Commonwealth of Australia (As Represented BY the Department of Infrastructure and Regional Development) v Watkins
[2015] FCCA 3399
•21 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) v WATKINS & ANOR | [2015] FCCA 3399 |
| Catchwords: ADMINISTRATIVE LAW – Commonwealth tenancy dispute – termination of a periodic tenancy agreement under s.85 of the Residential Tenancies Act 2010 (NSW) – respondents in possession of the premises for less than 20 years – whether termination of the tenancy agreement is granted – original tenancy agreement expired – respondents notified of termination – predominant use of premises – termination of tenancy agreement granted – order for vacant possession suspended. |
| Legislation: Federal Circuit Court of Australia Act 1999 (Cth) s.10AA |
| Barry Leonard Frost & Ors v Commonwealth of Australia (As Represented By The Department Of Infrastructure And Regional Development) [2015] FCCA 3386. Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Odzic & Anor [2015] FCCA 3363 Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Rigney & Anor (No.3) [2015] FCCA 3133 |
| Applicant: | COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
| First Respondent: | LORRAINE WATKINS |
| Second Respondent: | NIKKI ALLEN |
| File Number: | SYG 1803 of 2015 |
| Judgment of: | Judge Smith |
| Hearing dates: | 18 & 19 November 2015 |
| Date of Last Submission: | 14 December 2015 |
| Delivered at: | Sydney |
| Delivered on: | 21 December 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr J. Doyle, Mr D.W. Rayment & Ms A. Mitchelmore |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the First Respondent: | Mr P. King |
ORDERS
The residential tenancy agreement in relation to the premises at 404721, 195 Longleys Road (Formerly Lot 55), Badgerys Creek NSW 2555 (“Premises”), comprising part of folio identifier Lot 1 DP 838361 be terminated with immediate effect.
Vacant possession of the Premises be given to the Applicant on or before 28 December 2015.
The order for vacant possession be suspended until 8 February 2016.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1803 of 2015
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
Applicant
And
| LORRAINE WATKINS |
First Respondent
| NIKKI ALLEN |
Second Respondent
REASONS FOR JUDGMENT
Ms Watkins has occupied the land situated at 404721, 195 Longleys Road (Formerly Lot 55), Badgerys Creek NSW 2555 (“Premises”) since July 1998 as a tenant of the Commonwealth. The Premises are part of a larger area of land which the Commonwealth proposes to develop for the purposes of an airport.
On 26 November 2014 the Commonwealth gave Ms Watkins a notice of termination of the residential tenancy agreement in respect of the Premises specifying 15 June 2015 as both the date of termination and the day on which vacant possession of the Premises was to be given. Ms Watkins did not vacate the Premises by that date and the Commonwealth now seeks orders terminating the residential tenancy agreement and for vacant possession.
Ms Watkins opposes the orders sought by the Commonwealth on a number of bases. The first is that the law relied upon by the Commonwealth for the determination of the dispute between the parties does not apply because the Premises are predominantly used for non-residential purposes. The second is that the Court does not have jurisdiction to make the orders because the legislation purporting to grant the Court jurisdiction is unconstitutional. Thirdly, the determination of the law to be applied by the Court was beyond the power granted by the relevant statute. Fourthly, the Court should refuse to exercise its jurisdiction to terminate the agreement as a matter of discretion.
Ms Watkins also gave evidence that her son, David, who is 20 years old, lives with her on the Premises and that she had granted him a right of occupation by way of sub lease. However, that does not make David a tenant or co-tenant within the meaning of the Residential Tenancies Act 2010 (NSW) (“Tenancies Act”). He is not a party to any residential tenancy agreement and has no “right to occupy residential premises under a residential tenancy agreement”, is not a person “to whom such right passes by transfer or operation of the law”, and is not a sub-tenant of Ms Watkins: see Tenancies Act s.3. In order to grant a sub-lease of residential premises, there must be prior written consent of the landlord: Tenancies Act s.74. Even if oral consent was sufficient in spite of that requirement, there is no evidence of such consent in this case. It may be questioned in any event whether one tenant can grant a sub-lease without the consent of the other tenant.
In her response, Ms Watkins also raised a number of other points that can be dealt with briefly:
a)She makes two pleading points:
i)the applicant has failed to allege properly or at all and/or to particularise any right to possession of the lands the subject of the claim, and has failed to allege any lease, the relevant terms thereof, or the service of any notice to quit upon the respondent according to law; and
ii)the applicant has failed to allege what right if any it has under the Tenancies Act or to make a claim reliant on the terms of the said Act.
The answer to these points 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 one notice. It is dealt with below.
There have been a number of proceedings brought by the Commonwealth against tenants and other occupiers of land in the vicinity of the Premises. The majority of those proceedings have fallen into two groups by reference to the length of time during which the tenants had been in possession of the land, namely, those who had been in possession for 20 years or more and those who had been in possession of the land for less than 20 years. Judgment has already been handed down in all of the first group of cases: see, for example, Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Rigney & Anor (No.3) [2015] FCCA 3133 (“Rigney”). These proceedings belong to the second group, most of the proceedings in which were heard concurrently. Judgment in each of the matters heard concurrently has been handed down at the same time as judgment in this matter. I note that judgment in these matters was reserved before I handed down judgment in Rigney.
In one of the matters handed down at the same time as this judgment, I explained in some detail the relevant statutory scheme: see Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Odzic & Anor [2015] FCCA 3363 (“Odzic”) at [7] – [19]. There is no need to repeat that explanation here. The judgment in that matter ought to be read together with my reasons in this matter.
In spite of the differences between the two groups of proceedings, similar issues arose in both groups. For example, similar challenges were made in both groups of proceedings to the jurisdiction of this Court. Those challenges were dealt with extensively in the reasons for judgment in Rigney. For that reason, these reasons ought to be read together with my reasons in that matter.
Ms Watkins was also one of five people who purported to bring proceedings against the Commonwealth as “representatives of all Commonwealth tenants at Badgerys Creek who have occupied the land for a period less than 20 years.” Those proceedings were heard concurrently with these proceedings. I have dealt with those proceedings in a separate judgment delivered at the same time as this judgment: Barry Leonard Frost & Ors v Commonwealth of Australia (As Represented By The Department Of Infrastructure And Regional Development) [2015] FCCA 3386.
Before turning to the jurisdictional issues, it is necessary to deal with a number of factual issues.
Questions of fact relevant to the jurisdictional issues
I find the following facts, noting that, to the extent that any of them is controversial, my reasons for making the finding are set out further below:
a)the Commonwealth is the registered proprietor of the land comprised in folio identifier 1/838361 (“airport site”);
b)the Premises form part of the airport site;
c)the respondents first occupied the Premises in April 2008 and Ms Watkins continues to occupy the Premises;
d)on 14 April 2008 the parties entered into a residential tenancy agreement (“Agreement”) in respect of the Premises;
e)the term of the Agreement was 13 weeks from 8 April 2008 and expired on 18 July 2008;
f)the respondents have been in continual possession of the Premises for less than 20 years;
g)the Premises are not predominantly used for non-residential purposes;
h)by letter dated 29 October 2014 the Commonwealth notified Ms Watkins that it will likely require her to vacate the Premises by June 2015;
i)on 26 November 2014, the Commonwealth served a notice of termination of the Agreement on Ms Watkins;
j)the notice of termination stipulated 15 June 2015 as the day on which the Agreement terminated and by which Ms Watkins was required to give vacant possession of the Premises to the Commonwealth; and
k)Ms Watkins has not indicated that she is willing to vacate the Premises by that date and has remained in possession of the Premises.
The finding at [11](g) above deals with Ms Watkins’s first contention set out at [3] above. The relevance of that contention was explained in my judgment in Rigney at [8]-[23]. Briefly, the argument is as follows: first, the Tenancies Act does not apply to land that is predominantly used for agricultural purposes: s.7(h); secondly, the land which is the subject of these proceedings is predominantly used for agricultural purposes; thirdly, in the premises, the Court does not have jurisdiction in respect of the land.
The conclusion does not follow from the premises. As I explained in Rigney at [16], the only consequence of any conclusion that land is not governed by the Tenancies Act is that the Court must apply the common law to the dispute between the parties. In any event, the issue can be decided by reference to the second premise, namely the predominant use of the Premises.
Ms Watkins’ gave evidence that, when she negotiated the Agreement with the agent for the Commonwealth, she told the agent that the “predominant use of the premises is for grazing and rearing my horses.” That evidence was admitted only to establish what was said rather than the truth of it. I doubt that Ms Watkins said that to the agent. I accept that she probably discussed her intention to have horses on the land, but it seems remarkably convenient that she used terms 7 years ago that reflect the provisions of the Tenancies Act. If she was aware of those terms, which I doubt, it raises the question of why she would want a residential tenancy agreement that allowed for horses rather than an agricultural lease that allowed for tenancy by humans. I find that she fabricated this evidence. In any event, it does not prove anything. What is said about the intended use of premises does not establish the actual use to which those premises are eventually put.
As to actual use, Ms Watkins says that she has horses on the Premises and has twelve pure bred cattle dogs which she uses to breed for sale. She says that she also sells horses. She says on the other hand that horses are an essential part of the Agreement because David loves horses and being around horses and agriculture is an important part of his rehabilitation, lifestyle and care. Although there is some tension between David’s love for horses and Ms Watkins’ evidence that she sells horses, I accept that the two can co-exist and do in this case.
I accept that breeding puppies and keeping horses for sale might constitute an agricultural or business activity. However, even if it does, in the absence of any details of the size or scale of that activity I cannot be satisfied that the use of the Premises is predominantly for that purpose. By contrast, the Premises have always been used by Ms Watkins and her son for residential purposes, as did the second respondent when she lived there. For those reasons, I conclude that the Premises are not predominantly used for agricultural or business purposes. Accordingly, subject to the remaining jurisdictional arguments, the law to be applied in resolution of these proceedings is the Tenancies Act.
Jurisdictional issues
The arguments raised in this case were the same as those argued in Odzic and are rejected for the reasons I gave there are at [40] – [44].
Consideration of substantive issues
In light of the statutory scheme outlined in Odzic, the first step in the resolution of these proceedings is to determine whether the duty to make a termination order arises. In essence, that requires consideration of whether a notice of termination has been given in terms required by the Tenancies Act and whether the respondents have vacated the property as required by the notice. The second step is to determine what the appropriate date is for vacant possession to be given. This involves some balancing of the parties’ interests. Part of this consideration could also involve the application of s.114 of the Tenancies Act to suspend the date of the order for vacant possession.
It is necessary, then, to turn to each relevant consideration.
Notice of termination
The term of the Agreement was 13 weeks from 8 April 2008 and it expired on 18 July 2008.
Another term of the Agreement was that at the end of that term the tenant could stay in the residential premises at the same or increased rent but otherwise under the same terms unless or until the agreement was ended in accordance with the Residential Tenancies Act 1987 (NSW). In other words, at the end of the term, the agreement continued as it had before but without any fixed term.
For that reason, it was a “periodic agreement” within the meaning of the Tenancies Act, at least from the commencement of the Tenancies Act in 2011: s.3. Further, the effect of s.18 of the Tenancies Act is that a fixed term agreement that continues after the day on which the fixed term ends, continues to apply as if the term of the agreement were replaced by a periodic agreement.
As Ms Watkins and Ms Allen have not been in continual possession of the property for 20 years or more, s.85 of the Tenancies Act applied to the termination of the agreement by the Commonwealth.
A termination notice under the Tenancies Act must set out the following matters: first, the residential premises concerned; secondly, the day on which the residential tenancy agreement is terminated by which vacant possession of the premises is to be given; thirdly, if the notice is not given under ss.84, 85, 96 or 97, the ground for the notice; and fourthly, any other matters prescribed by the regulations, in this case the Residential Tenancy Regulations 2010 (NSW). The termination notice must be in writing and be signed by the party giving the notice or the party’s agent and a termination notice for a periodic agreement may specify a day other than the last day of the period for the payment of rent as the termination date: s.82.
The notice of termination in this case was dated 24 November 2014 and given by delivering personally to Ms Watkins at the Premises on 26 November 2014. It correctly identified the property, set out the day on which the agreement was to be terminated (15 June 2015) and the date on which vacant possession of the premises was to be given, being the same date as the date of termination. It was in writing and signed by an agent for the Commonwealth. There were no relevant regulations.
In those circumstances I am satisfied that a notice of termination was given in accordance with the requirements of the Tenancies Act.
Have the respondents vacated the premises as required by the notice?
Ms Watkins’ evidence was that she is still living on the Premises.
For those reasons, the matters in sub-s.85(3) of the Tenancies Act have been established and the residential tenancies agreement between the parties must be terminated.
The appropriate date on which vacant possession is to be given to the landlord
In considering this issue, it is convenient to deal first with the Commonwealth’s case before turning to the individual circumstances of Ms Watkins. Apart from the fact that she is no longer living on the Premises, there is no evidence concerning Ms Allen’s circumstances.
The evidence in this matter concerning the circumstances relied on by the Commonwealth was the same as in each of the matters heard concurrently. I set out the effect of that evidence and my findings in Odzic at [59] – [81]. They form part of my reasons in this case but need only be summarised here as follows:
a)the development of a further airport in Sydney is of the general importance for both the economic and social wellbeing of Western Sydney, if not this country;
b)significant time, effort and money has already been put into preparation of the site for the future development of the airport and the continued presence of tenants on the airport site is to increase the amount of costs likely to be incurred by the Commonwealth in that development;
c)the safety of individual tenants will decrease as more and more tenants vacate the site; and
d)Ms Watkins has been on notice since at least the beginning of the current residential tenancy agreement of the possibility of the use of the land in Badgerys Creek as an airport and the consequent need for her to give vacant possession to the Commonwealth for that purpose. That awareness was heightened by correspondence in October 2014 from the agents for the Commonwealth and put beyond doubt by the notice of termination served in November 2014.
Apart from the matters I have already dealt with, Ms Watkins relies on a number of matters in support of the argument that the Court should refuse the Commonwealth’s argument.
First, she argues that the power to make a termination order under s.85 is discretionary. That argument is rejected for the reasons I gave in Odzic at [82] – [84]. For that reason, I have considered Ms Watkin’s remaining arguments (as outlined below) on the basis that they might inform the question of the appropriate date by which vacant possession of the Premises ought to be given to the Commonwealth:
a)The proposed termination and/or eviction will cause hardship to the Respondents;
There is no direct evidence of any hardship that might be caused to the respondents by an order requiring vacant possession to be given by a particular date. There are a number of animals on the Premises that will need to be moved and David, Ms Watkins’ son, has some form of disability, though its nature and extent are not disclosed in the evidence. Ms Watkins says that she is attempting to move to the Hunter Valley where her elderly parents live but has not been able to follow up any leads. I accept that all of these matters impact on Ms Watkins and her son but do not accept that they will cause particular hardship. More importantly, as I have said, none of them assists, to any great extent, in identifying the appropriate date by which vacant possession ought to be given. Ms Watkins’ plan to move to the Hunter Valley might take a little time to come to fruition, but she has not given any details of the leads she refers to or why she has been unable to follow them up.
b)The cost of moving and finding alternative premises is $20,000 including the purchase of containers and building kennels and stables;
There is no evidence to support this claim.
c)David John Allen is very unwell and is infirm and the Orders sought will adversely affect the health and livelihood of myself and David;
There is no evidence to support this claim. I accept that David has some form of disability but there is no evidence to indicate what it is and whether it might be affected by moving to different premises at some time in the immediate future. That said, I have made some allowance for it in determining whether, and for how long any order should be suspended.
d)Having regard to the length of occupation of the lands in question and the property of the Respondents the period for vacating the lands is insufficient and unduly short;
Ms Watkins has been on notice of the need to vacate for over a year. There is nothing beyond mere assertion to suggest that that is inadequate time to prepare to vacate. Ms Watkins’ evidence is that she had a litter of puppies that were not old enough to be moved until the end of June 2015. That date has long passed and there is no evidence of any other matter that might require further time within which to relocate.
e)There is no urgency for the Applicant to evict the Respondent because the Applicant within the last 10 years has given a 99 year right of refusal to open or use Badgerys Creek as a commercial airport in the Sydney Metropolitan region to Macquarie Airports the lessee and user of Kingsford Smith Airport a commercial airport within the Sydney Metropolitan region, and Macquarie Airports has no commercial use nor requirement nor interest nor plan to operate or use Badgerys Creek as an airport at any time in the foreseeable future including the next 30 years;
Ms Watkins also raised a similar claim, namely, that there was no pending commercial requirement for the orders for termination for over 12 years. I dealt with and rejected the same arguments in Odzic at [95] – [101]. In brief, the evidence does not support the claim.
f)There is no suitable or available alternative similar leaseholds in the region of Badgerys Creek or Luddenham for the Respondents to rent or occupy on the same or similar terms;
This is one of the generic claims made on behalf of the tenants in the proceedings heard concurrently with this matter. In light of Ms Watkins’ stated plan to move to the Hunter Valley, it has no relevance to her.
In each of the proceedings there was a folder of material in evidence (Exhibit E) that included some documents relevant to the availability of accommodation in the Greater Western Sydney region. For the reasons just given, this evidence does not relate to Ms Watkins’ circumstances. In any event, the material in the folder does not establish that there is no suitable alternative accommodation available for rent within a reasonable period.
g)The Applicant has offered to the Respondent no compensation for the loss of the Respondents’ property affixed to the land or otherwise and for the costs of complying with the eviction notices.
No basis was given in evidence or submissions for any right to compensation and, in any event, it is difficult to understand how such a right might affect the determination of an appropriate date by which vacant possession of the Premises must be given. That is particularly so in the absence of any evidence about Ms Watkins’s financial means, beyond the fact that her source of income is the pension and the sale of dogs and horses.
h)As there was an express provision in the Agreement in relation to termination, the rights of the parties are governed by that clause
I dealt with and rejected this, and a similar argument in Odzic at [106] – [109]. The argument is rejected in these proceedings for the same reasons. In doing so, I note that the express provision in the Agreement was sufficiently similar to the one referred to in Odzic.
h)Because the termination notice was served before the introduction of s.10AA into the FCCA [Federal Circuit Court of Australia Act 1999 (Cth)], it was not effective for the purposes of the Commonwealth law
I dealt with and rejected this argument in Odzic at [110] – [111]. The argument is rejected in these proceedings for the same reasons.
In my view, Ms Watkins has given no substantial basis for opposing the orders sought by the Commonwealth.
Conclusion
In light of the circumstances relied on by the Commonwealth as summarised above and the fact that Ms Watkins has put forward nothing of any substance in opposition to the orders sought, I am satisfied that the appropriate date on which Ms Watkins is to give vacant possession of the Premises is 28 December 2015, but that the order for vacant possession should be suspended until 8 February 2016. In fixing that date, I have taken into account the time of year, even though that was not addressed by either of the parties. I have also taken into account the disability of Ms Watkins’ son, David.
The Commonwealth sought orders for the issue of warrants for possession. In my view, the basis on which it sought those orders was unclear. The Tenancies Act makes provision for the issue of warrants (s.121) and, if it is necessary to do so, there is nothing preventing the Commonwealth from making use of those provisions.
For those reasons, I make the following orders:
a)The residential tenancy agreement in relation to the premises at 404721, 195 Longleys Road (Formerly Lot 55), Badgerys Creek NSW 2555 (“Premises”), comprising part of folio identifier Lot 1 DP 838361 be terminated with immediate effect.
b)Vacant possession of the Premises be given to the Applicant on or before 28 December 2015.
c)The order for vacant possession be suspended until 8 February 2016.
I certify that the preceding thirty-six (36) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 21 December 2015
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