Commonwealth of Australia (As Represented BY the Department of Infrastructure and Regional Development) v Carr
[2015] FCCA 3382
•21 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) v CARR | [2015] FCCA 3382 |
| Catchwords: ADMINISTRATIVE LAW – Commonwealth tenancy dispute – termination of a periodic tenancy agreement under s.85 of the Residential Tenancies Act 2010 (NSW) – respondent in possession of the premises for less than 20 years – whether termination of the tenancy agreement is granted – original tenancy agreement expired – respondent notified of termination – predominant use of premises – whether other residents were co-tenants – termination of tenancy agreement granted – order for vacant possession suspended. |
| Legislation: Federal Circuit Court of Australia Act 1999 (Cth) s.10AA |
| Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Carr [2015] FCCA 3383 Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 243 CLR 361 |
| Applicant: | COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
| Respondent: | WILLIAM CARR |
| File Number: | SYG 1786 of 2015 |
| Judgment of: | Judge Smith |
| Hearing dates: | 18 & 19 November 2015 |
| Date of Last Submission: | 14 December 2015 |
| Delivered at: | Sydney |
| Delivered on: | 21 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 Respondent: | Mr P. King |
ORDERS
The residential tenancy agreement in relation to the premises at Lot 1 Badgerys Creek Road (also known as 15 Fuller Street), Badgerys Creek NSW 2555 (“Premises”), comprising part of folio identifier Lot 1 DP 838361 be terminated with immediate effect.
Vacant possession of the Premises be given to the Applicant on or before 28 December 2015.
The order for vacant possession be suspended until 25 January 2016.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1786 of 2015
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
Applicant
And
| WILLIAM CARR |
Respondent
REASONS FOR JUDGMENT
Mr Carr has occupied the land situated at Lot 1 Badgerys Creek Road (also known as 15 Fuller Street), Badgerys Creek NSW 2555 (“Premises”) since April 2000 as a tenant of the Commonwealth. The Premises are part of a larger area of land which the Commonwealth proposes to develop for the purposes of an airport.
On 26 November 2014 the Commonwealth gave Mr Carr a notice of termination of the residential tenancy agreement in respect of the Premises specifying 15 June 2015 as both the date of termination and the date on which vacant possession of the Premises was to be given. Mr Carr did not vacate the Premises by that date and the Commonwealth now seeks orders terminating the residential tenancy agreement and for vacant possession.
Mr Carr is also the licensee of the land situated at 490 Badgerys Creek Road, Badgerys Creek (“the Land”). Separate proceedings have been brought by the Commonwealth in respect of that property and I delivered judgment in that matter at the same time as judgment in these proceedings: Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Carr [2015] FCCA 3383.
Mr Carr opposes the orders sought by the Commonwealth on a number of 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 Premises 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 Court should refuse to exercise its jurisdiction to terminate the agreement as a matter of discretion.
In his response, Mr Carr also raised a number of other points that can be dealt with briefly:
a)He makes two 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 respondent according to law; and
ii)the applicant has failed to allege what right if any it has under Residential Tenancies Act 2010 (NSW) (“Tenancies Act”) or to make a claim reliant on the terms of the said Act.
The answer to 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.
b)He contests that letters sent to him by the Commonwealth’s property agents were lawful and effective notices of termination. The Commonwealth only relies on one notice in respect of the Premises. It is dealt with below.
There have been a number of proceedings brought by the Commonwealth against tenants and other occupiers of land in the vicinity of the Premises. The majority of those proceedings have fallen into two groups by reference to the length of time during which the tenants had been in possession of the land, namely, those who had been in possession for 20 years or more and those who had been in possession of the land for less than 20 years. Judgment has already been handed down in all of the first group of cases: see, for example, Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Rigney & Anor (No.3) [2015] FCCA 3133 (“Rigney”). These proceedings belong to the second group most of the proceedings in which were heard concurrently. Judgment in each of the matters heard concurrently has been handed down at the same time as judgment in this matter. I note that judgment in these matters was reserved before I handed down judgment in Rigney and the other matters heard concurrently with it.
In one of the matters handed down at the same time as this judgment, I explained in some detail the relevant statutory scheme: see Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Odzic & Anor [2015] FCCA 3363 (“Odzic”) at [7]-[19]. There is no need to repeat that explanation here.
In spite of the differences between the two groups of proceedings, similar issues arose in both groups. For example, similar challenges were made in both groups of proceedings to the jurisdiction of this Court. Those challenges were dealt with extensively in the reasons for judgment in Rigney. For that reason, these reasons also ought to be read together with my reasons in that matter.
Mr Carr was also one of five people who purported to bring proceedings against the Commonwealth as “representatives of all Commonwealth tenants at Badgerys Creek who have occupied the land for a period less than 20 years.” Those proceedings were heard concurrently with these proceedings. I have dealt with those proceedings in a separate judgment delivered at the same time as this judgment: Frost & Ors v Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development [2015] FCCA 3386.
Before turning to the jurisdictional issues, it is necessary to deal with a number of factual issues.
Questions of fact relevant to the jurisdictional issues
I find the following facts, noting that, to the extent that any of them is controversial, my reasons for making the finding are set out further below:
a)the Commonwealth is the registered proprietor of the land comprised in folio identifier 1/838361 (“airport site”);
b)the Premises form part of the airport site;
c)Mr Carr has occupied the Premises since April 2000;
d)on 1 March 2004 the parties entered into a residential tenancy agreement (“Agreement”) in respect of the Premises;
e)the term of the Agreement was 52 weeks commencing on 1 March 2004 and expiring on 28 February 2005;
f)the respondent has been in continual possession of the Premises for less than 20 years;
g)the Premises are not predominantly used for non-residential purposes;
h)by letter dated 29 October 2014 the Commonwealth notified Mr Carr that it will likely require him to vacate the Premises by June 2015;
i)on 26 November 2014, the Commonwealth served a Notice of Termination of the Agreement on Mr Carr;
j)the Notice of Termination stipulated 15 June 2015 as the day on which the Agreement terminated and by which Mr Carr was required to give vacant possession of the Premises to the Commonwealth; and
k)Mr Carr has not indicated that he is willing to vacate the Premises by that date and has remained in possession of the Premises.
The finding at [11](g) above deals with Mr Carr’s first contention set out at [4] above. The relevance of that contention was explained in my judgment in Rigney at [8]-[23]. Briefly, the argument is as follows: first, the Tenancies Act does not apply to land that is predominantly used for agricultural purposes: s.7(h); secondly, the land which is the subject of these proceedings is predominantly used for agricultural purposes; thirdly, in those circumstances, the Court does not have jurisdiction in respect of the land.
The conclusion does not follow from the premises. 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. In any event, the issue can be decided by reference to the second premise, namely the predominant use of the Premises.
Mr Carr’s evidence relevant to this issue was:
I needed the extra bedrooms in the house for my business. The property was chosen by me to run my business. I did not need a house that big just for me as a residence, but for my business purposes. The house is 4 bedrooms and occupies about ¾ acre in area.
… The company of which I am sole director, used and still uses the premises for storage of all its equipment.
…
I also had 5 horses at the time I moved in. Since that time I have developed a mini-horse breeding programme and presently have at the moment 18 horses, with 10 Percherons[1]. I use these horses as part of my wedding carriage business.
[1] Percherons are a breed of draft horse.
An aerial photograph of the Premises was in evidence with the boundary marked in black. Under cross-examination Mr Carr gave evidence that the Land was across the road from the Premises and could not be seen in the photograph. Two building are shown in the photograph, one L-shaped which Mr Carr said was the house and the other with a white roof which he said was used as the workshop for the business. The photograph also showed a number of objects situated under the tree-line on the boundary of the outline area. In re-examination, Mr Carr explained:
They consist of truck bodies and mainly vehicles I’ve bought and then not got rid of, because those parts could be used to fix other vehicles that we have. So the truck that we use for our business – there’s another truck there which potentially could be used for parts. I think from memory those vehicles we just considered as spare parts or could become useful in the future to the business.
Mr Carr also explained in re-examination that part of the house was a two-space garage which is used to house the carriage.
Mr Carr’s business is the supply of horse-drawn wedding carriages. I accept that Mr Carr uses the Premises for the purposes of that business. At the very least, he houses his carriage in the garage attached to the house.
I also accept that breeding mini-horses could constitute either a business or agricultural activity. However, the evidence is insufficiently detailed for me to be satisfied that the Premises are used predominantly for the purposes of either or both the horse drawn wedding carriage business or the breeding of mini-horses. First, although Mr Carr says that he only needed such a large house for his business purposes, apart from the use of the garage, he does not say what he does in the house in respect of his business. Secondly, in his response, Mr Carr refers to his de facto wife, Caroline, and two children but he does not mention those in his affidavit. Rather, he only mentions his 7 year-old son. He does not say that only his son lives with him. In cross-examination, he agreed that there were four people living in the house permanently and that his brother stayed over quite often. Thirdly, Mr Carr does not specify whether he keeps his Percherons and mini-horses on the Premises or on the vacant land. It is possible that he uses both, but the evidence is not sufficiently clear to enable me to make a finding in his favour. Finally, although the white-roofed building is used for business purposes, there is, again, insufficient evidence to be satisfied that use means that the predominant use of the whole Premises is for those purposes.
For those reasons, I am not satisfied that the Premises are predominantly used for agricultural or business purposes. Accordingly, subject to the remaining jurisdictional arguments, the law to be applied in resolution of these proceedings is the Tenancies Act.
Jurisdictional issues
The arguments raised in this case were the same as those argued in Odzic and are rejected for the reasons I gave there are at [40]-[44].
Consideration of substantive issues
In light of the statutory scheme outlined in Odzic, the first step in the resolution of these proceedings is to determine whether the duty to make a termination order arises. In essence, that requires consideration of whether a notice of termination has been given in terms required by the Tenancies Act and whether the respondents have vacated the Premises as required by the notice. The second step is to determine what the appropriate date is for vacant possession to be given. This involves some 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.
It is necessary, then, to turn to each relevant consideration.
Notice of termination
The term of the Agreement was 52 weeks from 1 March 2004 and it expired on 28 February 2005.
Another term of the Agreement was that at the end of that term the tenant could stay in the residential premises at the same or increased rent but otherwise under the same terms unless or until the agreement was ended in accordance with the Residential Tenancies Act 1987 (NSW). In other words, at the end of the term, the Agreement continued as it had before but without any fixed term. For that reason, it was a “periodic agreement” within the meaning of the Tenancies Act at least from the commencement of the Tenancies Act in 2011: s.3. Further, the effect of s.18 of the Tenancies Act is that a fixed term agreement that continues after the day on which the fixed term ends, continues to apply as if the term of the agreement were replaced by periodic agreement.
As Mr Carr has not been in continual possession of the property for 20 years or more, s.85 of the Tenancies Act applied to the termination of the Agreement by the Commonwealth.
A termination notice under the Tenancies Act must set out the following matters: first, the residential premises concerned; secondly, the day on which the residential tenancy agreement is terminated by which vacant possession of the premises is to be given; thirdly, if the notice is not given under ss.84, 85, 96 or 97, the ground for the notice; and fourthly, any other matters prescribed by the regulations, in this case the Residential Tenancy Regulations 2010 (NSW). The termination notice must be in writing and be signed by the party giving the notice or the party’s agent and a termination notice for a periodic agreement must specify a day other than the last day of the period for the payment of rent as the termination date: s.82.
The Notice of Termination in this case was dated 24 November 2014 and given by delivering personally to Mr Carr at the Premises on 26 November 2014. Mr Carr’s evidence was that he received the notice. The notice correctly identified the Premises, set out the day on which the agreement was to be terminated (15 June 2015) and the date on which vacant possession of the Premises was to be given, being the same date as the date of termination. It was in writing and signed by an agent for the Commonwealth. There were no relevant regulations.
In those circumstances I am satisfied that a notice of termination was given in accordance with the requirements of the Tenancies Act.
Before leaving this issue, I note that counsel for the Respondent argued that the Commonwealth had impliedly conceded that the Notice of Termination was not effective. This argument was based on the fact that, after commencement of the proceedings, the Commonwealth served Mr Carr with a document entitled “Notice to Quit”. This, it was said, was inconsistent with continued reliance on the Notice of Termination and, on the authority of Kuhl v Zurich Financial Services Australia Ltd [2011] HCA 11; 243 CLR 361 (“Kuhl”) at [64] (Heydon and Bell JJ), was an implied admission of the invalidity of that notice.
That argument is rejected. First, the passage in Kuhl relied on does not support the argument. It concerned the inference that may be drawn from the failure of a witness to give evidence about a particular matter in light of the obligation to tell the whole truth in response to questions asked. Second, the notice to quit expressly reserved reliance on the notice of termination and, in its own terms, was based on the alternative hypothesis that Mr Carr’s argument about the predominant use of the Premises was correct. That is inconsistent with any admission.
Has the respondent vacated the premises as required by the notice?
Mr Carr’s evidence was that he is still living on the Premises.
For those reasons, the matters in s.85(3) of the Tenancies Act have been established and the residential tenancies agreement between the parties must be terminated.
The appropriate date on which vacant possession is to be given to the landlord
In considering this issue, it is convenient to deal first with the Commonwealth’s case before turning to the individual circumstances of Mr Carr.
The evidence in this matter concerning the circumstances relied on by the Commonwealth was the same as in each of the matters heard concurrently. I set out the effect of that evidence and my findings in Odzic at [59] – [81]. They form part of my reasons in this case. Certain findings there relate to documents served on the Odzics. The same documents were also served on Mr Carr. For those reasons, those findings need only be summarised here as follows:
a)the development of a further airport in Sydney is of the general importance for both the economic and social wellbeing of Western Sydney, if not this country;
b)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;
c)the safety of individual tenants will decrease as more and more tenants vacate the site; and
d)Mr Carr has been on notice since at least the beginning of the current residential tenancy 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 for that purpose. That awareness was heightened by correspondence in October 2014 from the agents for the Commonwealth and put beyond doubt by the notice of termination served in November 2014.
Apart from the matters I have already dealt with, Mr Carr relies on a number of matters in support of the argument that the Court should refuse the Commonwealth’s argument.
First, he argues that the power to make a termination order under s.85 is discretionary. That argument is rejected for the reasons I gave in Odzic at [82]-[85]. For that reason, I have considered Mr Carr’s remaining arguments (as outlined below) on the basis that they might inform the question of the appropriate date by which vacant possession of the Premises ought to be given to the Commonwealth:
a)“The proposed termination and/or eviction will cause hardship to the Respondents”
The evidence of hardship relied on by Mr Carr was that:
i)moving would adversely affect or cause the closure of Mr Carr’s business;
ii)he has had to take a second job to enable the move away from Badgerys Creek to occur;
iii)he has purchased land at Marulan (in the southern highland region of New South Wales);
iv)the second job has limited his ability to find and prepare alternative premises;
v)the move will place him under extreme personal pressure; and
vi)his 7 year-old son has ADHD and the move would adversely affect him due to his condition and he has already had to move school once already in light of the closure of Badgerys Creek Public School.
While I accept that moving home can be difficult, the fact is that Mr Carr and his family have no choice. The Court must make an order terminating the Agreement. The only question is the appropriate date on which vacant possession should be given to the Commonwealth.
b)“The cost of removing buildings and equipment to myself and the company is not less than $30,000”
There is no evidence to support this claim.
c)“The cost of moving from Badgerys Creek gives rise to further costs and expenses per annum of approximately in terms of wasted time and additional fuel costs being not less than $20,000 per annum”
There is no evidence to support this claim.
d)“The Respondent is infirm and the Orders sought will adversely affect the health and livelihood of the Respondent and his family being his de facto wife Caroline and two children”
Apart from the evidence already outlined above in regards to the hardship claimed by Mr Carr, there is no evidence to support this claim.
e)“Having regard to the length of occupation of the lands in question and the property of the Respondent the period for vacating the lands is insufficient and unduly short”
Mr Carr has been on notice of the need to vacate for over a year. There is nothing beyond mere assertion to suggest that that is inadequate time to prepare to vacate.
f)“There is no urgency for the Applicant to evict the Respondent because the Applicant within the last 10 years has given a 99 year right of refusal to open or use Badgery’s Creek as a commercial airport in the Sydney Metropolitan region to Macquarie Airports the lessee and user of Kingsford Smith Airport a commercial airport within the Sydney Metropolitan region, and Macquarie Airports has no commercial use nor requirement nor interest nor plan to operate or use Badgerys Creek as an airport at any time in the foreseeable future including the next 30 years”
Mr Carr also raised a similar claim, namely, that there was no pending commercial requirement for the orders for termination for over 12 years. I dealt with and rejected the same arguments in Odzic at [95] – [101]. In brief, the evidence does not support the claim.
g)“There is no suitable or available alternative similar leaseholds in the region of Badgerys Creek or Luddenham for the Respondent to rent or occupy on the same or similar terms”
Mr Carr did not give evidence of any attempts to locate alternative suitable accommodation. All that he says is that having a second job and running his business have left him with limited time in finding and preparing alternate premises.
A folder of material was in evidence (Exhibit E) that, amongst other things, included certain documents relevant to the availability of accommodation in the Greater Western Sydney region. The first of those documents related to community housing. There was no evidence about Mr Carr’s financial circumstances other than that he runs businesses providing horse-drawn carriage services and runs miniature horses on his land. For that reason, the availability of community housing is not relevant to their circumstances. The second group of documents consists of advertisements for rental accommodation that seem to have been downloaded from an online real estate website. However, they do not establish anything relevant other than that, at certain dates the properties shown in the advertisements were available for rent for particular amounts. There is no evidence that these were the only properties available, or what properties were available at other times or in other locations. None of this material carries any weight.
h)“The applicant has offered to the Respondent no compensation for the loss of the Respondents property affixed to the land or otherwise and for the cost of complying with the eviction notices”
No basis was given in evidence or submissions for any right to compensation and, in any event, it is difficult to understand how such a right might affect the determination of an appropriate date by which vacant possession of the Premises must be given. That is particularly so in the absence of any evidence about Mr Carr’s financial means.
i)“It is unlikely that Badgerys Creek can be used as an airport for a number of years”
Mr Carr says that, based on what he has read, the Commonwealth has no urgent need for the land for any purpose, and it is unlikely or improbable that the land will be used as an airport. I reject that evidence for two reasons: first, I accept the evidence of Mr Peter Robertson, a General Manager at the Department of Infrastructure and Regional Development, about the Commonwealth’s need for the land and the reasons for it; and secondly, Mr Carr has not disclosed what he read in order to form his opinion.
j)As there was an express provision in the Agreement in relation to termination, the rights of the parties are governed by that clause
I dealt with and rejected this and a similar argument in Odzic at [106] – [109]. The argument is rejected in these proceedings for the same reasons. In doing so, I note that the express provision in the Agreement was sufficiently similar to the one referred to in Odzic.
k)Because the termination notice was served before the introduction of s.10AA into the FCCA, it was not effective for the purposes of the Commonwealth law
I dealt with and rejected this argument in Odzic at [110] – [111]. The argument is rejected in these proceedings for the same reasons.
In my view, Mr Carr has presented no real basis for his opposition to the orders sought by the Commonwealth.
Conclusion
In light of the circumstances relied on by the Commonwealth as summarised above, and the fact that Mr Carr has put forward nothing of any substance in opposition to the orders sought, I am satisfied that the appropriate date on which Mr Carr is to give vacant possession of the Premises is 28 December 2015, but that the order for vacant possession should be suspended until 25 January 2016. In fixing that date, I have taken into account the time of year even though that was not addressed by either of the parties.
The Commonwealth sought orders for the issue of warrants for possession. In my view, the basis on which it sought those orders was unclear. The Tenancies Act makes provision for the issue of warrants (s.121) and, if it is necessary to do so, there is nothing preventing the Commonwealth from making use of those provisions.
For those reasons, I make the following orders:
(1)The residential tenancy agreement in relation to the premises at Lot 1 Badgerys Creek Road (also known as 15 Fuller Street), Badgerys Creek NSW 2555 (“Premises”), comprising part of folio identifier Lot 1 DP 838361 be terminated with immediate effect.
(2)Vacant possession of the Premises be given to the Applicant on or before 28 December 2015.
(3)The order for vacant possession be suspended until 25 January 2016.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 21 December 2015
Key Legal Topics
Areas of Law
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Administrative Law
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Statutory Interpretation
Legal Concepts
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Judicial Review
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Standing
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Statutory Construction
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Procedural Fairness
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