Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Rigney & Anor (No.3)
[2015] FCCA 3133
•11 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) v RIGNEY & ANOR (No.3) | [2015] FCCA 3133 |
| 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: Civil and Administrative Tribunal Act 2013 (NSW), ss.38(4), 60(2) |
| ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559 Jackson v Sterling Industries Ltd (1987) 162 CLR 612 Truthful Endeavour Pty Ltd v Condon (2015) 321 ALR 483 Articles and other material cited: Adrian Bradbrook, ‘The Role of the Judiciary in Reforming Landlord and Tenant Law’ (1976) 10 Melbourne University Law Review 459 |
| Applicant: | COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
| First Respondent: | ANTHONY RIGNEY |
| Second Respondent: | KERRY RIGNEY |
| File Number: | SYG 652 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 Second Respondent: | Mr P. King |
ORDERS
The residential tenancy agreement between the applicant and the respondents in relation to the properties situated at 404784, 2072 The Northern Road, Luddenham, NSW 2745 and 40475, 2135 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 9 February 2016.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 652 of 2015
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
Applicant
And
| ANTHONY RIGNEY |
First Respondent
| KERRY RIGNEY |
Second Respondent
REASONS FOR JUDGMENT
INTRODUCTION...................................................................................................... [1]
PROCEDURAL ISSUES........................................................................................... [5]
JURISDICTION......................................................................................................... [6]
Facts relevant to the jurisdictional issues........................................................... [7]
Predominant use of premises............................................................................... [8]
Procedural background to the jurisdictional issues......................................... [28]
The jurisdictional questions............................................................................... [32]
The statutory framework............................................................................... [35]
Tenancies Act............................................................................................. [36]
FCCA Act................................................................................................... [47]
Instrument.................................................................................................. [51]
First jurisdictional question.......................................................................... [58]
Second jurisdictional question..................................................................... [62]
Third jurisdictional question......................................................................... [78]
Fourth jurisdictional question...................................................................... [84]
Fifth jurisdictional question......................................................................... [95]
Summary of jurisdictional findings................................................................. [115]
SUBSTANTIVE APPLICATION........................................................................... [117]
The power of the Court under s.94 of the Tenancies Act.............................. [118]
History of termination in New South Wales tenancy law............................. [120]
Approach to termination under Tenancies Act............................................... [139]
Consideration.................................................................................................... [141]
Continual possession for a period of 20 years or more:sub-s.94(1)(a). [142]
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)...................................................... [146]
The Court is satisfied that it is appropriate to do so in circumstances of the case: sub-s.94(1)(c) [147]
CONCLUSION...................................................................................................... [206]
Introduction
Kerry Rigney, the second respondent, currently lives on a property in Luddenham, a suburb on the semi-rural Western fringe of Sydney in New South Wales. There is some issue about the precise address of the property, but there is no dispute that the Commonwealth is the registered proprietor. Mrs Rigney and her husband, Anthony Rigney, the first respondent, most recently entered into a residential tenancy agreement in respect of the property and another property nearby on 27 November 2007. The original term of that agreement has expired and the agreement has continued as a periodic agreement. The Commonwealth has brought proceedings seeking orders terminating the agreement between it and the Rigneys and for vacant possession of the properties.
Mrs Rigney resists the orders sought by the Commonwealth on a number of alternative bases. The first is that the Court does not have jurisdiction to make the orders because the legislation purporting to grant the Court jurisdiction is unconstitutional. Secondly, the determination of the law to be applied by the Court was beyond the power granted by the relevant statute. Thirdly, 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. Fourthly, the Court should refuse to exercise its jurisdiction to terminate the agreement because of Mrs Rigney’s long-standing possession of the properties and the lack of evidence to show the Commonwealth’s need for possession of the properties.
In her response, Mrs Rigney also raises a number of other points that can be dealt with briefly:
a)She makes three pleading points:
(1)the applicant has failed to allege properly or at all and/or to particularise any right to possession of the lands the subject of the claim, and has failed to allege any lease, the relevant terms thereof, or the service of any notice to quit upon the respondent according to law;
(2)the applicant has failed to allege what right, if any, it has under the Residential Tenancies Act 2010 (NSW) (“Tenancies Act”) or to make a claim reliant on the terms of the said Act; and
(3)she says that it was an express term of the residential lease between the parties that the tenancy ends by expiry of a properly given notice of termination 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 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)She contests that letters sent to her by the Commonwealth’s property agents were lawful and effective notices of termination. The Commonwealth only relies on 2 notices. They are dealt with below.
c)She argues 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)She says that she has incurred losses in breach of the contract she has 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 breach of contract is referred to. In those circumstances, it is unnecessary to consider this claim any further.
e)She contends that the Commonwealth has not offered to compensate her 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.
For the reasons that follow, each of Mrs Rigney’s arguments outlined at [2] above will be rejected.
Procedural issues
Mr Rigney did not take any part in the proceedings even though it appeared, at one point, that counsel appearing for Mrs Rigney also made submissions on his behalf. The evidence was to the effect that Mr Rigney no longer lived on the property and there was no suggestion that he would ever return. On 23 March 2015, I ordered that pursuant to r.6.14(1) of the Federal Circuit Court Rules 2001 (Cth) that service on the first respondent of the initiating documents be dispensed with. In light of these circumstances, I have treated the arguments and evidence put forward by Mrs Rigney as dealing with the interests of both of the Rigneys.
Jurisdiction
Every Australian Court in the federal system is a court of limited jurisdiction (Jackson v Sterling Industries Ltd (1987) 162 CLR 612 at 630 per Toohey J). As a result, it is the first duty of the Court to be satisfied of its jurisdiction, namely, its public authority to adjudicate: Truthful Endeavour Pty Ltd v Condon (2015) 321 ALR 483 at [32] referring to Federated Engine Drivers’ and Firemen’s Association of Australasia v Broken Hill Pty Co Ltd (1911) 12 CLR 398 at 145; Khatri v Price (1999) 95 FCR 287 at [14]. For that reason I will deal with the jurisdictional issues raised by Mrs Rigney before dealing with the other matters. Those issues involve both constitutional questions and an issue of construction. In order to deal with them, it is necessary first to set out my findings of certain matters so that these issues can be seen in their context and be said properly to arise from a justiciable controversy rather than in hypothetical circumstances.
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 following properties:
(1)404784, 2072 The Northern Road, Luddenham NSW 2745 (“first property”); and
(2)404754, 2135 The Northern Road, Luddenham NSW 2745 (“second property”);
b)the parties most recently entered into a residential tenancy agreement in respect of the first property and the second property on 27 November 2007 (“Agreement”);
c)the term of the Agreement was 52 weeks;
d)that term has now expired;
e)the Rigneys have been in continual possession of the first property and the second property for at least 20 years;
f)by letter dated 29 October 2014 the Commonwealth notified the Rigneys that it will likely require possession of the properties by June 2015;
g)by letter dated 24 November 2014 the Commonwealth notified the Rigneys that it required possession of the properties by 15 June 2015; and
h)neither of the Rigneys had indicated that they were willing to vacate the properties by that date.
Predominant use of premises
There is one further relevant fact that was in dispute. In her response, Mrs Rigney contended that the Court had no jurisdiction in respect of the dispute because the land was in part or whole not residential land, or it was part or in whole land used for agricultural land or land used for commercial purposes. That forms part of the third contention referred to at [2] above.
The contention does not completely address the issues. What must be determined is whether the predominant use of the properties was for the purposes of a trade, profession, business or agriculture. I find that, at any time immediately prior to, or during the Rigneys’ possession of the properties, the predominant use was not for any of those purposes.
These facts are relevant because of the statutory regime which, although it will be dealt with in more detail below, requires a little explanation for the purposes of the jurisdictional issues.
Section 10AA of the Federal Circuit Court of Australia Act1999 (Cth) (“FCCA Act”) gives this Court jurisdiction to hear and determine a Commonwealth tenancy dispute between the parties to a lease, licence or other arrangement in which, inter alia, the Commonwealth is the lessor and the other person is the lessee. A Commonwealth tenancy dispute includes a matter involving a dispute about the termination of the lease, licence or other arrangement. Section 10AA(3) provides that the Minister may, by legislative instrument, make provision for the law to be applied in determining the Commonwealth tenancy dispute.
On 4 March 2015 the Attorney-General for the Commonwealth made the Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015 (Cth) (“Instrument”). Part 2 of the Instrument deals with Commonwealth tenancy disputes involving land in New South Wales. Section 7 of the Instrument provides that, in determining a Commonwealth tenancy dispute involving land in New South Wales, the Tenancies Act and any regulations made under that Act are to be applied to the extent necessary to determine the dispute and subject to the modifications set out in s.8 of the Instrument. However, s.5(2) of the Instrument provides that pt.2 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.
Section 6 of the Tenancies Act provides that the Act applies to residential tenancy agreements in respect of residential premises that were made before or after the commencement of that section. Residential premises means “any premises or part of premises (including any land occupied with the premises) used or intended to be used as a residence”: s.3.
Section 7(h) of the Tenancies Act provides that the Act does not apply in respect of premises used for residential purposes if the predominant use of the premises is for the purposes of a trade, profession, business or agriculture. This is the provision relevant to the facts asserted by Mrs Rigney.
The first step in her argument is that, if the property is predominantly used for agricultural purposes, the Tenancies Act does not apply. The second step in the argument is that, if the Tenancies Act does not apply, this Court does not have jurisdiction to determine the dispute between the parties. I do not understand the basis for the second step. The Court has jurisdiction in respect of a Commonwealth tenancy dispute: FCCA Act s.10AA. Such a dispute does not depend on whether the property in question is governed by the Tenancies Act.
If the first step in Mrs Rigney’s argument is correct, the only consequence is that the Tenancies Act is not the law to be applied to the resolution of the dispute. This means that the Court must apply the common law to the dispute. In circumstances where the parties have entered into a contract concerning the tenancy of the premises, the law of contract and tenancy must be applied. For reasons that will become apparent, the Tenancies Act is much more favourable to Mrs Rigney than the common law.
In any event, in order to determine the jurisdictional issues it is necessary to decide the factual issue concerning the use of the properties.
In this respect, a question of construction arises under s.7(h) of the Tenancies Act that was not addressed by either party. It is whether the use of the premises is an historical one or whether it is characterised at the time the question arises or whether it must be both. In other words, does the exemption apply to land that has, prior to any agreement for occupation, been used in a particular way or whether, for example, the use is the one that is current at the time of the relevant dispute? There are indications in both directions. For example, it would be an odd result if the Tenancies Act originally applied to the premises but a change in the use of the premises during the term of a residential tenancy agreement meant that the Tenancies Act no longer applied. In any event, for the reasons that follow, I do not need to resolve that issue.
There is very little evidence about the use of the properties by the Rigneys. There is no evidence about its use prior to their occupation of the properties.
In her affidavit of 28 April 2015, Mrs Rigney says that she is a “long term residential tenant” and that she has pets and “a few domestic farm animals to be accommodated”. However, two weeks later, she affirmed an affidavit dated 10 May 2015 in which she stated that the first property consists of a 25 acre lot, part of which is a chicken farm. She affirmed that “we only reside in the corner part of the Lot of approximately 1 acre” and that they “also rent another 16 acres from Pam (an agent for the Commonwealth) on the other side of The Northern Road, where we run horses.”
This last statement by Mrs Rigney raises the possibility that only the first property falls within the definition of “residential premises” for the purposes of the Tenancies Act. Whether the second property falls within that definition would involve further findings of fact. I have not made those findings because neither party raised the issue in the proceedings.
Neither of the parties addressed me on the meaning of “predominant” or drew my attention to any authorities relevant to s.7(h) of the Tenancies Act, its predecessors or inter-state analogues. However, the answer is straightforward having regard to the text and context of that provision. In its context, there is no special meaning of the word “predominant”. Generally speaking, the predominant use of something is the main, prevailing or preponderant use of that thing. In an Act, the general concern of which is to ensure a balance between residential tenants and landlords, the exception in s.7(h) is clearly intended to capture premises that are mainly used for specific non-residential purposes such as business or agriculture. One example might be a service station that has a small room at the rear in which the manager sleeps and cooks his or her evening meal.
The definition of “residential premises” assists in understanding this exception. Section 3 provides that “residential premises” means “any premises or part of premises (including land occupied with the premises) used or intended to be used as a residence”. This suggests that s.7(h) is not answered simply by arithmetic but rather, by qualitative analysis. For example, in all but the most extreme cases, the predominant use of a service station would be for the purposes of business regardless of the size of the manager’s lodgings.
Applying that approach to the present facts, I am satisfied that the predominant use of the land is not for purposes of trade, profession, business or agriculture and so s.7(h) of the Tenancies Act does not apply.
Taking Mrs Rigney’s evidence as a whole, the term “chicken farm” in her second affidavit can only be a reference to a small number of chickens kept for domestic purposes. If it were otherwise, her first affidavit would have been false insofar as it referred to only a few domestic animals. Even if that were wrong and the word “farm” was understood to show a business purpose to the keeping of chickens, it includes no indication of the size or nature of the undertaking. It may be, for example, that Mrs Rigney sells whatever eggs are surplus to her domestic needs. That could amount to a business-like activity, but would not necessarily mean that the land is used for business purposes. Without any evidence of the details of the “chicken farm” it is impossible to compare that aspect of the use of the land with the residential use of the land.
By contrast, the Agreement signed by the parties entitling the Rigneys to occupy both properties reveals that the purpose of that occupation was predominantly residential: the Agreement was described as a “residential tenancy agreement”; the premises were described as unfurnished and “residential premises”; and, the Rigneys agreed not to keep animals or birds on the premises without the prior written consent of the Commonwealth, although the Agreement expressly entitled them to use the premises for the purpose of grazing no more than ten adult horses.
The evidence establishes that, at no time immediately prior to or during the Rigneys’ tenancy, was the predominant use of the properties for the purposes of a trade, profession, business or agriculture. As s.7(h) does not apply, the Court must prima facie apply the Tenancies Act in determining the tenancy dispute.
Procedural background to the jurisdictional issues
Before turning to deal with the jurisdictional and constitutional arguments raised by Mrs Rigney it is necessary to explain part of the procedural background.
In April 2015 this matter was listed together with a number of other matters involving tenancies in and around Badgerys Creek for hearing of constitutional issues on 18 May 2015. After the matter had been set down for hearing, Mrs Rigney and a number of other tenants engaged Mr King of counsel, apparently on a direct access basis. Mr King, however, was not available to appear at the hearing on 18 May 2015 and, on behalf of his clients, applied for an order vacating that hearing date. I refused that application. A respondent in other proceedings, Mr Shirvington, sought leave to appeal that decision in the Federal Court but was unsuccessful: Shirvington v Commonwealth of Australia [2015] FCA 476. The hearing proceeded on 18 May 2015 without the respondents, for whom Mr King was acting, obtaining alternative counsel. Mr Shirvington appeared. Immediately after the hearing commenced, and without making a formal appearance, Mr Shirvington said that the Court was a kangaroo court[1], placed some written submissions on the bar table and promptly left the courtroom. The hearing proceeded with the parties in one matter (Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Hevers & Anor (SYG651/2015)) where the respondents were represented by senior counsel and two junior counsel.
[1] A word apparently originating in the mid-19th century in the goldfields of California (Macquarie Online Dictionary) meaning a ‘hearing’ that purports to be judicial or quasi-judicial in form and effect but which ignores or perverts legal procedure and fair trial rights and protections. Formal political ‘show trials’ are often derided as kangaroo courts, although the term is normally used for impromptu, informal, and summary ‘justice’ by ad-hoc ‘courts’ such as those convened by vigilante or community groups: Encyclopaedic Australian Legal Dictionary, LexisNexis. The use of the phrase by Mr Shirvington could have been intended to express some disrespect for the Court: see Clampett v Attorney-General of the Commonwealth of Australia [2009] FCAFC 151.
The written submissions left by Mr Shirvington on 18 May 2015 purported to relate to a number of proceedings listed in a schedule at the end of the document, including this matter. As such they were treated as being filed in court in each of the matters listed in the schedule. The submissions essentially repeated and expressly relied upon the submissions presented by counsel for the Hevers. However, it soon became apparent that, apart from the matter of Hevers, the constitutional issues could not be determined because there were insufficient facts before the Court. For that reason, the matters in which Mr King was briefed were adjourned so that the parties could attempt to agree on facts for the purposes of the jurisdictional and constitutional arguments. Such agreement proved impossible. For that reason, the constitutional issues were left for determination after hearing of the substantive matters. In the meantime however, I published my reasons in the Hevers’ matter: Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) vHevers & Anor [2015] FCCA 1814 (“Hevers”).
Although the arguments pursued by Mrs Rigney and other tenants have evolved since May 2015, they remain largely repetitive of the issues dealt with in Hevers. I am not persuaded that any of my reasons in that judgment were wrong, let alone clearly wrong, and for that reason, I will largely rely on my reasons in that decision in determining Mrs Rigney’s arguments in this matter.
The jurisdictional questions
As I have said, Mrs Rigney’s arguments on the jurisdictional issues evolved to some degree in the course of proceedings. Ultimately, her arguments were those set out in a document entitled “Revised Outline Submissions”. The submissions specifically related to the matter of the Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Dattilo & Anor (SYG669/2015) but counsel for the Mrs Rigney sought to rely on the arguments contained in the submissions and as such they were filed in Court in this matter on 13 August 2015. That document described the jurisdictional and constitutional issues as follows (without alteration) at [34]:
…
a)There was not at the date of the Application a matter within the meaning of Constitution Chapter 111 and FCCA Act section 5 which the Court is required to resolve;
b)There is and was at 14 February 2015 no power in the parliament under Constitution Chapter 111 to make the 2015 Commonwealth tenancy law nor the March 2015 tenancy Instrument to confer upon this or any Chapter 111 court the power to resolve the alleged dispute the subject of the Application because to do so impairs the separation of powers principle in the Australian Constitution;
c)There is and was at the date of the Application no power under Constitution section 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;
d)Assuming the 2015 Commonwealth tenancy law is valid the March 2015 Instrument is unauthorised and is ultra vires;
e)The 2015 Commonwealth tenancy law is also invalid as impairing the constitutional guarantee against expropriation of property except on just terms in Constitution section 51(xxxi) because it is a law for the acquisition of property other than on just terms.
(Errors in the original)
A number of the arguments that appeared in the document left in court by Mr Shirvington on 18 May 2015 were not addressed in this document and I take them to have been abandoned. I also note the arguments contained in a document entitled “Respondents Supplementary Argument” which was filed in court on 5 June 2015. These arguments were incorporated into the issues outlined above.
On 22 May 2015, the parties were ordered to file an agreed set of separate issues for determination in relation to the Constitutional issues by 28 May 2015. The parties were seemingly unable to agree as to the form of the jurisdictional questions to be answered. The questions set out below were adapted from the responses and submissions filed by Mrs Rigney as best as could be understood:
(1)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?
(2)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?
(3)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?
(4)Assuming the 2015 Commonwealth tenancy law is valid, is the March 2015 Instrument unauthorised and ultra vires?
(5)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?
The statutory framework
Although I have outlined some of the statutory provisions above, it is necessary to set out a more detailed summary. The following summary of the relevant statutory provisions is largely derived from the judgment in Hevers.
Tenancies Act
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” are defined to include any premises or part of premises (including any land occupied with 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.
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:
84End 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 New South Wales Civil and Administrative Tribunal (“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) (“1987 Act”), 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 1987 Act 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 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).
FCCA Act
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 the provision in relation to the jurisdiction of this Court in respect of Commonwealth tenancy disputes (the meaning of which is set out below). The amendments made by that Part apply in relation to a lease, licence or other arrangement entered into before, on or after, 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.
(Emphasis in original)
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.
Instrument
As noted above, on 4 March 2015 the Attorney-General of the Commonwealth, pursuant to s.10AA(3) of the FCCA Act, made the 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, as noted above, that 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 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. This prevents the bifurcation of proceedings in respect of Commonwealth tenancy disputes.
Sections 7 and 8 of the 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 officer, 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.
(Emphasis in original)
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: the
(a) powers of the Civil and Administrative Tribunal under the applicable NSW law; and
(b) relevant to determining the dispute.
In very broad overview, the relevant effect of the 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 jurisdictional and constitutional questions.
First jurisdictional question:
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?
Mrs Rigney’s argument on this point is that in the absence of a pre-existing dispute, the Court has not been called upon to resolve a “matter” within the meaning of the Constitution. She argues that it was only upon the making of the application that there existed any controversy between the parties. I reject that argument.
In her response to the application, Mrs Rigney did not contend that there was no “dispute” between the parties. Further, there was no evidentiary contest that that dispute arose from the fact that the Commonwealth wrote to Mrs Rigney and her husband indicating that it proposed to use the property upon which they were residing for the purpose of an airport and that it wished to have vacant possession by 15 June 2015. The fact that the original term of the Rigneys’ residential tenancy agreement had expired and they had been in continual possession of the properties for in excess of 20 years meant that the Commonwealth had the right, at that time, to apply to the NCAT for an order terminating the residential tenancy agreement. Further, the residential tenancy agreement could have terminated if the Rigneys abandoned the residential premises or gave up possession of them with the Commonwealth’s consent: Tenancies Act sub-ss.81(4)(d) and (e).
In those circumstances, the fact that Mrs Rigney remained in possession of the property gave rise to a justiciable controversy between the parties. That controversy arose well before the application.
For that reason, the answer to this jurisdictional question is “Yes”.
Second jurisdictional question:
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?
The gist of this question and Mrs Rigney’s argument is that s.10AA of the FCCA Act attempts to grant executive power to this Court rather than judicial power. I rejected the same argument in Hevers and gave the following reasons.
This Court, being a Court within the meaning of Ch.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 of factors 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”), Griffith CJ described, at 357, the concept of judicial power in terms of a 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[2]:
… 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 whom it intervenes, to observance of the rights and obligations that the application of law to facts has shown to exist. …
[2] 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].
The reference in the passage from Huddart to 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 JW 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, 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 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 Instrument.
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 Mrs Rigney’s 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 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 Instrument which relevantly gives the Court the “powers of the Civil and Administrative Tribunal under the applicable NSW law”. The argument is 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 Civil and 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”. Pursuant to s.7 of the Instrument, “applicable NSW law” is a defined term that means the Tenancies Act as modified by s.8 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: HA Bachrach Pty Ltd v Queensland (1998) 195 CLR 547 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 to this Court.
I therefore find the answer to the second jurisdictional question to be “No”.
Third jurisdictional question:
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?
This question has two elements: first, s.51 of the Constitution is the only potential source of Commonwealth legislative power; and secondly that there is no basis in any of the placita of that section for the conferral of jurisdiction on this Court in respect of Mrs Rigney’s tenancy. Both elements are incorrect.
As to the first element, s.10AA of the FCCA Act is an exercise of the power in sub-s.77(i) of the Constitution for the Parliament to make laws defining the jurisdiction of any Federal court other than the High Court with respect to any of the matters in ss.75 and 76. Subsection 75(iii) provides that the High Court shall have original jurisdiction for matters “in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party”. The definition of “Commonwealth tenancy dispute” in s.5 of the FCCA Act indicates that the Commonwealth will be a party to any such dispute.
However, s.10AA of the FCCA Act does not govern the substantive rights and liabilities of the parties in proceedings brought in the jurisdiction conferred by it. That is done by s.7 of the Instrument which, as I have noted, picks up the Tenancies Act insofar as the dispute relates to land in New South Wales which is covered by that Act. In that respect, s.7 of the Instrument is similar in operation to s.79 of the Judiciary Act 1903 (Cth). That section relevantly provides:
(1)The laws of each State or Territory, including the laws relating to procedure, evidence, and the competency of witnesses, shall, except as otherwise provided by the Constitution or the laws of the Commonwealth, be binding on all Courts exercising federal jurisdiction in that State or Territory in all cases to which they are applicable.
…
The operation of that section was considered by the High Court in ASIC v Edensor Nominees Pty Ltd (2001) 204 CLR 559. There, Gleeson CJ, Gaudron and Gummow JJ said, at 587 [57]:
… Two matters generally have been assumed concerning the adoption of State law by s 79. The first is that s 79 implements, or at least is consistent with, what in any event would flow from the operation of Ch III and covering cl 5 of the Constitution. The second is that s 79 is to be supported under s 51(xxxix) of the Constitution as a law with respect to matters incidental to the execution of powers vested by Ch III in that Federal Judicature.
(Citations omitted)
See also 600-1 [102], and 606-7 [121] per McHugh J and 639 [219] per Hayne and Callinan JJ.
That passage applies with equal force to s.7 of the Instrument. Thus, there was power under the Constitution for the making of both s.10AA of the FCCA Act and s.7 of the Instrument.
The answer to the third jurisdictional question is “Yes”.
Fourth jurisdictional question:
Assuming the 2015 Commonwealth tenancy law is valid, is the March 2015 Instrument unauthorised and ultra vires?
Section 10AA(3) of the FCCA Act enables the Minister, by legislative instrument, to make provision “for and in relation to” a number of matters in respect of a Commonwealth tenancy dispute. Those matters include the law to be applied in determining the dispute (sub-s.10AA(3)(b)) and the powers that the Court may exercise under the applicable law (sub-s.10AA(3)(d)). On 4 March 2015 the Attorney-General made the Instrument under the power given by this section. Section 7 of the Instrument provided for the law to be applied (as modified under s.8) and s.9 provided for the powers of the Court.
Mrs Rigney argues that, in making the Instrument, the Attorney-General acted beyond the power granted by sub-s.10AA(3). She put this argument on four bases.
The first basis was that the applicable law under the Instrument was not “in respect of” a Commonwealth tenancy dispute but was “in respect of a State statutory power which excludes all the powers of landlords and tenants in respect of lease disputes and substitutes those powers with exclusive statutory powers to end or continue the exclusive occupation of the Respondents and the use by them of the land.” It is very difficult to understand what that means and the authorities relied on by Mrs Rigney[3] do not make the argument any clearer.
[3] Shanahan v Scott (1957) 96 CLR 245 at 250; Utah Engineering Pty Ltd v Petarky (1966) AC 625 (sic – 629); Willcocks v Anderson (1970) 124 CLR 293 at 298; Project Blue Sky Inc v ABA (1998) 194 CLR 355 at 380.
In order to come within the power granted by sub-s.10AA(3), the Instrument must first:
… make provision for and in relation to all or any of the following matters in respect of a 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);
…
(d) the powers that the Federal Circuit Court of Australia may exercise under the applicable law;
Section 7 of the Instrument provides that, in determining a Commonwealth tenancy dispute involving land in New South Wales, the Tenancies Act and any regulations made under it are to be applied to the extent necessary to determine the dispute and subject to the modification set out in s.8. Section 7 is both “for” and “in relation to” the law to be applied in determining a Commonwealth tenancy dispute.
The second requirement of sub-s.10AA(3) is imposed by the words “in respect of”. It appears that this is the focus of Mrs Rigney’s argument. Properly understood, the requirement is that the Minister makes provision in respect of a Commonwealth tenancy dispute. That is, whatever provision is made it must have a substantial connection with the Commonwealth tenancy dispute. That is undoubtedly the case here: s.7 of the Instrument applies (and only applies) to a Commonwealth tenancy dispute. In light of that, making the Instrument was a proper exercise of the power given under sub-s.10AA(3).
The second basis for Mrs Rigney’s argument is that the qualifications in s.7 of the Instrument create an “ambulatory chameleon power that is repugnant to the rule of law.” Those qualifications are that the Tenancies Act and regulations are to be applied “to the extent necessary to determine the dispute” and “subject to the modifications set out in section 8 of this instrument”. Although Mr King referred to these qualifications as “Henry VIII” clauses, they do not purport to override any Commonwealth statute. The effect of the Instrument is to require the Court to apply a particular law in determining a particular dispute. That particular law is a New South Wales statute with some modification. The fact that part of the modification is that the statute is to be applied “to the extent necessary to determine the dispute” does not make the Instrument repugnant to any law, let alone the rule of law. If that qualification were not contained in the Instrument, it would be applied in any event: the Court does not apply a law that is not necessary to the determination of a dispute.
The final point made by Mrs Rigney in this respect is that the word “modifications” in sub-s.10AA(3)(c) refers to alterations by the parliament itself, not the object of the power. Subsection 10AA(3)(c) provides that the Minister may make provision for and in relation to any modifications of the applicable law that are to apply in relation to the Commonwealth tenancy dispute. “Applicable law” is the law for which provision is made under sub-s.10AA(3)(b). Mrs Rigney’s argument is that the Minister has no power to make his or her own modifications to the applicable law, but can only specify modifications that are made by the parliament which made the applicable law. The argument must be rejected. First, there is no basis for this argument in the text of Act. In particular, the word “modifications” is not qualified so as to be restricted in the manner suggested. Second, it would be unnecessary in light of sub-s.10AA(3)(b). The “law” referred to in that paragraph can be “a law of the Commonwealth or a law of a State or Territory”. The only sensible reading of that is that it refers to a law as it stands at the time the Minister makes the provision. A statute always speaks to the present: Commissioner of Police (NSW) v Eaton (2013) 252 CLR 1 at [97] per Gageler J. Here, that means that the law applies with any modification that has been made to it by the Commonwealth, the State or Territory in question. The work of sub-s.10AA(3)(c) is then to enable the Minister to make modifications to that law.
The third basis of Mrs Rigney’s argument is that the Instrument falls outside the regulation making power in sub-s.12(2) of the Legislative Instruments Act 2003 (Cth) because it operates retrospectively. That section provides:
(2)A legislative instrument, or a provision of a legislative instrument, has no effect if, apart from this subsection, it would take effect before the date it is registered and as a result:
(a)the rights of a person (other than the Commonwealth or an authority of the Commonwealth) as at the date of registration would be affected so as to disadvantage that person; or
(b)liabilities would be imposed on a person (other than the Commonwealth or an authority of the Commonwealth) in respect of anything done or omitted to be done before the date of registration.
The only explanation given by Mr King as to why this provision applied at all was that the Commonwealth relied on notice given to Mrs Rigney before the registration of the Instrument. That argument is, with respect, without any merit. As Perry J recently explained, the words “it would take effect before the date it is registered” mean that the legislative instrument must take effect from a date which precedes its registration, ie, that it applies retrospectively, and not merely that the legislative instrument adversely affects a pre-existing right: Kaur v Minister for Immigration & Border Protection (2015) 230 FCR 229 at 240 [42]. The fact that the Commonwealth relies on an act that preceded the registration of the Instrument has no bearing on whether the Instrument applies retrospectively. No accrued right of Mrs Rigney was destroyed as at a date before registration.
The final basis for Mrs Rigney’s argument is that the Instrument is repugnant to the rule making power because it empowers the Court to impair the constitutional guarantee against the acquisition of property other than on just terms. That is the same as the premise underpinning the fifth jurisdictional question. The answer to the fourth jurisdictional question is “No”.
Fifth jurisdictional question:
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?
The arguments raised on this point were essentially identical to those raised in the Hevers matter. I rejected them for the reasons I gave in that judgment which are set out below.
The argument is that the grant of jurisdiction to this Court to determine Commonwealth tenancy disputes implies that the creation of a Federal tenancy law and, thus, that the tenants 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.
Mrs Rigney argues that this means that the Commonwealth has acquired for itself several of the crucial benefits previously enjoyed by her under the agreement, benefits which are attached to her estate in the premises and were vested in her 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, the 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 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.
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 Parliament 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". The argument on this question principally focussed on whether there has been an acquisition.
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 Dams 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 (2012) 250 CLR 1. In JT International, Hayne and Bell JJ examined a number of the authorities 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 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 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 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.
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] :
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 principles
As I have already noted, the relevant substantive effects of s.10AA of the FCCA Act and the Instrument taken together are; 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, those substantive effects do not constitute an acquisition of property.
First, there is no effect on the terms of the residential tenancy agreement subject to which Mrs Rigney is currently in occupation of the properties. Contrary to her 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 Mrs Rigney 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 Mrs Rigney of a reasonable opportunity to present her case. Rather, her 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, Mrs Rigney 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 Instrument. 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. In any event, the NCAT does have power to order costs: Civil and Administrative Tribunal Act 2013 (NSW), s.60(2). Secondly, there was no acquisition of any right by the Commonwealth. In this Court, the Commonwealth faces the same potential liability for costs as Mrs Rigney. It may be otherwise if the power to award costs would inevitably be exercised in favour of the Commonwealth; however, Mrs Rigney 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.
The answer to the fifth jurisdictional question is “No”.
Summary of jurisdictional findings
In summary, I answer the jurisdictional questions as follows:
(1)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.
(2)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.
(3)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.
(4)Assuming the 2015 Commonwealth tenancy law is valid, is the March 2015 Instrument unauthorised and ultra vires?
No.
(5)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.
For each of these reasons, Mrs Rigney’s challenge to the Court’s jurisdiction fails.
Substantive application
I turn next to the substantive issues between the parties. In order to do so, it is first necessary to examine in more detail the power of the Court under s.94 of the Tenancies Act.
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 the importance of treating tenants equitably.
Mr Robertson explained that planning for an airport requires substantial on-site technical work including extensive investigations to support environmental assessment and geotechnical work by engineers and other consultants. He said in his affidavit of 11 March 2015 that such work had already commenced and was expected to continue throughout 2015. He said that the site investigations included invasive geotechnical drilling work to obtain samples to inform the engineering options which required substantial machinery on the site including large mobile rigs to drill and dig holes often several metres deep. The work was, at the time of his affidavit, being undertaken on a limited scale due to the occupants on the site. That was because the work is intrusive, requires out of hours access and could cause safety concerns for occupants.
In light of that occupation the work had been either been tailored to the sites of which the Commonwealth had possession, or alternatively, the Commonwealth had liaised with tenants to ensure that testing could be conducted safely without unnecessary disturbance. Mr Robertson explained that the additional work and costs that have resulted from working around tenants were “considerable”, although he did not give any further detail in that respect. Notably, his evidence did not deal directly with the part of the site on which the Rigneys’ home is located. Indeed, his evidence was that the planning, assessment, site management and preparation activities for the airport site were being undertaken on a “whole of site” basis for all of the land to be included in the airport site.
Mr Robertson also gave evidence of the further work that would be required on the site in general. Generally speaking that work was to obtain further geotechnical and contamination information across the whole site which would then be fed directly into the Government’s consideration of the land use arrangements for the site and the associated costings. Mr Robertson said that the information was urgently required in order to feed into the government consideration process but did not really explain the basis for the urgency other than saying that a delay in obtaining the testing information “risks delaying the proposal overall.”
Mr Robertson described the process for assessing residential tenant blocks as being “administratively onerous” and taking considerable time, effort and cost to implement. The steps usually followed in that respect were:
a)Identify sites for access: contracted specialists would identify access requirements for all specialist investigations on the site and then submit a request for access to the Department. That request would then be reviewed by the Department in consultation with the property manager. Alternative access options would be identified should there be tenancy considerations.
b)Seek consent from tenants: once the final list of survey sites was determined then the Department would liaise with existing tenants by way of letters prepared by lawyers and follow-up telephone calls.
c)Where tenants refuse access: a new survey site would need to be identified in accordance with the previous steps.
d)Finalise access to the sites: when tenants are notified and consent is received the lists of sites for access is finalised, mapped and sent to contracted specialists to be given to the survey team.
e)Access to sites on the day of investigations.
Mr Robertson explained that the constant requirement to seek consent had implications for the achievement of the projects timeframes and generates substantial costs.
Mr Robertson stated that the next stages of investigative work would be increasingly incompatible with the continued residential occupation of the land being tested. In addition to the substantial noise and disturbance caused by machinery there was a significant risk to safety arising both from the danger of individuals interacting with the machinery and dangers associated with holes which have been drilled.
In his affidavit of 30 March 2015 Mr Robertson stated that a minimum of 9 to 12 months was expected to be required to clear the proposed airport site and that that timeframe was only achievable with multiple contractors working concurrently on the site with limited unfavourable weather. The expectation is also based on the assumption that there would only be 150 structures remaining for demolition after June 2015.
In his affidavit of 21 May 2015 Mr Robertson stated that, as at that date, 58 of an estimated total of 163 tenants had vacated the site. He further stated that termination notices with respect to 99 of the 163 tenants had been issued and were due to expire on 15 June 2015 by which time it was expected that the vacancy of the site would increase substantially.
Mr Robertson gave evidence that demolition of an initial 10 vacant premises commenced from December 2014 and that the Department had also established a panel of demolition firms to carry out the next stage of demolition at Badgerys Creek. Those demolitions commenced in March 2015. Since that time, contractors has had 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 on the site would be vacated.
Mr Robertson also explained that, based upon the previous experience of demolitions on the site, the process of demolition required between 15 to 20 days for each property. That is because of a significant number of requirements including confirmation by inspection that the premises are in fact vacant, site visit from the demolition contractor to assess the structure including for the presence of asbestos, obtaining subsequent approval under WorkCover to allow the demolition to go ahead, obtaining a hazardous material survey and report, development of safety on site management plan, removal of asbestos, and demolition of the structure.
Where asbestos has been identified in this process, which the Commonwealth considers may be a significant proportion of the structures, an additional seven days is required for the demolition to be finalised. The presence of any buried asbestos, either before or once demolition works has commenced will, according to Mr Robertson, mean additional time, costs and health concerns.
Mr Robertson was cross-examined by Mr King. For the most part, the questions asked of him went to establish that there were other people in the Department with more knowledge of and responsibility for particular decisions with respect to the development of the site for an airport. Those questions did not assist the proceedings in any way. Mr Robertson gave evidence about what he knew. The fact that someone else was responsible for decision-making or any other matter is irrelevant to the facts in issue. I found that Mr Robertson gave his evidence truthfully and I accept what he said.
Preparation for development by a private sector operator
As was mentioned in the 15 April 2014 joint press release, the Commonwealth envisaged that the costs of the airport would be principally met by a private sector operator. Mr Robertson gave evidence about the contractual processes being undertaken by the Commonwealth in connection with that operator.
He said that when the Commonwealth sold Sydney (Kingsford Smith) Airport to the Sydney Airport Group in 2002, the sale agreement included terms granting an opportunity to the purchaser to develop and operate any second major airport in the Sydney region within 100 kilometres of the Sydney GPO, 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 the Rigneys
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 the Rigneys’ interests:
i.the length of the Rigneys’ occupation of the property;
ii.the terms of the Agreement between the Rigneys and the Commonwealth;
iii.the process which the Commonwealth has undertaken to obtain vacant possession of the properties. That process includes the notice of proposed development of the site for the airport, notice of the proposed termination of the residential tenancy agreement, and any assistance given by the Commonwealth to the Rigneys in relation to moving from the properties; and
iv.the availability of suitable alternative accommodation.
The first matter is, as I have mentioned above, the Rigneys have at least been in continual possession of the properties for over 20 years. It is easy to infer that they have created their home on at least the first property and have developed a considerable attachment to it.
The second matter arises from the fact that the additional terms to the residential tenancy agreement referred to the proposed airport site. Clause 42 provided:
Proposed Airport Site
42.1The tenant acknowledges that the premises form part of the proposed site for Sydney West Airport;
42.2In the event that the Commonwealth of Australia requires vacant possession of the premises:
b)to develop the Sydney West Airport; or
c)for any other purpose
the landlord may terminate this Agreement by serving on the tenant written notice expiring six months from the date of the notice or on expiration of the fixed term (whichever is the earlier);
42.3The tenant shall not be entitled to any payment or compensation from the landlord arising from such termination;
42.4A termination of the Agreement under clause 42.2 shall not affect an existing right or obligation accrued or incurred by the landlord or by the tenant under this Agreement or otherwise at law or in equity.
(Emphasis in original)
Those provisions are, as I have found, subject to the operation of the Tenancies Act. If I had accepted Mrs Rigney’s submissions that the Tenancies Act did not apply her tenancy would arguably already have been terminated by operation of cl.42.2. In any event, these clauses are relevant to the extent that they show that at least from the entry into the residential tenancy agreement in November 2007, the Rigneys were aware of the possibility that the site may be developed for the purposes of the development of an airport.
By letter dated 29 October 2014 from the firm managing the property on the site, the Commonwealth informed the Rigneys 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 tenancy 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 tenancy. 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.
…
There are special rules for residential tenants who have been in occupation for more than 20 years. Please tell us if anyone in your household falls into this category.
…
That letter enclosed a document entitled “Information to Assist You”. The information contained in that document included the following:
…
Garbage Collection Service
Arrangements are currently in place for the collection of household waste from your premises and those arrangements 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 24 November 2014 to the Rigneys. That letter relevantly stated:
…
The Government requires that all tenants vacate the site by 15 June 2015. In our recent letter we advised that certain provisions apply to residential tenants who have been in continuous occupation of their property for more than 20 years.
We understand that you may have occupied the above property for a period of 20 years or more.
The attachment to this letter details the provisions that relate to the form of notification you will receive. This will not affect your vacation date of 15 June 2015 or other requirements for vacating the site.
You may vacate the property earlier than 15 June 2015.
…
The terms of this letter are somewhat surprising given that they are both inconsistent with the Tenancies Act and misleading to the extent that the letter suggests that there was any obligation on the Rigneys at all to vacate the their home by 15 June 2015. The misleading nature of the letter was overcome, to some extent, by an attachment to the letter referring to the position of tenants in possession of the premises for 20 years or more. That attachment included the following statements:
…
If on the basis of available information, the Government considers that you have occupied the property for 20 years or more, the Government intends to apply to obtain an order pursuant to the Act to terminate your tenancy with effect from 15 June 2015.
It is not necessary for you to do anything in relation to obtaining that order. However, you may be invited to attend a hearing prior to the order being made.
If you vacate the property in the coming months it will not be necessary for an order to be obtained.
…
These statements are also misleading to the extent that they suggest that the right of the Rigneys 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. The impression given by these letters is to the effect that the Rigneys would have no option but to vacate by June 2015.
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 the Rigneys were directly provided with this assistance but it may be accepted that it was at least available to them.
Availability of suitable alternative accommodation
Finally, there is the issue of the availability of suitable alternative accommodation. In this respect Mr Simon Azar, an expert valuer, gave evidence for the Commonwealth.
Mr Azar described the improvements on the Rigneys’ property as being a 1970s style, single-storey, project style, brick veneer dwelling. He said that it has cement tiled roofing and aluminium framed windows, four bedrooms, lounge/dining area, internal laundry, single lock-up garage and basic dated bathroom and kitchen areas. He said that the property was in a “basic dated” condition throughout with the exception of updated flooring. The property at 2072 The Northern Road was 2.3 hectares and that at 2135 The Northern Road was 6.713 hectares being vacant rural land. The current rent for the properties was $280 per week.
Mr Azar said that, from his investigations of properties that were currently available for lease, he found no substantiation for the claim that there was a lack of readily available properties to lease. This opinion was based upon a comparison between the description of the properties set out above and the following four properties (the descriptions are those of Mr Azar):
2150 The Northern Road, Luddenham. Similar age and style dwelling. Superior condition. Smaller allotment. Asking rent $550 p/w.
4 Phillip Street, Leppington. Similar age and style dwelling. Smaller allotment. Asking rent $550 p/w.
315 Sixth Avenue, Austral. Slightly younger dwelling. Superior accommodation. Smaller allotment. Asking rent $650 p/w.
430 Devonshire Road, Kemps Creek. Similar age and style dwelling. Superior condition. Smaller allotment. Asking rent $570 p/w.
Mr Azar also gave evidence about the current market rent for the Rigneys’ property on the basis of these four properties. He concluded that the market rent for the property at 2072 The Northern Road, Luddenham was between $475 and $525. In outlining the rationale for this opinion, Mr Azar said that he had used a “direct comparison methodology” which requires examination of rental properties which are similar to that identified for valuation and then to make adjustments for differences between them. Typical factors that are taken into account in making adjustments include the comparative size of the allotment, topographical and locational aspects, position of the allotment, size and quality of the residences, and a general state of repair and presentation.
Mr Azar accepted under cross-examination that Mrs Rigney would be unable to obtain any comparable property at the same rent that she is currently paying. He also admitted that, for the purposes of finding current market rent, he had not made any adjustments in respect of whether or not the property was able to take livestock including dogs, cattle or horses. He later explained however, that the human accommodation was comparable in the properties which he had used as a comparison for the purposes of valuation.
It was suggested to Mr Azar that his report was inaccurate because, since the time he had conducted the searches, a number of the properties mentioned in it had in fact been leased. He did not agree and explained simply that properties get leased. He did, however agree that the fact that these properties had by that time been leased demonstrated that there was a very robust and highly competitive rental market in the precinct of Badgerys Creek.
Mr Azar accepted that his description of one of the properties referred to in his report was not accurate. He had described it as being two acres whereas he accepted that it was in fact half an acre in size. However, that property was not relevant to the Rigneys’ properties.
In response to Mr Azar’s evidence, Mrs Rigney relied upon evidence given by Simone Fogarty who is the daughter of Ken Shirvington, the respondent in another proceeding, Lopco Neskovski, a registered real estate valuer, and Leanne Uren, who lives in one of the properties on the airport site.
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.
In her affidavit, Ms Fogarty criticised Mr Azar’s evidence on a number of bases. Most of those criticisms however were no more than submissions without any adequate supporting material. For example, she said at [6] that most of the properties listed in Mr Azar’s tables had incorrect data but she does not give any details of how the descriptions are inaccurate or back up her assertion with any evidence. Ms Fogarty also 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. However, as Mrs Rigney has given no evidence about her financial means, this has no significance to these proceedings.
On the other hand Ms Fogarty does 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 the Rigneys’ property were, as at the date of the hearing, no longer available for lease. It also showed that a number of the other properties referred to by Mr Azar were of a different size to that appearing in his report. However, those properties were not preferable to the Rigneys’ property and I leave them to one side.
Mr Neskovski made a number of preliminary points on the basis of his local experience. First, most rural property is held for “owner occupied rural lifestyle purposes” particularly the larger rural (10 hectares to 40 hectares) properties which means that there is a scarce supply available to rent. 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. Thirdly, not all large properties are actually capable of carrying horses. 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. He says that the land referred to by Mr Azar for the purposes of agistment would not be comparable to the land currently used by the Rigneys which will require the equivalent of two, 3.5 hectare parcels.
Next, Mr Neskovski said that he had analysed the rentals that had occurred throughout early to mid-2015, making allowances for the purposes of comparison with individual properties bearing in mind:
a)location;
b)views and outlook;
c)dates of rental;
d)land area;
e)topography;
f)fencing and dams;
g)style construction and accommodation provided by the delegate dwelling houses on each rental property; and
h)market movements, including increases.
He then noted that the residential part Rigneys’ property was actually 2,500 metres² to 2,600 metres² in size and not 2.3 hectares as reported by Mr Azar. Having said that, he said that as a consequence of the larger land areas and the lack of truly comparable rental evidence of properties with large land areas (for example 7 hectares, being the approximate size of the Rigneys’ properties) a valuer would be entitled to assess the values of the property as if they were hypothetically situated on a parcel of land and then to add to the first assessment and adjustment rental rate per hectare for the balance of the rural land area.
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 between May 2015 and end of July 2015. 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 relevant period. The first was a single property that was available for agistment which was available at a rental of $300 per week being an area of 17 hectares. Next was a list of properties by reference to size, the first being granny flats and houses on residential sized blocks; the second being older houses on rural/residential sized blocks of 4000 metres² to 2 hectares and the third being more modern houses on rural/residential sized blocks of 1.8 hectares to 2.83 hectares. The second category of these appears to be most relevant to Mrs Rigney. Five properties are shown in this category with rentals from between $430 per week for a recently renovated three-bedroom home to $850 per week for a four-bedroom double brick house plus study room including air conditioning.
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.
I do not agree with the approach taken by Mr Azar that a semi-rural property on a number of acres of land is readily comparable to a house on a residential sized block of land. However, the question to which all of this evidence is directed is not whether 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. It does not 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. It also means that it is unnecessary to resolve the individual differences in the evidence.
The evidence does show, however, that there have been properties available for rent in the areas in the vicinity of Luddenham. Those properties are, for the most part, more expensive than that currently rented by Mrs Rigney. That is hardly surprising, given that her tenancy was always subject to the possibility of there being an airport built on the property. There are two other factors, however, that are more important in that respect. First, Mrs Rigney has given no evidence about her financial means; and secondly, she has given no evidence about the number of people living in the property. Her husband no longer lives there. Her son lives in Bathurst, as does her daughter. In those circumstances, it is not clear why, in order to be suitable, alternative accommodation needs to include a four-bedroom house nor, indeed, that she cannot afford to pay any more rent than she is currently paying.
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 vacating the site after notice having been given by the Commonwealth. I therefore give this assertion little weight.
The third point which Ms Fogarty and Mr Neskovski raised concerned animals. I accept that animals are relevant to the suitability of alternative accommodation. Mrs Rigney says that she has pets and a few domestic farm animals. She says that she runs horses on part of the property but does not say how many. In the absence of anything more specific, I cannot be satisfied that Mrs Rigney requires anything near the size of the properties that she currently occupies in order to adequately accommodate all of her animals. Mr Neskovski did not give evidence of small agistment lots. Mr Azar did, indicating that land with areas of between 2 acres and 5 acres were available for an agistment fee of between $120 and $250 per week. There is no evidence to suggest that Mrs Rigney could not afford that amount.
On Mr Neskovski’s evidence, there have been two-bedroom and four-bedroom homes on smaller lots available for between $410 per week and $500 per week.
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 Rigneys are to give vacant possession is 60 days from the date of judgment.
I fully accept the general importance of the development of a further airport in Sydney for both the economic and social well-being of this State, if not this country.
The following matters add to that general importance. First, significant time, effort and money has already been put into preparation of the site for the future development of the airport. Secondly, although of less weight, the Rigneys have been on notice since at least the beginning of the current residential tenancy agreement of the possibility of the use of the land in Badgerys Creek as an airport and the consequent need for them to give vacant possession to the Commonwealth for that purpose. Indeed, it was plain to anyone living in Sydney that that has been a distinct possibility for the last thirty years. Thirdly, although the evidence of Mr Robertson does not specifically address the property on which Mrs Rigney has lived for so long, I find that, as the properties are part of the site for the airport, ready access to it, unhindered by concerns for tenant safety or permission, will save the Commonwealth time and taxpayers’ money.
While the Commonwealth’s letters to the Rigneys in October and November 2014 were misleading, Mrs Rigney has taken part in these proceedings in spite of that. I can discern no ongoing impact from that aspect of the letters. Further, although they were misleading to some extent, they clearly put Mrs Rigney on notice of the Commonwealth’s desire to obtain vacant possession. I also find that on the basis of the dates of the Commonwealth’s letters to the Rigneys, Mrs Rigney’s evidence that Mr Rigney was uncontactable from January 2015, and the lack of evidence regarding Mr Rigney’s movements prior to January 2015, that Mr Rigney was also on notice of the Commonwealth’s desire to obtain vacant possession.
The fact that Mrs Rigney has been in possession of the properties as a tenant for over 20 years must be given some weight. However, given that suitable alternative accommodation is available to the Rigneys, their long tenure is well and truly outweighed by the very real need of the Commonwealth to obtain vacant possession of the properties.
For that reason, it is appropriate to order that the residential tenancy agreement between the parties be terminated.
There is some truth in Mrs Rigney’s submission that the Commonwealth has not shown any real urgency in its need for possession. Although I do not wholly accept the submission, I cannot see that a delay of a number of weeks will have a great impact on the progress of the development of the site. On the other hand, Mrs Rigney will need some time to locate other premises and to pack up and move or store her belongings. I consider that 60 days is a suitable period to allow her to do that without causing unwarranted expense or delay to the Commonwealth.
I therefore order:
(1)The residential tenancy agreement between the applicant and the respondents in relation to the properties situated at 404784, 2072 The Northern Road, Luddenham, NSW 2745 and 40475, 2135 The Northern Road, Luddenham, NSW 2745 comprising part of folio identifier Lot 1 DP 838361 (“Premises”) be terminated forthwith.
(2)Vacant possession of the Premises be given to the applicant on or before 18 December 2015.
(3)The order for vacant possession be suspended until 9 February 2016.
I certify that the preceding two hundred and thirteen (213) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 11 December 2015
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