Commonwealth of Australia v Hevers & Anor (No.2)
[2015] FCCA 2753
•23 October 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COMMONWEALTH OF AUSTRALIA v HEVERS & ANOR (No.2) | [2015] FCCA 2753 |
| Catchwords: ADMINISTRATIVE LAW – Commonwealth Tenancy Dispute – termination of long term tenancy agreement under s.94 Residential Tenancies Act 2010 (NSW) – respondents in possession of the premises for over 20 years – whether long term tenancy agreement ought to be terminated – original tenancy agreement expired – respondents notified of termination – consideration of personal circumstances of respondents – consideration of the applicant’s interests – termination ordered – appropriate date for vacant possession – order for vacant possession suspended. |
| Legislation: Fair Rents Act 1915 (NSW) |
| Baltic Shipping Co v Dillon (1993) 176 CLR 344 Swain v Residential Tenancies Tribunal of New South Wales (Supreme Court of New South Wales, Rolfe J, unreported, 22 March 1995) Articles and other material cited: |
| Applicant: | COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
| First Respondent: | JIM HEVERS |
| Second Respondent: | ISOBEL HEVERS |
| File Number: | SYG 651 of 2015 |
| Judgment of: | Judge Smith |
| Hearing date: | 20 July 2015 |
| Date of Last Submission: | 21 October 2015 |
| Delivered at: | Sydney |
| Delivered on: | 23 October 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr J. Doyle & Mr D.W. Rayment |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the Respondents: | Mr M. Seymour |
| Solicitors for the Respondents: | Tenants Union NSW Co-op Ltd |
ORDERS
The residential tenancy agreement between the applicant and the respondents in relation to the properties situated at 1955-1975 The Northern Road, Luddenham, NSW 2745 and 1995-2005 The Northern Road, Luddenham, NSW 2745 comprising part of folio identifier Lot 1 DP 838361 (“Premises”) be terminated.
Vacant possession of the Premises be given to the applicant on or before 8 December 2015.
The order for vacant possession be suspended until 15 February 2016.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT SYDNEY |
SYG 651 of 2015
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
Applicant
And
| JIM HEVERS |
First Respondent
| ISOBEL HEVERS |
Second Respondent
REASONS FOR JUDGMENT
Introduction
For over 27 years, Jim and Isobel Hevers have lived on a property in Luddenham, part of the semi-rural western edge of the greater metropolitan area of Sydney. That property is owned by the Commonwealth of Australia and is part of a site which is proposed to be developed as a new airport. In order to proceed with the development of the site, the Commonwealth has brought proceedings seeking orders terminating the Hevers’ lease and for vacant possession of the property.
The power of this Court to terminate a residential tenancy agreement and to determine the date upon which vacant possession of a property is to be given must be exercised upon consideration of the competing interests of the parties.
The Hevers oppose an order terminating their lease but ask in the alternative that they be given time in order to relocate to live with their daughter and son-in-law in Queensland. At the hearing they asked that they be given until 31 December 2015 to leave the property; however, when notice was given to the parties that judgment would be delivered, they asked for leave to file further evidence of recent events and to reopen their case in order to rely on that evidence. That request was not opposed by the Commonwealth and I granted it. In light of that further evidence, the Hevers sought until 31 March 2016 to vacate the property.
I conclude that the lease ought to be terminated, and that the individual circumstances of the Hevers outweigh the Commonwealth’s desire for possession within 60 days. I will therefore make orders which will allow the Hevers until the middle of February 2016 to arrange their affairs and move out of their home.
The relevant statutory framework
As I explained in my first judgment in these proceedings, Commonwealth of Australia (as represented by Department of Infrastructure and Regional Development) v Hevers [2015] FCCA 1814 (“Hevers”), this Court has jurisdiction pursuant to s.10AA of the Federal Circuit Court of Australia Act 1999 (Cth) (“FCCA Act”) in relation to Commonwealth tenancy disputes in which the Commonwealth is the lessor and a person other than the Commonwealth is the lessee. In exercising that jurisdiction in respect of land in New South Wales, the Court is to apply the Residential Tenancies Act 2010 (NSW) (“Tenancies Act”) subject to some modifications and to the extent necessary to determine the dispute: s.7, Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015 (Cth) (“Tenancy Disputes Instrument”).
A Commonwealth tenancy dispute includes a matter involving a lease, licence or other arrangement to possess, occupy or use land and a dispute about the termination of the lease, licence or other arrangement in which the Commonwealth is a party: FCCA Act, s.5.
There is no question that these proceedings involve a Commonwealth tenancy dispute. In order to understand the law that is to be applied in determining the dispute, it is necessary to have regard to the relevant provisions of the Tenancies Act and briefly to consider some of the historical context of that Act.
Tenancies Act
The following summary of the Tenancies Act is largely taken from the judgment in Hevers.
The Tenancies Act relevantly commenced operation on 31 January 2011 and applies to residential tenancy agreements in respect of residential premises made before or after that date: s.6. “Residential premises” is defined to include any premises or part of premises (including any land occupied within the premises) used or intended to be used as a residence: s.3.
A residential tenancy agreement is an agreement under which a person grants to another person, for value, a right of occupation of residential premises for the purposes of use as a residence: s.13. An agreement may be a residential tenancy agreement for the purposes of the Tenancies Act even if the agreement does not grant a right of exclusive occupation or grant the right to occupy residential premises together with the letting of goods or the provision of services or facilities: s.13(3).
A residential tenancy agreement that is for a fixed term continues to apply after that term ends as if the term of the agreement were replaced by a periodic agreement and on the same terms as immediately before the end of the fixed term: s.18.
The critical provisions of the Tenancies Act are found in pt.5 and concern the termination of residential tenancy agreements. Importantly, s.81(1) provides that a residential tenancy agreement terminates only in the circumstances set out in the Tenancies Act. Division 2 of pt.5 (ss.84-95) makes provision for termination by the landlord. Section 84 is contained in that Division and provides:
84End of residential tenancy agreement at end of fixed term tenancy
(1)A landlord may, at any time before the end of the fixed term of a fixed term agreement, give a termination notice for the agreement that is to take effect on or after the end of the fixed term.
(2)The termination notice must specify a termination date that is on or after the end of the fixed term and not earlier than 30 days after the day on which the notice is given.
(3)The Tribunal must, on application by a landlord, make a termination order if it is satisfied that a termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice.
(4)This section does not apply to a residential tenancy agreement if the tenant has been in continual possession of the same residential premises for a period of 20 years or more and the fixed term of the original fixed term agreement has ended.
Section 85 deals with the termination of periodic agreements and provides:
85Termination of periodic agreement
(1)A landlord may, at any time, give a termination notice for a periodic agreement.
(2)The termination notice must specify a termination date that is not earlier than 90 days after the day on which the notice is given.
(3)The Tribunal must, on application by a landlord, make a termination order if it is satisfied that a termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice.
(4)This section does not apply to a residential tenancy agreement if the tenant has been in continual possession of the same residential premises for a period of 20 years or more.
The Tribunal means the New South Wales Civil and Administrative Tribunal (“NCAT”): s.3.
Section 83 of the Tenancies Act provides that, if the Tribunal makes an order terminating a residential tenancy agreement under the Act, it must also make an order for possession of the residential premises, specifying the day on which the order takes or took effect.
Section 94 of the Tenancies Act is central to these proceedings. It provides:
94Termination of long term tenancies
(1)The Tribunal may, on application by a landlord, make a termination order for a residential tenancy agreement:
(a)if the tenant has been in continual possession of the same residential premises for a period of 20 years or more, and
(b)if the tenant occupied the premises under a fixed term agreement, the fixed term of the original agreement has expired, and
(c)if the Tribunal is satisfied that it is appropriate to do so in the circumstances of the case.
(2)A landlord may make an application under this section without giving the tenant a termination notice.
(3)The Tribunal must not make a termination order under this section that specifies a termination date that is before the end of the fixed term if the residential tenancy agreement is a fixed term agreement.
(4)The Tribunal, in determining the day on which vacant possession of the residential premises is to be given to the landlord, must not order that vacant possession be given earlier than 90 days after the order is made.
It may be noted that the predecessor to the Tenancies Act, the Residential Tenancies Act1987 (NSW) (“1987 Act”), did not make any specific provision in relation to the termination of tenancies in circumstances where the tenant had been in possession of the premises for a long period: see 1987 Act, s.64.
Recovery of possession of premises is dealt with in pt.6 of the Tenancies Act (ss.119-135). Section 119 provides that a landlord or former landlord must not commence proceedings against a tenant or former tenant of the landlord in the Supreme Court, the District Court or the Local Court to obtain recovery of possession of residential premises subject to a residential tenancy agreement. The effect of this provision is adumbrated above, namely, that the NCAT has exclusive jurisdiction in New South Wales in respect of the recovery of possession of residential premises subject to a residential tenancy agreement.
Part 9 of the Tenancies Act (ss.187-195) provides for the powers of the NCAT. Amongst the powers provided for in that Part, the NCAT may make an order that restrains any action in breach of a residential tenancy agreement or an order that requires an action in performance of a residential tenancy agreement: subs-ss.187(1)(a) and (b). An order under either of those subsections may be made even though it provides a remedy in the nature of an injunction or order for specific performance in circumstances in which such a remedy would not otherwise be available: s.187(3).
Tenancy Disputes Instrument
Sections 7, 8 and 9 of the Tenancy Disputes Instrument are also important to the determination of the issues in these proceedings. They provide:
7 Law to be applied
(1)In determining a Commonwealth tenancy dispute involving land in New South Wales, the Residential Tenancies Act 2010 (NSW) and any regulations made under that Act are to be applied;
(a)to the extent necessary to determine the dispute; and
(b)subject to the modifications set out in section 8 of this instrument.
(2)The law mentioned in subsection (1) is the applicable NSW law.
8 Modifications of applicable NSW Law
(1)The applicable NSW law is to be applied as if:
(a)a reference to the Tribunal were a reference to the Federal Circuit Court of Australia; and
(b)a reference to the principal registrar of the Tribunal were a reference to a Registrar of the Federal Circuit Court of Australia; and
(c)a reference to the Sheriff, or to a sheriff’s office, were a reference to the Sheriff of the Federal Circuit Court of Australia.
(2)The Residential Tenancies Act 2010 (NSW) is to be applied as if it included the following section:
Despite anything else in this Act, if the Federal Circuit Court of Australia makes a termination order in respect of residential premises, the Court may make such orders as it considers appropriate in relation to the day vacant possession of the premises is to be given to the landlord.
9 Powers of the Court
In determining a Commonwealth tenancy dispute involving land in New South Wales, the Federal Circuit Court of Australia may exercise any powers that are:
(a)powers of the Civil and Administrative Tribunal under the applicable NSW law; and
(b) relevant to determining the dispute.
In very broad overview, the relevant effect of s.10AA of the FCCA Act and the Tenancy Disputes Instrument is that this Court has jurisdiction to determine an application by the Commonwealth, as landlord, for an order for termination (which includes an order for vacant possession) and that, subject to one qualification, where the tenant has been in occupation of the premises for 20 years or more, that application has to be determined in accordance with s.94 of the Tenancies Act. The qualification is that this Court is not bound by s.94(4), namely, that “in determining the day on which vacant possession of the residential premises is to be given to the landlord, [the Tribunal] must not order that vacant possession be given earlier than 90 days after the order is made.”
The power to make a termination order under s.94 of the Tenancies Act is expressed in permissive terms (“may”) and is conditioned by three matters. Before considering those matters, it may be noted that, at first glance, it is odd that the power to terminate a lease is at the discretion of the Court. It presents a large qualification to the ordinary right of a land owner, under common law, to the reversionary interest in the land as well as the contractual rights that ordinarily flow from leases of land. As will be seen, those incursions into the rights of landowners are part of a relatively recent legislative response to the imbalance in power between landlords and tenants and the changing need for rental accommodation throughout Australia and other parts of the developed world. Similar responses have been made in relation to retail tenancies. Further, the more immediate history of the Tenancies Act suggests that the power to make a termination order under s.94 is indeed discretionary.
The three conditions to the power to make a termination order under s.94 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.
History of termination in New South Wales tenancy law
As I have mentioned above, the 1987 Act did not make any separate provision by reference to the length of a tenant’s occupation of premises. The provision providing for termination by a landlord was s.64. The relevant part of that provision was:
64Application to Tribunal by landlord for termination and order for possession
(1) If:
(a)a landlord or a tenant gives notice of termination of a residential tenancy agreement under this Part, and
(b)the tenant fails to deliver up vacant possession of the residential premises on the day specified,
the landlord may, not later than 30 days after that day, apply to the Tribunal for an order terminating the agreement and an order for possession of the premises.
(2)The Tribunal, on application by a landlord under this section, is to make an order terminating the agreement if it is satisfied:
(a)in the case of a notice given by a landlord on a ground referred to in section 56 or 61 - that the landlord has established the ground, or
(b)in the case of a notice given by a landlord on the ground referred to in section 57, relating to a breach of the agreement:
(i) that the landlord has established the ground, and
(ii) that the breach, in the circumstances of the case, is such as to justify termination of the agreement, or
(c)in any other case (except in the case of a notice given by a landlord on a ground referred to in section 63B, 63F or 63I):
(i) that the tenant has seriously or persistently breached the agreement, or
(ii) that, having considered the circumstances of the case, it is appropriate to do so.
(Emphasis added)
In Swain v Residential Tenancies Tribunal of New South Wales (Supreme Court of New South Wales, Rolfe J, unreported, 22 March 1995) it was argued that a landlord had the right to obtain a termination order under s.64 upon giving the requisite notice at the end of the term of a lease. Rolfe J rejected this argument, holding that the Tribunal must also be satisfied of the matters in sub-s.64(2)(c)(ii), namely, that it was appropriate to terminate the lease having considered the circumstances of the case. As to those circumstances, his Honour said:
… Possible “circumstances”, which may have to be taken into account, are the time the tenant has occupied the premises, the age and state of health of the tenant, the necessity for any number of reasons for the tenant to live in a particular area, and the inability of the tenant to obtain other suitable accommodation in which, of course, I include accommodation in an area suitable for matters such as proximity to family, facilities or employment. …
That decision was upheld on appeal: Roads and Traffic Authority v Swain (1997) 41 NSWLR 452. There, Meagher AJ, with whom Priestley and Cole JJA agreed, held at 456B, that the “circumstances” referred to in s.64 were the particular case before the Tribunal. His Honour also explained that the Act was intended to balance the rights of the landlords and tenants. See also Celemajer Holdings Pty Ltd v Kopas [2011] NSWSC 40 at [447].
In Scicluna v New South Wales Land and Housing Corporation (2008) 72 NSWLR 674 the New South Wales Court of Appeal considered, amongst other things, the nature of the power of the Tribunal under s.64(2). The Court found that the power conferred on the Tribunal was to make an order terminating a residential tenancy agreement if it was satisfied as to the statutory criteria; it was not a discretionary power but a matter of statutory obligation, once an evaluative opinion had been formed: 676 [1] per Hodgson JA, 677 [6] per Basten JA, 690 [63] per Campbell JA. See also Sydney Harbour Federation Trust v McCluskey [2012] NSWSC 253 at [19].
That conclusion was clearly correct in light of the terms of the chapeau that provides that the Tribunal “is to make an order terminating the agreement if it is satisfied …”. The evaluative opinion referred to in the decision arises from the condition of the power that the Tribunal be satisfied, “having considered the circumstances of the case, it is appropriate to do so”
The scope of the power under s.94 of the Tenancies Act is to be understood against that legislative history.
There are a number of differences between the Tenancies Act and its predecessor that are worth noting. First, the Tenancies Act makes clear that the power to terminate a periodic tenancy (other than those where the tenant has been in occupation for 20 years) is not discretionary. Thus, s.85(3) provides that the Tribunal must, on application by a landlord, make a termination order if it is satisfied that a termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice. Secondly, the evaluative opinion referred to above is no longer a condition of the power to terminate. Thirdly, as is clear from the proviso in the parentheses above, the power to terminate is different depending on whether the tenant has been in occupation of the premises for 20 years or less. Where the occupation is greater than 20 years, the only power to terminate is under s.94.
As already mentioned, s.94 provides that the Tribunal (or, in this case, the Court) may make a termination order if three conditions, as set out at [22] above, are met. The power to terminate in s.91 of the Tenancies Act is similarly phrased: “The Tribunal may … make a termination order if it is satisfied …”. That power was considered by the Court of Appeal in Cain v New South Wales Land and Housing Corporation (2014) 86 NSWLR 1. In that case the respondent Housing Corporation had applied to the Tribunal for a termination order on the basis that the applicant, Ms Cain, had been convicted of the cultivation and supply of cannabis. The Tribunal did not make that order, but made an order in the nature of specific performance requiring the appellant to comply with the terms of the tenancy agreement. The respondent successfully appealed to the District Court and Ms Cain applied to the Court of Appeal for judicial review of that Court’s decision. The Housing Corporation argued that, in spite of the word “may”, the power in s.91 was not discretionary. That argument did not gain much traction in the Court of Appeal. It is unnecessary to examine the reasons too closely; however, the following matters are relevant to the present case.
First, Basten JA noted at 5 [15], referring to Ward v Williams (1955) 92 CLR 496, that the correct question was why what is, on its face, a discretionary power should be construed otherwise. Secondly, the principal argument was that the words “sufficient to justify termination” in sub-s.91(1)(b) conferred such an evaluative discretionary judgment that there would be no occasion for a further exercise of discretion. While both Basten and Leeming JJA found this argument plausible, they rejected it. Basten JA found that it gave insufficient force to s.91(2) which went to the decision “whether to make a termination order”: at 6 [19]. Leeming JA said, at 11 [47]:
… A natural meaning of s 91(1)(b) is that the Tribunal must first be satisfied that there has been sufficiently serious unlawful use to engage the power to make a termination order without necessarily first giving a termination notice. If so, the Tribunal may then have regard to more general considerations in the exercise of the discretion to make the order. …
Thirdly, Leeming JA contrasted the use of the word “must” in s.84(3) with the word “may” in ss.86(4), 87(4), 89(5), 90(1), 91(1), 92(1), 93(1), 94(1), and 95(3) and stated that the change from one to the other was a “remarkable feature of the structure of the Division.”
Fourthly, the Housing Corporation relied on the terms of sub-s.94(1)(c), namely, “if the Tribunal is satisfied that it is appropriate to do so in the circumstances of the case” to argue that, if the discretionary language of subparagraph (c) were satisfied, there could be no further discretion remaining. Leeming JA held, at 11 [50]:
That is so. However, accepting as I think it must be that this is a case where there is superfluous language, a consistent legal meaning is achieved by regarding the words of (c) as confirmatory of the discretion, rather than reading “may” as “must”.
His Honour there was applying the well-established principle that a statute is to be construed “so that it is consistent with the language and purpose of all the provisions of the statute”: Certain Lloyd’s Underwriters v Cross (2012) 248 CLR 378 at [24] citing Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69].
Although Leeming JA’s comments in respect of s.94 could be said to be strictly by way of obiter dictum, given the immediate legislative history of the termination provisions it is clearly correct. It is reinforced by regard to the broader context and the evident purpose of the enactment of s.94.
A very brief history of the development of the common law of landlord and tenant is set out by Adrian (now Professor) Bradbrook in The New Era of Tenancy Protection (1987) 61 ALJ 593. He explains that, after the adoption of the English law by the Australian states there were very few statutory amendments or case law developments to that law. Amongst the few statutory amendments was the Landlord and Tenant Act 1899 (NSW) that contained very few provisions and could not be described as a comprehensive scheme of protection for tenants.[1] Bradbrook opined that the failure of the law in Australia to provide for such a scheme was that the tenant in 16th Century England required no such protection and that the problem with the common law approach of freedom of contract was not its inherent bias towards landlords but its failure to keep pace with the times by recognising societal changes.[2]
[1] (1987) 61 ALJ 593 at 594.
[2] Ibid.
These societal changes were addressed to some extent in the First World War and subsequent legislation for the control of rents such as the Fair Rents Act 1915 (NSW) and the Reduction of Rents Act 1931 (NSW), the vestiges of which remain today in New South Wales in the Landlord and Tenant (Amendment) Act 1948 (NSW).
The reasons for the need for more comprehensive reform are explained by Bradbrook in both The New Era of Tenancy Protection and an earlier article: The Role of the Judiciary in Reforming Landlord and Tenant Law (1976) 10 MULR 459. Amongst those were the revelations of the Commonwealth Commission of Inquiry into Poverty in 1974, the fundamental one of which was the basic inequality of bargaining power between landlord and tenant.
The first attempt in New South Wales at comprehensive reform of the law of landlord and tenant (at least insofar as it relates to residential tenancies) was the 1987 Act. The Tenancies Act represents a further step in the same direction. The second reading speech made on the introduction of the bill elaborates on the need for the further reform. The Hon. Penny Sharpe (Parliamentary Secretary) said:
The structure and composition of the residential rental market in New South Wales has significantly changed since the current laws were developed more than 20 years ago. Families and older people are now a much bigger part of the rental market. Shared households are becoming increasingly common and many tenants now rent for their entire lives, compared to the past when renting was often seen as just a stepping stone into home ownership.
…
The changing rental market means that it is becoming increasingly important to make sure our tenancy laws are up to date, that they are unambiguous, and that they are responsive to the needs of the community. We need a regulatory regime that reduces unnecessary costs, promotes equity and supports the future provision of rental housing in New South Wales.
One of the concerns addressed in the second reading speech was that, under the 1987 Act, the Tribunal had to consider the circumstances of the case before making a termination order. The Hon. Penny Sharpe described the removal of that “discretion” as a “major win for landlords.” What was not mentioned was that the “discretion” still pertained in respect of a number of cases including long term tenants.
In any event, the concerns discussed in the second reading speech were an evolution of the concerns that led to the first comprehensive reforms under the 1987 Act. Essentially, the continued reforms are aimed at achieving a balance between the interests of the landlord and the tenant. In light of that purpose, and the historical context of the reforms, the fact that there remains a discretion whether to make a termination order in respect of long term tenants is not as surprising at it first appears.
Approach to termination under Tenancies Act
The approach to this case must then be to first determine whether the power to make a termination order arises. That requires consideration of whether the three conditions set out in s.94 exist on the facts of the case. Those include whether “in the circumstances” the Court considers that a termination order is appropriate: sub-s.94(1)(c). Those circumstances are, as explained in Swain, 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, 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.
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.
Evidence
It is necessary, then, to turn to each relevant consideration. There was very little, if any, dispute about the essential facts of the case and there was no cross-examination of any of the witnesses. The dispute between the parties essentially boils down to the balance that ought to be struck between each of the parties’ interests.
Continual possession for a period of 20 years or more: sub-s.94(1)(a)
The property in question is part of the land comprised in certificate of title folio identifier Lot 1 DP.838361 of which the Commonwealth is the registered proprietor. The address of the premises is 1955-1975 and 1995-2005 the Northern Road, Luddenham, NSW 2745. The Hevers started renting the premises in 1987 having located them through a real estate agent. They have lived there ever since. On 10 September 1987, a bond in the amount of $920 was lodged with the NSW Bond Authority in respect of the premises.
On 27 November 2007 the Commonwealth entered into a residential tenancy agreement with the Hevers in relation to the premises.
I am satisfied on the basis of these facts that the Hevers are the tenants of the premises and that they have been in continual possession of the premises for a period of 20 years or more.
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)
The term of the residential tenancy agreement between the parties was 52 weeks beginning on 19 August 2008 and ending on 18 August 2009. 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)
It is convenient to deal first with the circumstances relied upon by the Commonwealth.
The first steps towards construction of an airport
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.
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.
On 15 April 2014, in a joint release with the then Prime Minister Mr Abbott, the Minister for Infrastructure and Regional Development, Mr 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.
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.
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 the fourth, was importance of treating tenants equitably.
Mr Robertson explained that planning for an airport requires substantial on-site technical work including extensive investigations to support environmental assessment and geotechnical work by engineers and other consultants. He said in his affidavit of 11 March 2015 that such work had already commenced and was expected to continue through 2015. He said that the site investigations included invasive geotechnical drilling work to obtain samples to inform the engineering options and required substantial machinery on the site including large mobile rigs to drill and dig holes often several metres deep. The work was, at the time of his affidavit, being undertaken on a limited scale due to the occupants on the site. That was because the work is intrusive, requires out of hours access and could cause safety concerns for occupants.
In light of that occupation the work had been either been tailored to the sites of which the Commonwealth had possession, or alternatively, the Commonwealth had liaised with tenants to ensure that testing could be conducted safely without unnecessary disturbance. Mr Robertson explained that the additional work and costs that have resulted from working around tenants were “considerable”, although he did not give any further detail in that respect. Notably, his evidence did not deal directly with the part of the site on which the Hevers’ home is located. Indeed, his evidence was that the planning, assessment, site management and preparation activities for the airport site were being undertaken on a “whole of site” basis for all of the land to be included in the airport site.
Mr Robertson also gave evidence of the further work that would be required on the site in general. Generally speaking that work was to obtain further geotechnical and contamination information across the whole site which would then be fed directly into the government’s consideration of the land use arrangements for the site and the associated costings. Mr Robertson said that the information was urgently required in order to feed into the government consideration process but did not really explain the basis for the urgency other than saying that a delay in obtaining the testing information “risks delaying the proposal overall.”
Mr Robertson described the process for assessing residential tenant blocks as being “administratively onerous” and taking considerable time, effort and cost to implement. The steps usually followed in that respect were:
a)Identify sites for access: contracted specialists would identify access requirements for all specialist investigations on the site and then submit a request for access to the Department. That request would then be reviewed by the Department in consultation with the property manager. Alternative access options would be identified should there be tenancy considerations.
b)Seek consent from tenants: once the final list of survey sites was determined then the Department would liaise with existing tenants by way of letters prepared by lawyers and follow-up telephone calls.
c)Where tenants refuse access: a new survey site would need to be identified in accordance with the previous steps.
d)Finalise access sites: when tenants are notified and consent is received the lists of sites for access is finalised, mapped and sent to contracted specialists to be given to the survey team.
e)Access to sites on the day of investigations.
Mr Robertson explained that the constant requirement to seek consent had implications for the achievement of the project’s timeframes and generates substantial costs. He did not say that the Hevers had refused consent or indeed whether their home had been subject to the processes outlined above.
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. While I accept that these dangers are very real and present, as will be seen, I consider that they present far less of a risk to people such as the Hevers who are significantly immobile due to ill-health and age.
In his affidavit of 30 March 2015 Mr Robertson stated that a minimum of 9 to 12 months was expected to be required to clear the proposed airport site and that that timeframe was only achievable with multiple contractors working concurrently on the site with limited unfavourable weather. The expectation is also based on the assumption that there would only be 150 structures remaining for demolition after June 2015.
In his affidavit of 21 May 2015 Mr Robertson stated that, as at that date, 58 of an estimated total of 163 tenants had vacated the site. He further stated that termination notices with respect to 99 of the 163 tenants had been issued and were due to expire on 15 June 2015 by which time it was expected that the vacancy of the site would increase substantially.
Clearly enough, demolition of the premises on the site cannot occur until vacant possession is obtained. Demolition of an initial 10 vacant premises commenced in December 2014 and further demolitions commenced in March 2015. Between March and May 2015 a further 24 properties were demolished and a further 11 properties had been allocated for demolition before 30 June 2015.
The evidence was that demolition required between 15 to 20 days on average per property because of various requirements including confirmation of vacant possession, assessment for the presence of asbestos, approval from the WorkCover Authority, the obtaining of a hazardous material survey and report, preparation of safety and site management plan, removal of asbestos and demolition of the structure. Where asbestos is evident on any site a further seven days is required for the demolition to be finalised.
Mr Robertson also gave evidence of the effect of ongoing possession of the sites by the tenants. He said that the interaction of access requirements was complex and required careful coordination. If vacant possession could not be obtained the project management team could not be certain that access to a particular site could be given on a particular day. Equally, he continued, access for contractors would be potentially limited or their work constrained. Such uncertainties caused serious obstacles to planning, delay and costs for the work on-site.
In addition, Mr Robertson explained that as site vacancy increased, security and safety risks for the remaining tenants as well as substantial impacts on their residential amenity would increase. In order to manage safety and security it would be necessary for structures to be demolished, roads to be progressively closed and other security measures to be put in place. Mr Robertson said that, as the site becomes vacant, local council services such as rubbish collection would also be discontinued. He noted that it was also possible that some or the whole of the proposed airport site would need to be fenced for safety and security reasons.
Mr Robertson stated that there had been recent issues with vandalism, theft, arson and squatters in vacant properties and that, although the Commonwealth would make every effort to ensure security, it was not feasible to fence off all of the vacant lots individually to ensure that the security of the remaining tenants because of prohibitive costs. He also said that there was a problem in allowing access for a small number of tenants as the security arrangements for the remainder of the site would be compromised.
Finally, Mr Robertson said that contracts for the demolition work were being put in place to ensure that the works could proceed expeditiously as properties became vacant in anticipation of a planned occupation date of June 2015. Clearly enough, that date has long passed.
Preparation for development by a private sector operator
As was mentioned in the 15 April 2014 joint press release, the Commonwealth envisaged that the costs of the airport would be principally met by a private sector operator. Mr Robertson gave evidence about the contractual processes being undertaken by the Commonwealth in connection with that operator. I note that almost all of Mr Robertson’s evidence in this respect was hearsay, being the effect of statements in written documents. Although the Hevers did not object to the admission of the evidence, I have taken the nature of the evidence into account in giving weight to it.
Mr Robertson said that when the Commonwealth sold Sydney (Kingsford Smith) Airport to the Sydney Airport Group in 2002, the sale agreement included terms bestowing an opportunity for the purchaser to develop and operate any second major airport in the Sydney region within 100 kilometres of the Sydney GPO. That sale agreement detailed the process and timeframes for consultation between the government and owners of the Sydney airport on the development and operation of a second airport. Those processes were not in evidence before me.
As Badgerys Creek is located approximately 56 kilometres from the Sydney GPO, the right of first refusal in the airport sale contract was applicable. That right includes a number of phases including a consultative phase and a contractual phase. Those phases are expected to take between one and two years to complete.
On 30 September 2014 the Commonwealth government issued a “Notice to Consult” to the Sydney Airport Group advising that the consultative phase of the process would commence on 1 October 2014. The notice specified that the consultative phase would take nine months and so expire on 30 June 2015.
Following that phase, Mr Robertson explained that the government may enter a contractual phase which would involve the issuing of a “Notice of Intention” to the Sydney Airport Group which would include detailed terms for the proposed development and operation of an airport at Badgerys Creek including technical specifications, contractual terms and timetable. The Sydney Airport Group would then have the opportunity to exercise its option to develop and operate the airport at Badgerys Creek. If it declined that opportunity, the Commonwealth would be entitled to approach the market, or develop and operate the airport itself.
Mr Robertson gave evidence that while consultation was currently underway and a final decision on the airport proposal had not yet 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 in order to determine whether development would be carried out by the government itself. Essential to such a proposal was the outcome of the environmental impact assessment process, geotechnical and engineering investigations, archaeological surveys, and other site interrogations.
Mr Robertson said that a second airport in Sydney would be a substantial piece of national transport infrastructure utilising a site measuring in the order of 1700 hectares and would be a key resource for the operation of the New South Wales and national economies because of its significance to air transport and a number of associated industries. The Hevers did not dispute that fact and I accept it.
The circumstances affecting the Hevers
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 two categories of circumstances that relevantly affect the Hevers’ interests. The first of these categories is related to the terms of the residential tenancy agreement between the Hevers and the Commonwealth, the notice of proposed development of the site for the airport, notice of the proposed termination of the residential tenancy agreement, any assistance given by the Commonwealth to the Hevers in relation to moving from the premises and the availability of suitable alternative accommodation. The second category relates to the individual circumstances of the Hevers.
The first matter to note is that the additional terms to the residential tenancy agreement referred to the proposed airport site. Clause 42 provided:
42.1The tenant acknowledges that the premises form part of the proposed site for Sydney West Airport;
42.2In the event that the Commonwealth of Australia requires vacant possession of the premises:
b)to develop the Sydney West Airport; or
c)for any other purpose
the landlord may terminate this Agreement by serving on the tenant written notice expiring six months from the date of the notice or on expiration of the fixed term (whichever is the earlier);
42.3The tenant shall not be entitled to any payment or compensation from the landlord arising from such termination;
42.4A termination of the Agreement under clause 42.2 shall not affect an existing right or obligation accrued or incurred by the landlord or by the tenant under this Agreement or otherwise at law or in equity.
Those terms are subject to the operation of the Tenancies Act; however, they are relevant to the extent that they show that at least from the entry into the residential tenancy agreement in November 2007, the Hevers were aware of the possibility that the site may be developed as part of an airport.
By letter dated 29 October 2014 from the firm managing the property on the site, Preston Rowe Paterson (“PRP”), the Commonwealth informed the Hevers of the decision that the site at Badgerys Creek would be the site for Western Sydney’s airport. That letter also stated:
…
To implement the Australian Government’s decision, all properties on the site, including the property you occupy, will need to be vacated. The purpose of this letter is to provide you with additional information about the Government’s plans for Badgerys Creek and is for information only. This letter does not terminate your tenancy or alter the rights and obligations under your occupation arrangements.
What to expect
In the coming weeks, you will receive a formal notice of termination of your tenancy. That notice will provide a specific date by which you will be required to vacate the property. It is likely that this date will be in June 2015 - but it will not be earlier.
…
There are special rules for residential tenants who have been in occupation for more than 20 years. Please tell us if anyone in your household falls into this category.
…
That letter enclosed a document entitled “Information to Assist You”. The information contained in that document included the following:
…
Garbage Collection Service
Arrangements are currently in place for the collection of household waste from your premises and those arrangements are scheduled to end mid-2015 at the termination of your occupancy.
Internal Roads
Arrangements are currently in place for the maintenance of internal roads and public street lighting at the site to enable you to access your premises. Those arrangements are scheduled to end when you are required to vacate.
Roads inside the site may be closed if they are no longer required to enable occupiers to access their premises or if a road closure is required for other reasons (such as safety and security).
Despite any such road closure, convenient access to your premises will be available to you until you are required to vacate.
…
PRP sent a further letter dated 24 November 2014 to the Hevers. That letter relevantly stated:
…
The Government requires that all tenants vacate the site by 15 June 2015. In our recent letter we advise 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 are provisions that relate to the form of notification you will receive. This will not affect your vacation date the 15 June 2015 or other requirements for vacating the site.
You may vacate the property earlier than 15 June 2015.
…
The terms of this letter are somewhat surprising given that they are both inconsistent with the Tenancies Act and misleading to the extent that they suggest that there was any obligation on the Hevers to vacate the their home by 15 June 2015. The misleading nature of the letter was overcome, to some extent, by an attachment to the letter referring to the position of tenants in possession of the premises for 20 years or more. That attachment included the following statements:
…
If on the basis of available information, the Government considers that you have occupied the property for 20 years or more, the Government intends to apply to obtain an order pursuant to the Act to terminate your tenancy with effect from 15 June 2015.
It is not necessary for you anything in relation to obtaining that order. However, you may be invited to attend a hearing prior to the order being made.
If you vacate the property in the coming months it will not be necessary for an order to be obtained.
…
These statements are also misleading to the extent that they suggest that the right of the Hevers to be heard in connection with orders terminating their tenancy was optional. Given the apparent importance to the Commonwealth of treating tenants equitably it could have been expected that notices such as these would have accurately informed the tenants of their rights. The impression given by these letters is to the effect that the Hevers would have no option but to vacate by June 2015. Counsel for the Commonwealth accepted in submissions that this was unfortunate. That is an understatement.
Mr Robertson gave evidence about assistance and information provided to tenants beyond those two letters. This assistance included the appointment of a Place Manager, Wendy Salked, a dedicated point of contact responsible for communicating with the tenants of the site on an individual basis concerning the transition of the site and to help tenants understand the process. The services offered by the Place Manager included one-on-one meetings to facilitate tenant access to government and non-government accommodation services, information about the rental process, local government pick up services, Centrelink loan programs and local charity assistance. Mr Robertson stated that the Place Manager has had regular phone and email contact with those tenants seeking assistance. Further, there was optional information drop-in session held on 25 February 2015 which was attended by NSW Housing Services, Centrelink and local real estate agents to give tenants personalised assistance in the services that were relevant and available to them.
It is not clear whether the Hevers were directly provided with this assistance but it may be accepted that it was at least available to them.
Mrs Hevers gave evidence that she was approached about survey and investigative works on the premises on 7 April 2015 and that the Department were allowed access to the premises for that purpose.
Mrs Hevers also gave evidence about the Department’s efforts to give them assistance. She says that there were two meetings offered by the PRP to facilitate discussions, and that they were given a phone number to call sometime in November 2014. She called that number and a meeting with Ms Salkeld was organised. At that meeting she was told that she could go to the Housing Commission and get application forms for bond support however none of the assistance offered seemed to cover the Hevers’ position as far as their animals were concerned. Mrs Hevers says that despite what was said that was offered to her and her husband they did not receive any specific information or assistance and still do not know the details of the program of works and whether it involves their home. She says that they had not received any assistance to help them relocate and that they have been left to their own resources to do that.
The final aspect of the evidence concerning the general circumstances of tenants on the airport site relates to the availability of alternative suitable accommodation to those tenants. The Commonwealth relied upon the evidence of Simon Azar, a registered valuer and licensed builder. Mr Azar was asked to provide an opinion on the following matters:
a.the current market rent that would be payable for the existing premises (which would logically be the market rent for comparable premises); and
b.the current available supply of such comparable premises within comparable and surrounding locations in the western and south-western fringe of Sydney.
Mr Azar based his opinion upon observations of the premises made by him from the road, discussions with the property manager, and an aerial photograph of the premises. He noted that the area of the property was 12 hectares and that the improvements included a 1960s style single-storey double brick dwelling with three bedrooms, an ensuite bathroom, and large lounge/dining areas. He said that the dwelling was architect designed and features indoor gardens, exposed beams, besser block glass walls, original bathroom and sunken bath tub and had a kitchen which had been updated in around 2010. Improvements included an old granny flat in poor basic condition.
Mr Azar then prepared a list of what he described as readily available properties on the market in the areas of Badgerys Creek, Luddenham, and other surrounding suburbs. Taking into account the rent, size and improvements of those properties and making adjustments for the differences, he concluded that the market rental for the property was between $550 and $600 per week.
Further, based upon the material obtained by him concerning available rental properties, Mr Azar stated that there were “undoubtedly properties available that would accommodate the Hevers.” He conceded, however, that if the Hevers’ maximum rental was $280 per week (which was the evidence given on behalf of the Hevers) then acreage within metropolitan Sydney was not within their means in the current property market. He went on to say that there were properties available for that price outside Sydney in towns close to where the Hevers’ evidence suggested that they were looking.
This evidence was, to a significant extent, overtaken by two events. In his affidavit of 15 July 2015 Mr Hevers relevantly says two things: first, that he and his wife had been looking for rental properties near or around Woodstock where his daughter lives but they had not been able to find suitable accommodation that they could afford. Secondly, he says that he had recently had a discussion with his son-in-law, Gregory Lee in which Mr Lee said to Mr Hevers:
Jim, when Vicky gets better we will sell our place and move to a bigger property that will accommodate all of us. There’s just no way our place can fit all of us. We can get something in Queensland and it will be warmer. I do not want you to have to move twice. Can you hold off there until we buy the new place?
Mr Lee then told Mr Hevers that he was planning to put their current place on sale and it would take at least another 5 to 6 months before they could expect to find a place.
Mr Lee also swore an affidavit on 15 July 2015. He says that on 7 July 2015 he decided that he would sell his current home in order to purchase a bigger property in or around the south of Bundaberg, Queensland in order to give the Hevers somewhere to live that would be warmer than Woodstock. He says that he has contacted a few real estate agents to draw the contracts and to do a valuation of their current property. He expected the process of moving to Queensland would take 5 to 6 months at least.
Mr Azar prepared a further report in response to the first aspect of Mr Hevers’ affidavit of 15 July 2015. Mr Azar gave evidence that he conducted searches of housing for lease in the New South Wales postcode area 2793 which included the area surrounding Woodstock. He said that his research has revealed eight listed residential properties that “may suit the Hevers’ accommodation requirements”. I do not give much weight to that evidence. Mr Azar does not explain why these properties might be suitable for accommodation for the Hevers and, in any event, the evidence only goes so far as to point out the possibility of such suitability.
In any event, the evidence, detailed more fully below, that the Hevers’ daughter and her husband are willing to accommodate the Hevers as soon as they are able to locate and acquire property in Queensland diminishes the significance of the availability of other property in rural New South Wales. As will be seen, that evidence must be weighed against the evidence produced when the Hevers re-opened their case.
The Hevers relied upon a report prepared by Dr Rigmor Helene Berg, a self-employed psycho-social research consultant. Although Dr Berg expressed opinions about the availability of alternative suitable accommodation, her evidence went primarily to the individual circumstances of the Hevers that informed the question of what accommodation was suitable for them. For that reason is convenient to deal with her evidence after setting out the direct evidence of those circumstances.
Mr Hevers is 73 years old. He retired fairly recently at the age of 68 or 69 after having worked as a carpet layer. He stopped work because of illness and his health has deteriorated significantly over the last two years.
In November 2014 the Hevers’ son was diagnosed with an aggressive form of cancer and died a few months later in February 2015.
The Hevers’ daughter, Vicky Lee, who lives in Woodstock in central west New South Wales, was diagnosed with breast cancer and in April 2015 underwent a mastectomy. About two years ago her husband, Gregory Lee, was diagnosed with Grover’s disease, a skin disease sometimes known as transient acantholytic dermatosis. The couple moved to Woodstock while he was recovering from the disease and Mr Lee left his job in order to concentrate on getting better. It now appears that Mr Lee is working on weekdays as well as caring for his wife.
Mr Hevers has emphysema and a heart condition. He has very limited breathing capacity and can only walk 25-30 metres before it has to catch his breath. Some days he is bedridden.
Recently Mr Hevers mother passed away and he could not make it to her funeral in Tweed Heads because of his illness. He has not travelled much since he became ill and the last time he did travel was to go to his mother’s 100th birthday four years ago, where he had trouble with his breathing.
On 25 September 2015 Mr Hevers was hospitalised after 2 days of abdominal pain. On 29 September 2015 he was diagnosed with choleodocholithiasis[3] with multiple stones. He had an ERCP[4] and a number of stones were removed. The hospital treatment records show that, on 30 September 2015, Mr Hevers was haemodynamically stable (had no blood circulation issues) and afebrile (not feverish), was tolerating an oral diet and mobilising independently. He was advised to follow up with his GP and at a gallstone and hernia clinic, not to engage in heavy lifting for 4-6 weeks and to take pain relief as needed. While in hospital Mr Hevers had a catheter inserted; however, upon release he suffered a urinary tract infection and was treated by his GP.
[3] Gall stones in the bile duct
[4] Endoscopic retrograde cholangiopancreatography
Mrs Hevers, like her husband, is 73 years old. She worked as a bus driver for children with disabilities for over 27 years and used to do both morning and afternoon shifts. However, she had open heart surgery in September 2014 and was consequently slowed down in her work. She recently retired as the work made her more tired and weary and she had been stressed by these proceedings and her inability to find alternative accommodation. Since retiring she has been unable to supplement her income and says that she and her husband may have to do without some expenses like private health insurance and may need to cut back on comprehensive car insurance, personal comfort items and many essential items like food and heating.
Both of the Hevers say that they have made considerable but ultimately unsuccessful efforts to find alternative accommodation. In his latest affidavit Mr Hevers says that he and his wife have looked for “places to rent in the area but because of distance and costs involved” they cannot do it on their own. The reference to “area” here is ambiguous. It could either be to the area in which the Hevers’ daughter lives or to Bundaberg, where their daughter and her husband are planning to move. Either way, I accept that the Hevers have made efforts to find suitable alternative accommodation. Mr Hevers adds that it has now become necessary for him and his wife to live with their daughter and son-in-law but that it would not be possible at least until their current home is sold.
Mr Hevers also gave evidence that, as at 19 October 2015, his daughter had not been able to sell her house. Mrs Hevers explained that there had only been two inspections of the house since it went on the market in July.
As I have noted, Dr Berg gave evidence which was predominantly focused upon the Hevers’ personal circumstances. Although that evidence should clearly have been given by the Hevers themselves, there was no objection to the admission of her report, either because it was hearsay or because it expressed opinions that were not substantially based upon specialised knowledge based on Dr Berg’s training, study or experience. The critical aspects of Dr Berg’s report are:
a)Mr Hevers requires a lung operation from which he will need 2 months recovery. However in order to undergo that surgery he is required to abstain from smoking for a minimum of three months. Mr Hevers apparently stopped smoking at some time in June 2015;
b)the Hevers have four horses that they have owned for many years, aged from 24 to 37 years. They feel that they require a minimum of 5 acres for their horses but have considered renting separately a house and a paddock with access to water;
c)the cost of moving their household goods and personal effects to Cowra (a regional centre close to Woodstock) would be in the vicinity of $2,000. The cost of moving and settling their horses would be between $1,200 and $2,000; and
d)while they currently pay $360 per week in rent, the loss of Mrs Hevers’ additional income means that the Hevers believe that the maximum amount of rent that they will be able to pay is $280 per week. As their combined income is $600 per week, even at that amount of rent they will be paying in excess of 30% of a low income on rent which puts them within the usual definition of housing stress.
Submissions
The question in these circumstances is whether I consider that it is appropriate to make a termination order and, if so, what is the appropriate date for an order for vacant possession. As I have noted, that question is essentially the same as whether the Court ought to make a termination order bearing in mind that a termination order includes an order for possession of the residential premises.
The Hevers submit that such an order should not be made until a more certain position is established by the evidence. Their alternative submission is that the Court should terminate the agreement but suspend the order until one day prior to the date set for an order for possession, namely 31 March 2016. The date posited was initially 31 December 2015, but the Hevers changed this on the basis of the evidence that was given when they were granted leave to reopen their case.
They argue that the nature of the tenancy, being one with an occupation in excess of 20 years, is that the premises have become a home and it has become more difficult simply to vacate and provide possession. They further say that s.94 of the Tenancies Act represents a policy of the State and Federal parliaments that such tenants be provided with a reasonable period of time in which to vacate and provide possession, and that this period is to be set by reference to the “circumstances of the case” which is not solely dependent on the needs or desires of the landlord. For the reasons I have given above, I agree with that submission.
The Hevers point to the following circumstances as to why they ask the Court to set the order for possession at 1 April 2016:
a)there is no cogent evidence before the Court to suggest that the Commonwealth requires the premises to be vacant at any particular time or immediately; and, by comparison,
b)the Hevers can point to significant matters in their evidence that demonstrate that they cannot vacate the premises as a simple operation, namely:
i)they are both in poor health and cannot carry out the physical work of finding alternative premises or moving their items;
ii)they require assistance from others and were recently bereaved due to personal family tragedy;
iii)their financial resources are extremely limited;
iv)there are animals also in occupation of the premises for which arrangements cannot easily be made and they should not be required to destroy living property to which they have significant attachment; and
v)an arrangement for alternative accommodation has recently been reached and that arrangement is still uncertain however it is not reasonable to require a temporary move pending resettlement in accordance with the offer made by Mr Lee. That will now take longer given the fact that the Hevers’ daughter and son-in-law have so far been unable to sell their current home.
The Hevers also argue that the Court ought to make orders compensating them for the termination. They rely on their evidence that they have suffered stress and anxiety and hurt regarding the actions of the Commonwealth and that it is well recognised that such feelings caused by a party in the termination of a contract can be compensated by a modest solatium: see Baltic Shipping Co v Dillon (1993) 176 CLR 344 at 359; Holloway v Witham (1990) 21 NSWLR 70 at 86-87.
The Hevers also seek an order for the return of the bond.
The Commonwealth argues that the evidence of Mr Robertson establishes the Commonwealth’s need for vacant possession of the premises. In particular, it relies on the fact that the site is one of strategic national importance and that delays in vacating the premises will delay the process of demolition and thus the development of the site for an airport. It says that the evidence concerning the Hevers position is relatively vague and that they cannot say that the termination of the tenancy would take them by surprise given the notice provided to them towards the end of 2014. In the circumstances, the Commonwealth submits that the tenancy agreement should be terminated and a period of 60 days should be given for vacant possession.
In respect of the most recent evidence from the Hevers, the Commonwealth argues that the situation has not significantly changed: Mr Hevers was relatively immobile before his gall stone operation and the fact that the Hevers have been on notice of the Commonwealth’s intention to obtain vacant possession has been long-standing.
Consideration
Having considered the circumstances of this case as outlined above, I am satisfied that it is appropriate to make a termination order and that the date by which the Hevers are to give vacant possession is 15 February 2016.
While I fully accept the general importance of the development of a further airport in Sydney for both the economic and social well-being of this State if not this country, the very real and serious personal circumstances of the Hevers outweighs the apparent immediacy of the Commonwealth’s need for vacant possession.
That said, I do not accept the submission that the Commonwealth evidence is so unclear or uncertain that a termination order ought not to be made. First, significant time, effort and money has already been put into preparation of the site for the future development of the airport. Secondly, although of less weight, the Hevers have been on notice since at least the beginning of the current residential tenancy agreement of the possibility of the use of their home as an airport and the consequent need for them to give vacant possession to the Commonwealth for that purpose. Thirdly, although the evidence of Mr Robertson does not specifically address the property on which the Hevers have lived for so long, on Mrs Hevers’ own evidence there has already been some testing on the property. This supports the inference that, at the very least, further and unhindered access to their property is required in order to progress the development of the site.
On the other hand, the general nature of Mr Robertson’s evidence does support the submission by the Hevers that, in so far as the date of vacant possession is concerned, their interests outweigh any urgency pressed by the Commonwealth. In this respect I note not only that the Hevers are afflicted by their own illnesses but also that they may have been affected by the recent death of their son and the illness of their daughter. Further, the Hevers have not been sitting on their hands. They have, very reasonably, not only been seeking alternative accommodation but, in light of the relatively recent offer by their son-in-law, pressed the Court only for sufficient time for that offer to come to fruition. This is not a case where the tenants rely simply on the length of their possession of the property and their emotional attachment to it. I also agree with the submission that, at least to some extent, the Hevers’ situation has deteriorated since the hearing of the matter in July 2015. The proposal developed by the Hevers and their family has, without any fault on their part, not gone smoothly. While Mr Hevers’ recent hospitalisation was relatively brief and not serious, it must be remembered that, for people of his age and in his condition, even minor matters can be much more significant both physically and mentally than they would be for younger, healthier people.
That said, while, absent the recent evidence, I would have thought that 31 December 2015 was an appropriate date on which the Hevers should give vacant possession of the property, I do not think that the change in circumstances warrants a further 3 months. In my view, balancing the circumstances of each party, I consider that it is appropriate that the Hevers vacate the property by 15 February 2016. That will give them time to finalise the efforts to move that they have already started, and will give the Commonwealth some certainty to enable it to plan the further development of the site even if, in the meantime, it must work around the Hevers property.
On the other hand, I reject the Hevers’ claim for financial compensation. It may be that, in certain limited circumstances, breach of a contract can be compensated by a modest solatium: see Baltic Shipping at 362, 366 per Mason CJ, 370 per Brennan J, and 405 per McHugh J. Compensation of a similar nature can also be awarded in actions for tort and under certain statutory schemes. However, there is no breach of contract in this case, no tort, and no specific provision under the Tenancies Act for compensation for distress or anxiety.
While there is power under s.188(c) of the Tenancies Act to make any ancillary order the Tribunal (or Court in this case) thinks appropriate, I do not think an order for compensation for distress or anxiety is ancillary to an order for termination. Even if I were wrong about that, I do not think that it would be appropriate. One of the matters I have taken into account in determining whether there ought to be a termination order and, if so the time of vacant possession, was the impact upon the Hevers of the conduct of the Commonwealth. I do not consider that it is appropriate in light of that to make any award of money in addition.
Further, I do not think it is appropriate for me to order the return of the bond to the Hevers prior to their giving up vacant possession of the property. Not only would that require a third party to be joined to the proceedings, but it would ignore the protection that the bond affords to the Commonwealth. Thus, while I appreciate that one of the purposes of a bond is to provide some insurance to a landlord for damage to the property and that this is clearly inapplicable in circumstances where the improvements on the property are going to be demolished, even if I had the power to order the return of the bond I would not do so.
Conclusion
I therefore order:
(1)The residential tenancy agreement between the applicant and the respondents in relation to the properties situated at 1955-1975 The Northern Road, Luddenham, NSW 2745 and 1995-2005 The Northern Road, Luddenham, NSW 2745 comprising part of folio identifier Lot 1 DP 838361 (“Premises”) be terminated.
(2)Vacant possession of the Premises be given to the applicant on or before 8 December 2015.
(3)The order for vacant possession be suspended to 15 February 2016.
I will hear the parties on costs.
I certify that the preceding one hundred and twenty-six (126) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 23 October 2015
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