Commonwealth of Australia v Rickwood
[2015] FCCA 3412
•21 December 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| COMMONWEALTH OF AUSTRALIA v RICKWOOD | [2015] FCCA 3412 |
| 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 – termination of tenancy agreement granted – order for vacant possession suspended. |
| Legislation: Federal Circuit Court of Australia Act 1999 (Cth), s.10AA |
| Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Odzic & Anor [2015] FCCA 3363 Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Rigney & Anor (No.3) [2015] FCCA 3133 |
| Applicant: | COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
| Respondent: | MARK RICKWOOD |
| File Number: | SYG 1824 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 15 (Formerly Lot 14) Winston Close, 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 1824 of 2015
| COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT) |
Applicant
And
| MARK RICKWOOD |
Respondent
REASONS FOR JUDGMENT
Mr Rickwood has occupied the land situated at 15 (Formerly Lot 14) Winston Close, Badgerys Creek NSW 2555 (“Premises”) since May 2000 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 24 November 2014 the Commonwealth gave 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 Rickwood did not vacate the Premises by that date and the Commonwealth now seeks orders terminating the residential tenancy agreement and for vacant possession.
Mr Rickwood opposes the orders sought by the Commonwealth on a number of bases. The first is that a notice of termination was not properly served on him. The second 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. Thirdly, the Court does not have jurisdiction to make the orders because the legislation purporting to grant the Court jurisdiction is unconstitutional. Fourthly, the determination of the law to be applied by the Court was beyond the power granted by the relevant statute. Fifthly, he relies on a number of representations made to him on behalf of the Commonwealth as to his right to purchase the Premises if the airport did not proceed. Sixthly, he argues that the Court should refuse to exercise its jurisdiction to terminate the agreement as a matter of discretion.
In his response, Mr Rickwood also raised a number of other points that can be dealt with briefly:
a)He reserves the right to contend that he holds the land in adverse possession to the Commonwealth.
Mr Rickwood did not ever claim adverse possession in the proceedings. In any event, it is difficult to see how such a claim could succeed in light of his own evidence that he was a tenant of the Commonwealth.
b)He makes three pleading points:
i)the applicant has failed to allege properly or at all and/or to particularise any right to possession of the lands the subject of the claim, and has failed to allege any lease, the relevant terms thereof, or the service of any notice to quit upon the respondent according to law;
ii)the applicant has failed to allege what right if any it has under the Residential Tenancies Act 2010 (NSW) (“Tenancies Act”) or to make a claim reliant on the terms of the said Act; and
iii)he says that it was an express term of the residential lease between the parties that the tenancy ends by expiry of a properly given notice of termination serve by the Commonwealth or by an order of the Residential Tenancies Tribunal [sic] neither of which was alleged by the applicant nor has occurred.
The answer to all of these is that the application is not a pleading and the availability of the relief sought in the application must be dealt with on the basis of the evidence in the proceedings.
c)He contests that letters sent to him by the Commonwealth’s property agents were lawful and effective notices of termination. The Commonwealth only relies on one notice. It is dealt with below.
There have been a number of proceedings brought by the Commonwealth against tenants and other occupiers of land in the vicinity of the Premises. The majority of those proceedings have fallen into two groups by reference to the length of time during which the tenants had been in possession of the land, namely, those who had been in possession for 20 years or more and those who had been in possession of the land for less than 20 years. Judgment has already been handed down in all of the first group of cases: see, for example, Commonwealth of Australia (As Represented By The Department of Infrastructure and Regional Development) v Rigney & Anor (No.3) [2015] FCCA 3133 (“Rigney”). These proceedings belong to the second group, most of the proceedings in which were heard concurrently. Judgment in each of the matters heard concurrently has been handed down at the same time as judgment in this matter. I note that judgment in these matters was reserved before I handed down judgment in Rigney 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] – [9]. 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.
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 Rickwood has occupied the Premises since May 2000;
d)on 1 April 2002 the parties entered into a residential tenancy agreement (“Agreement”) in respect of the Premises;
e)the term of the Agreement was one year from 1 April 2002 and expired on 31 March 2003;
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 Rickwood that it will likely require him to vacate the Premises by June 2015;
i)on 24 November 2014, the Commonwealth served a Notice of Termination of the Agreement on Mr Rickwood;
j)the Notice of Termination stipulated 15 June 2015 as the day on which the Agreement terminated and by which Mr Rickwood was required to give vacant possession of the Premises to the Commonwealth; and
k)Mr Rickwood has not indicated that he is willing to vacate the Premises by that date and has remained in possession of the Premises.
Commencement of Mr Rickwood’s possession
The finding at [9](c) above is not really controversial, but, as the evidence on the issue was not consistent I will explain the basis for it. Kylie Blackwood, an employee of the Commonwealth’s property manager, gave evidence that Mr Rickwood has occupied the Premises since May 2000. This appears to have been based on the record kept by the NSW Department of Fair Trading that a bond was lodged in Mr Rickwood’s name on 31 May 2000. On the other hand, Mr Rickwood gave evidence that he had lived in the Premises for at least 15 years and had moved in in 1999. Although it is usually the case that the person who does something can more reliably give evidence about that, I prefer Ms Blackwood’s evidence in this case. That is because it is based on a contemporaneous document and Mr Rickwood’s evidence is a little vague. That said, the point is of no great significance for two reasons: first, I draw no adverse inference against Mr Rickwood in this respect and, secondly, both parties agree that Mr Rickwood has been in occupation of the Premises for less than 20 years.
Predominant use of Premises
The finding at [9](g) above deals with Mr Rickwood’s second contention set out at [3] above. The relevance of that contention was explained in my judgment in Rigney at [8]-[23]. Briefly, the argument is as follows: first, the Tenancies Act does not apply to land that is predominantly used for agricultural purposes: s.7(h); secondly, the land which is the subject of these proceedings is predominantly used for agricultural purposes; thirdly, in these 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 Rickwood’s evidence relevant to this issue was set out in his affidavit dated 27 July 2015:
[5]The property is 5 acres and the residential premises on the land occupies one half an acre. The house yard is fenced. There are other fences on the property for agricultural purposes. I presently have one horse on the property which grazes on the land. I also have had sheep dogs and cattle dogs from time to time.
[6]I also built a large farm shed on the land with the knowledge of Marjorie [a property agent for the Commonwealth] who inspected the premises from time to time. I have stored machinery on the land in the large farm shed. The shed stores farm equipment such as mowers. It also stores specialised machinery being light industrial fabrication equipment which I use from time to time for undertaking repairs for various projects, including maintenance works for people including residents and others in the area.
…
[8]The predominant use of the premises is agricultural and industrial with the house used primarily but not solely for residential purposes. I have a company MIR Services Pty Ltd which is registered at the house which provides building management and building services. Linked to those services are the works done in the large farm shed. …
I do not accept that keeping a horse grazing on land or a number of sheep dogs or cattle dogs are agricultural activities. It may well be that the projects referred to in Mr Rickwood’s affidavit do constitute business activity but, given that the evidence is left at that level of generality, I am not satisfied that, in this case, it does. There is, for example, no evidence of any financial aspect of the projects and they could simply be part of a hobby. Further, even if it did constitute such an activity, in the absence of any details of the size or scale of that activity, I cannot be satisfied that the use of the Premises is predominantly for that purpose. 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
Mr Rickwood contested service of the notice of termination (cf. the finding at [9](i). Ms Blackwood gave evidence that the notice of termination was sent to Mr Rickwood by registered post on or around 24 November 2014. Postal records annexed to her affidavit show that an item was delivered to Mr Rickwood at 9:24am on 12 December 2014. No objections were made to this evidence and Ms Blackwood was not cross-examined in respect of it.
Mr Rickwood makes a number of points about service. First, in his evidence, he says that he does not recall receiving the notice. I accept that, but it does not establish either that he did not receive it or it was not posted to him at his address. Secondly, he says that there is no evidence as to his residential or business address last known to the Commonwealth giving or serving the document. This is a reference to the method for giving documents set out in sub-s.223(1)(iv) of the Tenancies Act. That is not correct. Ms Blackwood gave evidence that the records kept in relation to Mr Rickwood were that his address was 15 Winston Close, Badgerys Creek NSW 2555. No objection was made to that evidence. That was also the address that Mr Rickwood gave in his affidavit as his address. Thirdly, he says that there was no evidence of where the envelope containing the notice was sent. It may be assumed that the notice was sent by first putting it into an envelope and then addressing the envelope. Also, it is true that there is no direct evidence of the address on the envelope that contained the notice. However, Ms Blackwood’s uncontested evidence was that the notice was sent to Mr Rickwood. The notice was addressed to him at 15 Winston Close, Badgerys Creek NSW 2555. I infer that it was sent to Mr Rickwood to that address by registered post.
I find on the basis of Ms Blackwood’s uncontested evidence that the Commonwealth’s agents did send the notice of termination to Mr Rickwood by registered post at his residential address last known to the Commonwealth. In light of that, the Notice of Termination was given on Mr Rickwood in the manner required by the Tenancies Act.
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 one year from 1 April 2002 and it expired on 31 March 2003.
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 Rickwood 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. I have found that it was given to the respondent in accordance with sub-s.223(1)(iv) of the Tenancies Act.
The notice correctly identified the property, set out the day on which the agreement was to be terminated (15 June 2015) and the date on which vacant possession of the premises was to be given, being the same date as the date of termination. It was in writing and signed by an agent for the Commonwealth. There were no relevant regulations.
In those circumstances I am satisfied that a notice of termination was given in accordance with the requirements of the Tenancies Act.
Has the respondent vacated the premises as required by the notice?
Mr Rickwood’s evidence was that he is still living on the Premises.
For those reasons, the matters in sub-s.85(3) of the Tenancies Act have been established and the residential tenancies agreement between the parties must be terminated.
The appropriate date on which vacant possession is to be given to the landlord
In considering this issue, it is convenient to deal first with the Commonwealth’s case before turning to the individual circumstances of Mr Rickwood.
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 Rickwood 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 him 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 given in November 2014 and received in December 2014.
Apart from the matters I have already dealt with, Mr Rickwood relies on a number of matters which I set out together with my consideration of them:
a)The proposed termination and/or eviction will cause hardship to the Respondent;
The hardship relied on involved several matters: first, Mr Rickwood’s health; secondly, the loss of his equipment and machinery or the expense of moving and storing it; and thirdly, the fact that he would have to change jobs if he moved to Picton or Lithgow. I will consider these further below.
b)The cost of removing buildings and equipment belonging to him and which it has been represented he may take with him on termination is at least $600,000;
This falls under the previous matter and is considered below.
c)The respondent is infirm and the orders sought will adversely affect the health and livelihood of the respondent;
This is dealt with below.
d)Having regard to the length of occupation of the lands in question and the property of the Respondent the period for vacating the lands is insufficient and unduly short;
Mr Rickwood has been on notice of the need to vacate for over a year. There is nothing beyond mere assertion to suggest that that is inadequate time to prepare to vacate.
e)There is no urgency for the applicant to evict the Respondent because the applicant within the last 10 years has given a 99 year right of refusal to open or use Badgerys Creek as a commercial airport in the Sydney Metropolitan region to Macquarie Airports the lessee and user of Kingsford Smith Airport a commercial airport within the Sydney Metropolitan region, and Macquarie Airports has no commercial use nor requirement nor interest nor plan to operate or use Badgerys Creek as an airport at any time in the foreseeable future including the next 30 years;
Mr Rickwood also raised a similar claim, namely, that there was no pending commercial requirement for the orders for termination for over 12 years. I dealt with and rejected the same arguments in Odzic at [95] – [101]. In brief, the evidence does not support the claim.
f)There is no suitable or available alternative similar leaseholds in the region of Badgerys Creek or Luddenham for the Respondents to rent or occupy on the same or similar terms;
Mr Rickwood did not give evidence of any attempts to locate alternative suitable accommodation. However, he relies on the particular matters referred to at [33](a) above. In my view, his evidence, including that considered immediately below, does not establish that there is no suitable alternative accommodation available.
Mr Rickwood tendered a folder of material (Exhibit E) that included some documents relevant to the availability of accommodation in the Greater Western Sydney region. The first of those documents related to community housing. There was no evidence about Mr Rickwood’s financial circumstances other than that he mainly works in the city of Sydney in high rise property management but is currently unemployed. For that reason, the availability of community housing is not relevant to their 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.
g)The applicant has offered to the Respondent no compensation for the loss of the Respondent’s property affixed to the land or otherwise and for the cost of complying with the eviction notices.
No basis was given in evidence, or submissions for any right to compensation and, in any event, it is difficult to understand how such a right might affect the determination of an appropriate date by which vacant possession of the Premises must be given. That is particularly so in the absence of any evidence about Mr Rickwood’s financial means.
h)As there was an express provision in the Agreement in relation to termination, the rights of the parties are governed by that clause
I dealt with and rejected this and a similar argument in Odzic at [106] – [109]. The argument is rejected in these proceedings for the same reasons. In doing so, I note that the express provision in the Agreement was sufficiently similar to the one referred to in Odzic.
i)Because the termination notice was served before the introduction of s.10AA into the Federal Circuit Court of Australia Act 1999 (Cth), it was not effective for the purposes of the Commonwealth law
I dealt with and rejected this argument in Odzic at [110] – [111]. The argument is rejected in these proceedings for the same reasons.
Overview of Mr Rickwood’s circumstances
Mr Rickwood’s evidence was that he was in a severe accident in October 2013, suffering from brain and other injuries. He said that his recovery and rehabilitation had been a major setback in his life, health and commitments and that he was still under medical monitoring. He also said that he had Polycystic Kidney Disease and impaired kidney function. His driver’s licence was medically suspended due to his injuries and this affected his ability to work. He says that he is working again, mainly helping out his neighbours. Other evidence appears to be inconsistent with this. He says that if he is forced to move to Lithgow or Picton he will have to change his vocation because of his occupation as high rise property manager. He also says that he was unemployed because he lost a contract managing buildings in North Sydney two months ago.
It is difficult to accept all of Mr Rickwood’s evidence. At its best, it establishes that he was, for some time, suffering from injuries as a result of an accident but that he is now sufficiently well to be able to undertake his normal employment. Thus, in spite of his set-backs, Mr Rickwood has no real health issues that might impact on the appropriate date for him to give vacant possession of the Premises to the Commonwealth.
The second aspect of hardship relied on by Mr Rickwood is the loss of his equipment and machinery or the expense of moving and storing it. These must be alternatives. Contrary to the assertion in his response, Mr Rickwood’s evidence is that it will cost him $12,000 to move. Once again, even if that were the case, it is difficult to see how that impacts on the appropriate date for giving vacant possession.
The third matter relating to hardship is that he will have to change jobs if he has to move to Lithgow or Picton. There is no basis in the evidence for any suggestion that he will be forced to move to either of those locations. Indeed, as already discussed, there is no evidence that suitable alternative accommodation is not readily available in the vicinity of where he currently lives.
Mr Rickwood also relied on certain representations by a property agent of the Commonwealth. His evidence in this respect was set out in his affidavit dated 27 July 2015:
[13]Due to definite Commonwealth decisions during the period of my lease, I had explained to me by Marjorie Bellero in 1999 just before the Olympics, in words to the following effect
“Mark, if the airport is not to be built then you have the option to purchase you own property at a reasonable market value, and some credit will be given to you for the rent you will have paid” I said “That’s good. I agree.”
[14]I contest that the Respondent is not proposing to build an airport at Badgery’s Creek and I wish to exercise my option to purchase.
There are numerous problems with this argument. First, the conversation cannot amount to an enforceable promise because it was made without any consideration and was not in writing; secondly, there is no evidence of reliance on the representation; and thirdly, even if the first two problems were overcome, it is clear that the Commonwealth is going to develop an airport and so no option to purchase has arisen.
Finally, Mr Rickwood gave evidence about his mother’s health. She, too, has Polycystic kidney disease and also has an acoustic neuroma. He says that, as a result, she is unable to offer support. That may be so, but I am not satisfied that Mr Rickwood needs any support. As I have found, he has recovered his health sufficiently to work, there is no evidence of his financial means and I am not satisfied that there are no suitable alternative premises available for rent within a reasonable time.
In my view, Mr Rickwood has presented no real basis for his 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 Rickwood has put forward nothing of any substance in opposition to the orders sought, I am satisfied that the appropriate date on which Mr Rickwood 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:
a)The residential tenancy agreement in relation to the premises at 15 (Formerly Lot 14) Winston Close, Badgerys Creek NSW 2555 comprising part of folio identifier Lot 1 DP 838361 (“Premises”) be terminated with immediate effect.
b)Vacant possession of the Premises be given to the Applicant on or before 28 December 2015.
c)The order for vacant possession be suspended until 25 January 2016.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Judge Smith
Associate:
Date: 21 December 2015
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