Commonwealth of Australia (As Represented BY the Department of Infrastructure and Regional Development) v Dattilo
[2015] FCCA 3260
•11 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) v DATTILO & ANOR | [2015] FCCA 3260 |
| 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. |
| Legislation: Residential Tenancies Act2010 (NSW), ss.3, 7(h), 13, 94 |
| Cain v New South Wales Land and Housing Corporation (2014) 86 NSWLR 1 Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Rigney & Anor (No.3) [2015] FCCA 3133 |
| Applicant: | COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
| First Respondent: | GUISEPPE DATTILO |
| Second Respondent: | CATERINA DATTILO |
| File Number: | SYG 669 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 |
ORDERS
The residential tenancy agreement between the applicant and the respondents in relation to the property situated at 2026 The Northern Road, Luddenham, NSW 2745 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 be suspended until 24 February 2016.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 669 of 2015
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
Applicant
And
| GUISEPPE DATTILO |
First Respondent
| CATERINA DATTILO |
First Respondent
REASONS FOR JUDGMENT
Introduction
Mr and Mrs Dattilo have lived at 2026 The Northern Road, Luddenham, NSW 2745 (“Premises”) since 1980. Initially, they owned the Premises but, in 1987 they sold the land to the Commonwealth and have lived there since then as a tenant of the Commonwealth.
The Premises now comprise part of folio identifier Lot 1 DP 838361 of which the Commonwealth is the registered proprietor. The Commonwealth wishes to develop this land for the purposes of an airport and has brought proceedings seeking orders terminating the lease between it and Mr and Mrs Dattilo and for vacant possession of the Premises.
Mr and Mrs Dattilo oppose the orders sought by the Commonwealth on a number of alternative bases. First, 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 Court should refuse to exercise its jurisdiction to terminate the lease as a matter of discretion.
In their response, the Dattilos also raise a number of other points that can be dealt with briefly:
a)They make three pleading points:
i)the applicant has failed to allege and/or to particularise any right to possession of the lands to which are 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;
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 Act; and
iii)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 served 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 points pleaded by the Dattilos 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)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 which are dealt with below.
c)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.
d)They say that they have incurred losses “in breach of the contract they have with the Applicant in relation to the land, and will provide particulars of losses.” 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.
e)They contend that the Commonwealth has 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 judgment 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 issues
It is necessary first to consider the jurisdictional issues. Before doing so it is necessary to consider certain factual matters, relevant to the Dattilos’ case.
Facts relevant to the jurisdictional issues
The following facts were uncontroversial on the evidence before me:
a)the Commonwealth is the registered proprietor of the land on which the Premises are situated;
b)Mr and Mrs Dattilo have been in continual possession of the Premises for a period of 20 years or more;
c)Mr and Mrs Dattilo and the Commonwealth most recently entered into a lease in respect of the Premises on 15 July 2004 (“Agreement”);
d)the term of the Agreement was 1 year and 43 weeks which expired on 31 December 2005;
e)by letter dated 29 October 2014 the Commonwealth notified Mr and Mrs Dattilo that it will likely require possession of the Premises by June 2015;
f)by letter dated 9 December 2014 the Commonwealth notified Mr and Mrs Dattilo that it intended to apply to obtain an order to terminate the Agreement with effect from 22 June 2015; and
g)Mr and Mrs Dattilo have not indicated at any time that they are willing to vacate the Premises by that date.
Predominant use of Premises
For the reasons explained in Rigney at [8] – [27], it is also necessary to determine whether the predominant use of the Premises has been for the purposes of a trade, profession, business or agriculture. In short, the Dattilos argue that, as the Premises have been predominantly used for agricultural purposes, the Tenancies Act does not apply because of s.7(h) of that Act. However, for the reasons that follow, I find that the essential factual premise of that argument has not been established and so the argument, too, must be rejected. That means that, subject to the constitutional issues, the matter falls to be determined by reference to the Tenancies Act and, in particular, s.94 of that Act.
Mr Dattilo’s evidence was that the Premises consisted of 72 acres, on one acre of which are residential premises including a granny flat. There is an electric fence around the residential premises to keep the cows out. He stated that the Premises had been used as a market garden since he and his wife moved there in 1980. Since that time, he has built storage and work sheds, a cold room, a cattle yard and two dams. He said that he has also made money by having 35 Murray Grey cattle on the land “including a bull, and also by breeding young calves and fattening them up and then selling them.”
The Agreement entitled the Dattilos to use the Premises as a Market Garden and Residence. The rent payable under it was $20,800 (plus GST of $780) per year. That amount was calculated as follows: $150 (plus GST of $15) per week for commercial rent and $250 per week for residential rent.
There is no question in those circumstances that the Dattilos have used the Premises for both residential and agricultural purposes. I doubt that they still use the land for agricultural purposes because Mr Dattilo describes himself as retired. Mr Dattilo does state in his second affidavit that “We have a food basket that is our land, and we feed many people in the Sydney region”, however this statement was not explained at all. Unfortunately, although he was required for cross-examination he neither appeared in person nor by telephone to enable that to occur. To explain his absence at the July hearing dates, a medical certificate was tendered in Court on 24 July 2015 stating that the applicant required medical treatment and rest for the following three weeks due to acerbation of pre-existing medical conditions. In any event, I do not need to come to a concluded view about that.
A residential tenancy agreement is an agreement under which a person grants to another person, for value, a right of occupation of residential premises for the purpose of use as a residence: Tenancies Act s.13. Residential premises are “any premises or part of premises (including any land occupied with the premises) used or intended to be used as a residence”; Tenancies Act s.3. On that basis, it is clear that the Agreement was a residential tenancy agreement for the purposes of the Tenancies Act subject to exclusion by operation of s.7(h) of that Act.
That exclusion applies to premises used for residential purposes, if the predominant use of the premises is for the purposes of a trade, profession, business or agriculture. The question raised by that provision requires a qualitative analysis rather than a simple comparison of the size of the land used for the different purposes. In this case, there is very little to indicate that use of the land was predominantly for the purpose of agriculture. Although there has undoubtedly been agricultural activities on the land, apart from the reference to there being 35 cows and a bull, 2 dams, 2 sheds and a cold room, the scale of those activities is not in evidence. By contrast, the Agreement reveals that the amount of rent paid for the non-residential aspect of the occupation was far less than that paid for the residential aspect.
On the evidence, I am satisfied that the Premises were used for residential and agricultural purposes but am not satisfied that the predominant use of the Premises was for the purposes of a trade, profession, business or agriculture.
I add that no point was taken by the Dattilos about the form of the Agreement and, for that reason, I have not considered it.
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 respondent’s 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.
The substantive issues
I turn next to the substantive issues between the parties. That requires an understanding of the power of the Court under the Tenancies Act.
The power of the Court under s.94 of the Tenancies Act
As I said in Rigney, the approach to this case under s.94 must be: first, to determine whether the power to make a termination order arises. That requires consideration of whether the three conditions exist on the facts of the case. Those are: first, that the tenant has been in continual possession of the same residential premises for a period of 20 years or more; second, that if the tenant occupied the premises under a fixed term agreement, the fixed term of the original agreement has expired; and third, that the Court is satisfied that it is appropriate to do so in the circumstances of the case.
The circumstances referred to in the third condition are, as explained in Swain v Residential Tenancies Tribunal of New South Wales (Supreme Court of New South Wales, Rolfe J, unreported, 22 March 1995), all of the matters that arise on the material before the Court including the availability of suitable alternative accommodation. Once that is considered, the second step is to consider the exercise of the discretion. As Leeming JA said in Cain v New South Wales Land and Housing Corporation (2014) 86 NSWLR 1, this may be surplus and may be no more than an affirmation of the consideration under sub-s.94(1)(c). Although there is a real discretion, it is difficult to imagine the circumstances in which it would be appropriate to make a termination order and then exercise the discretion not to make such an order.
I also said in Rigney, at [140]:
Once the Court decides to make a termination order it must also make an order for possession of the residential premises specifying the day on which the orders takes or took effect: s.83(1). As the minimum 90 day period specified in s.94(4) does not apply to these proceedings, there is no explicit guidance in the Tenancies Act as to the date on which possession should be ordered. In light of that, the contextual matters considered above must also be involved in the determination of the date of possession. Essentially, the determination involves a balancing of the interests of the landlord and the tenant in the circumstances of each case including with some regard to the length of the tenant’s possession of the land.
Much of what follows arises from the same evidence that was led in the Rigney matter and other matters. In order to make it clear how my findings on that evidence have led to the resolution of this matter, I will set out all of my findings that are relevant to this matter. To some extent, they are the same findings as in other matters but, for the sake of brevity, I will not refer to that fact in each case.
Continual possession for a period of 20 years or more: sub-s.94(1)(a)
There was no dispute that Mr and Mrs Dattilo were in continual possession of the Premises for a period of more than 20 years.
If the tenant occupied the premises under a fixed term agreement, the fixed term of the original agreement has expired: sub-s.94(1)(b)
The original term of the Agreement expired on 31 December 2005.
The Court is satisfied that it is appropriate to do so in circumstances of the case: sub-s.94(1)(c)
In this respect I first consider the circumstances of the Commonwealth. The evidence of those circumstances was the same in these proceedings as in Rigney and make the same findings of fact which are set out here for the sake of convenience.
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 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 Mr and Mrs Dattilo’s 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 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 ten 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 counsel for the respondents. 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, the “Right of First Refusal”. 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.
The circumstances affecting Mr and Mrs Dattilo
Apart from the security, safety and convenience issues that arise, according to the evidence of Mr Robertson, in relation to the whole site, there are four matters that relevantly affect Mr and Mrs Dattilo’s interests:
i)the length of Mr and Mrs Dattilo’s occupation of the property;
ii)the terms of the Agreement between Mr and Mrs Dattilo and the Commonwealth;
iii)the process which the Commonwealth has undertaken to obtain vacant possession of the property. That process includes the notice of proposed development of the site for the airport, notice of the proposed termination of the Agreement, and any assistance given by the Commonwealth to Mr and Mrs Dattilo in relation to moving from the premises; and
iv)the availability of suitable alternative accommodation.
The first matter is, as I have mentioned above, that Mr and Mrs Dattilo have been in continual possession of the Premises since 1980 and since 1987 as a tenant of the Commonwealth.
The second matter arises from the fact that the additional terms in the Agreement referred to the proposed airport site. Clause 29 provided:
Termination for other reasons
29.2The Lessee acknowledges that the premises forms part of the proposed site for Sydney West Airport.
29.3In the event that the Commonwealth of Australia decides to develop the Sydney West Airport or to utilise or dispose of the Land for any purpose the Lessor may terminate this Agreement by serving on the Lessee written notice expiring six months from the date of the notice or on expiration of the term (whichever is the earlier).
29.4The Lessee shall not be entitled to any payment or compensation from the Lessor arising from such termination, including but not limited to prospective profits and cash flows, or recouping any costs associated with any improvements.
29.5A termination of this Lease under clause 29.3 shall not affect an existing right or obligation accrued or incurred by a party under this Lease or otherwise at law or in equity.
Those provisions are, as I have found, subject to the operation of the Tenancies Act. These clauses are relevant to the extent that they show that at least from the entry into the Agreement in July 2004, Mr and Mrs Dattilo were aware of the possibility that the site may be developed for the purposes of the airport. Indeed, they knew that when they sold the land to the Commonwealth in 1987, who acquired it for that very purpose.
By letter dated 29 October 2014 from the firm managing the property on the site, the Commonwealth informed Mr and Mrs Dattilo of the decision that the site at Badgerys Creek would be the site for Western Sydney’s airport. That letter also stated:
…
To implement the Australian Government’s decision, all properties on the site, including the property you occupy, will need to be vacated. The purpose of this letter is to provide you with additional information about the Government’s plans for Badgerys Creek and is for information only. This letter does not terminate your occupancy or alter the rights and obligations under your occupation arrangements.
What to expect
In the coming weeks, you will receive a formal notice of termination of your occupancy. That notice will provide a specific date by which you will be required to vacate the property. It is likely that this date will be in June 2015 - but it will not be earlier.
…
That letter enclosed a document entitled “Information to Assist You”. The information contained in that document included the following:
…
Garbage Collection Service
Any arrangements that we currently in place for the routine collection of waste from your premises are scheduled to end mid-2015 at the termination of your occupancy.
Internal Roads
Arrangements are currently in place for the maintenance of internal roads and public street lighting at the site to enable you to access your premises. Those arrangements are scheduled to end when you are required to vacate.
Roads inside the site may be closed if they are no longer required to enable occupiers to access their premises or if a road closure is required for other reasons (such as safety and security).
Despite any such road closure, convenient access to your premises will be available to you until you are required to vacate.
…
The Commonwealth’s property managers sent a further letter dated 9 December 2014 to Mr and Mrs Dattilo. That letter relevantly stated:
…
There is some uncertainty as to whether your tenancy is an agricultural tenancy and not a residential tenancy.
...
In view of the uncertainty referred to above the Australian Government has decided to treat your tenancy as a residential tenancy.
…
I note you wrote to us on 24 November 2014 requesting an extension of time to vacate your property.
We have referred your request to the Department of Infrastructure and Regional Development, and I understand they have written to you separately regarding the Government’s agreement to allow you additional time to access your property until 22 September 2015 for agricultural purposes only, including information about how the extension period will be implemented.
The notification that you will receive in relation to the termination of your current tenancy will not affect the new arrangements which will allow you additional time to vacate your property, namely until 22 September 2015.
The attachment to the letter included the following statements:
… the Government intends to apply to obtain an order pursuant to the Act to terminate your tenancy with effect from 22 June 2015.
It is not necessary for you to do anything in relation to obtaining any orders. However, you may be invited to attend a hearing prior to the order being made.
If the forum that makes the order decides for any reason that you are an agricultural tenant and not a residential tenant the Government will serve a notice on you terminating your agricultural tenancy with effect from 22 June 2015.
I note that these statements are also misleading to the extent that they suggest that the right of the Dattilos to be heard in connection with orders terminating their tenancy was optional. Given the apparent importance to the Commonwealth of treating tenants equitably it could have been expected that notices such as these would have accurately informed the tenants of their rights.
Mr Robertson gave evidence about assistance and information provided to tenants beyond these two letters. This assistance included the appointment of a Place Manager, Wendy Salked, as a dedicated point of contact responsible for communicating with the tenants of the site on an individual basis concerning the transition of the site and to help tenants understand the process. The services offered by the Place Manager included one-on-one meetings to facilitate tenant access to government and non-government accommodation services, information about the rental process, local government pick up services, Centrelink loan programs and local charity assistance. Mr Robertson stated that the Place Manager has had regular phone and email contact with those tenants seeking assistance. Further, there was optional information drop-in session held on 25 February 2015 which was attended by NSW Housing Services, Centrelink and local real estate agents to give tenants personalised assistance in the services that were relevant and available to them.
It is not clear whether Mr and Mrs Dattilo were directly provided with this assistance but it may be accepted that it was at least available to them.
Availability of alternative accommodation
Finally, there is the issue of the availability of suitable alternative accommodation.
In a number of other matters, a registered real estate valuer, Simon Azar, gave evidence for the Commonwealth on this issue. He did not give evidence in Mr and Mrs Dattilo’s matter. In spite of that, a number of witnesses who gave evidence in the Dattilos’ case referred to Mr Azar’s evidence. Those witnesses were Ms Simone Fogarty who is the daughter of one of the other tenants, Ken Shirvington, as well as evidence of a registered real estate valuer, Lopco Neskovski, and a document prepared by a Ms Leanne Uren who lives on one of the properties in the Badgerys Creek area.
To some extent, their evidence in reply to Mr Azar’s evidence is relevant and I will refer to it as far as that is the case.
Ms Fogarty is a senior property manager. In her oral evidence she said that she was a licensed real estate agent, although in her affidavit affirmed on 20 July 2015 she said that she had only recently applied for her real estate licence. I did not find Ms Fogarty to be a convincing witness and find that, although she has worked in the property management industry for close to eight years, she is not a licensed real estate agent.
Ms Fogarty gave evidence about the availability of social housing in south-western Sydney, Western Sydney and Nepean Blue Mountains areas. This evidence was drawn from the number of documents sourced from the NSW Department of Family and Community Services. It comes as no surprise that social housing is in high demand in those areas of Sydney. However, as Mr and Mrs Dattilo have not given evidence about his financial means other than to say that Mr Dattilo is now retired.
On the other hand Ms Fogarty did make a number of reasonable points to which I will return in due course.
The document prepared by Ms Uren shows that the properties used by Mr Azar as comparable to some of the other tenants’ properties were, as at the date of the hearing, no longer available for lease. The relevance of this evidence is that it shows that the market for rental properties in and around the Badgerys Creek area is not stagnant. Properties do become available to lease but there is some demand for them and they are leased or, perhaps, are taken off the market for some other reason.
In his report dated 5 August 2015, Mr Neskovski made a number of preliminary points on the basis of his local experience. First, most rural property is held for owner occupied lifestyle purposes particularly the larger rural (10 hectares to 40 hectares) properties which meant that there is a scarce supply available for rental. Secondly, there is an impact on the market demand caused by the number of residents required to relocate with livestock and thus diminish further the availability of large of properties. Finally, rentals have dramatically increased over the last 12 to 24 months with a surge in the last six months.
Mr Neskovski then made some observations not relevant to these proceedings before giving evidence about suitable sites for agistment.
Next, Mr Neskovski said that he had analysed the rentals that had occurred throughout early 2015 to mid-2015, making allowances for the purposes of comparison with individual properties bearing in mind:
i)location;
ii)views and outlook;
iii)dates of rental;
iv)land area;
v)topography;
vi)fencing and dams;
vii)style construction and accommodation provided by the delegate dwelling houses on each rental property; and
viii)for market movements i.e. increases.
Importantly, Mr Neskovski said that in considering availability of suitable premises available in the market for relocation he specifically looked at and considered rental premises that were listed for rent in the last three months. He explained that that adequately took into account rental property increases as a result of diminishing supply and heavy competition by tenants being forced to relocate from the Badgerys Creek airport precinct. This competition was one of the matters referred to by Ms Fogarty in her evidence and I will return to it in due course.
Mr Neskovski then set out properties that he said were available in the period from May to end July 2015. The first was land available for agistment, the other properties were for human accommodation and were divided into groups according to age and size.
Mr and Mrs Dattilo’s house was described in the Agreement as “land together with all improvements erected thereon.” There was no evidence when it was built, but, as Mr and Mrs Dattilo said that it had been his home for 35 years, I infer that the house was at least that old.
There are five points made by Ms Fogarty that deserve further attention. Three of them are also made by Mr Neskovski: first, there must be some comparison made between the size of the land and not simply the size of the house for rent; secondly, the rental market has been impacted by the number of other tenants from Badgerys Creek who are relocating; and thirdly, some consideration has to be given to the animals owned by the tenants. All of these are, to different extents, valid points.
The question to which this evidence is directed is not whether identical or comparable properties are available but rather, whether there is some suitable alternative accommodation that is reasonably available. I do not mean to state the question in a concrete way so as to substitute what is a broad discretion for some narrower, potentially stricter, test. However, framed in that way, the question captures, in my view, more accurately the balance that is sought to be struck between the interests of the landlord and those of the tenant. That aim has not gone so far as to require the eradication of any difficulty or hardship that might be suffered by a tenant who must leave a property after a long occupation. Nor does it require an order that ensures that the tenant is able to live in near identical circumstances as those to which he or she has become accustomed.
In light of the proper focus required by the Tenancies Act, all of the evidence concerning the availability of premises is of limited assistance to the Court.
The evidence does show, however, that there have been properties available for rent in the areas in the vicinity of Badgerys Creek. Those properties are, for the most part, more expensive than that currently rented by Mr and Mrs Dattilo. That is hardly surprising, given that their tenancy was always subject to the possibility of there being an airport built on the Premises.
Although both Ms Fogarty and Mr Neskovski assert that the market has been impacted by the large number of people relocating from the Badgerys Creek area, there is no real evidence to support those assertions. There is not, for example, a comparison of available properties at the same period this time last year before tenants started to vacate the site after notice having been given by the Commonwealth. In light of that, I give this assertion little weight.
Mr and Mrs Dattilo did not give much evidence about alternative accommodation. Mr Dattilo said that he was in poor health from a life time of hard work and that these proceedings had caused great anxiety and worry to both of them. He also said that, if forced to move they would have to take their stock with them. I do not accept that. If Mr Dattilo is indeed in poor health, it is very unlikely that he will continue to engage in any agricultural activities.
While I accept that it may take time for Mr and Mrs Dattilo to find suitable alternative accommodation I am not satisfied that none is available.
The final two points made by Ms Fogarty are these: first, that the properties listed by Mr Azar had all been rented. That evidence however does not suggest that there is not and will not shortly be other properties available for rent. In fact Mr Neskovski did not suggest that that would be the case. Secondly, Ms Fogarty said that more time would improve the tenants’ chances of obtaining alternative accommodation. I accept that.
Conclusion
Having considered the circumstances of this case, as outlined above, I am satisfied that it is appropriate to make a termination order and that the date by which the Dattilos are to give vacant possession is 75 days from the date of judgment.
Mr and Mrs Dattilo have been aware since 1987 that the land on which they have been living may be required for the development of an airport. That knowledge was fortified by the terms of the Agreement entered into in July 2004 and the possibility of having to move clarified with the letters sent to the Dattilos at the end of last year. They have now known of the Commonwealth’s intention to obtain vacant possession for over a year.
Apart from the suggestion that Mr Dattilo still makes some money raising and selling cows, there is no evidence about the Dattilos’ financial means or other needs. Mr Dattilo’s ill health makes it unlikely that he will be able to continue his agricultural activities and so will not need to find a property to enable those activities to take place. I consider that even allowing for Mr Dattilo’s ill health, 75 days is sufficient time period for relocation. I note that no evidence was adduced as to Mrs Dattilo’s circumstances.
I am satisfied that the Commonwealth has a very real need to obtain vacant possession and, in order to do so, for the Agreement to be terminated. That need is a public one for the purposes of developing a second major airport for Sydney and a considerable amount of money and effort has already been spent on that development.
In those circumstances, I consider that it is appropriate that the Agreement be terminated and that there be an order for vacant possession which is to take effect 75 days from the date of judgment.
I therefore order:
(1)The residential tenancy agreement between the applicant and the respondents in relation to the property situated at 2026 The Northern Road, Luddenham, NSW 2745 comprising part of folio identifier Lot 1 DP 838361, 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 be suspended until 24 February 2016.
I certify that the preceding eighty-three (83) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 11 December 2015
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