Director of Housing v Lefevre
[2021] TASSC 33
•30 July 2021
[2021] TASSC 33
COURT: SUPREME COURT OF TASMANIA
CITATION: Director of Housing v Lefevre [2021] TASSC 33
PARTIES: DIRECTOR OF HOUSING
v
LEFEVRE, Marie
FILE NO: 1735/2019
DELIVERED ON: 30 July 2021
DELIVERED AT: Hobart
HEARING DATE: 1 November 2019
JUDGMENT OF: Wood J
CATCHWORDS:
Landlord and Tenant – Residential tenancies legislation – Recovery of possession – Generally – Application for order of vacant possession – After notice to vacate was issued and application made for vacant possession the parties entered into a new residential tenancy agreement - Order can only relate to the residential tenancy agreement that is the subject of the notice.
Residential Tenancy Act 1997 (Tas), ss 11, 12, 45.
Logan v Director of Housing [2004] TASSC 153, 14 Tas R 324; Director of Housing v Parsons [2019] TASFC 3, considered.
Aust Dig Landlord and Tenant [217]
REPRESENTATION:
Counsel:
Appellant: P Turner SC
Respondent: M Norton, B Bartl
Solicitors:
Appellant: Office of the Solicitor-General
Respondent: Tenant's Union of Tasmania Inc
Judgment Number: [2021] TASSC 33
Number of paragraphs: 57
Serial No 33/2021
File No 1735/2019
DIRECTOR OF HOUSING v MARIE LEFEVRE
REASONS FOR JUDGMENT WOOD J
30 July 2021
This is an appeal from a decision of Magistrate S Brown following a hearing of an application for an order that vacant possession of premises be delivered to the owner under the Residential Tenancy Act 1997. The owner of the premises, the Director of Housing, sought the order with respect to premises at Invermay leased by Marie Lefevre. The premises were leased pursuant to a residential tenancy agreement which periodically had been extended, recently, from 31 October 2018 until 18 June 2019. On 16 November 2018 the applicant served the respondent with a notice to vacate the premises alleging that she had breached the residential tenancy agreement principally by failing to keep the premises in good condition and repair. The notice set out breaches that needed to be remedied, and was to take effect on 4 December 2018. It was considered by the applicant that some of the breaches had not been remedied by that date and the application was then made to the magistrates court for an order for vacant possession. The application was opposed. The hearing commenced on 15 May 2019 and was adjourned part-heard. It was relisted on 21 June 2019.
In the meantime, there was a development critical to the magistrate's decision and this appeal. On 19 June 2019, two days before the hearing resumed and the day after the residential tenancy agreement expired, the parties signed an agreement which provided that the parties agreed to extend the fixed term lease until 18 December 2019. The agreement is titled "Agreement to extend Tenancy Agreement (Lease)."
At the resumption of the hearing, it was argued for the respondent that there was a new residential tenancy agreement in place, that the application for an order for vacant possession sought to terminate an expired agreement and that the notice did not relate to the new agreement.
The learned magistrate determined that there was a new agreement and that the application should be dismissed. He considered that the proceedings were nugatory because no effective order could be made. Judgment was entered for the respondent.
This overview glances over the history of the matter. The following is a chronology which provides some detail of the key events:
The Director entered into a residential tenancy agreement with the respondent in respect of the property at Invermay, commencing on 18 September, 2009 for a period of three months.
The residential tenancy agreement was extended from time to time. On 31 October 2018 it was extended from 18 December 2018 for a period of six months ending on 18 June 2019.
The property was inspected by Housing Tasmania officers on 4 July 2018 and 19 October 2018, and it was determined that the respondent had failed to comply with various provisions of the agreement concerning the condition of the property.
On 16 November 2018 a notice to vacate the Invermay property was served on the respondent pursuant to s 42 of the Residential Tenancy Act. The notice identified that the respondent failed to comply with conditions of the agreement to keep the premises clean and tidy and clear of rubbish, not to damage the premises and not to keep an animal at the property. The notice provided that if breaches were addressed then the respondent did not have to vacate the property.
The notice took effect on 4 December 2019, 17 days from the date of service of the notice, and in compliance with the Act which required a minimum of 14 days (s 43(1) of the Act).
The property was inspected by Housing Tasmania officers on about 21 December 2018. It was considered that not all of the breaches of the lease set out in the notice had been remedied. The respondent had not vacated the property.
On 24 December 2018 an application for an order for vacant possession was made by the Director and filed with the Magistrates Court.
The application for an order was opposed by the respondent, Ms Lefevre. Her position was that the breaches had been remedied or were not of a kind capable of founding a notice to vacate. It was originally listed for hearing on 17 February 2019 but for various reasons did not proceed until 15 May 2019. At the hearing witnesses were called for the applicant. The Director's case closed late in the day and the hearing was then adjourned to a later date for the court to hear evidence on the respondent's case. It was originally listed for 24 May but on that date the parties were informed that the listing could not be reached and a new date was provided, 21 June 2019.
On 19 June 2019 the respondent and a Housing Tasmania officer on behalf of the Director signed a document titled "Agreement to extend Tenancy Agreement (Lease)." The period was until 18 December 2019. The document ends as follows:
"Declaration
By signing you accept that the tenancy agreement is extended and that you acknowledge that all the terms of your tenancy agreement continue to apply except that the tenancy agreement will now end on 18-12-19"
The proceedings before the Magistrate
When the application resumed before the learned Magistrate on 21 June 2019, the respondent's counsel applied to have the application dismissed pursuant to r 38 of the Magistrates Court (Civil Division) Rules 1998. It was argued that to continue with the matter would be futile given that the Director had entered into a new fixed term agreement with the respondent on 19 June 2019.
Rule 38(a) provides:
"38 Abuse of process
The Court, on the application of a party, may –
(a) enter judgment in an action that the Court considers to be scandalous, frivolous, oppressive, vexatious or otherwise an abuse of process of the Court;
…"
On 26 June 2019 the learned magistrate dismissed the Director's application for an order for vacant possession and provided comprehensive reasons, later reduced to writing and published to the parties. His Honour found that the original agreement expired on 18 June 2019, and by operation of ss 11(2) and (3), a "new" residential tenancy agreement was established, in the same terms and conditions as the original agreement. He found that, on 19 June 2019 a further new agreement, not an extension of the original agreement was entered into by the parties which adopted the terms and conditions of the original agreement but was for a fixed term ending on 18 December 2019.
The learned magistrate concluded:
"It is the residential tenancy agreement of 2009 as extended since which founds the notice to vacate that is under construction and relied on the substantive application before me. That notice to vacate is now of no effect because it relates to a residential tenancy agreement which is no longer in existence. Breaches of that agreement cannot be relied on as breaches of the new residential tenancy agreement.
…
The respondent now enjoys a right to occupy the premises in question pursuant to a residential tenancy agreement of the 19 June 2019, not the residential tenancy agreement of 2009 as extended on 16 November 2018 [it is uncontroversial that this date is an error and should be 31 October 2018]. As Mr Bartl submitted if I were to continue hearing the application any order made on it would be of no effect because the tenant now occupies pursuant to a different 'new' agreement. The agreement of 19 June 2019 is undoubtedly a residential tenancy agreement. It gives the tenant the right to exclusive occupancy of the premises for in excess of four weeks and it is for value (see the act, s10). The parties' rights and obligations under that agreement are governed by the act which is, of course, a code. The act provides for clear mechanisms for an owner to obtain an order for vacant possession. In relation to the agreement of 19 June 2019 none of those steps have been taken at all.
…
The notice of 16 November 2018 relates to the 'old' agreement. A valid notice must state on its face "the details of the reason for the serving of the notice" (s44(c)). Those reasons are those set forth in s 42. Relevantly those reasons must amount to a failure to comply with "the agreement" sought to be terminated, not some earlier one."
Legislative framework
There are a number of provisions of the Residential Tenancy Act which provide context for the issues on appeal:
"10 Residential tenancy agreement
(1) A residential tenancy agreement exists where a right of occupancy of residential premises is granted by the owner of the premises to a person for value –
(a) whether or not the right is a right of exclusive occupation; or
(b) whether the agreement is express or implied; or
(c) whether the agreement is oral or in writing, or partly oral and partly in writing; or
(d) whether or not the agreement is for a fixed period –
and includes a relevant social housing sub-lease."
Section 10(1) provides that a residential tenancy agreement exists where a right of occupancy of residential premises is granted by the owner of the premises to a person for value. This is the situation whether the agreement is oral or in writing, or partly oral and partly in writing, and whether or not the agreement is for a fixed period: s 10(1)(c) and (d). Section 10(2) provides that a residential tenancy agreement is for a fixed period if it is for a period of at least 4 weeks.
Section 11 is concerned with expiry of a residential tenancy agreement and relevantly provides:
"11 Expiry
(1) A residential tenancy agreement for a fixed period, unless earlier terminated under Part 4 , expires –
(a) on a date specified in the agreement; or
(b) if a date is not specified in the agreement, on a date agreed on by both parties.
(2) If a residential tenancy agreement for a fixed period in relation to premises expires on a date and before that date –
(a) no notice to vacate in relation to the premises is served under section 42 on the grounds specified in section 42(1)(d) ; and
(b) the residential tenancy agreement is not extended or renewed –
a new residential tenancy agreement for no fixed period is established on that date in relation to the premises.
(3) A residential tenancy agreement established under subsection (2) is subject to the same terms and conditions that existed before that establishment.
(4) Despite subsection (1) , if –
(a) but for this subsection, a residential tenancy agreement for a fixed period in relation to premises would, under subsection (1) , expire on a date; and
(b) a notice to vacate in relation to the premises is served under section 42 on the grounds specified in section 42(1)(d) –
the agreement expires on the day on which the notice takes effect under section 43 .
…"
Section 12 is concerned with extension and renewal and provides:
"12 Extension and renewal
(1) A residential tenancy agreement may only be extended or renewed before it has expired.
(2) A residential tenancy agreement for a fixed period may only be extended or renewed by agreement in writing of the owner and the tenant."
Section 37 is concerned with termination and provides the "only" bases for termination of a residential tenancy agreement in respect of residential premises. Relevantly for our purposes it provides:
"37 Termination of agreement
(1) A residential tenancy agreement in respect of residential premises is terminated only by –
(a) the delivery of vacant possession of the premises by the tenant to the owner as a result of their agreement to terminate the agreement; or
(b) the delivery of vacant possession of the premises by the tenant to the owner following a notice to vacate by the owner; or
…
(d) the delivery of vacant possession of the premises by order of the Court to the owner;
…"
Section 42 sets out the circumstances in which the owner of residential premises, including social housing, may serve a notice to vacate on a tenant. Section 42 provides in part:
"42 Notice to vacate by owner
(1) An owner of residential premises, including but not limited to social housing, may serve on a tenant of the premises a notice requiring the tenant to deliver vacant possession of the premises to the owner for any of the following reasons:
(a) that the tenant has failed to comply with any provision of the residential tenancy agreement;
…
(d) that a residential tenancy agreement is due to expire not more than 60 days after service of the notice;
…"
Section 43 provides when a notice to vacate takes effect. Section 43(3) provides that a notice to vacate served on the ground that the tenant has failed to comply with a provision of the residential tenancy agreement is of no effect if the tenant complies with that provision before expiry of the period. Section 44 is concerned with the form of a notice to vacate.
Section 45 provides for an application to the court for delivery of vacant possession of premises by the tenant and the threshold requirements for an order. One of those requirements is that the notice to vacate the premises was properly given and subs (5) specifies when a notice is properly given. The relevant terms of s 45 are as follows:
"45 Order for vacant possession
(1) An owner may apply to the Court for delivery of vacant possession of residential premises by the tenant if a notice to vacate in respect of the premises has taken effect and vacant possession has not been delivered to the owner.
(2) An owner is to serve on the tenant a copy of an application under subsection (1) a reasonable time before the application is heard.
(3) The Court may order that vacant possession be delivered to the owner if satisfied that –
(a) a notice to vacate the premises was properly given; and
(b) the reason for serving the notice to vacate was genuine or just; and
(c) vacant possession was not delivered to the owner; and
(ca) where the premises are social housing and the reason for serving the notice is a reason referred to in section 42(1)(da) , (db) or (dc) , vacating the premises would not result in unreasonable financial disadvantage, or unreasonable social disadvantage, to the tenant; and
(d) the tenant was served with a copy of the application.
…
(5) A notice to vacate is properly given if –
(a) the notice states the information required under section 44 (even if the statement of the date on which the notice takes effect is incorrect because of the operation of section 43(3B) or (3C) ); and
(b) the tenant was served with the notice; and
(c) . . . . . . . .
…"
The appeal
Section 28(2) of the Magistrates Court (Civil Division) Act 1992 provides for a right of appeal in respect of an order made in proceedings concerning a 'minor civil claim'. An application under s 45(1) of the Residential Tenancy Act is a minor civil claim as defined under s 3 of the Magistrates Court (Civil Division) Act and reg 3(b) of the Magistrates Court (Civil Division) (Minor Civil Claims) Regulations 2013.
Section 28(2) of that Act provides for limited grounds of appeal. The appellant acknowledges that the only applicable ground available for these proceedings is that the magistrate "lacked jurisdiction or exceeded his or her jurisdiction".
It is argued for the appellant that the learned magistrate exceeded his jurisdiction in making the order in favour of the respondent. There are two grounds of appeal identifying error in construing the Act:
"The Appellant appeals on the grounds that the learned Magistrate exceeded his jurisdiction by making the said order in circumstances where it could not be made by reason that:
1He construed the provisions of the Residential Tenancy Act in such a way that he found that a new Residential Tenancy Agreement was created between the Appellant and the Respondent on the 19th June 2019 and by which the Respondent was given rights of occupation which could not be displaced by any order in the application when, upon the proper construction of such provisions and application to the facts, no such new Residential Tenancy Agreement was (nor could be) created.
2He failed to properly construe and to apply the provisions of s 45(1) of the Residential Tenancy Act 1997 by determining that the Respondent was entitled to possession of the premises pursuant to a new Residential Tenancy Agreement, which right could not be displaced by application of s 45 of the Act, in circumstances where that section was engaged and had to be applied by the learned Magistrate."
It is acknowledged by the appellant that ground one identifies an error which is not a jurisdictional error. It is argued that the error was made because the learned magistrate misconstrued the relevant provisions of the Residential Tenancy Act and applied that misconceived view of the statutory regime to the facts. It is illustrative of the jurisdictional error identified in ground 2.
The arguments on appeal
Ground one concerns the learned magistrate's determination that the "Agreement to extend Tenancy Agreement (Lease)" signed on 19 June 2019 created a new residential tenancy agreement. The argument highlights that by virtue of s 11(2) of the Act, a new residential tenancy agreement for no fixed period was created by statute the day the original residential tenancy agreement expired on 18 June 2019. It is argued that because of the s 11 agreement, the "Agreement to extend Tenancy Agreement (Lease)" could have no legal effect when the learned magistrate had determined to the contrary. This error is relied on to show that his Honour misapprehended the statutory scheme, illustrative of jurisdictional error.
The argument in relation to ground 2 is that s 45 was engaged. It is argued that the section is not concerned with anything but the application and satisfaction of the criteria and that the status of the respondent's occupation of the premises was irrelevant. Such an order under s 45 terminates any residential tenancy agreement. It is contended that the learned magistrate went on an impermissible excursion into the status of the relationship between the Director and the respondent and misconceived the nature of the function he was required to perform.
By contrast, the respondent's contentions regarding ground 2 are that a proper reading of the Residential Tenancy Act, requires that the agreement that the owner seeks to have terminated by order of court be the same agreement that has been breached, and in respect of which a notice to vacate has been given. Where, as here, the agreement that is the subject of the notice to vacate has expired and been replaced by a new agreement, no such symmetry exists. A contrary interpretation would run counter to the purpose and effect of the Act. It is argued that support for this interpretation can be found in various protections in the Act that would not have been necessary if the court's jurisdiction under s 45(3) existed regardless of whether or not the agreement sought to be terminated is the same agreement in respect of which a notice to vacate has been given.
In relation to ground 1, the respondent argued that the Act does not prevent the parties from being able to agree to a fixed term agreement in circumstances where an existing non-fixed term agreement is in place as a result of s 11(2). The respondent submitted that, in any event, it does not matter for the purpose of the question of jurisdiction, whether the parties were governed by an agreement established under s 11(2) or a written agreement for a fixed term. An error in this regard is immaterial.
General principles and uncontroversial findings
The provisions of the Act as to recovery of possession of premises are intended to operate as a code: Logan v Director of Housing [2004] TASSC 153, 14 Tas R 324 at [10]; Director of Housing v Parsons [2019] TASFC 3 per Estcourt J at [46] with whom Blow CJ and Martin AJ agreed. The Act simplifies the law in relation to residential tenancies. The long title provides that the Act is to regulate tenancies of residential premises.
It is permissible to refer to certain extrinsic materials for the purpose of interpreting s 45 of the Act. The provision is ambiguous or obscure with regard to whether symmetry is required: s 8B of the Acts Interpretation Act 1931. This is helpful in identifying the purpose of the Act, an important consideration in interpreting the section: s 8A of the Acts Interpretation Act. The Second Reading Speech in relation to the Residential Tenancy Bill 1997 (Tasmania, Parliamentary Debates, House of Assembly, 28 November 1997, 131, 136 (Raymond Groom)) referred to the need to reform residential tenancy law in Tasmania to provide a "better system of managing residential tenancy arrangements" given the "absence of clear rules, and clearly stated rights and responsibilities, for the parties to residential tenancy agreements". The Bill will result in "creating much more certainty for both tenants and property owners and outlines clear rights and responsibilities which are based on the principle of fairness to tenants and also the right of property owners to make a reasonable return on their investment."
The respondent highlighted that in Parsons at [46], Estcourt J stated that some sections such as ss 42-45 are to benefit tenants, not landlords. His Honour stated:
"I also accept the submissions of counsel for Mr Parsons that, as found by Blow J in Logan (above), the Act sets out a code for the termination of agreements, either by the giving of vacant possession, or by a court ordering vacant possession, and thus regulates the minimum content of residential tenancy agreements, including in relation to termination rights, and that ss 42-45 operate for the protection of tenants, not landlords."
It was argued that s 45, operating for the protection of tenants, ought to be given a liberal construction in favour of the tenant. However, I am not convinced that the protective operation of ss 42-45 means that this is the singular purpose in guiding the task of interpreting s 45. While the protection provided for tenants is to be borne in mind, so too is the purpose of fairness to the parties, providing clarity of rights and responsibilities, and that the provisions of the Act as to the recovery of premises are intended to operate as a code.
On this appeal, many of the facts and the application of some of the key provisions are uncontroversial. A residential tenancy agreement expires on a date specified in the agreement: s 11(1)(a). The Act gives force to that agreement. The original residential tenancy agreement expired on 18 June 2019 at midnight. Section 12 provides that a residential tenancy agreement may only be extended or renewed before it has expired. It can only be extended or renewed in writing. It is uncontentious that here the residential tenancy agreement had not been extended or renewed before it expired on 18 June 2019. The "Agreement to extend Tenancy Agreement (Lease)" was signed by the respondent and the appellant on 19 June 2019. It could not be said that the residential tenancy agreement was extended or renewed before it expired on 18 June 2019. It was signed after the agreement expired and so it could not constitute an extension of the original agreement.
However, by virtue of s 11(2) of the Act, a "new" residential tenancy agreement for no fixed period is established in relation to the premises. This new agreement is only established under subs (2) if two conditions are met. These are set out in s 11(2)(a) and (b). Both conditions were met in this case. The first condition requires that no notice to vacate be served under s 42 with respect to the ground specified in s 42(1)(d) which is in terms that a residential tenancy agreement is due to expire not more than 60 days after service of the notice. That did not occur. The second condition is that before the date of expiry the residential tenancy agreement is not extended or renewed.
So, on the date the residential tenancy agreement expired, a new residential tenancy agreement was established by statute. The section describes it as a "new" residential agreement for no fixed period.
Ground 1: an error illustrative of a flawed approach
As noted, the appellant argued that, given that s 11(2) establishes a new agreement, the parties could not then have entered into a new residential agreement for a fixed period, and the learned magistrate erred in this regard. The s 11 agreement was extant and could not be terminated as the only bases for termination are governed by the Act, as specified in s 37.
On any view, this error is peripheral to the question on appeal of whether there has been jurisdictional error. The respondent's argument is that parties can agree to a fixed term agreement in circumstances where an existing non-fixed term agreement is in place. Section 37 does not have the implications contended for. The respondent submitted that in any event, it matters not whether the parties were governed by an agreement established under s 11 or a written agreement for a fixed term.
The appellant does not suggest that it does matter, but rather submits that the notion that the parties were governed by a written agreement for a fixed term is illustrative of the magistrate's erroneous approach to the Act. Given that absent jurisdictional error the Court has no power to hear this appeal, this Court should be reticent to determine whether there was some other type of error made.
It should be noted that in the course of the hearing before the magistrate, different arguments were made on behalf of the Director than on appeal. It was argued before the magistrate that the written agreement of 19 June 2019 was a valid agreement to extend the previously existing agreement for a fixed term. Accordingly, because the parties were still subject to the original agreement, the notice to vacate was valid and could properly ground an order for vacant possession. As a result of this argument one of the issues the learned magistrate needed to decide was whether the agreement of 19 June 2019 was a renewal or extension or rather, a new agreement.
This argument was abandoned on appeal. The learned magistrate's determination that the agreement of 19 June 2019 is not a renewal or extension of the original agreement and does not keep the original agreement on foot is not impugned on this appeal. The reasoning that the respondent could enjoy a right to occupy the premises pursuant to the residential tenancy agreement of 19 June 2019, was not in issue before the magistrate and indeed, the Director's argument was that the agreement of 19 June 2019 was all important in terms of its legal effect. Given the position advanced before the learned magistrate and now on appeal, there is a further reason to decline to consider whether there is error with respect to this peripheral matter. Rather than illustrative of an erroneous approach to the Act, it is illustrative of the issues as they were defined and argued at the hearing.
I turn now to ground 2 and the learned magistrate's conclusion that the notice to vacate was of no effect because it related to a residential tenancy agreement which was no longer in existence. Ground 2 asserts that that symmetry between the order and the notice is not required.
Ground 2: whether symmetry is required
The appellant's central contention is that the magistrate was required to engage in the evaluative exercise under s 45(3) and the order would apply to the existing contractual relationship between the parties. The argument is that s 45 was engaged and it is not concerned with anything but the application and satisfaction of the criteria. The status of the respondent's occupation of the premises was irrelevant. It is argued that such order terminates any residential tenancy agreement. It matters not that the nature of the relationship between the parties had changed. His Honour's failure to engage in that exercise, it is said, constituted a failure to exercise jurisdiction.
This is a question of statutory construction and in particular, the interpretation of s 45. The principles guiding the task of the courts in construing legislation are well-established. The courts must have regard to the words chosen by Parliament and matters of context bearing on the task of interpretation. I begin with a consideration of the text, then pay regard to context including extrinsic materials and the consequences of the competing arguments.
I turn first to the terms of the Act and whether there is an indication that the proceedings and an order are tied to a particular tenancy agreement, or whether it is any tenancy agreement regardless of whether it is the agreement that is alleged to have been breached and in respect of which the notice to vacate has been given.
At the outset, it is worth noting that there is no express term to the effect that a notice to vacate remains effective, and can be the subject of an order, notwithstanding a new agreement has come into place under s 11(2). If this was the intended outcome, it would seem more likely that Parliament would have expressly said so, if only because the conduct of the parties in creating a new agreement, after the notice to vacate was served, would seem at odds with the court outcome, that the tenant be ordered to vacate the premises.
Section 42(1) provides for the reasons which may ground a valid notice to vacate. Paragraph (a) states one of the grounds "that the tenant has failed to comply with any provision of the residential tenancy agreement, …". The use of the definite article in the phrase, "the residential tenancy agreement" presupposes that there is only one agreement and that can only be the agreement which gives the tenant possession at the material time of failure to comply. Section 43 which provides for the effect of notice to vacate also refers to "the residential tenancy agreement": s 43(1)(c). It is contemplated that a notice to vacate attaches to a particular residential tenancy agreement. Similarly, s 43(3C) contemplates that with respect to a notice to vacate relying on s 43(1)(d) there is only one residential tenancy agreement: "the residential tenancy agreement". This connection between the notice to vacate and a particular residential tenancy agreement can also be seen in s 11(4).
It can be seen from the terms of s 45(1) that an order for delivery of vacant possession is tied to two conditions: a notice to vacate in respect of the premises has taken effect and vacant possession has not been delivered to the owner. Because the order is tied to a notice to vacate and the notice to vacate is tied to a particular residential tenancy agreement, "the" residential tenancy agreement, the obvious conclusion is that an order relates to the same agreement, not any agreement. The text provides a strong indication that the order can only relate to the residential tenancy agreement the subject of the notice to vacate.
It is argued for the Director that:
"The order to be made pursuant to s 45(3) of the RTA requires the delivery of vacant possession of the residential premises. Such order terminates any residential tenancy agreement. The section is not concerned with anything but the application and satisfaction of the criteria. It matters not that the nature of the relationship between the parties had changed (viz that the residential tenancy agreement at the time the NTV took effect, had been overtaken by operation of s 11(2); or that the Agreement to Extend Tenancy Agreement (Lease) created a new residential tenancy agreement)."
This argument seems to ignore that s 45 does not exist in a vacuum. There is a statutory process which culminates in s 45, an order for vacant possession. The Act provides for a step-by-step process to ground an order for vacant possession. Where the landlord relies on a tenant's failure to comply with a provision of the residential tenancy agreement, the steps in ss 42-45 must be completed: service of a notice to vacate setting out the necessary information, a notice taking effect on the date specified in the notice and non-compliance with the term of the residential tenancy agreement and that vacant possession has not been delivered. This is the foundation for and the context of the making of an order. These steps are tied to the residential tenancy agreement the subject of the notice to vacate, not any residential tenancy agreement. The implicit and compelling inference is that a consideration of the Act reveals that these steps are precursors to the making of an order.
The fairness of this statutory process is undermined if an order to vacate premises could be made where the tenant's possession of the premises is by virtue of a new agreement. At a fundamental level, the merit in an order and its rationale is lacking. Why should an owner be entitled to an order for vacant possession if, since the breach of the agreement, the parties have entered into a new residential tenancy agreement and there is no suggestion that the new agreement has been breached? This does not accord with a sense of what is reasonable.
Counsel for the appellant submitted that when the requirements of s 45(3) are satisfied, a magistrate has no discretion. It is a mandated process and if the Court is satisfied of the criteria in s 45(3), then the owner is entitled to relief and the order must be made. I observe that s 45(3) is not expressed in mandatory terms. The word "may" is generally construed as enabling or discretionary. In construing legislation, the prima facie presumption is that permissive or facultative expressions operate according to their natural meaning: Ward v Williams (1955) 92 CLR 496 at 505. This may be displaced by the construction of the particular statute, whether it be the interpretation of particular provisions, or the purpose gleaned from the general scope and objects of the statute conferring power. It lies on those who assert that the word "may" has a compulsory meaning to show, as a matter of construction of the statute, that the word was intended to have such a meaning. By contrast, the words "is to" are directory and "must" is construed as mandatory.
A consideration of the Act does not suggest a contrary intention. It can be seen from the Act, that "may" is used elsewhere in the Act to confer a right not an obligation: s 45(1), the owner "may" apply to the Court for delivery of vacant possession, s 29F(1), a tenant "may" dispute a claim. Plainly, it is not used in the mandatory sense in those contexts. As a general rule, a word is to be given a consistent meaning in a statute. I cannot see any examples of where "may" is used in a context which conveys an obligation. The statute uses the terms "is to" in ss 23(2), 33 and 45(4), to impose on magistrates obligations as to which they were obviously intended to have no choice: Logan at [11]. The word "must" appears in ss 28 and 29F(7), in a context that suggests an obligation. The use of the words "is to" and "must" in these contexts suggests a contrasting meaning to that of 'may' and appear consistent with the common law presumption of their meaning.
The effect of s 45(3) and whether "may" allows for any sort of discretion has not been decided. In the obiter reasons of Geason J in Parsons [2018] TASSC 62 at [46], there is support for the view that "may" in the context of s 45(3) is enabling, operating to empower the Court to act upon it being satisfied of the requisite matters. The issue is whether the courts in question have a discretion to decline to grant the remedy that the legislation empowers them to issue. The power may be facultative even though the number of occasions on which it would not be exercised would be rare. See the discussion in Statutory Interpretation in Australia, D Pearce, 9th ed at 11.11. In Logan it was determined that magistrates did not have a discretion under s 45(3) to refuse to order that vacant possession be given in reliance upon the equitable doctrine of relief against forfeiture: Logan at [10], [20]; Director of Housing v Parsons [2019] TASFC 3 at [37] per Estcourt J, with whom Blow CJ and Marshall AJ agreed. However, Logan did not go so far as to decide whether the terms of s 45(3) when it says that the Magistrates Court "may" order that vacant possession be delivered to the owner, confers any sort of discretion to grant or refuse relief: Parsons per Blow CJ at [4], Estcourt J at [36]–[37]. Of course, if there is an overarching discretion, it would undermine the appellant's argument that s 45 provides that an owner is entitled to relief and the order must be made if the court is satisfied of the criteria in s 45(3). However, if the word has a compulsory meaning, it does not cause damage to the respondent's argument. The question would remain whether symmetry was required. Noting that the submissions have not ventured into a consideration of the meaning of "may" in 45(3), I decline to decide this point. It is not necessary to reach a concluded view about it.
Before leaving this matter, I note s 10A(1) of the Acts Interpretation Act, which provides that the word "may" is to be construed as being discretionary or enabling as the context requires, does not apply in this case. According to s 10A(2) it only applies in respect of a provision if that provision is passed after the commencement of the Justice Legislation (Miscellaneous Amendments) Act 2000. That Act commenced on 14 November 2000 and an earlier comparable version of s 45(3) of the Residential Tenancy Act, providing that the court or magistrate "may" order that vacant possession be delivered to the owner, was in the Residential Tenancy Act when it was passed on 14 January 1998. In any event, s 10A(1) does not advance the question of whether the word "may" is enabling or discretionary. That remains a question of context.
It was argued for the appellant that the construction urged by the respondent leads to difficulties. It means that the owner is at the mercy of the vagaries of court listings. There may be delay in listing the application, as there was here, or delay in the resolution of the hearing. The argument highlights the difficulty that if the order expires in the meantime, then another notice to vacate would need to be served. Of course, even if the matter is listed and resolved expeditiously the same difficulty may arise. The hearing may fall at the end of the agreement or the breach may occur just before the expiration of the agreement. It was contended that it would be unjust for the owner to have to issue a fresh notice to vacate and not be able to rely on the breaches that have occurred.
Certainly, if the respondent's construction is correct, it will result in a degree of inconvenience and delay to the owner in some cases. In the general run of cases though it can be expected that the court would hear and determine an application to vacate while the agreement is still on foot. In those cases where this is not possible, the owner is not shut out from an order. The current agreement can be kept on foot by extending it or renewing it before it expires: s 12. Another option, as pointed out by the learned magistrate, is that the landlord could serve the respondent with a second notice to vacate based on the ground in s 42(1)(d) of the Act, the pending expiry of the residential tenancy agreement and elect to proceed on that notice. Additionally, if there is a new residential tenancy agreement then any breaches of the new agreement can be addressed by serving a new notice to vacate. It is worth noting that the breaches of the previous agreement are not lost history, they would still be relevant to the court's consideration of the matters in s 45(3).
This consequence is one of inconvenience, not injustice. It is a factor to be considered but is not particularly significant in construing the Act.
The respondent argued that support for the argument that symmetry is required can be found in certain provisions in the Act which operate as an exception and a protection for the landlord in certain scenarios. Where a notice to vacate is given under s 42(1)(d) (by reason of the impending expiry of a residential tenancy agreement), s 11(4) provides that the agreement expires on the day on which the notice to vacate takes effect. It can be seen that s 11(2) does not apply to create a new agreement upon expiry if the notice to vacate is served on the ground in s 42(1)(d) except in the case where the owner subsequently withdraws the notice to vacate: s 11(2)(a) and 11(5). This result is further ensured by s 42(3) which provides that the payment of rent after a notice to vacate takes effect does not constitute the existence of a new residential tenancy agreement. In a case when a notice is given under s 42(1)(d) and an application for an order for vacant possession is later made, by the time the court hears that application the tenancy agreement will have expired and not been replaced by a new one.
It is argued that this exceptional protection for landlords where a notice to vacate is given under s 42(1)(d) preserving the landlords' right to seek an order for vacant possession despite the expiry of the agreement, speaks against the appellant's construction. It is argued that this special protection would not have been necessary if the court's jurisdiction under s 45(3) exists, regardless of whether the agreement sought to be terminated is the same agreement for which a notice to vacate has been given. It is accepted that there would not be this concern to exempt a class of case to protect landlords from the establishment of a new agreement if orders to vacate are "floating" and may attach to whatever current residential tenancy agreement is in place between the parties.
I conclude that it is implicit in s 45 that there must be symmetry with the residential tenancy agreement the subject of the notice and the order to vacate. I have reached that conclusion based on the indicia that can be found in the text, and the statutory context of a step-by-step process culminating in the order as discussed. The consequences of the appellant's argument lead to a result that seems unlikely to have been intended. I reach this conclusion, regardless of whether "may" in s 45(3) is discretionary. Ultimately, the order in s 45(3) is part of a process that is connected to a particular residential tenancy agreement. If the parties are bound by a new agreement, the foundation for an order falls away.
Conclusion
It is acknowledged by the appellant that if the respondent's argument regarding statutory construction and the need for symmetry is correct, then r 38 was properly engaged and the learned magistrate was correct to dismiss the application. In view of my conclusion, the Director's application was futile and thus, frivolous, vexatious and an abuse of process: Dey v Victorian Railway Commissioners (1949) 78 CLR 62 per Latham CJ at 84-85 and per Dixon J at 90 and 91. The appeal is dismissed.
6
1