Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development) v Shirvington (No.3)

[2015] FCCA 3234

FEDERAL CIRCUIT COURT OF AUSTRALIA

COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) v SHIRVINGTON (No.3) [2015] FCCA 3234

Catchwords:
ADMINISTRATIVE LAW – Commonwealth tenancy dispute – termination of long-term tenancy agreement under section 94 of the Residential Tenancies Act 2010 (NSW) – respondent in possession of the premises for over 20 years – whether long-term tenancy agreement ought to be terminated – original tenancy agreement expired – respondent notified of termination – consideration of personal circumstances of respondent – predominant use of premises – termination of tenancy agreement granted – order for vacant possession suspended.

CONSTITUTIONAL LAW – Jurisdiction of the Federal Circuit Court of Australia – judicial power – improper restraint on judicial power – acquisition of property other than on just terms – whether there was a “matter” – whether legislative instrument was unlawful.

Legislation:

Residential Tenancies Act2010 (NSW), ss.7, 94

Ashton v Pratt (2015) 88 NSWLR 281
Cain v New South Wales Land and Housing Corporation (2014) 86 NSWLR 1

Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development) v Rigney & Anor (No.3) [2015] FCCA 3133
Queensland v Congoo (2015) 89 ALJR 538
Sidhu v Van Dyke (2014) 251 CLR 505
Swain v Residential Tenancies Tribunal of New South Wales (Supreme Court of New South Wales, Rolfe J, unreported, 22 March 1995)
Tabe v The Queen (2005) 225 CLR 418
United States v Dollfus Mieg et Cie SA [1952] AC 582

Applicant: COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT)

Respondent: KEN SHIRVINGTON

File Number: SYG 648 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 Respondent: Mr P. King

ORDERS

(1)The residential tenancy agreement between the applicant and the respondent in relation to the properties situated at;

(a)1962-1970 The Northern Road Luddenham, NSW 2745;

(b)2035-2045 The Northern Road Luddenham, NSW 2745;

(c)2055 The Northern Road Luddenham, NSW 2745;

(d)80 Anton Road Luddenham, NSW 2745; and

(e)90 Anton 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.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 648 of 2015

COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE & REGIONAL DEVELOPMENT)

Applicant

And

KEN SHIRVINGTON

Respondent

REASONS FOR JUDGMENT

Introduction

1.Mr Shirvington currently lives at 1966 The Northern Road Luddenham NSW 2745. This property is also referred to as Lot 121A and sometimes as Lot 2 The Northern Road, Luddenham. However, that property is not the subject of these proceedings. That is because the lessees of that property are Mr Kevin Dickerson and Ms Annette Patrick. That property is the subject of other proceedings to which Mr Shirvington has, on his motion, recently been joined as a party.

2.Mr Shirvington is the lessee of the following properties which are the subject of these proceedings:

a)1962-1970 The Northern Road Luddenham, NSW 2745;

b)2035-2045 The Northern Road Luddenham, NSW 2745;

c)2055 The Northern Road Luddenham, NSW 2745;

d)80 Anton Road Luddenham, NSW 2745; and

e)90 Anton Road Luddenham, NSW 2745.

(Together the “Premises”)

3.The Premises comprise part of folio identifier Lot 1 DP 838361 of which the Commonwealth is the registered proprietor. The Commonwealth wishes to develop this land for the purposes of an airport and has brought proceedings seeking orders terminating the lease between it and Mr Shirvington and for vacant possession of the Premises.

4.Mr Shirvington opposes the orders sought by the Commonwealth on a number of alternative bases. First, he argues that the Court does not have jurisdiction to make the orders because the legislation purporting to grant the Court jurisdiction is unconstitutional. Secondly, 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. Thirdly, the Court should refuse to exercise its jurisdiction to terminate the lease because Mr Shirvington was led to believe by an agent of the Commonwealth that he would be given two years to vacate the premises if they were ever needed by the Commonwealth and he relied upon that belief. Fourthly, the Court should refuse to exercise its jurisdiction to terminate the lease as a matter of discretion

5.In his response, Mr Shirvington also raises a number of other points that can be dealt with briefly:

a)He makes three pleading points:

i)the applicant has failed to allege and/or to particularise any right to possession of the lands to which are the subject of the claim, and has failed to allege any lease, the relevant terms thereof, or the service of any notice to quit upon the respondent according to law;

ii)the applicant has failed to allege what right, if any, it has under the Residential Tenancies Act 2010 (NSW) (“Tenancies Act”) or to make a claim reliant on the terms of the Act; and

iii)it was an express term of the residential lease between the parties that the tenancy ends by expiry of a properly given notice of termination served by the Commonwealth or by an order of the Residential Tenancies Tribunal; neither of which was alleged by the applicant nor has occurred.

The answer to all of these points pleaded by Mr Shirvington is that the application is not a pleading and the availability of the relief sought in the application must be dealt with on the basis of the evidence in the proceedings.

b)He contests that letters sent to him by the Commonwealth’s property agents were lawful and effective notices of termination. The Commonwealth only relies on two notices which are dealt with below.

c)He 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)He says that he has incurred losses “in breach of the contract they (sic) have with the Applicant in relation to the land, and will provide particulars of losses which exceed 3 folios.” No particulars of any loss have been provided, no evidence of any loss has been adduced and no explanation has been given as to what breaches of contract or duty are referred to. In those circumstances, it is unnecessary to consider this claim any further.

e)He contends that the Commonwealth has not offered to compensate him for the costs of complying with the “eviction notices”. 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.

6.These proceedings were conducted concurrently with a number of other proceedings brought by the Commonwealth against lessees of land in the vicinity of the Premises. To a large extent, the same issues arose in each of those proceedings. I have already given judgment in one of them: Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development) v Rigney & Anor (No 3) [2015] FCCA 3133 (“Rigney”). These reasons ought to be read together with my reasons in that matter.

Jurisdictional issues

7.It is necessary first to consider the jurisdictional issues. Before doing so it is necessary to consider certain factual matters, relevant to Mr Shirvington’s case.

Facts relevant to the jurisdictional issues

8.The following facts were uncontroversial on the evidence before me:

a)the Commonwealth is the registered proprietor of the Premises;

b)Mr Shirvington has been in continual possession of the Premises for a period of 20 years or more;

c)on 6 August 2002 the Commonwealth and Mr Shirvington entered into a residential tenancy agreement in respect of the Premises (“Agreement”);

d)the term of the Agreement was one year and has now expired;

e)by letter dated 29 October 2014 the Commonwealth notified Mr Shirvington that it will likely require possession of the Premises by June 2015;

f)by letter dated 24 November 2014 the Commonwealth notified Mr Shirvington that it required possession of the properties by 15 June 2015; and

g)Mr Shirvington had not indicated at any time that he was willing to vacate the premises by that date.

Predominant use of Premises

9.For the reasons explained in Rigney at [8] – [27] it is also necessary to determine whether the predominant use of the Premises has been for the purposes of a trade, profession, business or agriculture. In short, Mr Shirvington argues that the Premises have been predominantly used for business purposes, and as such, the Tenancies Act does not apply because of s.7(h) of that Act. However, for the reasons that follow, I find that the essential factual premise of that argument has not been established and so the argument, too, must be rejected. That means that, subject to the constitutional issues, the matter falls to be determined by reference to the Tenancies Act and, in particular, s.94 of that Act.

10.Mr Shirvington gave evidence that he used the property to store a number of items including containers, site sheds, truck trailers, cranes, trucks, forklifts, sheds, prospect loads, miscellaneous loads, cars, a dozer, two loaders, tanks, excavators and caravans. Altogether, he said that there were some 487 such items on the Premises. He said that in addition there were several loads of equipment belonging to Vietnam veterans who had purchased it with the intention of moving it in due course to Lightning Ridge to prospect in the opal mining industry. In later evidence, he stated that he also had mobility scooters, bicycles, forklifts and drilling equipment as well as sheds full of workshop equipment.

11.Mr Shirvington’s evidence in this respect was not challenged and I accept that Mr Shirvington has on the Premises all of the goods to which he deposes. What is lacking from the evidence, however, is anything that might connect those goods to any type of business activity. It is possible that those goods belong to other people and that Mr Shirvington is charging the owners of the goods to store them on his property. It is also possible that Mr Shirvington is storing the goods for the purposes of selling them. There is no evidence of that. In particular, there is no evidence of any income derived from having these goods on the Premises, or otherwise any dealing with them. In the absence of books and records showing a business type activity, I find that it is most likely that the goods are being kept for Mr Shirvington’s own purposes, and that, whatever else they be, those purposes have nothing to do with a trade, profession, business, or agriculture.

Purported promise

12.Finally, it is necessary to resolve the factual issue concerning a promise apparently made on behalf of the Commonwealth to Mr Shirvington about his tenure of the Premises.

13.In his affidavit of 29 April 2015 Mr Shirvington deposes to a conversation he had with Ms Marjorie Bellero who was a real estate agent acting for the Commonwealth. He says that in that conversation she said to him:

[4]I refer to your 6 blocks Ken taken up by you and your family for leases totalling (sic) 125 acres on the Commonwealth land. Because of your investment in the area of the Badgery’s Creek land and your purchase and payment to the Commonwealth Government for the buildings and igloos and other equipment located on the land as arranged by me that the Government agrees that you have at least two years to vacate the premises if the Government should ever require the land and gives notice to vacate your leased land. The purpose of that is to enable you to pull down and remove the buildings and the equipment which you have purchased a lot of it from the Government and put to commercial use. I am also able to tell you that if the airport does not go ahead, and I do not think it will go ahead, then the Government will sell you the land and you will have first right of refusal, because you are a resident.

14.Mr Shirvington said that he replied by saying: “Thank you. I am pleased that there is recognition of my rights and family issues.”

15.Mr Shirvington then said that he relied on those words to his detriment “by continuing with the purchase and paying the Commonwealth through Ms Bellero its agent for the buildings and equipment and thereafter using and possessing the land and paying rent and occupying land in the area on that basis.”

16.He then said that the proposed termination or eviction orders would cause hardship to him and his family including the cost and expense of relocating. He said that the cost of removing the buildings and equipment “belonging to the Respondent and which it has been represented he may take with him upon termination” is at least $600,000. I will return to that evidence in due course.

17.There are a number of difficulties with this evidence. First, Mr Shirvington says nothing about the timing of the conversation with Ms Bellero. That is important because the residential tenancy agreement entered into on 6 August 2002 in respect of the Premises is clearly inconsistent with any promise made on behalf the Commonwealth that Mr Shirvington could have two years to vacate the Premises. Clause 53.2 of the Agreement provides that, in the event that the Commonwealth decides to develop the Sydney West airport that it may terminate the agreement by serving on the tenant written notice expiring six months from the date of the notice or on expiration of the term whichever is the earlier. The page on which that clause is found was signed by Mr Shirvington and he must have been aware of it. Mr Shirvington would have been unlikely to sign such an agreement if he had been promised two years to vacate.

18.Secondly, there is an internal inconsistency in Mr Shirvington’s evidence. In the first place, Mr Shirvington said that Ms Bellero made the promise on the basis that the applicant had not only purchased it but had also paid for certain buildings and igloos and other equipment located on the land (which I infer is a reference to the Premises). However, he then says that, in reliance on the statement, he continued with the purchase and payment to the Commonwealth for the buildings and equipment. If the latter were correct, Mr Shirvington could well have established the existence of a contract, a term of which was the extended period of two years to enable him to vacate the Premises. However, he does not assert any contract. That must be because, if it was made at all, the representation by Ms Bellero about vacation of the Premises occurred after the purchase of buildings, igloos and other equipment had been completed.

19.Thirdly, it strikes me as highly implausible that a real estate agent acting for the Commonwealth would make such a representation. Leaving aside the plain awkwardness of the reported speech, there is no logical reason why a real estate agent talking to a tenant in the agent’s office would start a conversation by saying “I refer to your 6 blocks Ken taken up by you and your family for leases totalling 125 acres on the Commonwealth land.” More importantly however, there is no indication of what “investment” had been made by Mr Shirvington. It was not the purchase of buildings, igloos and other equipment because Mr Shirvington says that Ms Bellero referred to the “investment” and those other matters. There is no evidence of any other possible investment except, possibly, the fact that Mr Shirvington had been living on the Premises since 1988. That would not ordinarily be considered an investment of anything other than of an emotional kind. However, that would not fit with the stated purpose of the promise: to enable sufficient time for the buildings and other items to be removed.

20.I can see no motivation whatsoever for the representation. There is no question that the Commonwealth had been planning to build an airport in the area for many years.

21.For those reasons, I do not accept Mr Shirvington’s evidence about the conversation with Ms Bellero. I do not accept that she made any representation concerning an extension of time of at least two years to vacate the premises or anything of that nature. If I had accepted Mr Shirvington’s evidence, interesting questions may have arisen about whether the reliance deposed to by Mr Shirvington would have either been made out or, if so, were sufficient to give rise to an estoppel and whether that estoppel was promissory or proprietary (see, for example, Ashton v Pratt (2015) 88 NSWLR 281; Sidhu v Van Dyke (2014) 251 CLR 505). However, in light of my findings, there is no need to explore any of those questions.

Resolution of the jurisdictional issues

22.The jurisdictional questions, including those relying on aspects of the Constitution, were the same as those argued in Rigney. The parts of the judgment in Rigney dealing with the jurisdictional questions ([58]-[116]) are to be read together with and as part of these reasons. The parties were unable to agree as to the form of the jurisdictional questions to be answered. The questions set out below were adapted from the respondent’s response and submissions, as best as could be understood. Those questions and the answers to them are as follows:

a)Was there, at the date of the Application, a matter within the meaning of Constitution Chapter III and s.5 of the FCCA Act which the Court is required to resolve?

Yes.

b)Was it beyond the power of the Parliament under the Constitution to make the 2015 Commonwealth tenancy law or the March 2015 Tenancy Instrument to confer upon this or any Chapter III court the power to resolve the alleged dispute the subject of the Application in that it impairs the separation of powers principle in the Australian Constitution?

No.

c)Was there any power under Constitution s.51 for the Parliament to make a law with respect to the land of the Respondent imposing the operation of the 2015 Commonwealth tenancy law and the March 2015 Instrument?

Yes.

d)Assuming the 2015 Commonwealth tenancy law is valid, is the March 2015 Instrument unauthorised and ultra vires?

No.

e)Is the 2015 Commonwealth tenancy law invalid by reason that it impairs the Constitutional guarantee against expropriation (sic) of property except on just terms as contained in s.51 (xxxi) of the Constitution because it is a law for the acquisition of property other than on just terms?

No.

The substantive issues

23.I turn next to the substantive issues between the parties. That requires an understanding of the power of the Court under the Tenancies Act.

The power of the Court under s.94 of the Tenancies Act

24.As I said in Rigney, the approach to this case under s.94 must be: first, to determine whether the power to make a termination order arises. That requires consideration of whether the three conditions exist on the facts of the case. Those are: first, that the tenant has been in continual possession of the same residential premises for a period of 20 years or more; second, that if the tenant occupied the premises under a fixed term agreement, the fixed term of the original agreement has expired; and third, that the Court is satisfied that it is appropriate to do so in the circumstances of the case.

25.The circumstances referred to in the third condition are, as explained in Swain v Residential Tenancies Tribunal of New South Wales (Supreme Court of New South Wales, Rolfe J, unreported, 22 March 1995), all of the matters that arise on the material before the Court including the availability of suitable alternative accommodation. Once that is considered, the second step is to consider the exercise of the discretion. As Leeming JA said in Cain v New South Wales Land and Housing Corporation (2014) 86 NSWLR 1, this may be surplus and may be no more than an affirmation of the consideration under sub-s.94(1)(c). Although there is a real discretion, it is difficult to imagine the circumstances in which it would be appropriate to make a termination order and then exercise the discretion not to make such an order.

26.I also said in Rigney, at [140]:

Once the Court decides to make a termination order it must also make an order for possession of the residential premises specifying the day on which the orders takes or took effect: s.83(1). As the minimum 90 day period specified in s.94(4) does not apply to these proceedings, there is no explicit guidance in the Tenancies Act as to the date on which possession should be ordered. In light of that, the contextual matters considered above must also be involved in the determination of the date of possession. Essentially, the determination involves a balancing of the interests of the landlord and the tenant in the circumstances of each case with some regard to the length of the tenant’s possession of the land.

Continual possession for a period of 20 years or more: sub-s.94(1)(a)

27.The parties were in agreement that Mr Shirvington was in continual possession of the Premises for a period of more than 20 years. Perhaps because of that, neither party addressed me on the meaning of “possession” or “continual possession” in the context of s.94 of the Tenancies Act. The word “possession” can have a variety of meanings in different contexts. In Tabe v The Queen (2005) 225 CLR 418 at 423 [7] Gleeson CJ noted the comment by Earl Jowitt in United States v Dollfus Mieg et Cie SA [1952] AC 582 at 605 that “the English law has never worked out a completely logical and exhaustive definition of “possession”.” It can mean actual physical possession or a right to exclusive possession equivalent to the unqualified right of a fee simple owner to exclude anyone and everyone from the land for any reason whatsoever: see Queensland v Congoo (2015) 89 ALJR 538 at 544 [11] (French CJ and Keane J). As the matter was not argued and there was no dispute about the result, there is no need for me to make a determination about the precise meaning of “possession” in these proceedings.

28.Mr Shirvington gave evidence that he had exclusively occupied the Premises since approximately 1988. That is not quite accurate because he also said that his daughter Simone Fogarty resides on a house on one of the blocks on the Premises with her husband and two children. It appears, however, that the occupation by Mr Shirvington’s daughter and her family is temporary. He says that her family has purchased a block outside of Sydney and has started the process of building but that it takes time due to Council regulations and planning. Thus, Mr Shirvington’s daughter and her family are on the Premises with his consent and for a limited and specific purpose which does not exclude any right of Mr Shirvington’s to the Premises. On that basis, although Mr Shirvington does not reside in part of the Premises, I find that he has been in possession of them (in either of the senses referred to above) for well over 20 years.

If the tenant occupied the premises under a fixed term agreement, the fixed term of the original agreement has expired: sub-s.94(1)(b)

29.The term of the residential tenancy agreement between the parties was 52 weeks beginning on 6 August 2002. The original term of the lease expired on 5 August 2003. On that basis, I am satisfied that the fixed term of the original agreement has expired.

The Court is satisfied that it is appropriate to do so in circumstances of the case: sub-s.94(1)(c)

30.In this respect I first consider the circumstances of the Commonwealth. The evidence of those circumstances was the same in these proceedings as in Rigney and make the same findings of fact which are set out here for the sake of convenience.

The first steps towards construction of an airport

31.In the late 1980s and 1990s the Commonwealth undertook a land acquisition program in the Badgerys Creek area to acquire and reserve the land needed for an airport in Western Sydney. The acquisition program resulted in the acquisition by the Commonwealth of a large number of individual titles in the suburbs of Badgerys Creek, Luddenham and Greendale.

32.A 2012 Joint Study on aviation capacity in the Sydney region, commissioned jointly by the Commonwealth and NSW governments, identified that the demand for passenger journeys in the Sydney region was forecast to more than double over the next 20 years and to double again by 2060.

33.On 15 April 2014, in a joint release with the then Prime Minister Tony Abbott, the Minister for Infrastructure and Regional Development, Warren Truss, announced that this site for Western Sydney’s new airport would be Badgerys Creek. He announced that, although the airport would not be fully operational for a decade, planning for the new airport would start immediately and construction should start in 2016. He also said that because of the time it takes to plan and build an airport, the Government’s approach would be to build the roads first and the airport second. It was envisaged that most of the cost of the airport would be met by a private sector operator.

34.The evidence in respect of the development of the site for the airport was given on behalf the Commonwealth by Peter Robertson, a General Manager at the Department of Infrastructure and Regional Development (“Department”). He is one of three Senior Executive Service staff members managing the proposed Badgerys Creek airport project and has been engaged on it since the establishment of the Western Sydney unit which is tasked with the management of the proposed airport. Mr Robertson is responsible for management of policy development for the project and project timeframes.

35.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.

36.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.

37.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 Premises are 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.

38.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’s 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.”

39.Mr Robertson described the process for assessing residential tenant blocks as being “administratively onerous” and taking considerable time, effort and cost to implement. The steps usually followed in that respect were:

a)Identify sites for access: contracted specialists would identify access requirements for all specialist investigations on the site and then submit a request for access to the Department. That request would then be reviewed by the Department in consultation with the property manager. Alternative access options would be identified should there be tenancy considerations.

b)Seek consent from tenants: once the final list of survey sites was determined then the Department would liaise with existing tenants by way of letters prepared by lawyers and follow-up telephone calls.

c)Where tenants refuse access: a new survey site would need to be identified in accordance with the previous steps.

d)Finalise access to sites: when tenants are notified and consent is received the lists of sites for access is finalised, mapped and sent to contracted specialists to be given to the survey team.

e)Access to sites on the day of investigations.

40.Mr Robertson explained that the constant requirement to seek consent had implications for the achievement of the projects timeframes and generates substantial costs.

41.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.

42.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.

43.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.

44.Mr Robertson gave evidence that demolition of an initial ten vacant premises commenced from December 2014 and that the Department had also established a panel of demolition firms to carry out the next stage of demolition at Badgerys Creek. Those demolitions commenced in March 2015. Since that time, contractors have completed the demolition of an additional 24 properties and 11 further properties had been allocated to demolition to be completed before 30 June 2015. This would leave the bulk of the demolition to take place after June 2015 when it was expected that the majority of the premises would be vacated.

45.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.

46.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.

47.Mr Robertson was cross-examined by counsel for the respondent. 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

48.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.

49.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.

50.As Badgerys Creek is located approximately 56 kilometres from the Sydney GPO the Right of First Refusal in the airport sale contract were applicable.

51.Mr Robertson explained that whilst consultation was currently underway and a final decision on the airport proposal had not been made, a clear site was necessary to allow for investigations of the site to inform any proposal that could be made to the Sydney Airport Group, or the market, or to be carried out by the government itself. He said that essential to such proposal was the outcome of the Environmental Impact Assessment process, geotechnical and engineering investigations, archaeological surveys, and other site interrogations. In his opinion, restricted access to the site due to tenants being in possession of individual properties limits this process in many practical ways.

The circumstances affecting Mr Shirvington

52.Apart from the security, safety and convenience issues that arise, according to the evidence of Mr Robertson, in relation to the whole site, there are four matters that relevantly affect Mr Shirvington’s interests. They are:

i)the length of Mr Shirvington’s occupation of the property;

ii)the terms of the residential tenancy agreement between the Mr Shirvington and the Commonwealth;

iii)the process which the Commonwealth has undertaken to obtain vacant possession of the property. That process includes the notice of proposed development of the site for the airport, notice of the proposed termination of the Agreement, and any assistance given by the Commonwealth to Mr Shirvington in relation to moving from the Premises; and

iv)the availability of suitable alternative accommodation.

53.The first matter is that Mr Shirvington has been in continual possession of the property for over 20 years.

54.The second matter arises from the fact that the additional terms in the residential tenancy agreement referred to the proposed airport site. Clause 53 provided:

Proposed Airport Site

53.1The tenant acknowledges that the premises form part of the proposed site for Sydney West Airport.

53.2In the event that the Commonwealth of Australia decides to develop the Sydney West Airport 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 term (whichever is the earlier).

53.3The tenant shall not be entitled to any payment or compensation from the landlord arising from such termination.

53.4A termination of the Agreement under clause 53.2 shall not affect an existing right or obligation accrued or incurred by a party under this Agreement or otherwise at law or in equity.

55.Those provisions are, as I have found, subject to the operation of the Tenancies Act. If I had accepted Mr Shirvington’s submissions that the Tenancies Act did not apply, his tenancy would arguably already have been terminated by operation of cl.53.2. 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 August 2002, Mr Shirvington was aware of the possibility that the site may be developed for the purposes of the airport.

56.By letter dated 29 October 2014 from the firm managing the property on the site, the Commonwealth informed him 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.

…

57.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.

…

58.The Commonwealth’s property managers sent a further letter dated 24 November 2014 to Mr Shirvington. 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.

…

59.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 Mr Shirvington at all to vacate the Premises 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.

…

60.These statements are also misleading to the extent that they suggest that the right of Mr Shirvington 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 Mr Shirvington would have no option but to vacate by June 2015.

61.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.

62.It is not clear whether Mr Shirvington was directly provided with this assistance but it may be accepted that it was at least available to him.

Availability of alternative accommodation

63.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.

64.Mr Azar gave evidence about the availability of a number of different properties referable to the Premises: first, a number of properties consisting of vacant rural land and, secondly, a number of properties that included dwellings similar to that on the Premises.

65.In response to Mr Azar’s evidence, Mr Shirvington relied upon evidence given by his daughter, Simone Fogarty, as well as evidence of a registered real estate valuer, Lopco Neskovski, and a document prepared by a Ms Leanne Uren who lives on one of the properties in the Badgerys Creek area.

66.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.

67.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 a number of documents sourced from the NSW Department of Family and Community Services. However, as Mr Shirvington has given no evidence about his financial means, this has no significance to these proceedings.

68.On the other hand Ms Fogarty does make a number of reasonable points to which I will return in due course.

69.The document prepared by Ms Uren shows that the properties used by Mr Azar as comparable to some of the other tenants’ properties were, as at the date of the hearing, no longer available for lease. 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 Mr Shirvington’s property and I leave them to one side.

70.In his report dated 5 August 2015, Mr Neskovski made a number of preliminary points on the basis of his local experience. First, most rural property is held for owner occupied lifestyle purposes particularly the larger rural (10 hectares to 40 hectares) properties which means that there is a scarce supply available for rental. Secondly, there is an impact on the market demand caused by the number of residents required to relocate with livestock and thus diminish further the availability of large of properties. Finally, rentals have dramatically increased over the last 12 to 24 months with a surge in the last six months.

71.Mr Neskovski then made some observations relevant to these proceedings before giving evidence about suitable sites for adjustment. 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 Mr Shirvington which will require the equivalent of twenty-three, 2 hectare parcels.

72.Next, Mr Neskovski said that he had analysed the rentals that had occurred throughout early 2015 to mid-2015, making allowances for the purposes of comparison with individual properties bearing in mind:

i)location;

ii)views and outlook;

iii)dates of rental;

iv)land area;

v)topography;

vi)fencing and dams;

vii)style construction and accommodation provided by the delegate dwelling houses on each rental property; and

viii)market movements, including increases.

73.Importantly, Mr Neskovski said that in considering availability of suitable premises available in the market for relocation he specifically looked at and considered rental premises that were listed for rent in the last three months. He explained that that adequately took into account rental property increases as a result of diminishing supply and heavy competition by tenants being forced to relocate from the Badgerys Creek airport precinct. This competition was one of the matters referred to by Ms Fogarty in her evidence and I will return to it in due course.

74.Mr Neskovski then set out properties that he said were available in the period from May to end July 2015. The first was land available for agistment, the other properties were for human accommodation and were divided into groups according to age and size. Those relevant to Mr Shirvington were older houses on rural/residential sized blocks of 4000 metres² to 2 hectares. A number of properties were available in this bracket at a rental between $430 and $850 per week.

75.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.

76.As I said in Rigney, 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 house on a residential sized block of land (say, up to 0.5 acres). 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. Nor does it require an order that ensures that the tenant is able to live in near identical circumstances as those to which he or she has become accustomed.

77.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.

78.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 Mr Shirvington. That is hardly surprising, given that his tenancy was always subject to the possibility of there being an airport built on the property. There are three other factors, however, that are more important in that respect. First, Mr Shirvington has given no evidence about his financial means; secondly, Mr Shirvington does not live on the Premises; and thirdly, although Ms Fogarty, who does live on the Premises, gave evidence in the proceedings, she did not give any evidence about the personal circumstances of her and her family that might assist in determining the balance to be struck between the interests of the Commonwealth and Mr Shirvington.

79.Although both Ms Fogarty and Mr Neskovski assert that the market has been impacted by the large number of people relocating from the Badgerys Creek area, there is no real evidence to support those assertions. There is not, for example, a comparison of available properties at the same period this time last year before tenants started to vacate the site after notice having been given by the Commonwealth. In light of that, I give this assertion little weight.

80.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

81.This matter is relatively straightforward. Mr Shirvington is the tenant of the Premises who resists the order sought by the Commonwealth; however, he does not live on the Premises. Even if he intended, one day, to return to live on the Premises, there is no indication in the evidence of when that might be. On the other hand, the Commonwealth has established a very real need for termination of the residential tenancy agreement and for vacant possession. Its need is part of the public need for a second major Sydney airport. Contrary to the suggestion by Mr Shirvington’s counsel, the Commonwealth has undertaken considerable work towards that end, work which can only be continued safely and efficiently if the tenants on the land in question are no longer there.

82.I have given some weight to the interests of members of Mr Shirvington’s family who do reside on the Premises. They are there because they are building a home on land they already own. In the absence of any more concrete evidence about that, however, I do not give this matter much weight. They will need some time to leave the Premises, but have not shown any particular matter that will require an extended period to do so.

83.Mr Shirvington has a large amount of personal property on the land in the form of cars, trucks and other types of machinery. He will need some time to move it but has been on notice of the need to do so for over a year. He estimated in his evidence that it would cost over $600,000 to move this property. However, he gave no basis for that estimate and I give it no weight. In any event, even if I were to accept the evidence, it would make little difference in outcome. First, Mr Shirvington has stored this property in full knowledge of the possibility that he would have to move it; and secondly, there is no evidence of Mr Shirvington’s financial means.

84.In those circumstances, I consider that it is appropriate that the Agreement be terminated and that there be an order for vacant possession which is to take effect 60 days from the date of judgment.

85.I therefore order:

(1)The residential tenancy agreement between the applicant and the respondent in relation to the properties situated at;

a)1962-1970 The Northern Road Luddenham, NSW 2745;

b)2035-2045 The Northern Road Luddenham, NSW 2745;

c)2055 The Northern Road Luddenham, NSW 2745;

d)80 Anton Road Luddenham, NSW 2745; and

e)90 Anton Road Luddenham, NSW 2745

comprising part of folio identifier Lot 1 DP 838361, be terminated forthwith.

(2)Vacant possession of the Premises be given to the applicant on or before 18 December 2015.

(3)The order for vacant possession be suspended until 9 February 2016.

I certify that the preceding eighty-five (85) paragraphs are a true copy of the reasons for judgment of Judge Smith

Associate: 

Date:     11 December 2015