Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development) v Hevers & Anor
[2015] FCCA 1814
•2 July 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) v HEVERS & ANOR | [2015] FCCA 1814 |
| 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. |
| Legislation: Administrative Tribunal Act 2013 (NSW) |
| Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 Attorney-General (Cth) v Alinta Limited (2008) 233 CLR 542 Attorney-General (NT) v Chaffey (2007) 231 CLR 651 Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 Chu Kheng Lim v Minister for Immigration, Local Government & Ethnic Affairs (1992) 176 CLR 1 Commonwealth v New South Wales (1923) 33 CLR 1 Federal Commissioner of Taxation v Munro; British Imperial Oil Co Ltd v Federal Commission of Taxation (1926) 38 CLR 153 Georgiadis v Australian & Overseas Telecommunications Corporation (1994) 179 CLR 297 H A Bachrach Pty Ltd v Queensland (1998) 195 CLR 547 Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 International Finance Trust Company Limited v New South Wales Crime Commission (2009) 240 CLR 319 JT International SA v Commonwealth (2012) 250 CLR 1 Minister of State for the Army v Dalziel (1944) 68 CLR 261 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 R v Davison (1954) 90 CLR 353 R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 Rola Co (Australia) Pty Ltd v Commonwealth (1944) 69 CLR 185 Smith v ANL Ltd (2000) 204 CLR 493 Commonwealth v Tasmania (The Tasmanian Dams Case) (1983) 158 CLR 1 Thomas v Mowbray (2007) 233 CLR 307 Victoria v Commonwealth (1996) 187 CLR 416 Waterside Workers’ Federation (Aust) v J W Alexander Ltd (1918) 25 CLR 434 Wurridjal v Commonwealth (2009) 237 CLR 309 |
| Applicant: | COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
| First Respondent: | JIM HEVERS |
| Second Respondent: | ISOBEL HEVERS |
| File Number: | SYG 651 of 2015 |
| Judgment of: | Judge Smith |
| Hearing date: | 18 May 2015 |
| Date of Last Submission: | 18 May 2015 |
| Delivered at: | Sydney |
| Delivered on: | 2 July 2015 |
REPRESENTATION
| Counsel for the Applicant: | Ms A. Mitchelmore & Mr J. Doyle |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the Respondents: | Mr M. Robinson SC, Mr M Seymour & Mr O. Jones |
| Solicitors for the Respondents: | Tenants Union NSW Co-op Ltd |
ORDERS
The separate questions for determination be answered as follows:
1.Do ss 7, 8, and 9 of the Tenancy Disputes Instrument read with s 5(3) of the Tenancy Disputes Instrument, pick up and apply s 94(1) of the Residential Tenancies Act 2010 (NSW) (Tenancies Act) in a Commonwealth tenancy dispute (as defined in s 5 of the Federal Circuit Court of Australia Act 1999 (Cth) (FCCA Act))?
A: Yes, with some modification.
2.If the answer to question 1 is “yes”, is the Tenancy Disputes Instrument and/or s 10AA of the FCCA Act invalid, in whole or in part because it would involve the Court exercising non-judicial power under s 94 of the Tenancies Act?
A: No.
3.Does one or both of s 10AA(2) and (3) of the FCCA Act direct the FCCA in the exercise of its judicial power in a manner that impermissibly interferes with its institutional integrity?
A: No.
4.If the answer to question 3 is “yes”, is s 10AA of the FCCA Act invalid in whole or in part?
A: The question does not arise.
5.In the alternative to questions 1 to 3, do s 10AA of the FCCA Act and/or the Tenancy Disputes Instrument which confer jurisdiction on the Court to make an order under s 94 of the Tenancies Act subject to the modification of the section in s 8(2) of the Instrument, involve an acquisition of property by the Commonwealth contrary to s 51(xxxi) of the Constitution?
A: No
6.If the answer to question 5 is “yes”, is s10AA of the FCCA Act and/or the Tenancy Disputes Instrument invalid in whole or in part?
A: The question does not arise.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 651 of 2015
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
Applicant
And
| JIM HEVERS |
First Respondent
| ISOBEL HEVERS |
Second Respondent
REASONS FOR JUDGMENT
Background
The applicant (“Commonwealth”) is the registered proprietor of the land situated at 1955-1975 and 1995-2005 The Northern Road, Luddenham, in the State of New South Wales (“Premises”). The respondents occupy the Premises under a residential tenancy agreement within the meaning of the Residential Tenancies Act2010 (NSW) (“Tenancies Act”) although the original term of that agreement has now expired.
Until recently, matters concerning the tenancy of the Premises would have been dealt with in proceedings before the New South Wales Civil and Administrative Tribunal (“NCAT”) under the provisions of the Tenancies Act. However, the Commonwealth has brought proceedings in this Court seeking an order under s.94(1) of the Tenancies Act that the residential tenancy agreement between it and the respondents be terminated and an order that the respondents give vacant possession of the Premises by 15 June 2015. That date has now passed, but that is neither fatal nor relevant to the present issues.
The Commonwealth contends that this Court has jurisdiction to make the order it seeks pursuant to s.10AA of the Federal Circuit Court of Australia Act1999 (Cth) (“FCCA Act”). It further contends that the law to be applied in the exercise of the Court’s jurisdiction is the Tenancies Act (with some amendments) which is provided for by the Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015 (Cth) (“the Tenancy Disputes Instrument”).
The respondents argue that s.10AA of the FCCA Act and the Tenancy Disputes Instrument are invalid as they are beyond the constitutional power of the Commonwealth Parliament. By consent of the parties, I ordered that the following questions be decided separately pursuant to r.17.02 of the Federal Circuit Court Rules 2001 (Cth) (“Rules”):
On the basis of the agreed facts set out in Grounds 1 - 5 of each respective application (and the fact that each Application is made):
1. Do ss 7, 8, and 9 of the Tenancy Disputes Instrument, read with s 5(3) of the Tenancy Disputes Instrument, pick up and apply s 94(1) of the Residential Tenancies Act in a Commonwealth tenancy dispute (as defined in s 5 of the FCCA Act)?
2. If the answer to question 1 is “yes”, is the Tenancy Disputes Instrument and/or s 10AA of the FCCA Act invalid, in whole or in part because it would involve the Court exercising non-judicial power under s 94 of the Tenancies Act?
3. Does one or both of s 10AA(2) and (3) of the FCCA Act direct the FCCA in the exercise of its judicial power in a manner that impermissibly interferes with its institutional integrity?
4. If the answer to question 3 is “yes”, is s 10AA of the FCCA Act invalid in whole or in part?
5. In the alternative to questions 1 to 3, do s 10AA of the FCCA Act and/or the Tenancy Disputes Instrument which confer jurisdiction on the Court to make an order under s 94 of the Tenancies Act subject to the modification of the section in s 8(2) of the Instrument, involve an acquisition of property by the Commonwealth contrary to s 51(xxxi) of the Constitution?
6. If the answer to question 5 is “yes”, is s 10AA of the FCCA Act and/or the Tenancy Disputes Instrument invalid in whole or in part?
The “agreed facts” as referred to in the separate questions are as follows:
1.The Applicant (the Commonwealth) is the owner of the Premises being part of Lot 1 DP 838361 which are intended to form part of an airport site to be declared for the purposes of the Airports Act 1996 (Cth).
2.The tenant (being the respondents) occupied the Premises under a fixed term agreement within the meaning of the Tenancies Act and the fixed term of the original agreement has expired.
3.The Respondents have been in continual possession of the same residential premises for a period of 20 years or more.
4.The Applicant has notified the Respondents by letters of 29 October 2014 that it will likely require possession of the premises by June 2015 and 24 November 2014 that the applicant requires possession of the Premises by 15 June 2015.
5.The Respondents have not yet communicated to the Applicant their agreement to vacate the premises on or before 15 June 2015.
For the reasons that follow, I conclude that this Court has jurisdiction to determine the current dispute between the parties and that the law to be applied in that determination is the Tenancies Act with some modification.
Relevant statutory provisions
The Tenancies Act relevantly commenced operation on 31 January 2011 and applies to residential tenancy agreements in respect of residential premises made before or after that date: s.6. “Residential premises” is defined to include any premises or part of premises (including any land occupied within the premises) used or intended to be used as a residence: s.3
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 purposes of use as a residence: s.13. An agreement may be a residential tenancy agreement for the purposes of the Tenancies Act even if the agreement does not grant a right of exclusive occupation or grant the right to occupy residential premises together with the letting of goods or the provision of services or facilities: s.13(3).
A residential tenancy agreement that is for a fixed term continues to apply after that term ends as if the term of the agreement were replaced by a periodic agreement and on the same terms as immediately before the end of the fixed term: s.18(a).
The critical provisions of the Tenancies Act for present purposes are found in pt.5 and concern the termination of residential tenancy agreements. Importantly, s.81(1) provides that a residential tenancy agreement terminates only in the circumstances set out in the Tenancies Act. Division 2 of pt.5 (ss.84-95) makes provision for termination by the landlord. Section 84 is contained in that Division and provides:
84 End of residential tenancy agreement at end of fixed term tenancy
(1)A landlord may, at any time before the end of the fixed term of a fixed term agreement, give a termination notice for the agreement that is to take effect on or after the end of the fixed term.
(2)The termination notice must specify a termination date that is on or after the end of the fixed term and not earlier than 30 days after the day on which the notice is given.
(3)The Tribunal must, on application by a landlord, make a termination order if it is satisfied that a termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice.
(4)This section does not apply to a residential tenancy agreement if the tenant has been in continual possession of the same residential premises for a period of 20 years or more and the fixed term of the original fixed term agreement has ended.
Section 85 deals with the termination of periodic agreements and provides:
85 Termination of periodic agreement
(1)A landlord may, at any time, give a termination notice for a periodic agreement.
(2)The termination notice must specify a termination date that is not earlier than 90 days after the day on which the notice is given.
(3)The Tribunal must, on application by a landlord, make a termination order if it is satisfied that a termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice.
(4)This section does not apply to a residential tenancy agreement if the tenant has been in continual possession of the same residential premises for a period of 20 years or more.
The Tribunal means the NCAT: s.3. Section 83 of the Tenancies Act provides that, if the Tribunal makes an order terminating a residential tenancy agreement under the Act, it must also make an order for possession of the residential premises, specifying the day on which the order takes or took effect.
Section 94 of the Tenancies Act is of critical importance to these proceedings. It provides:
94 Termination of long term tenancies
(1)The Tribunal may, on application by a landlord, make a termination order for a residential tenancy agreement:
(a) if the tenant has been in continual possession of the same residential premises for a period of 20 years or more, and
(b) if the tenant occupied the premises under a fixed term agreement, the fixed term of the original agreement has expired, and
(c) if the Tribunal is satisfied that it is appropriate to do so in the circumstances of the case.
(2)A landlord may make an application under this section without giving the tenant a termination notice.
(3)The Tribunal must not make a termination order under this section that specifies a termination date that is before the end of the fixed term if the residential tenancy agreement is a fixed term agreement.
(4)The Tribunal, in determining the day on which vacant possession of the residential premises is to be given to the landlord, must not order that vacant possession be given earlier than 90 days after the order is made.
It may be noted that the predecessor to the Tenancies Act, the Residential Tenancies Act 1987 (NSW), did not make any specific provision in relation to the termination of tenancies in circumstances where the tenant had been in possession of the premises for a long period: see s.64.
Recovery of possession of premises is dealt with in pt.6 of the Tenancies Act (ss.119-135). Section 119 provides that a landlord or former landlord must not commence proceedings against a tenant or former tenant of the landlord in the Supreme Court, the District Court or the Local Court to obtain recovery of possession of residential premises subject to a residential tenancy agreement. The effect of this provision is adumbrated at [2] above, namely, that the NCAT has exclusive jurisdiction in New South Wales in respect of the recovery of possession of residential premises subject to a residential tenancy agreement.
Part 9 of the Tenancies Act (ss.187-195) provides for the powers of the NCAT. Amongst the powers provided for in that Part is that the NCAT may make an order that restrains any action in breach of a residential tenancy agreement or an order that requires an action in performance of a residential tenancy agreement: sub-ss.187(1)(a) and (b). An order under either of those subsections may be made even though it provides a remedy in the nature of an injunction or order for specific performance in circumstances in which such a remedy would not otherwise be available: s.187(3).
The Federal Courts Legislation Amendment Act 2015 (Cth) was assented to on 25 February 2015 and commenced the following day. Part 1 of sch.2 to that Act makes provision in relation to the jurisdiction of this Court in respect of Commonwealth tenancy disputes (the meaning of which is set out at [20] below). The amendments made by that Part apply in relation to a lease, licence or other arrangement entered into before the day of commencement and a Commonwealth tenancy dispute between the parties to the lease, licence or other arrangement that arises before, on or after that date: cl.5.
Clause 4 of pt.1 of sch.2 inserted sub-s.10(1A) and s.10AA into the FCCA Act. The first of these provisions was:
10Original jurisdiction - general
…
(1A)The Federal Circuit Court of Australia also has such original jurisdiction as is vested in it by a legislative instrument made under section 10AA.
Section 10AA provides:
10AA Original jurisdiction – Commonwealth tenancy disputes
(1)The Federal Circuit Court of Australia has jurisdiction to hear and determine a Commonwealth tenancy dispute between the parties to a lease, licence or other arrangement in which:
(a) the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is:
(i)the lessor (other than as a sublessor); or
(ii)the licensor (other than as sublicensor); or
(iii)the grantor of a right or permission to possess, occupy or use land owned by the Commonwealth; and
(b) a person other than:
(i)the Commonwealth; or
(ii)person suing or being sued on behalf of the Commonwealth; or
(iii)a Commonwealth officer or employee;
is:
(iv)the lessee (other than as sublessee); or
(v)the licensee (other than as a sublicensee); or
(vi)the grantee of the right or permission.
(2)The Minister may, by legislative instrument, confer jurisdiction on the Federal Circuit Court of Australia in respect of any other specified Commonwealth tenancy dispute.
(3)The Minister may, by legislative instrument, make provision for and in relation to all or any of the following matters in respect of a Commonwealth tenancy dispute:
(a) the rights of the parties to the Commonwealth tenancy dispute;
(b) the law (whether a law of the Commonwealth or a law of a State or Territory) to be applied in determining the Commonwealth tenancy dispute (the applicable law);
(c) any modifications of the applicable law that are to apply in relation to the Commonwealth tenancy dispute;
(d) the powers that the Federal Circuit Court of Australia may exercise under the applicable law;
(e) if the Federal Circuit Court of Australia makes an order when exercising jurisdiction over the Commonwealth tenancy dispute – the powers that may be exercised when executing the order or a class orders.
Section 5 of the FCCA Act provides that a “Commonwealth tenancy dispute” is a matter:
(a) involving a lease, licence or other arrangement to possess, occupy or use land and a dispute about:
(i)the recovery of rent or other payments payable under or in relation to the lease, licence or other arrangement; or
(ii)the termination of the lease, licence or other arrangement; or
(iii)the possession, occupation or use of the land; and
(b) in which the Commonwealth, or a person suing or being sued on behalf the Commonwealth, is a party.
On 4 March 2015 the Attorney-General of the Commonwealth, pursuant to s.10AA(3) of the FCCA Act, made the Tenancy Disputes Instrument. Part 2 of that Instrument makes provision for certain matters in respect of a Commonwealth tenancy dispute involving land in New South Wales. However the Part does not apply in relation to a Commonwealth tenancy dispute involving land in New South Wales unless the dispute involves a tenancy within the meaning of the Tenancies Act: s.5(2) of the Instrument.
Section 5(3) of the Instrument provides that:
Nothing in this Part has effect so as to confer non-judicial power on the Federal Circuit Court of Australia, unless the non-judicial power is incidental to the exercise of judicial power by the Court.
The Tenancy Disputes Instrument further provides that where a party is a tenant within the meaning of the Tenancies Act and this Court has jurisdiction to hear and determine the dispute then that party must not make an application to the NCAT under the Tenancies Act in relation to a lease, licence or other arrangement to possess, occupy or use the land that is the subject of the dispute: s.6(2). This prevents the bifurcation of proceedings in respect of Commonwealth tenancy disputes.
Sections 7 and 8 of the Tenancy Disputes Instrument are critical to the issues in these proceedings. They provide:
7 Law to be applied
(1)In determining a Commonwealth tenancy dispute involving land in New South Wales, the Residential Tenancies Act 2010 (NSW) and any regulations made under that Act are to be applied:
(a) to the extent necessary to determine the dispute; and
(b) subject to the modifications set out in section 8 of this instrument.
(2)The law mentioned in subsection (1) is the applicable NSW law.
8 Modifications of applicable NSW Law
(1)The applicable NSW law is to be applied as if:
(a) a reference to the Tribunal were a reference to the Federal Circuit Court of Australia; and
(b) a reference to the principal registrar of the Tribunal were a reference to a Registrar of the Federal Circuit Court of Australia; and
(c) a reference to the Sheriff, or to a sheriff’s office, were a reference to the Sheriff of the Federal Circuit Court of Australia.
(2)The Residential Tenancies Act 2010 (NSW) is to be applied as if it included the following section:
Despite anything else in this Act, if the Federal Circuit Court of Australia makes a termination order in respect of residential premises, the Court may make such orders as it considers appropriate in relation to the day vacant possession of the premises is to be given to the landlord.
Section 9 of the Instrument is also pertinent to the issues in the proceedings. It provides:
9 Powers of the Court
In determining a Commonwealth tenancy dispute involving land in New South Wales, the Federal Circuit Court of Australia may exercise any powers that are:
(a) powers of the Civil and Administrative Tribunal under the applicable NSW law; and
(b) relevant to determining the dispute.
In very broad overview, on the assumption that they are valid, the relevant effect of the Tenancy Disputes Instrument and the amendments to the FCCA Act is that this Court has jurisdiction to determine an application by the Commonwealth, as landlord, for an order for termination (which includes an order for vacant possession) and that, subject to one qualification, where the tenant has been in occupation of the premises for 20 years or more, that application has to be determined in accordance with s.94 of the Tenancies Act. The qualification is that this Court is not bound by s.94(4), namely that “in determining the day on which vacant possession of the residential premises is to be given to the landlord, [the Tribunal] must not order that vacant possession be given earlier than 90 days after the order is made.”
I turn then to the separate questions for determination.
Question 1:
Do ss 7, 8, and 9 of the Tenancy Disputes Instrument, read with s 5(3) of the Tenancy Disputes Instrument, pick up and apply s 94(1) of the Tenancies Act in a Commonwealth tenancy dispute (as defined in s 5 of the FCCA Act)?
The answer to this question is “yes” but with some modification.
As noted above, s.10(1A)(2) of the FCCA Act provides that this Court has such original jurisdiction as vested in it by a legislative instrument made under s.10AA. Section 10AA(3) empowers the Minister to make provision by legislative instrument in relation to a number of matters, including the rights of the parties to the Commonwealth tenancy dispute, the law (whether that be the law of the Commonwealth or a State or territory) to be applied in determining the Commonwealth tenancy dispute, and any modifications of the applicable law that are to apply in relation to that dispute.
The Tenancy Disputes Instrument was made by the Attorney-General who was the relevant Minister for the purposes of the FCCA Act.
Section 7 of the Tenancy Disputes Instrument provides for the law to be applied by the Court in determining a Commonwealth tenancy dispute in respect of land in New South Wales and is clearly empowered by sub-s.10AA(3)(b) of the FCCA Act. The law that it provides for is, with some qualifications, the Tenancies Act. In that way, in light of s.10(1A) of the FCCA Act, s.7 of the Instrument picks up and applies the provisions of Tenancies Act for the purposes of this Court determining a Commonwealth tenancy dispute.
The first qualification to that is that the Commonwealth tenancy dispute must involve land in New South Wales: s.5(1) of the Instrument. The second qualification is that the Tenancies Act and any regulations made under it are to be applied to “the extent necessary to determine the dispute”: sub-s.7(1)(a). The third qualification is that the Tenancies Act and any regulations under that Act are to be applied “subject to the modifications set out in s.8 of the Tenancy Disputes Instrument: sub-s.7(1)(b).
Section 8 of the Tenancy Disputes Instrument modifies the Tenancies Act for the purposes of the determination of a matter in this Court in a number of ways. Those modifications are: first, that a reference to NCAT in the Tenancies Act is taken to be a reference to this Court; secondly, that a reference to the principal registrar of the Tribunal is a reference to the Registrar of this Court; thirdly, that a reference to the Sheriff, or to a sheriff’s officer is a reference to the Sheriff of this Court; and, fourthly, that the Court may make any order it considers appropriate in relation to the day vacant possession of the premises is to be given to the landlord.
Section 8 of the Tenancy Disputes Instrument is within the power of the Minister under sub-s.10AA(3)(c) which relates to the modification of the applicable law.
Section 9 of the Instrument provides for the powers of this Court in determining a Commonwealth tenancy dispute involving land in New South Wales, a matter that clearly responds to the power granted to the Minister under sub-s.10AA(3)(d) of the FCCA Act.
Section 5(3) of the Instrument acts as a general qualification to the operation of pt.2 of the Instrument. Its purpose is to ensure as far as possible, that the grant of power to this Court is within the limits of the Constitution.
The answer to the first question then is yes, except that it is qualified in the following respects: first, that s.94(1) of the Tenancies Act is only picked up and applied in relation to Commonwealth tenancy disputes involving land in New South Wales; and secondly, the modifications outlined in [33] above.
Question 2:
If the answer to question 1 is “yes”, is the Tenancy Disputes Instrument and/or s 10AA of the FCCA Act invalid, in whole or in part because it would involve the Court exercising non-judicial power under s 94 of the Tenancies Act?
The respondents argued that the following factors indicate that the Tenancy Disputes Instrument and s.10AA of the FCCA Act involve the Court in exercising non-judicial power:
a)the power to terminate the tenancy under s.94 of the Tenancies Act is not for any cause or because of any particular conduct of the parties to that agreement;
b)the making of a termination order involves no determination of questions about the existence or enforcement of a right or obligation;
c)there is no adjudication of any matter of dispute in the context of performance obligations or reflecting upon any prior conduct of the parties therefore there is no assessment of the rights of the parties as they exist;
d)rather, the determination is a factum upon which the provisions of the Tenancies Act can then operate. In that sense it involves the application of policy and executive administration rather than legal questions and is a determination of rights as they ought to be;
e)this is emphasised by the fact that the modification of s.94(4) of the Tenancies Act broadens the discretionary power involved even further;
f)an order that of itself terminates a contract and determines an estate in land is a result “foreign to the nature of the judicial power”;
g)that is because it is a remedy unknown to any common law or equitable jurisdiction and is a unique statutory creation;
h)the vesting of the powers of NCAT in the Court assumes that the jurisdiction vested in the Court is to provide or enforce such an order according to “equity, good conscience and the substantial merits of the case without regards to technicalities or legal form”; and
i)the fact that the state of New South Wales has deployed an administrative agent (the NCAT) reveals a judgment that the power involved is not judicial.
In response, the Commonwealth argued that:
a)judicial power involves a decision settling for the future, as between defined persons or classes of persons, the question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which the question is in future to be decided as between those persons or classes of persons;
b)the fact that the Court has the power to enforce its own orders is a significant indicator that there is an exercise of judicial power;
c)the fact that a discretion is conferred upon the Court in broad terms or that policy considerations are to be taken into account does not of itself render a decision non-judicial;
d)in any event, the criterion of “appropriateness” is confined by reference to the circumstances of the case, a matter which is not an unusual feature in the exercise of judicial power; and
e)finally, even if the powers that the Court exercises pursuant to the Tenancies Act could be classified as non-judicial, it would not follow that s.10AA of the FCCA Act which confer jurisdiction on the Court and the power to make an instrument is invalid.
The relevant principles
This Court, being a Court within the meaning of Chap.III of the Constitution, can only exercise the judicial power of the Commonwealth: R v Kirby; Ex parte Boilermakers’ Society of Australia (1956) 94 CLR 254 at 289 per Dixon CJ, McTiernan, Fullager and Kitto JJ. The precise meaning of judicial power and the distinction between it and non-judicial power is difficult, if not impossible to state, not so much because it consists of a number of factors but because the combination is not always the same and it is hard to point to any essential or constant characteristic: Brandy v Human Rights and Equal Opportunity Commission (1995) 183 CLR 245 (“Brandy”) at 267 per Deane, Dawson, Gaudron and McHugh JJ.
In Huddart, Parker & Co Pty Ltd v Moorehead (1909) 8 CLR 330 (“Huddart, Parker & Co”), Griffith CJ described, at 357, the concept of judicial power in terms of the binding and authoritative decision of controversies between subjects or between subjects and the Crown made by a tribunal which is “called upon to take action”.
In R v Trade Practices Tribunal; Ex parte Tasmanian Breweries Pty Ltd (1970) 123 CLR 361 (“Tasmanian Breweries”), Kitto J said, at 374[1]:
[1] Cited inter-alia in Attorney -General (Cth) v Breckler (1999) 197 CLR 83 at 109 – 110 [41] per Gleeson CJ, Gaudron, McHugh, Gummow, Hayne and Callinan JJ; and Attorney- General (Cth) v Alinta Limited (2008) 233 CLR 542 at [94].
…
Thus a judicial power involves, as a general rule, a decision settling for the future, as between defined persons or classes of persons, a question as to the existence of a right or obligation, so that an exercise of the power creates a new charter by reference to which that question is in future to be decided as between those persons or classes of persons. In other words, the process to be followed must generally be an inquiry concerning the law as it is and the facts as they are, followed by an application of the law as determined to the facts as determined; and the end to be reached must be an act which, so long as it stands, entitles and obliges the persons between which it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist.
…
The reference in the passage from Huddart, Parker & Co regarding a Tribunal “called upon to take action” does not necessarily mean that it is essential to the exercise of judicial power that a tribunal should be called upon to execute its own decision: Brandy at 269 referring to R v Davison (1954) 90 CLR 353 at 368. Nevertheless, as the decision in Brandy itself revealed, the capacity to give a decision enforceable by execution, namely by carrying a judgment into effect between the contending parties, is an important factor when the power in question is otherwise equivocal: see also Waterside Workers’ Federation of Australia v J W Alexander Ltd (1918) 25 CLR 434 at 451; Federal Commissioner of Taxation v Munro; British Imperial Oil Co Ltd v Federal Commission of Taxation (1926) 38 CLR 153 at 176; and Rola Co (Australia) Pty Ltd v Commonwealth (1944) 69 CLR 185 at 198-199.
In Tasmanian Breweries it was important to the decision that the power of the Tribunal in question arose solely upon the Tribunal’s own satisfaction that certain conditions existed. That is to say that there was no application of any ascertainable criterion, and the power relied upon the Tribunal’s own idiosyncratic conceptions and modes of thought: see, for example, Tasmanian Breweries at 376 per Kitto J. However, the fact that there is a discretion conferred on the Court in broad terms or that policy considerations are to be taken into account does not of itself render a power non-judicial: Attorney-General (Cth) v Alinta Limited (2008) 233 CLR 542 at 553 [14] per Gummow J, 560 [37], 561 [40] per Kirby J, 597 [168] per Crennan and Kiefel JJ; Thomas v Mowbray (2007) 233 CLR 307 at 348 [80]-[82] per Gummow and Crennan JJ.
Application of the principles
The first step in determining this question is to ascertain what is required of the Court in the application brought in its jurisdiction under s.10AA of the FCCA Act together with the Tenancy Disputes Instrument. As noted above in respect of the response to question one, the Court is required to apply the Tenancies Act to the facts and circumstances shown on the evidence before it. Thus, in this case, there will need to be a factual determination of, amongst other things, whether or not the respondents have been in continual possession of the premises for 20 years. This in turn will require an evaluation of the nature of the respondents’ occupation and whether that amounts to possession within the meaning of the Tenancies Act. Also in issue will be whether there is a residential tenancy agreement in respect of those premises, whether that agreement was for a fixed term, and whether that fixed term (if any) has expired. In short, the Court is required to conduct an enquiry concerning the law as it is on the facts as they are: see Tasmanian Breweries at 374 per Kitto J.
Once that inquiry has been conducted, the Court must then determine whether to make a termination order. Such a termination order requires there to be an order for possession at the same time to take effect as the Court considers appropriate. While the respondents are correct to say that this second inquiry is a very broad and arguably a discretionary one, that is not, in light of the authorities discussed above, decisive of the issue of whether the power is non-judicial. First, any discretion, or more accurately determination of appropriateness, must be bound by the object, scope and purpose of the Tenancies Act. This is a familiar, if not daily, part of any Court’s work. Secondly, it is to be expected, as with any broad power with which a Court is invested, that guiding principles will emerge so that the power is not simply one that arises on the basis of some idiosyncratic notions of individual judges. Thirdly, the determination by the Court will set the rights and obligations of each of the parties to the dispute which must then be observed by the parties. Fourthly, and in my view, critically, those rights and obligations are immediately enforceable by the Court.
A number of the respondents’ arguments relate to the fact that the NCAT is an administrative body. At a general level, the fact that there is no formal separation of powers in the States suggests that the nature of the NCAT has no bearing on the issue for determination in these proceedings. Further, the respondents’ arguments on this point rested largely on the powers of the NCAT which, it was argued, would be expected now to be employed by this Court.
The argument arises from s.9 of the Tenancy Disputes Instrument which relevantly gives the Court the “powers of the Civil and Administrative Tribunal under the applicable NSW law”. The respondents then say that this means that the Court will be expected to act according to “equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms”. That obligation is said to arise from s.38(4) of the Civil and Administrative Tribunal Act 2013 (NSW) and s.187(3) of the Tenancies Act. However, the grant of power to the Court does not include any power that arises under the Administrative Tribunal Act 2013 (NSW). The only powers of the NCAT which are conferred on the Court for the purposes of determining a Commonwealth tenancy dispute are those found in the “applicable NSW law”. That is a defined term that means the Tenancies Act as modified by s.8 of the Tenancy Disputes Instrument: s.7 of the Instrument.
Section 187(3) of the Tenancies Act does not support the argument. That section, as noted above, provides that the NCAT may make an order restraining any action in breach of a residential tenancy agreement or requiring an action in performance of a residential tenancy agreement even if such a remedy would not otherwise be available. The argument pays no attention to the fact that the Tenancies Act is only to be applied “to the extent necessary to determine the dispute”. The power in s.187(3) does not meet that description in these proceedings. In any event, the fact that the power to grant an injunction or an order in the nature of specific performance outside of the ordinary principles does not mean that the power is non-judicial. The scope of a particular right or remedy is, in most cases, subject to variation by legislation.
Finally, it is possible for the proper characterisation of a power to be affected by the nature of the body dealing with it: H A Bachrach Pty Ltd v Queensland (1998) 195 CLR 547 (“H A Bachrach”) at 562 [15]. Thus, even if it were the case that the power to make a termination order were non-judicial when being exercised by the NCAT, it does not necessarily follow that the same power is non-judicial when being exercised by this Court.
On a proper understanding of the FCCA Act and the Instrument, they do not involve the grant of non-judicial power on this Court. The answer to question 2 is “no”.
Question 3:
Does one or both of s 10AA (2) and (3) of the FCCA Act direct the FCCA in the exercise of its judicial power in a manner that impermissibly interferes with its institutional integrity?
The respondents argue that ss.10AA(2) and 10AA(3) of the FCCA impair the institutional integrity of the Court because they direct the Court as to the rights of the parties and the law to be applied in determining the dispute.
The Parliament cannot direct Courts exercising federal jurisdiction as to the manner and outcome of the exercise of that jurisdiction: International Finance Trust Company Limited v New South Wales Crime Commission (2009) 240 CLR 319 at 352 per French CJ. As the Chief Justice said in that case, referring to the decision in Chu Kheng Lim v Minister for Immigration, Local Government & Ethnic Affairs (1992) 176 CLR 1, to do so “would constitute an impermissible intrusion into the judicial power which Ch III vests exclusively in the Courts which it designates”.
There was no issue about the principles to be applied in respect of this issue. However, the Commonwealth argued that those principles do not apply to the legislation in question.
It will be recalled that s.10AA(1) of the FCCA Act confers jurisdiction on this Court in respect of a Commonwealth tenancy dispute. Section 10AA(2) provides that the Minister may, by legislative instrument, confer jurisdiction on the Federal Circuit Court of Australia in respect of any other specified Commonwealth tenancy dispute.” The effect of that subsection is no more than to give the Minister the power to expand the jurisdiction already conferred upon the Court by the previous subsection. It does not require the Court to act in any manner or to arrive at any particular outcome in the exercise of the jurisdiction so granted. Insofar as the question relates to that section, the answer must be “no”.
The respondents’ argument focuses particularly upon sub-s.10AA(3)(a) and (b). The argument appears to be that sub-s.10AA(3)(a) in particular directs an outcome to the dispute, a matter that is inconsistent with the judicial function. However, that is not the proper understanding of that provision.
A Commonwealth tenancy dispute is a “matter” involving a lease, licence or other arrangement to possess, occupy or use the land and a dispute about the recovery of rent, the termination of the relevant agreement or arrangement or the possession, occupation or use of the land. Section 10AA then gives this Court jurisdiction in relation to such a dispute and sub-s.10AA(3) gives the Minister the power to “make provision for and in relation to” a number of matters in respect of a Commonwealth tenancy dispute. If the respondents’ argument were correct there would be a serious inconsistency between sub-s.10AA(3)(a) and the balance of s 10AA. That is because sub-s.10AA(3)(a) would give the Minister the power to resolve the dispute whereas the other provisions relate to the means of resolving the dispute. That outcome must be avoided in order for the provisions to act harmoniously: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381-382 [70]-[71] per McHugh, Gummow, Kirby and Hayne JJ.
Reading s.10AA as a whole, s.10AA(3) does not give the Minister the power to determine the dispute by final determination of the rights of particular parties to that dispute. Rather, as with sub-s.10AA(3)(b), it gives the Minister the power to make provision in relation to the rights of the parties which are then to be applied by the Court in resolving the issues and determining what the future rights and liabilities of the parties will be. There is no direction to the Court as to the manner in which that dispute is to be resolved and, in particular, no prohibition from acting in a judicial manner, here meaning, in accordance with the rules of procedural fairness. So understood, the provision does not interfere with the judicial function: H A Bachrach at 562-563 [16]-[17] and the cases cited there.
The answer to the third question is “no”.
Question 4:
If the answer to question 3 is “yes”, is s 10AA of the FCCA Act invalid in whole or in part?
This question does not arise.
Question 5:
In the alternative to questions 1 to 3, do s 10AA of the FCCA Act and/or the Tenancy Disputes Instrument which confer jurisdiction on the Court to make an order under s 94 of the Tenancies Act subject to the modification of the section in s 8(2) of the Instrument, involve an acquisition of property by the Commonwealth contrary to s 51(xxxi) of the Constitution?
The respondents argue that the grant of jurisdiction to this Court to determine Commonwealth tenancy disputes implies the creation of a federal tenancy law and, thus, that they were party to a different agreement to that created under State law. The relevant differences relied on are:
a)the term of the agreement was indefinite because no termination of the agreement could occur except by the procedure provided under s.94 of the Tenancies Act whereas under the Commonwealth law it is unclear whether there can be termination other than by the procedure initiated under s.94;
b)the security of at least 90 days between the making of a termination order and any order for the vacant possession provided under s.94(4) does not apply in respect of the Commonwealth law; and
c)under State law there would be no order as to costs made between the parties in the event of a dispute and the NCAT could exercise its powers to adjust the relationship between the parties during the termination period whereas this Court has power to make an order for costs and there is no certainty as to whether the Court can adjust the rights of the parties during the termination period.
The respondents argue that this means that the Commonwealth has acquired for itself several of the crucial benefits previously enjoyed by the respondents under the agreement, benefits which attached to the respondents’ estate in the Premises and were vested in them under the Tenancies Act.
The Commonwealth argues that the Instrument makes no changes to the nature of the residential tenancy agreement which is the subject of the Commonwealth tenancy dispute because it continues unless and until an application is made for an order under s.94 or for an order under one of the other provisions of div.2 of pt.5. It further argues that the modification of the Tenancies Act in s.8(2) does not alter the provisions of the Tenancies Act which would otherwise apply to the agreement albeit that the Court will administer those provisions as amended to a Commonwealth tenancy dispute.
Further, it argues that the modification in s.8(2) does not represent an “acquisition” of “property”: first, the asserted right in s.94(4) of the Tenancies Act has no existence apart from statute; secondly, that asserted right does not constitute a proprietary interest; thirdly, the asserted right was, in any event, only inserted into the Tenancies Act after the end of the initial term of the residential tenancies agreement in question; and fourthly, the asserted right is in any event clearly susceptible to the statutory change.
In respect of the argument concerning costs in the NCAT, the Commonwealth argues: first, that the NCAT does have power to make an award of costs; secondly, there is no acquisition of property involved in the modification or extinguishment of a right or interest that has not yet accrued such as any right concerning the outcome and risk of proceedings before the NCAT; and thirdly, no corresponding benefit is conferred upon the Commonwealth.
Relevant principles
Section 51(xxxi) of the Constitution provides that the Commonwealth may make laws with respect to:
The acquisition of property on just terms from any … person for any purpose with respect to which the Commonwealth has the power to make laws.
This section both grants a power to the Commonwealth Parliament and guarantees protection in respect of that grant and other powers granted to the Parliament. There are two concepts in the section that are critical to the arguments in these proceedings: property and acquisition.
The protective nature of the section has led to a broad interpretation of the term “property”.[2] The argument on this question principally has focussed on whether there has been an acquisition.
[2] See Commonwealth v New South Wales (1923) 33 CLR 1 at 20-1; Australian Tape Manufacturers Association Ltd v Commonwealth (1993) 176 CLR 480 at 509; and Zines, The High Court and the Constitution, The Federation Press, 6th edition, 2015 at 621.
The first matter to note in respect of the meaning of “acquisition” is that it is different to “taking”. In Commonwealth v Tasmania (The Tasmanian Dam Case) (1983) 158 CLR 1, Mason J, said at 145:
The emphasis in s.51(xxxi) is not on a “taking” of private property but on the acquisition of property for purposes of the Commonwealth. To bring the constitutional provision into play it is not enough that legislation adversely affects or terminates a pre-existing right that an owner enjoys in relation to his property; there must be an acquisition whereby the Commonwealth or another acquires an interest in property, however slight or insubstantial it may be.
Taking involves a deprivation of property seen from the perspective of its owner whereas acquisition involves the receipt of something seen from the perspective of the acquirer: JT International SA v Commonwealth (2012) 250 CLR 1 (“JT International”) at 33-34 [42] per French CJ referring to Georgiadis v Australian & Overseas Telecommunications Corporation (1994) 179 CLR 297 at 304-305 per Mason CJ, Deane and Gaudron JJ, 315 per Dawson J, 320-321 per Toohey J.
Further, the interest or benefit accruing to the Commonwealth or another person must be proprietary in character: JT International at 33-34 [42] per French CJ, 70-73 [180] – [189] per Hayne and Bell JJ, and 99 [277] per Crennan J.
Whether something is “acquired” involves questions of substance and degree rather than simply form: JT International at 54 [119] per Gummow J. Thus, in considering whether there has been an acquisition of property within s.51(xxxi) the focus of attention must fall upon identification of a legal interest in, or legal relation with, some subject matter: Minister of State for the Army v Dalziel (1944) 68 CLR 261; JT International 150 CLR 1. In JT International, Hayne and Bell JJ examined a number of the authorities in this manner, at 69 [174]:
…
In Dalziel the impugned provisions gave the Commonwealth possession of land to the exclusion of a weekly tenant. In Bank of NSW v The Commonwealth[3] the impugned provisions gave the Commonwealth control of a banking company to the exclusion of its shareholders by giving the Commonwealth control over the bank's board of directors. In Georgiadis v Australian and Overseas Telecommunications Corporation[4] a right of action (a property right) was taken away and, as a result, the party otherwise liable to action obtained a defence to the claim akin to a release from liability. In Newcrest Mining (WA) Ltd v The Commonwealth[5] a right to mine minerals from land vested in the Commonwealth was extinguished and, as a result, the Commonwealth's interest in the land was freed from the previously existing right to mine.
See also the analysis in Smith v ANL Ltd (2000) 204 CLR 493 at 505-506 [22]-[23] per Gaudron and Gummow JJ referred to by Gummow J in JT International at 57-58.
[3] (1948) 76 CLR 1.
[4] (1994) 179 CLR 297.
[5] (1994) 179 CLR 297.
In this respect it may be significant that the “property” in question involves statutory entitlements. In Wurridjal v Commonwealth (2009) 237 CLR 309 Crennan J said at 439-440 [363]-[364][6]:
It can be significant that rights which are diminished by subsequent legislation are statutory entitlements. Where a right which has no existence apart from statute is one that, of its nature, is susceptible to modification, legislation which effects a modification of that right is not necessarily legislation with respect to an acquisition of property within the meaning of s 51(xxxi). It does not follow, however, that all rights which owe their existence to statute are ones which, of their nature, are susceptible to modification, as the contingency of subsequent legislative modification or extinguishment does not automatically remove a statutory right from the scope of s 51(xxxi).
Putting to one side statutory rights which replace existing general law rights, the extent to which a right created by statute may be modified by subsequent legislation without amounting to an acquisition of property under s 51(xxxi) must depend upon the nature of the right created by statute. It may be evident in the express terms of the statute that the right is subject to subsequent statutory variation. It may be clear from the scope of the rights conferred by the statute that what appears to be a new impingement on the rights was in fact always a limitation inherent in those rights. The statutory right may also be a part of a scheme of statutory entitlements which will inevitably require modification over time.
Application of the principles
[6] See also Attorney-General (NT) v Chaffey (2007) 231 CLR 651 at 664 [23]-[25] and JT International at 47 [102] per Gummow J.
The relevant substantive effect of s.10AA of the FCCA Act and the Tenancy Disputes Instrument taken together is first, that instead of having a dispute determined by the NCAT, the parties are constrained to proceedings in this Court; and secondly, that in such proceedings there can be an order for vacant possession at a date less than 90 days after the date of the order. In my view, on the basis of the authorities referred to above, that substantive effect is so distant from an acquisition of property that there is no reason to fear in this case, that what has been described as the flame of the Commonwealth’s hatred for the beneficial constitutional guarantee given by s.51(xxxi) will start a destructive blaze: cf. JT International at 89 [241] per Heydon J.
First, there is no effect on the terms of the residential tenancy agreement subject to which the respondents are currently in occupation of the Premises. Contrary to the respondents’ submission, the term of that agreement was never “indefinite because no termination of the Agreement could occur except by the procedure provided under s.94 of the Tenancies Act.” Once the fixed term of the agreement expired, it became a periodic agreement: s.18(a) of the Tenancies Act. Such an agreement was always subject to the right of the Commonwealth, as landlord, to terminate it either, broadly speaking, for cause, or pursuant to a notice given under the Tenancies Act (or its predecessors) followed by a termination order by the NCAT (and its predecessors). The so-called security given by s.94(4) did not exist at the time of the original agreement and, as already noted, was only introduced with the enactment of the Tenancies Act.
That is not to say that no recently acquired benefit could possibly amount to an “acquisition of property”. However, it does highlight the important fact that that benefit is purely one of statutory creation and, as such, is always susceptible of amendment. Further, in this case the “security” of the 90 day period is relatively insignificant and I doubt that it amounts to, or adds to any proprietary interest. Significantly, the 90 day period in s.94(4) comes at the cost of the 90 day notice period that must be given in respect of any other periodic residential tenancy agreement.
Secondly, the grant of jurisdiction of this Court does not deprive the respondents of a “fast and cheap resolution of tenancy disputes”. The combined operation of ss.3 and 42 of the FCCA Act requires the Court to act informally with streamlined procedures. More importantly, it was not, and could not be, suggested that proceedings in this Court would deprive the respondents of a reasonable opportunity to present their case. Rather, the respondents’ focus in this respect was on the difference in the costs regimes in the NCAT and this Court.
There are a number of difficulties with that focus: first, the respondents had no accrued right to have proceedings determined without any risk of costs. There were no proceedings before the NCAT at the time of the amendment to the FCCA Act and the making of the Tenancy Disputes Instrument. In any event, the NCAT does have power to order costs: Civil and Administrative Tribunal Act s.60(2). There is no acquisition of property involved in the modification of a right or interest that has not yet accrued: Victoria v Commonwealth (1996) 187 CLR 416 at 559. Secondly, there was no acquisition of any right by the Commonwealth. In this Court, the Commonwealth faces the same potential liability for costs as do the respondents. It may be otherwise if the power to award costs would inevitably be exercised in favour of the Commonwealth; however, the respondents did not submit that that would be the case and, in light of the discretionary nature of the power under s.79(2) of the FCCA Act, any such submission would be difficult to accept.
Those reasons are sufficient to determine this question. The answer to question 5 is “no”.
Question 6
If the answer to question 5 is “yes”, is s 10AA of the FCCA Act and/or the Tenancy Disputes Instrument invalid in whole or in part?
This question does not arise.
Conclusion
I would answer the separate questions as follows:
1.Do ss 7, 8, and 9 of the Tenancy Disputes Instrument read with s 5(3) of the Tenancy Disputes Instrument, pick up and apply s 94(1) of the Residential Tenancies Act in a Commonwealth tenancy dispute (as defined in s 5 of the FCCA Act)?
A: Yes, with some modification.
2.If the answer to question 1 is “yes”, is the Tenancy Disputes Instrument and/or s 10AA of the FCCA Act invalid, in whole or in part because it would involve the Court exercising non-judicial power under s 94 of the Tenancies Act?
A: No.
3.Does one or both of s 10AA(2) and (3) of the FCCA Act direct the FCCA in the exercise of its judicial power in a manner that impermissibly interferes with its institutional integrity?
A: No.
4.If the answer to question 3 is “yes”, is s 10AA of the FCCA Act invalid in whole or in part?
A: This question does not arise.
5.In the alternative to questions 1 to 3, do s 10AA of the FCCA Act and/or the Tenancy Disputes Instrument which confer jurisdiction on the Court to make an order under s 94 of the Tenancies Act subject to the modification of the section in s 8(2) of the Instrument, involve an acquisition of property by the Commonwealth contrary to s 51(xxxi) of the Constitution?
A: No
6.If the answer to question 5 is “yes”, is s 10AA of the FCCA Act and/or the Tenancy Disputes Instrument invalid in whole or in part?
A: This question does not arise.
The parties have not asked me to answer the question as to who should pay the costs of the application. I will stand that question over for argument at the substantive hearing.
I certify that the preceding eighty-two (82) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 2 July 2015
15
26
11