Cox v Krepp
[2010] VSC 117
•12 April 2010
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
No. S CI 2010 475
| KAY ANN COX and Another | Applicants |
| - and- | |
| ANNIE EVELYN KREPP and Others | Respondents |
―---
JUDGE: | Mukhtar AsJ |
WHERE HELD: | Melbourne |
DATES OF HEARING: | 26 March 2010 |
DATE OF JUDGMENT: | 12 April 2010 |
CASE MAY BE CITED AS: | Cox v Krepp |
MEDIUM NEUTRAL CITATION: | [2010] VSC 117 |
REASONS FOR DECISION
APPEAL ― Appeal from Tribunal on a question of law ― Question of Tribunal’s jurisdiction
― No challenge to Tribunal’s jurisdiction ― No error shown in jurisdictional facts ― No application for a stay in Tribunal by reason of related Court proceedings ― Leave to appeal refused.
APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr D P Lloyd | Donaldson Trumble Lawyers |
| For the Defendants | Mr S Hopper | Tate Leishman Taylor |
HIS HONOUR:
The applicants seek leave, as is required under s 148(1) of the Victorian Civil & Administrative Tribunal Act, to appeal on a question of law from a decision of that Tribunal ordering them as tenants to vacate residential premises in Torquay and to pay $8,000 to the landlords for arrears of rent. The order was made by the Tribunal Member on 4 December 2009. Reasons for decision were published subsequently on 5 January 2010.
Under the relevant rules of this Court, leave may be refused if the applicants do not have a prima facie case on appeal, or, if to refuse leave would impose no substantial injustice. This power has been interpreted as requiring it to be demonstrated, at least, that the Tribunal’s decision is attended by sufficient doubt to justify the granting of leave: see Secretary to the Department of Premier & Cabinet v Hulls. [1] The applicants need not establish that the Tribunal erred on the question of law; that is for the appeal, if leave be granted.
[1](1999) 3 VR 331 (CA).
The following facts are taken from the Tribunal’s reasons.
The applicants are husband and wife. The first respondent, Annie Krepp, is the 88-year old mother of the first applicant, Kay Cox. The second and third respondents are the brothers of Kay Cox. The applicants (who I may refer to as “the tenants”) have lived in the rented premises for about 20 years under a family arrangement. Annie Krepp and her late husband owned the premises as tenants-in-common in equal shares. He died in 2002. Under his will, Annie Krepp was given a life interest in her husband’s half share, and upon her death his half share is to be divided between his two daughters and one son. Thus, the respondents (who I may refer to as “the landlords”) are Annie Krepp, as part owner, and her two sons as executors of their father’s estate. There is now a deep personal rift between Kay Cox and the rest of her family.
The Tribunal made a finding that a residential tenancy was created in early 2007 on the basis that the applicants would pay $800 rent per calendar month. The Tribunal found that rent of that amount was paid by electronic funds transfer into Annie Krepp’s bank account until August 2008, but that from August 2008 until September 2009 only one further payment of rent occurred, and that was in January 2009.
On 8 September 2009, the landlords gave the tenants a notice to vacate under s 246 of the Residential Tenancies Act on the ground that the tenants owed $8,000 in rent as at July 2009. The tenants did not vacate. The landlords then lodged an application (bearing the date 1 October 2009) in the Tribunal for a possession order under s 322 of the Residential Tenancies Act and payment of the arrears of rent. According to the evidence in this application, for the purposes of the hearing at the Tribunal on 2 and 4 December 2009, the tenants prepared a short written response to the application, akin in nature or intent to a brief defence. In essence, their position was that they had spent about $10,184 in improving the property which should “be set off against the rental until such time as the amounts of rental forgiven equalled the amount expended on those improvements”[2], and that they had made cash payments of rent directly to Annie Krepp, which had not been accounted for by the landlords. Both these defences were rejected by the Tribunal after hearing from the witnesses and giving expositive reasons.
[2]See para 3 of the tenants’ “Statement” filed in the Tribunal.
I go now to the origins of the question for present purposes. On 6 October 2009 (remembering that the Tribunal application was dated 1 October 2009), the applicants filed a writ in this Court against Annie Krepp and the two executors. They allege that in August 2006, Annie Krepp proposed that: she would surrender her life interest in the Torquay property without payment; she would sell her half share to William Cox for $245,000; and the executors would sell the deceased’s half share to William Cox for $245,000. There were other ancillary matters which are not material. It is alleged that this proposal was accepted all round and that, subsequently, the solicitors for Annie
Krepp and the executors prepared a contract of sale which was submitted to the affected parties.
It is then alleged that in March 2007, the proposal was varied so that, in effect, Kay Cox and William Cox would buy the Torquay property for $490,000 on terms requiring them to pay $245,000 immediately and pay the balance by 1 February 2008. They allege that it was also agreed they would immediately repay the mortgage on the Torquay property and they would pay interest on the balance of the purchase price per month at a rate to be agreed, but if not agreed, the applicants would remain in possession until payment of the balance on the same terms as to rent then applying. There was no written contract of sale. The contract is said to be constituted by an e-mail and 2 letters. The plaintiffs allege they paid $245,000 on 3 April 2007 and repaid the mortgage. They allege the defendants repudiated the agreement in April 2007, which the plaintiffs refused to accept, leading them to lodge a caveat over the Torquay property. They seek a declaration of rights and an order for specific performance.
A defence has been filed in the Supreme Court proceeding to which I shall not refer beyond saying that the alleged agreements are resisted on factual and legal grounds. The defendants say there was no agreement. There is an issue whether the executors agreed personally to any sale and whether Annie Krepp had the authority to bind the executors.
The existence of the Supreme Court proceedings was mentioned to the Tribunal. An affidavit of William Samuel Cox states: [3]
At the commencement of the hearing on 4 December, 2009 there was a discussion between the Member and [the legal representatives] as to whether it was appropriate for the Member to continue hearing the matter in light of the fact that my wife and I had commenced the Supreme Court proceeding in which my wife and I seek specific performance of the agreement made with the applicants under which my wife and I had agreed to buy the property. The focus point for the discussion was s.448 of the Residential Tenancies Act . . . I do not recall these or any other documents from the Supreme Court proceeding being produced at the hearing.
In the result, the Member informed [the legal practitioners] that she believed she had to hear the matter, notwithstanding the Supreme Court proceeding. The Member then directed that the hearing continue and my wife returned to the witness box to continue with her evidence.
[3]Sworn 24 February 2010, at paras 14 and 15.
Section 448(1) of the Act states:
(1) Subject to this section, if an application is made to or proceedings are before the Tribunal, the issue concerned is not justiciable at any time before a court or person acting judicially other than the Supreme Court or the Tribunal except –
(a) in proceedings instituted before the application to the Tribunal was made or proceedings commenced; or
(b) if the application and proceedings have been withdrawn; or
(c) in proceedings for an offence.
(2) Subsection (1) applies whether the issue is shown in the application or emerges in the course of proceedings.
(3) The Tribunal must not determine an issue in an application or proceedings if a civil proceeding in respect of the issue was instituted before a court or person acting judicially before the application to or proceedings before the Tribunal unless the civil proceeding has been discontinued.
In the tenants’ written statement lodged with the Tribunal, there is an incidental reference made to a “process” under which Kay Cox would acquire the property. The Tribunal’s reasons state that Kay Cox gave evidence that an agreement had been made about 2 years ago to set out a “process” whereby she and her husband would purchase the property.[4] The Tribunal referred to the caveat lodged, and the existence of the Supreme Court proceedings and the principal relief sought. No more was said on the subject.
[4] Reasons at para 21.
The tenants on this application are now in effect raising the question of the Tribunal’s jurisdiction. Section 13 of the Residential Tenancies Act states:
This Act does not apply to a tenancy agreement created or arising between the parties to a contract of sale or mortgage of the premises in accordance with a term of the contract or mortgage.
Section 13 seems to recognise a special kind of tenancy, namely an entry under a
contract of sale − see generally Bradbrook and Croft, Commercial Tenancy in Australia.[5] A purchaser under a cash contract may be let into possession before settlement under a special term of the contract or some other arrangement. A terms contract of sale usually creates expressly a periodic tenancy. A situation can also arise where a purchaser simply permitted to be in possession may be characterised as a tenant at will. Nothing definitive needs to be stated here about the meaning or operation of clause 13, for it is enough to say a tenancy created under a contract of sale may create special or different right and equities to distinguish it from the ordinary residential tenancy expected to be dealt with by the Tribunal. It is significant to that s 13 requires the tenancy to arise in accordance with a term of the contract of sale.
[5](2nd ed) at [2.17]
Counsel for the tenants, Mr Lloyd, made 2 submissions. First, the Tribunal did not consider the question under s 13 whether the arrangement between the parties was a tenancy agreement “created or arising between the parties to a contract of sale of the premises in accordance with the terms of the contract”. If it was, then the jurisdiction of the Tribunal was not enlivened in the first place. Secondly, the Tribunal should not have decided the landlords’ application because of the pending Supreme Court case and the risk of inconsistent findings concerning the plaintiffs’ rights of occupation of the Torquay property. In that regard, he submitted that s 448 of the Act also gave this Court jurisdiction in a residential tenancy matter. I took this submission to have been put in the alternative; that is, the Tribunal should have declined to exercise its jurisdiction.
But as was submitted by counsel for the respondents, Mr Hopper (who also appeared for the landlords in the Tribunal), s 13 was not raised before the Tribunal and there was no challenge to jurisdiction as such, the onus being on the tenants to show that the Residential Tenancies Act did not apply. [6]
[6]See s 507 of the Act.
I see nothing in the Tribunal’s reasons to suggest there was a challenge to jurisdiction. There was no contention or evidence that a tenancy had arisen under a term, express or implied, of the alleged contract of sale. It seemed more a case of the tenants bringing the Supreme Court action to the Tribunal’s attention and agitating the question whether it was “appropriate” for the Tribunal to proceed. If, as the affidavit of Mr Cox says, there was discussion with the Member about s 448 of the Act, then not knowing any more than that, I have to suppose the tenants were contending that “the issue concerned” (that being the language of s 448) was also justiciable in the Supreme Court, and the Tribunal should defer to the Supreme Court as a matter of observance of Court hierarchy. If that is so, what is meant by “the issue”? Looking at the statement of claim, there is not an obvious issue about the tenancy. It is a claim for specific performance of a sale of land. Perhaps it was said in the Tribunal that by virtue of an alleged contract of sale, the general question about the parties’ legal interest in the tenanted premises was in issue and the Tribunal ought to await that outcome.
As a general rule, if a point is not taken in a court or Tribunal below and evidence could have been given which, by any possibility could have prevented the point from succeeding, it cannot be taken afterwards in an appellate Court: see Suttor v Gundowda Pty Ltd[7] and Sobania v Nitsche [8] In the latter case Gibbs J said [9]
It is true that if it appears from the face of the proceedings that the court from which an appeal has been brought had no jurisdiction, the point may be taken on appeal notwithstanding that it was not raised in the court below. If, however the question whether there was an absence of jurisdiction depends on the decision of a question of fact and all the facts are not before the court, it seems to me that an objection to the jurisdiction which was not taken in the court below should not as a general rule be allowed on appeal.
[7](1950) 81 CLR 418, 438.
[8](1969) 16 FLR 329, 333-4.
[9]At 334.
As his Honour went on to explain, lower courts or tribunals have limited or qualified jurisdiction and, whether an objection was made or not, questions may arise on an appeal ― or under judicial review ― about the very validity of a decision made on an assumption of jurisdiction. In that situation, a tribunal is expected to state the facts to show that it has, or is not, deprived of jurisdiction. When scrutinising the adequacy of those facts as stated, appellate Courts recognise that a tribunal acts without formality and technical manner and form.
In this case, as I say, there was no challenge to jurisdiction. If there was, the landlords would have been entitled to adduce evidence on the question whether the tenancy agreement truly did arise “in accordance with a term of the contract” of sale. An affidavit filed in this application on behalf of the respondents by their solicitor, Sergio Baccetti, shows there would be a real question of fact about the creation of a contract of sale at all. As it was, the Tribunal recorded that it was common ground that a residential tenancy agreement came into existence in early to mid 2007 on the basis that the tenants pay $800 per month under an informal family arrangement. The tenant’s written response to the Tribunal was not concerned with the assertion of an altered legal relationship between landlord and tenant by reason of a contract of sale or “process” as it was called. They sought to defeat the claim by a set off of their expenditure on the property, and alleging they had paid rent. Both of those grounds are consistent with the existence of the residential tenancy as asserted by the landlords and as found to exist by the Tribunal. It is not said that an error of law was made in the determination of those jurisdictional facts.
Therefore, I would conclude the first ground of leave to appeal has no real prospect of success and I would refuse leave to appeal.
The second ground concerns s 448 of the Act. That provision speaks openly of justiciability, not jurisdiction. In the context of judicial review, justiciability means amenability to litigation. The usual examples are review of prerogative powers, or decisions in a political context, which do not call for the application of judicial norms: see Aronson and others, Judicial Review of Administrative Action[10] . In the context of a tenancy dispute, I doubt if it has that meaning in s 448.I think “not justiciable” in s 448 is intended to mean “not to be heard and determined” as if to create an exclusivity or a preclusion.
[10](4th ed) at [3.170]ff.
The landlords submitted there was no application for a stay in the Tribunal and it
would undermine the establishment and utility of a specialist tribunal if a party could “gazump”, that is displace, a prior application to a specialist tribunal by filing a Supreme Court writ afterwards. They adopted the view that under s 448, justiciability depends upon where the proceedings were first commenced. If they were commenced first in the Tribunal, then the issue concerned is justiciable only before the Tribunal subject to the exceptions in s 448(1). If the Court case was started first, then the issue concerned is justiciable only before the court unless it is discontinued.
That construction seems reasonable but the problem is that s 448(1) says (with my italics) “…not justiciable at any time before a court or person acting judicially other than the Supreme Court or the Tribunal…” On a plain reading, that that means to my mind “the issue” is justiciable in the Supreme Court as well as VCAT. The exceptions in s 448(1) apply to other courts or persons acting judicially apart from the Supreme Court. In reality landlords and tenants would be thought to favour the informality, expedition and lesser expense of VCAT, as well as the usual absence of costs orders.
The tenants’ second submission really amounts to saying the Tribunal erred in not staying the proceedings. It would have had to be put on the conventional basis that concurrent actions between the same parties about the same subject matter ought to be avoided: see generally Williams, Supreme Court Procedure[11] But it has to be the same cause of action otherwise it cannot be said there is a risk of inconsistent findings.
[11]At [23.01.105]
But there was no application for a stay of proceedings in the Tribunal. Nor did the tenants as plaintiffs in the Supreme Court action seek to obtain an injunction to restrain the landlords (the putative vendors of the land) from dispossessing them (as putative purchasers) of the land. If so, any injunction might only have been on condition that all arrears of rent were paid, and observance of an obligation to pay all future rent.
The question on this application is whether the Tribunal’s decision to proceed despite the Supreme Court case was, as a matter of law, attended with sufficient doubt because of the tenant’s apprehended risk of inconsistent findings, in a situation where
the tenants did not ask for a stay on that ground?
I can accept the general proposition that if there truly is a concurrent issue before a tribunal and this Court then, unless statute says otherwise, there is usually good sense in “giving way” to a superior Court to make the determination especially if an appeal may run from the tribunal to this Court anyway on the same question. But, in my view, in this case, once the Tribunal found the facts to establish there was a residential tenancy and that it had jurisdiction, then there was in truth no risk of inconsistent findings. The Tribunal was not asked or led to consider the question whether there was a contract of sale and if it had been breached. The “issue concerned” for the purposes of s 448 was whether there were grounds for the landlords to serve a notice to vacate and whether the tenants had paid some rent in cash and could set off the rest against their expenditure on improvements to the premises. That is not an issue in the Supreme Court proceedings. A finding on that issue is not necessary to deal with the controversy. If successful, this Court will not decide anything more than the issue whether a contract of sale came into existence, and whether it was repudiated and whether it ought to be specifically performed, or damages ordered in lieu.
For those reasons, in my view, the decision of the Tribunal is not attended with sufficient doubt to justify leave to appeal.
Subject to hearing from counsel I would order that leave to appeal be refused and the plaintiffs pay the defendants’ costs of this application.
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