subject of the claim, and has failed to allege any lease, the relevant terms thereof, or the service of any notice to quit upon the respondents according to law;
ii)the applicant has failed to allege what right, if any, it has under the Residential Tenancies Act 2010 (NSW) (“Tenancies Act”) or to make a claim reliant on the terms of the said Act; and
iii)they say that it was an express term of the residential lease between the parties that the tenancy ends by expiry of a properly given notice of termination serve by the Commonwealth or by an order of the Residential Tenancies Tribunal neither of which was alleged by the applicant nor has occurred.
The answer to all of these is that the application is not a pleading and the availability of the relief sought in the application must be dealt with on the basis of the evidence in the proceedings.
c)They contest that letters sent to them by the Commonwealth’s property agents were lawful and effective notices of termination. The Commonwealth only relies on two notices: one terminating the lease, and one terminating the licence. They are dealt with below.
d)They argue that there is no urgency in the Commonwealth’s need for vacant possession because the Commonwealth had granted a 99 year “Right of Refusal” to the purchaser of the Sydney (Kingsford Smith) Airport. There is no evidence to support that contention.
e)They say that they have incurred losses “in breach of the contract or in breach of duty by the Applicant in relation to the land, and will provide particulars of losses which exceed 3 folios.” No particulars of any loss have been provided, no evidence of any loss has been adduced and no explanation has been given as to what breaches of contract or duty are referred to. In those circumstances, it is unnecessary to consider this claim any further.
f)They contend that the Commonwealth has not offered to compensate them for the costs of complying with the “eviction notice”. No particulars of this claim were provided and nor was any evidence adduced in support of the existence of any obligation on the Commonwealth to do so. In those circumstances, it is unnecessary to consider the claim further.
These proceedings were conducted concurrently with a number of other proceedings brought by the Commonwealth against lessees of land in the vicinity of the Premises. To a large extent, the same issues arose in each of those proceedings. I have already given judgement in one of them: Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Rigney & Anor (No 3) [2015] FCCA 3133 (“Rigney”). These reasons ought to be read together with my reasons in that matter.
Jurisdictional and preliminary issues
It is necessary first to consider the jurisdiction of this Court.
Facts relevant to the jurisdictional issues
Before considering the arguments concerning the jurisdiction of the Court, I set out my findings of fact relevant to that issue:
a)the Commonwealth is the registered proprietor of the land comprised in folio identifier 1/838361 (“airport site”);
b)the following properties form part of the airport site:
i)650 Badgerys Creek Road (Formerly Lot 19) Badgerys Creek NSW 2555 (that is, the Premises); and
ii)2160 Elizabeth Drive, Badgerys Creek NSW 2555 (that is, the Butts’ former home)
c)on 20 January 2012 the parties entered into a residential tenancy agreement in respect of the Premises (“Agreement”);
d)the term of the Agreement was from 20 January 2012 until 19 April 2012;
e)that term has now expired;
f)on 20 January 2012 the parties entered into a licence of land contiguous to the Premises which permitted the Butts to use that land the purpose of grazing six horses (“Licence”);
g)it was a term of the Licence that the Licence terminated without notice if the agreement was terminated or that the Commonwealth could terminate the Licence on six months written notice if it decided to proceed with the development of the Sydney West Airport or to dispose of or utilise the land for any other purpose;
h)the Butts have been in continual possession of the Premises for less than 20 years;
i)the Premises are not predominantly used for non-residential purposes;
j)by letter dated 29 October 2014 the Commonwealth notified the Butts that it will likely require possession of the Premises by June 2015;
k)by letter dated 24 November 2014 the Commonwealth notified the Butts that it required possession of the Premises by 15 June 2015; and
l)on 5 July 2015, the applicant served a notice of termination of the Agreement on the Butts; and
m)neither of the Butts indicated that they were willing to vacate the Premises by that date and have remained in possession of the Premises and the land subject to the licence.
Predominant use of Premises
It may be noted that the finding at [7](i) above deals with the Butts’ first contention set out at [3]. The relevance of that contention was explained in my judgment in Rigney at [8]-[27]. Briefly, the jurisdiction of this Court is said to arise under s.10AA of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”). The law that is to be applied by the Court in proceedings under that provision is that found in the Tenancies Act. However, the Tenancies Act does not apply to land that is predominantly used for agricultural purposes: s.7(h). The land which is the subject of these proceedings is predominantly used for agricultural purposes. Thus, so the argument goes, the Court does not have jurisdiction in respect of the land.
As I explained in Rigney at [16], the only consequence of any conclusion that land is not governed by the Tenancies Act is that the Court must apply the common law to the dispute between the parties. Here, there are two relevant lots of land: the Premises and the land the subject of the licence. The Commonwealth does not contend that the latter is governed by the Tenancies Act. It was clearly correct not to: the land is not used at all for residential purposes.
The Butts did not give evidence about the use of the Premises. However, their daughter, Lisa Butt, did give evidence as follows:
…
The area around No 650 is approximately 12 acres in size with the residential premises half an acre, which is fenced off from the remainder of the land. The land is then divided by fences into various horse and grazing paddocks. My parents and I have kept horses in the paddocks over the years.
At present I have one large horse and a number of miniature ponies which we graze in different paddocks by rotation.
…
The precise question posed by s.7(h) of the Tenancies Act is whether the predominant use of the Premises is for the purposes of a trade, profession, business or agriculture. “Agriculture” is defined in the Macquarie Dictionary as the “cultivation of land, including crop-raising, forestry, stock-raising, etc.; farming”. Keeping one large horse and the number of miniature ponies does not, in my view, amount to agriculture. In any event, I am not satisfied that even if that activity did fall within the meaning of agriculture in the Tenancies Act that the predominant use of the Premises was for that purpose.
I considered the meaning of s.7(h) in Rigney and concluded:
[22]… In its context, there is no special meaning of the word “predominant”. Generally speaking, the predominant use of something is the main, prevailing or preponderant use of that thing. In an Act, the general concern is to ensure a balance between residential tenants and landlords. The exception in s.7(h) is clearly intended to capture premises that are mainly used for specific non-residential purposes such as business or agriculture.
[23]The definition of “residential premises” assists in understanding this exception. Section 3 provides that “residential premises” means “any premises or part of premises (including land occupied with the premises) used or intended to be used as a residence”. This suggests that s.7(h) is not answered simply by arithmetic but rather, by qualitative analysis. …
Applying a qualitative analysis to the evidence in this case, it cannot be said that the maintenance of a horse and miniature ponies was the predominant use of the Premises. Rather, they are used predominantly as a home for the Butts and their daughter.
Resolution of the jurisdictional issues
The jurisdictional questions, including those relying on aspects of the Constitution, were the same as those argued in Rigney. The parts of the judgment in Rigney dealing with the jurisdictional questions ([58]-[116]) are to be read together with and as part of these reasons. The parties were unable to agree as to the form of the jurisdictional questions to be answered. The questions set out below were adapted from the respondents’ response and submissions, as best as could be understood. Those questions and the answers to them are as follows:
a)Was there, at the date of the Application, a matter within the meaning of Constitution Chapter III and s.5 of the FCCA Act which the Court is required to resolve?
Yes.
b)Was it beyond the power of the Parliament under the Constitution to make the 2015 Commonwealth tenancy law or the March 2015 Tenancy Instrument to confer upon this or any Chapter III court the power to resolve the alleged dispute the subject of the Application in that it impairs the separation of powers principle in the Australian Constitution?
No.
c)Was there any power under Constitution s.51 for the Parliament to make a law with respect to the land of the Respondent imposing the operation of the 2015 Commonwealth tenancy law and the March 2015 Instrument?
Yes.
d)Assuming the 2015 Commonwealth tenancy law is valid, is the March 2015 Instrument unauthorised and ultra vires?
No.
e)Is the 2015 Commonwealth tenancy law invalid by reason that it impairs the Constitutional guarantee against expropriation (sic) of property except on just terms as contained in s.51(xxxi) of the Constitution because it is a law for the acquisition of property other than on just terms?
No.
Whether the proceedings are properly constituted
The Butts argue that the proceedings are not properly constituted because their daughter is a co-tenant but has not been joined to the proceedings. This is an arid argument. Ms Butt was aware of the proceedings and gave evidence in them. In spite of this, Ms Butt never sought to be joined as a party. Ms Butt has been heard as fully as she would have been if she had been joined and it would serve no purpose to dismiss the proceedings simply because she had not been formally included as a party. In any event, I reject the foundation of the submission, namely, that Ms Butt is a co-tenant.
The evidence given by Ms Butt establishes that she moved back into the Premises in March 2015. That is, after the commencement of the proceedings. There is no clear evidence to suggest that Ms Butt is contributing to the payment of rent. Additionally, the provisions in the Tenancies Act dealing with co-tenancies are not satisfied.
Section 10 of the Tenancies Act enables a person who is not named in a residential tenancy agreement to be a tenant for the purposes of the Act in certain circumstances. They are that a tenant under the agreement transfers the tenancy to that person or the person is recognised as a tenant (as to which Part 4 of the Act is relevant) or the person is a sub-tenant under a written residential tenancy agreement. Part 4 includes ss.74 to 79. Most relevantly, s.77 enables the Civil and Administrative Tribunal (“Tribunal”) to make an order recognising a person as a tenant. However, the person must make an application for such an order and the Tribunal can only make the order if the sole tenant has died or no longer occupies the premises. None of the requirements of these provisions has been satisfied in this case. Ms Butt is not a co-tenant for the purposes of the Tenancies Act.
I should add that none of this was developed in any submissions made by Ms Butt or her parents and the Court has been left to guess the legal basis on which the submission was made.
The substantive issues
As I explained in Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Hevers & Anor [2015] FCCA 1814 (“Hevers”) and Rigney, this Court has jurisdiction pursuant to s.10AA of the FCCA Act in relation to Commonwealth tenancy disputes in which the Commonwealth is the lessor and a person other than the Commonwealth is the lessee. In exercising that jurisdiction in respect of land in New South Wales, the Court is to apply the Tenancies Act subject to some modifications and to the extent necessary to determine the dispute: Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015 (Cth) (“Instrument”), s.7.
Where the Tenancies Act does not apply, the Court is to apply the common law.
A Commonwealth tenancy dispute includes a matter involving a lease, licence or other arrangement to possess, occupy or use land and a dispute about the termination of the lease, licence or other arrangement in which the Commonwealth is a party: FCCA Act s.5.
There is no question that these proceedings involve a Commonwealth tenancy dispute. There are two aspects to that dispute: the Agreement and the Licence. The first of these is governed by the Tenancies Act. In Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Foster [2015] FCCA 2663 (“Foster”), I explained the relevant statutory scheme as well as the background to that scheme. There is no need to repeat that discussion here. Essentially, for the reasons given in Foster, if a notice of termination has been served and the tenants have not already given vacant possession, the Court must terminate the lease and to nominate a day by which vacant possession must be given. Section 8(2) of the Instrument amends the Tenancies Act so that the date for possession is the date that the Court considers appropriate. That date can be postponed to a later date having regard to the relative hardship to each of the parties.
In respect of the licence, the Court is to determine the dispute in accordance with ordinary principles of contract law.
Agreement
It is convenient to deal first with the Agreement.
As I noted in Foster, the first step of the approach to this issue is to determine whether the duty to make a termination order arises. That requires consideration of whether a notice of termination has been given in terms required by the Tenancies Act and whether the Butts have vacated the property as required by the notice. The second step is to determine what the appropriate date is for vacant possession to be given. This involves a balancing of the parties’ interests. Part of this consideration could also involve the application of s.114 of the Tenancies Act to suspend the date of the order for vacant possession.
In light of my conclusion that the predominant use of the Premises was not for the purposes of agriculture, there is no issue that the agreement is a residential tenancy agreement within the meaning of the Tenancies Act: s.13. Further, as it continued after the day on which the fixed term ended (namely, 20 April 2012), it did so as if it were replaced by a periodic agreement: Tenancies Act s.18. As such, the Commonwealth was entitled, at any time, to give a termination notice for the agreement: Tenancies Act s.85(1).
A termination notice must relevantly set out the following matters (Tenancies Act s.82(1)):
a)the residential premises concerned;
b)the day on which the residential tenancy agreement is terminated and by which vacant possession of the premises must be given; and
c)any other matters prescribed by the Regulations.
The notice must be in writing and be signed by the party giving the notice or the party’s agent: Tenancies Act s.82(2).
The evidence establishes that, on 5 July 2015, a process server attended the Premises and handed to Mr Butt personally, a letter dated 2 July 2015 from the solicitors for the Commonwealth together with a document entitled “Notice of Termination of Residential Tenancy Agreement” (“Notice”).
The notice set out the residential premises subject to the agreement, the day on which the residential tenancy agreement was to be terminated and by which vacant possession of the premises must be given, namely 10 October 2015. It was signed by an agent for the Commonwealth, namely a director of a property management company who had care of the Premises on behalf of the Commonwealth. There were no requirements stipulated by any regulations.
In those circumstances, I am satisfied that a termination notice was given in accordance with s.85 of the Tenancies Act. Given that the Butts’ evidence was that they still lived at the Premises and oppose any orders that they vacate the Premises I am also satisfied that they have not vacated the Premises as required by the notice.
For those reasons, I must make a termination order. The only issue remaining is the day by which vacant possession must be given. That requires some consideration of the circumstances of the parties. I will deal first with those of the Commonwealth.
The Commonwealth’s reasons for possession
The matters relied upon by the Commonwealth were set out in its affidavits. They can be summarised as follows.
The first steps towards construction of an airport
In the late 1980s and 1990s the Commonwealth undertook a land acquisition program in the Badgerys Creek area to acquire and reserve the land needed for an airport in Western Sydney. The acquisition program resulted in the acquisition by the Commonwealth of a large number of individual titles in the suburbs of Badgerys Creek, Luddenham and Greendale.
A 2012 Joint Study on aviation capacity in the Sydney region, commissioned jointly by the Commonwealth and NSW governments, identified that the demand for passenger journeys in the Sydney region was forecast to more than double over the next 20 years and to double again by 2060.
On 15 April 2014, in a joint release with the then Prime Minister Tony Abbott, the Minister for Infrastructure and Regional Development, Warren Truss, announced that this site for Western Sydney’s new airport would be Badgerys Creek. He announced that, although the airport would not be fully operational for a decade, planning for the new airport would start immediately and construction should start in 2016. He also said that because of the time it takes to plan and build an airport, the Government’s approach would be to build the roads first and the airport second. It was envisaged that most of the cost of the airport would be met by a private sector operator.
The evidence in respect of the development of the site for the airport was given on behalf the Commonwealth by Peter Robertson, a General Manager at the Department of Infrastructure and Regional Development (“Department”). He is one of three Senior Executive Service staff members managing the proposed Badgerys Creek airport project and has been engaged on it since the establishment of the Western Sydney unit which is tasked with the management of the proposed airport. Mr Robertson is responsible for management of policy development for the project and project timeframes.
Mr Robertson said that there were four aspects of the substantial urgency of vacating (by which he meant obtaining vacant possession of) the site. The first was to obtain vacant possession in accordance with the project timetable; second, was the incompatibility of continued residential accommodation and the ongoing investigation and demolition works both in terms of cost and delay impacts on the work at the site and the residential amenity and safety; third, was the balance to be struck between the interests of the tenants and the high costs of them remaining on the site; and the fourth, was importance of treating tenants equitably.
Mr Robertson explained that planning for an airport requires substantial on-site technical work including extensive investigations to support environmental assessment and geotechnical work by engineers and other consultants. He said in his affidavit of 11 March 2015 that such work had already commenced and was expected to continue throughout 2015. He said that the site investigations included invasive geotechnical drilling work to obtain samples to inform the engineering options which required substantial machinery on the site including large mobile rigs to drill and dig holes often several metres deep. The work was, at the time of his affidavit, being undertaken on a limited scale due to the occupants on the site. That was because the work is intrusive, requires out of hours access and could cause safety concerns for occupants.
In light of that occupation the work had been either been tailored to the sites of which the Commonwealth had possession, or alternatively, the Commonwealth had liaised with tenants to ensure that testing could be conducted safely without unnecessary disturbance. Mr Robertson explained that the additional work and costs that have resulted from working around tenants were “considerable”, although he did not give any further detail in that respect. Notably, his evidence did not deal directly with the part of the site on which the Butts’ home is located. Indeed, his evidence was that the planning, assessment, site management and preparation activities for the airport site were being undertaken on a “whole of site” basis for all of the land to be included in the airport site.
Mr Robertson also gave evidence of the further work that would be required on the site in general. Generally speaking that work was to obtain further geotechnical and contamination information across the whole site which would then be fed directly into the government’s consideration of the land use arrangements for the site and the associated costings. Mr Robertson said that the information was urgently required in order to feed into the government consideration process but did not really explain the basis for the urgency other than saying that a delay in obtaining the testing information “risks delaying the proposal overall.”
Mr Robertson described the process for assessing residential tenant blocks as being “administratively onerous” and taking considerable time, effort and cost to implement. The steps usually followed in that respect were:
a)Identify sites for access: contracted specialists would identify access requirements for all specialist investigations on the site and then submit a request for access to the Department. That request would then be reviewed by the Department in consultation with the property manager. Alternative access options would be identified should there be tenancy considerations.
b)Seek consent from tenants: once the final list of survey sites was determined then the Department would liaise with existing tenants by way of letters prepared by lawyers and follow-up telephone calls.
c)Where tenants refuse access: a new survey site would need to be identified in accordance with the previous steps.
d)Finalise access to the sites: when tenants are notified and consent is received the lists of sites for access is finalised, mapped and sent to contracted specialists to be given to the survey team.
e)Access to sites on the day of investigations.
Mr Robertson explained that the constant requirement to seek consent had implications for the achievement of the projects timeframes and generates substantial costs.
Mr Robertson stated that the next stages of investigative work would be increasingly incompatible with the continued residential occupation of the land being tested. In addition to the substantial noise and disturbance caused by machinery there was a significant risk to safety arising both from the danger of individuals interacting with the machinery and dangers associated with holes which have been drilled.
In his affidavit of 30 March 2015 Mr Robertson stated that a minimum of 9 to 12 months was expected to be required to clear the proposed airport site and that that timeframe was only achievable with multiple contractors working concurrently on the site with limited unfavourable weather. The expectation is also based on the assumption that there would only be 150 structures remaining for demolition after June 2015.
In his affidavit of 21 May 2015 Mr Robertson stated that, as at that date, 58 of an estimated total of 163 tenants had vacated the site. He further stated that termination notices with respect to 99 of the 163 tenants had been issued and were due to expire on 15 June 2015 by which time it was expected that the vacancy of the site would increase substantially.
Mr Robertson gave evidence that demolition of an initial 10 vacant premises commenced from December 2014 and that the Department had also established a panel of demolition firms to carry out the next stage of demolition at Badgerys Creek. Those demolitions commenced in March 2015. Since that time, contractors have completed the demolition of an additional 24 properties and 11 further properties had been allocated to demolition to be completed before 30 June 2015. This would leave the bulk of the demolition to take place after June 2015 when it was expected that the majority of the premises would be vacated.
Mr Robertson also explained that, based upon the previous experience of demolitions on the site, the process of demolition required between 15 to 20 days for each property. That is because of a significant number of requirements including confirmation by inspection that the premises are in fact vacant, site visit from the demolition contractor to assess the structure including for the presence of asbestos, obtaining subsequent approval under WorkCover to allow the demolition to go ahead, obtaining a hazardous material survey and report, development of safety on site management plan, removal of asbestos, and demolition of the structure.
Where asbestos has been identified in this process, which the Commonwealth considers may be a significant proportion of the structures, an additional seven days is required for the demolition to be finalised. The presence of any buried asbestos, either before or once demolition works has commenced will, according to Mr Robertson, mean additional time, costs and health concerns.
Mr Robertson was cross-examined by Mr King. For the most part, the questions asked of him went to establish that there were other people in the Department with more knowledge of and responsibility for particular decisions with respect to the development of the site for an airport. Those questions did not assist the proceedings in any way. Mr Robertson gave evidence about what he knew. The fact that someone else was responsible for decision-making or any other matter is irrelevant to the facts in issue. I found that Mr Robertson gave his evidence truthfully and I accept what he said.
Preparation for development by a private sector operator
As was mentioned in the 15 April 2014 joint press release, the Commonwealth envisaged that the costs of the airport would be principally met by a private sector operator. Mr Robertson gave evidence about the contractual processes being undertaken by the Commonwealth in connection with that operator.
He said that when the Commonwealth sold Sydney (Kingsford Smith) Airport to the Sydney Airport Group in 2002, the sale agreement included terms granting an opportunity to the purchaser to develop and operate any second major airport in the Sydney region within 100 kilometres of the Sydney GPO. That sale agreement detailed the process and timeframes for consultation between the government and owners of the Sydney airport on the development and operation of a second airport. Those processes were not in evidence before me.
As Badgerys Creek is located approximately 56 kilometres from the Sydney GPO the right of first refusal in the airport sale contract were applicable.
Mr Robertson explained that whilst consultation was currently underway and a final decision on the airport proposal had not been made, a clear site was necessary to allow for investigations of the site to inform any proposal that could be made to the Sydney Airport Group, or the market, or to be carried out by the government itself. He said that essential to such proposal was the outcome of the Environmental Impact Assessment process, geotechnical and engineering investigations, archaeological surveys, and other site interrogations. In his opinion, restricted access to the site due to tenants being in possession of individual properties limits this process in many practical ways.
Circumstances relied on by the Butts
There are three matters relied on by the Butts as to why they should not have to leave the Premises. The first is that Badgerys Creek has been their home for many years and that Lisa Butt has an expectation that she would remain living on the Premises for life. Ms Butt asserts (apparently on behalf of her parents) that because of this, the Court should not terminate the agreement or, in the alternative, that they should be given a long period of notice, not less than six months together with compensation for the loss of amenity and difficulties in finding alternative accommodation for themselves and their animals.
While I accept that the Butts have formed an emotional attachment to the area in which they have lived for over 20 years, I do not accept that they have had any expectation that they would live there for life. Both the agreement and the licence refer to the possibility that they would have to leave the Premises if the Commonwealth decided to use the land for the purposes of an airport.
The second matter is that asserted in written submissions and related to estoppel. The estoppel is based on the fact that, when the Butts moved from the termite-infested property to the Premises, an employee of the property management company engaged by the Commonwealth said to them words to the following effect:
… I will get you to sign another rental agreement to resolve this problem, this will not change the lease agreement and it will continue the same for the substitute premises.
…
This argument was not developed by counsel for the Butts either in written or oral submissions. To the extent that it suggests that this statement requires the Court to apply s.94 of the Tenancies Act to the Butts, it is rejected. At its highest, the statement was only to the effect that the Butts would get a lease of another property that would be on the same terms as the lease they had previously had. The evidence was that this is precisely what occurred. Ms Butt, for instance, gave evidence the rent for the Premises was the same as for the old property even though the house is larger in size. In any event, that was no evidence that the Butts assumed from this statement that, in the event that the Commonwealth wished to obtain vacant possession of the Premises, they would be treated the same as tenants who had been in continual possession of the Premises for more than 20 years. There is no evidence that they were even aware of the effect of s.94.
Further, it is extremely unlikely that the Butts would have remained living in a termite-infested house. On that basis, they would have moved to new premises even if the Commonwealth’s agent had not made the statement to them. If they had done so, they would not have had the benefit of s.94 of the Tenancies Act. For that additional reason, no estoppel arises. As Gageler J noted in Sidhu v Van Dyke (2014) 251 CLR 505 at [92] there can be no real detriment if the party asserting the estoppel would have been in the same position in any event.
The third matter relied on by the Butts was evidence that there was little suitable accommodation available to them in the area surrounding Badgerys Creek. That evidence was given in a number of matters that were heard at the same time as this case: for example, Rigney at [180]-[205]. It was admitted in evidence in each of the proceedings including these proceedings. However, the other proceedings involved tenants who had been in continuous possession of premises for over 20 years and the evidence was particularly relevant to whether, rather than when, an order for vacant possession ought to be made. That said, I accept on the basis of that evidence that it may be difficult for the Butts to move home on short notice and to find another home with sufficient land to keep a horse and some miniature ponies.
On the other hand, the evidence does not establish that suitable alternative accommodation is not available anywhere or that the Butts have insufficient means to afford alternative accommodation either inside or outside the Sydney basin. They have not given any evidence that they have made any effort to find such accommodation and I infer that they have not made any such effort.
Another matter to be considered is that the impending holiday period will make it more difficult than usual for the Butts to locate alternative accommodation.
Conclusion in relation to the Agreement
Having considered the circumstances of both parties, I consider that the appropriate date on which the Butts should give vacant possession is 60 days from the date of judgment.
First, I accept the general importance of the development of a further airport in Sydney for both the economic and social wellbeing of this state, if not, this country.
Secondly, significant time, effort and money has already been put into preparation of the site for the future development of the airport and the continued presence of tenants on the airport site is to increase the amount of costs likely to be incurred by the Commonwealth in that development.
Thirdly, the safety of individual tenants will decrease as more and more tenants vacate the site.
Fourthly, the Butts have been on notice since the beginning of the agreement of the possibility of the use of the land in Badgerys Creek as an airport and the consequent need for them to give vacant possession to the Commonwealth if and when the land is required for that purpose.
The Licence
The Licence is not governed by the Tenancies Act and its termination is determined by reference to its terms.
Clause 10 of the Licence provides for termination:
10.Termination of this Licence
10.1.1(Termination for Breach) If you are in breach of any provision of this Licence and You fail to remedy that breach within ten (10) days of written notice form the Commonwealth requiring rectification, the Commonwealth may terminate this Licence on written notice expiring at any time.
10.1.2(Termination if Licence terminates) If the Lease identified in clause 2 (Background) expires or is terminated, this Licence terminates without notice.
10.1.3(Termination for purposes of Sydney West Airport) You acknowledge that the Land forms part of the site of the Sydney West Airport site. If the Commonwealth decides to proceed with the development of Sydney West Airport or to dispose of or utilise the Land for any purpose, the Commonwealth may terminate this Licence on six (6) months written notice expiring at any time.
(Emphasis in original)
Clause 2 of the Licence does not expressly identify a lease. It provides:
2. Background
A.You propose to lease from the Commonwealth the residential property (Premises) located on the Land.
B.You request the right to make use of land contiguous to the Premises.
C.The Commonwealth is prepared to licence the contiguous land on the following terms and conditions.
Against the background given in the Butts’ evidence, the lease referred to in cl.10.1.2 is properly understood to be the Agreement. Thus, the effect of cl.10.1.2 is that when the Agreement is terminated, so too is the Licence. That means that, unless the Licence has already been terminated, it terminates on the date the termination order is made in respect of the Agreement in these proceedings.
Clause 11.1.6 of the Licence, which provides for holding over, should be noted at this point:
11.1.6(Holding Over) If you continue in occupation of the Land after expiration of the Term, you continue to occupy the Land on the same terms and conditions of this Licence, provided that the Commonwealth can terminate any holding over on one month’s written notice.
(Emphasis in original)
The term of the Licence was 13 weeks from 20 January 2012 and expiring on 19 April 2012. That means that, from 20 April 2012, as the Butts continued to occupy the land subject to the Licence, the Licence could be terminated on one month’s written notice.
On 24 November 2014 the agents for the Commonwealth gave the Butts a notice of termination of the Licence. That notice took effect from 15 June 2015.
In those circumstances, the Licence was terminated on 15 June 2015 and the Commonwealth is entitled to immediate possession of the land the subject of the Licence.
Conclusion
In those circumstances, I make the following declaration:
(1)The licence agreement between the applicant and the respondents dated 20 January 2012 in relation to part of Lot 1 in folio identifier PT 1/838361 (Formerly 19/D/1951) was terminated with effect from 15 June 2015.
I also make the following orders:
(1)The residential tenancy agreement between the applicant and the respondent in relation to the premises situated at 650 Badgerys Creek Road, Badgerys Creek NSW 2555 comprising part of folio identifier Lot 1 DP 838361 (“Premises”) be terminated forthwith.
(2)Vacant possession of the premises be given to the applicant on or before 18 December 2015.
(3)The order for vacant possession of the Premises be suspended until 9 February 2016.
(4)Vacant possession of the Land be given to the applicant forthwith.
I certify that the preceding seventy-seven (77) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 11 December 2015
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