Commonwealth of Australia v Frost
[2015] FCCA 3397
•21 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COMMONWEALTH OF AUSTRALIA v FROST | [2015] FCCA 3397 |
| Catchwords: ADMINISTRATIVE LAW – Commonwealth tenancy dispute – termination of a periodic tenancy agreement under s.85 of the Residential Tenancies Act 2010 (NSW) – respondent in possession of the premises for less than 20 years – whether termination of the tenancy agreement is granted – original tenancy agreement expired – respondent notified of termination – predominant use of premises – whether other residents were co-tenants – termination of tenancy agreement granted – order for vacant possession suspended. |
| Legislation: Evidence Act 1995 (Cth), s.70 |
| 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 Frost & Ors v Commonwealth of Australia (As Represented by the Department of Infrastructure and Regional Development [2015] FCCA 3386 |
| Applicant: | COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
| Respondent: | BARRY FROST |
| File Number: | SYG 1797 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 Respondent: | Mr P. King |
ORDERS
The residential tenancy agreement in relation to the premises at 745 (formerly Lot 2) Badgerys Creek Road, Badgerys Creek NSW 2555 comprising part of folio identifier Lot 1 DP 838361 (“Premises”) 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 25 January 2016.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 1797 of 2015
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
Applicant
And
| BARRY FROST |
Respondent
REASONS FOR JUDGMENT
Mr Frost lives on the land situated at 745 (formerly Lot 2) Badgerys Creek Road, Badgerys Creek NSW 2555 (“Premises”) 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 Mr Frost 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. Mr Frost did not vacate the Premises by that date and the Commonwealth now seeks orders terminating the residential tenancy agreement and for vacant possession.
Mr Frost did not file a response in these proceedings. I have gleaned from his evidence and submissions that he 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, he says that the determination of the law to be applied by the Court was beyond the power granted by the relevant statute. Fourthly, he submits the Court should refuse to exercise its jurisdiction to terminate the agreement as a matter of discretion.
Mr Frost also contends that the Notice of Termination relied on by the Commonwealth was neither served on him nor effective for the purposes of these proceedings. The first notice of these contentions was given in lengthy and somewhat discursive written submissions in reply filed well after the hearing. In spite of that, I will deal with them both later in these reasons.
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 and the matters heard concurrently with it.
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.
Mr Frost 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: 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 are 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)Mr Frost has occupied the Premises since June 2008;
d)on 4 June 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 4 June 2008 and expired on 3 September 2008;
f)the respondent has 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 Mr Frost that it will likely require him to vacate the Premises by June 2015;
i)on 26 November 2014, the Commonwealth served a Notice of Termination of the Agreement on Mr Frost;
j)the Notice of Termination stipulated 15 June 2015 as the day on which the Agreement terminated and by which Mr Frost was required to give vacant possession of the Premises to the Commonwealth; and
k)Mr Frost had not indicated that he was willing to vacate the Premises by that date and has remained in possession of the Premises.
Commencement of Mr Frost’s possession
There was some tension in the evidence about the date on which Mr Frost entered into possession of the Premises. His evidence was that it was in 2001. That was supported to some extent by evidence from Andrew Ramsay, who lives with Mr Frost, that he had lived on the Premises for 12 years. On the other hand, Mr Frost said that he had only entered into one residential tenancy agreement in 2001. He annexed the first page of that agreement to his affidavit. While that document does not state expressly the date on which it was made, the term of the agreement is said to commence on 4 June 2008. Given that, I conclude that Mr Frost in fact first occupied the Premises in or around June 2008. However, it does not really matter for the purposes of these proceedings whether Mr Frost first occupied the Premises in 2001 or 2008. What is important is that he has not been in possession of the Premises on any version of the evidence for 20 years.
Predominant use of Premises
The finding at [10](g) above deals with Mr Frost’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; and, thirdly, in those circumstances, 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.
Mr Frost’s evidence relevant to this issue was that the land has an area of 16 acres, the house on it being fenced off from the balance and taking up approximately half an acre. He says that he keeps up to 12 ponies on the Premises, although he only currently has 9. The ponies are used for kids rides at shows from which he makes money.
The Premises are also used as for residential purposes for Mr Frost, Mr Ramsay and Mr Ramsay’s son Tyrone. Tyrone is 16 and has just completed year 11 at Cecil Hills High School.
I accept that keeping show ride ponies might constitute a business or agricultural activity. However, I am not satisfied that the use of the Premises is predominantly for that purpose. Firstly, the ponies are only kept on the Premises, no doubt for grazing and other care necessary for their health and maintenance, but not for use in the course of any business. By contrast, the Premises are used by Mr Frost, Mr Ramsay and Tyrone as their home, that is, for residential purposes. 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.
Service of Notice of Termination
The issue of fact dealt with at [10](i) was, as I have mentioned, contested in Mr Frost’s written submissions. Although Mr Frost did not deny receipt of the Notice of Termination in his evidence, his contention is, essentially, that service of the notices was not proved. Instead, it is argued, the Commonwealth has only established service of an envelope. I reject that contention.
First, Kylie Blackwood, an agent for the Commonwealth, gave evidence that Mark Slater, a licensed process server, served the respondent with a termination notice dated 24 November 2015 on 26 November 2015. That evidence was not objected to and she was not cross-examined on it.
Secondly, Mr Slater swore an affidavit that he was given a number of envelopes by Vivienne Li and Joe Khayo of Wise McGrath, a firm of real estate agents. There were no objections to this affidavit and he was not required for cross-examination. Amongst those envelopes was one addressed to the Odzics. He says that he was instructed to “attempt to serve the envelopes at the addresses marked on the front of each envelope.” He says that he then “served the envelopes at the addresses marked on the front of each envelope as described in” his previous affidavits of service. Mr Slater’s previous affidavit in relation to Mr Frost was sworn on 1 December 2014 and was not objected to. In that affidavit he stated that he delivered the notice of termination “by delivering the same to Kevin, a male person apparently over the age of sixteen years and residing or apparently residing at 745 Badgerys Creek Road, Badgerys Creek in the State of New South Wales.” He said that he had the following conversation:
(I said)“Does Mr Barry Frost live here?” The male person replied “Yes.” I said “Do you live here?” The male person replied: “Yes”. I said: “I have an envelope for Mr Barry Frost. Could you please pass it on to him for me?” He replied: “Yes” I then handed him the said envelope.
Thirdly, Ms Li swore an affidavit saying that Dinesh Thambyrajah, another employee of Wise McGrath, returned to the Castlereagh Street office with a bundle of sealed envelopes that he had collected from Australian Government Solicitors. She then said that she and Mr Khayo divided the envelopes into three piles and gave one pile to each of three process servers including Mr Slater. There were no objections to her affidavit and she was not required for cross-examination.
Fourthly, Sarah Alderson affirmed an affidavit about the preparation of the envelopes. She said in her affidavit that she prepared affidavits for everyone whose name appeared on a list attached to her affidavit. Mr Frost was on that list. There was one envelope for each tenant or pair or group of tenants. Each envelope was labelled with the address stated for the relevant tenant. On 24 and 25 November 2014 she inserted into separate envelopes addressed respectively to each tenant or tenants the notice of termination addressed to the relevant tenant or tenant. Those notices were annexed to the affidavit and included one addressed to Mr Frost. Ms Alderson verified that each notice of termination was addressed to the same person or persons and contained the same address as the name and address appearing on the envelope before placing the notice in the envelope. She then sealed the envelope. On 25 November 2015 she saw all the envelopes prepared by her being collected by Mr Thambyrajah. There was no objection to any of this evidence.
Ms Alderson was cross-examined but it was never suggested to her that what was contained in her affidavit was not correct.
Counsel for the respondent now complains that Ms Alderson did not “evidence the envelope to Mr Frost by attaching a copy to the affidavit in the usual way, and there is only hearsay evidence of the existence of such envelope with the address of the Respondents on it.” That submission is rejected. Ms Alderson’s evidence was not hearsay. She prepared the envelopes. In any event, it was not objected to, possibly in light of s.70 of the Evidence Act 1995 (Cth).
I find on the basis of that evidence that Mr Slater delivered the notice of termination personally to a person apparently of or above the age of 16 years at Mr Frost’s residential address. On the basis of that finding, the notice Mr Frost was given or served with a notice of termination pursuant to sub-s.223(1)(ii) of the Tenancies Act. Mr Frost’s other arguments about the effectiveness of the service are dealt with below.
Resolution of 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 4 June 2008 and it expired on 3 September 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 periodic agreement.
As Mr Frost has 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 a person apparently over the age of 16 at the Premises on 26 November 2014. It correctly identified the Premises, 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.
Mr Frost argues that the notice was not “given” in accordance with ss.223(1)(a) and 85 of the Tenancies Act. I have already considered and rejected that argument at [17]-[24] above.
Mr Frost also contends (inconsistently with his earlier argument) that s.223 of the Tenancies Act does not apply to notices required to be served “by this Act” but only to notices served under a residential tenancy agreement. That is simply wrong. The chapeau to s.223(1) provides:
A notice or other document that is authorised or required by this Act or the regulations or a residential tenancy agreement to be given to or served on any person may be given or served by: …
(Emphasis added)
Mr Frost next argues that Mr Slater’s affidavit refers to a table but that there is none. He is wrong again. The table is on the second page of the affidavit and includes Mr Frost’s name.
The final argument in relation to service is that service was required by the FCCA Act not the Tenancies Act “as it is the former upon which the lessor moves not the latter”. As I have explained earlier, the FCCA Act gives jurisdiction to this Court. An instrument made under the FCCA Act then stipulates the law that is to be applied in the exercise of that jurisdiction. The law to be applied is the Tenancies Act. I reject the respondent’s argument in this respect.
In those circumstances I am satisfied that a notice of termination was given in accordance with the requirements of the Tenancies Act.
Has the respondent vacated the premises as required by the notice?
Mr Frost’s evidence was that he is still living on the Premises.
For those reasons, the matters in 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 Mr Frost.
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)Mr Frost 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 them 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, Mr Frost did not say anything in his evidence relevant to the appropriate time for giving vacant possession. However, Mr Ramsay affirmed an affidavit in which he says that he deals with a lot of depression and anxiety and fears he suffers a relapse and suffer further loss and damage if he is forced to move without arrangements in place. He does not specify what the losses and damage are. Further, it may well be that Mr Ramsay will be adversely affected by having to move home. However, as I have found that the Agreement must be terminated, there is no choice for him but to move. The only question is when. The evidence about his health does not really assist in determining that question.
In his written submissions Mr Frost relies on a number of matters in support of the argument that the Court should refuse the Commonwealth’s argument.
First, he 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]-[85]. For that reason, I have considered Mr Frost’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)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.
b)There is no suitable or available alternative similar leaseholds in the region of Badgerys Creek or Luddenham for the Respondent to rent or occupy on the same or similar terms
Mr Frost did not give evidence about any effort to find suitable alternative accommodation. There was some evidence about the availability of suitable alternative accommodation in the Greater Western Sydney region contained in a folder of material tendered in each of the matters heard concurrently. The first of the relevant documents related to community housing. There was no evidence about Mr Frost’s financial circumstances other than that he works providing pony rides to children at shows. For that reason, the availability of community housing is seemingly not relevant to his circumstances.
The second group of documents consists of advertisements for rental accommodation that seem to have been downloaded from an online real estate website. However, they do not establish anything relevant other than that, at certain dates the properties shown in the advertisements were available for rent for particular amounts. There is no evidence that these were the only properties available, or what properties were available at other times or in other locations. None of this material carries any weight.
c)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 [10]-[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.
d)Because the termination notice was served before the introduction of s.10AA into the FCCA, 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, nothing in the evidence or submissions provides any real basis for Mr Frost’s opposition to the orders sought by the Commonwealth.
Conclusion
In light of the circumstances relied on by the Commonwealth as summarised above and the fact that Mr Frost has put forward nothing of any substance in opposition to the orders sought, I am satisfied that the appropriate date on which Mr Frost is to give vacant possession of the Premises is 28 December 2015, but that the order for vacant possession should be suspended until 25 January 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.
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:
(1)The residential tenancy agreement in relation to the premises at 745 (formerly Lot 2) Badgerys Creek Road, Badgerys Creek NSW 2555 comprising part of folio identifier Lot 1 DP 838361 (“Premises”) be terminated with immediate effect.
(2)Vacant possession of the Premises be given to the Applicant on or before 28 December 2015.
(3)The order for vacant possession be suspended until 25 January 2016.
I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 21 December 2015
2
3
4