Giuseppe DATTILO and Caterina DATTILO v Commonwealth of Australia (As Represented BY the Department of Infrastructure and Regional Development)

[2017] HCATrans 67

[2017] HCATrans 067

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S70 of 2017

B e t w e e n -

GIUSEPPE DATTILO

First Applicant

CATERINA DATTILO

Second Applicant

and

COMMONWEALTH OF AUSTRALIA (AS REPRESENTED BY THE DEPARTMENT OF INFRASTRUCTURE AND REGIONAL DEVELOPMENT)

Respondent

NETTLE J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA ON WEDNESDAY, 5 APRIL 2017, AT 8.29 AM

Copyright in the High Court of Australia

MR P.E. KING:   May it please the Court, I appear for the applicant.  (instructed by The People’s Solicitors Pty Ltd)

MS A.M. MITCHELMORE:   If the Court pleases, I appear with my learned friends, MR D.W. RAYMENT and MR J.L. DOYLE, for the respondent.  (instructed by Australian Government Solicitor)

HIS HONOUR:   Ms Mitchelmore, just before I give judgment there was one further question I wished to ask you, if I may.

MS MITCHELMORE:   Yes, your Honour.

HIS HONOUR:   In the Full Federal Court’s reasons for judgment, reference is made to the Commonwealth having – the Parliament having legislative power under section 51(i) of the Constitution to enact the provisions of the Federal Circuit Court Act which confer the jurisdiction upon it and so forth. I take it that is a reference to 52(i) rather than 51(i); that is to say, to the Commonwealth places power rather than to the trade and commerce power? Is that ‑ ‑ ‑

MS MITCHELMORE:   Your Honour, the basis of power was put on two bases.  The first was 51(i) insofar as ‑ in relation to the power of the Commonwealth to enter into leases with tenants, pursuant to trade and commerce power; 52(i) was also raised.  They were the alternative bases, so ‑ ‑ ‑

HIS HONOUR:   Section 52(i) to enact the laws which would apply within the Commonwealth place thus acquired.

MS MITCHELMORE:   That is right, your Honour, but I do not believe that the Federal Court has referred to 51(i) in error.  As I say, your Honour, it was put on on the two bases so that the power arising from entering into arrangements, leasing arrangements in relation to the airport, 51(i) would support it.  Alternatively, 52(i) would support being a law with respect to a Commonwealth place.

HIS HONOUR:   Yes.

MS MITCHELMORE:   So I do not think ‑ in my submission, the Full Court is not erroneous in referring to 51(i).  The legislative power was put as being supported on either basis.

HIS HONOUR:   Presumably, 51(i), the trade and commerce power, would not support legislation providing for the law applicable to the transfer of land within a Commonwealth place.  It would be 52(i), would it not?

MS MITCHELMORE:   Well, certainly, your Honour, 52(i) is a basis.

HIS HONOUR:   Yes.

MS MITCHELMORE: Section 51(i), as I say, your Honour, was the basis for the power to enact the legislation relating to leasing arrangements with respect to the Commonwealth. If the Court pleases.

HIS HONOUR:   Very well.  Mr King, do you have any interest in responding to that?

MR KING:   No, your Honour.

HIS HONOUR:   Thank you.

This is an application pursuant to r 8.07.2 of the High Court Rules 2004 (Cth) for a stay of execution of judgment pending the determination of an application for special leave to appeal from the dismissal by the Full Court of the Federal Court of Australia (Kenny, Robertson and Griffiths JJ) of an appeal from orders of the Federal Circuit Court of Australia (Judge Smith). The effect of those orders was to terminate a residential tenancy agreement (“the lease”) between the respondent (“the Commonwealth”) and the applicants in relation to property situated at 2026 The Northern Road, Luddenham in the State of New South Wales, comprising part of folio identifier Lot 1 DP 838361 (“the Premises”). The orders were made pursuant to powers conferred on the Federal Circuit Court under cl 9 of the Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015 (Cth) (“the Legislative Instrument”). The Premises comprise part of a large area of land in Badgerys Creek, west of Sydney, which has been acquired by the Commonwealth for the purpose of constructing, or having constructed on it, Sydney’s second major airport.

Relevant legislation

As is explained in the reasons for judgment of the Full Court, by the Federal Courts Legislation Amendment Act 2015 (Cth) the Federal Circuit Court of Australia Act 1999 (Cth) (“the FCCA Act”) was amended, in among other respects, by the insertion of a new s 10AA. Section 10AA(1) relevantly provides that the Federal Circuit Court has jurisdiction to hear and determine a Commonwealth tenancy dispute between the parties to a lease in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is the lessor. A “Commonwealth tenancy dispute” is defined in s 5 of the FCCA Act as including a matter “involving a lease, licence or other arrangement to possess, occupy or use land and a dispute about ... the termination of the lease, licence or other arrangement”. It is agreed that this matter is a Commonwealth tenancy dispute.

Section 10AA(3) provides as follows:

“(3)The Minister may, by legislative instrument, make provision for and in relation to all or any of the following matters in respect of a Commonwealth tenancy dispute:

(a)the rights of the parties to the Commonwealth tenancy dispute;

(b)the law (whether a law of the Commonwealth or a law of a State or Territory) to be applied in determining the Commonwealth tenancy dispute (the applicable law);

(c)any modifications of the applicable law that are to apply in relation to the Commonwealth tenancy dispute;

(d)the powers that the Federal Circuit Court of Australia may exercise under the applicable law;

(e)if the Federal Circuit Court of Australia makes an order when exercising jurisdiction over the Commonwealth tenancy dispute - the powers that may be exercised when executing the order or a class of orders.”

The Legislative Instrument was issued pursuant to s 10AA(3).  As made, Pt 2 of the Legislative Instrument provided as follows:

“Part 2 - Commonwealth tenancy disputes involving land in New South Wales

5Operation of this Part

(1)This Part makes provision in relation to the following matters in respect of a Commonwealth tenancy dispute involving land in New South Wales:

(a)the rights of the parties to the dispute;

(b)the law to be applied in determining the dispute;

(c)the powers that the Federal Circuit Court of Australia may exercise under that law;

(d)the powers that may be exercised when executing an order made by the Court.

(2)This Part does not apply in relation to a Commonwealth tenancy dispute involving land in New South Wales unless the dispute involves a tenancy within the meaning of the Residential Tenancies Act 2010 (NSW).

(3)Nothing in this Part has effect so as to confer non‑judicial power on the Federal Circuit Court of Australia, unless the non‑judicial power is incidental to the exercise of judicial power by the Court.

6Rights of the parties

(1)This section applies to a party to a Commonwealth tenancy dispute involving land in New South Wales if:

(a)the party is a tenant within the meaning of the Residential Tenancies Act 2010 (NSW); and

(b)the Federal Circuit Court of Australia has jurisdiction to hear and determine the dispute.

(2)The party must not make an application to the Civil and Administrative Tribunal under the Residential Tenancies Act 2010 (NSW) in relation to a lease, licence or other arrangement to possess, occupy or use land that is the subject of the dispute.

7Law to be applied

(1)In determining a Commonwealth tenancy dispute involving land in New South Wales, the Residential Tenancies Act 2010 (NSW) and any regulations made under that Act are to be applied:

(a)to the extent necessary to determine the dispute; and

(b)subject to the modifications set out in section 8 of this instrument.

(2)The law mentioned in subsection (1) is the applicable NSW law.

8Modifications of applicable NSW law

(1)The applicable NSW law is to be applied as if:

(a)a reference to the Tribunal were a reference to the Federal Circuit Court of Australia; and

(b)a reference to the principal registrar of the Tribunal were a reference to a Registrar of the Federal Circuit Court of Australia; and

(c)a reference to the Sheriff, or to a sheriff’s officer, were a reference to the Sheriff of the Federal Circuit Court of Australia.

(2)The Residential Tenancies Act 2010 (NSW) is to be applied as if it included the following section:

Despite anything else in this Act, if the Federal Circuit Court of Australia makes a termination order in respect of residential premises, the Court may make such orders as it considers appropriate in relation to the day vacant possession of the premises is to be given to the landlord.

9Powers of the Court

In determining a Commonwealth tenancy dispute involving land in New South Wales, the Federal Circuit Court of Australia may exercise any powers that are:

(a)powers of the Civil and Administrative Tribunal under the applicable NSW law; and

(b)relevant to determining the dispute.

10Powers when executing orders made by the Court

(1) If the Federal Circuit Court of Australia makes an order when exercising jurisdiction over a Commonwealth tenancy dispute involving land in New South Wales:

(a)the Federal Circuit Court of Australia may exercise any powers of the Civil and Administrative Tribunal under the applicable NSW law; and

(b)a Registrar of the Federal Circuit Court of Australia may exercise any powers of the principal registrar of the Civil and Administrative Tribunal under the applicable NSW law; and

(c)subject to subsection (2), the Sheriff or a Deputy Sheriff of the Federal Circuit Court of Australia may exercise any powers of a sheriff’s officer under section 7A of the Sheriff Act 2005 (NSW);

to the extent that those powers are relevant to the execution or enforcement of the order. …

(3)To avoid doubt, nothing in this section limits any other power of:

(a)the Federal Circuit Court of Australia; or

(b)a Registrar of the Federal Circuit Court of Australia; ... ”

Contentions before the Full Court

Before the Full Court, the applicants contended that: (1) s 10AA purported to confer non‑judicial power on the Federal Circuit Court; (2) there was no justiciable “matter” before the Federal Circuit Court; (3) there was no power in s 51 of the Constitution or other legislative power to make the amendments to the FCCA Act comprised in s 10AA; (4) the Legislative Instrument was invalid; (5) there was an impairment of the guarantee of acquisition of property on just terms afforded by s 51(xxxi) of the Constitution; and (6) there was apprehended institutional bias. The Full Court rejected each of those contentions.

Proposed Grounds of Appeal

The proposed grounds of appeal set out in the applicants’ application for special leave are now as follows:

(1)the Commonwealth has no power under s 77 of the Constitution or otherwise to make a law delegating to a Minister of the Commonwealth the power to define the jurisdiction of a Ch III court, in this case the Federal Circuit Court;

(2)the Parliament of the Commonwealth has no power under s 77(iii) of the Constitution or otherwise to define the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in any administrative tribunal of a state that is not a court of a state;

(3)insofar as the Legislative Instrument purported to deprive New South Wales parties or citizens of the right to approach the New South Wales Civil and Administrative Tribunal (“NCAT”), it was neither “investing” the Federal Circuit Court with jurisdiction nor “defining” the jurisdiction of the Federal Circuit Court within the meaning of s 77 of the Constitution.

As will be apparent, neither the first nor the third of those grounds was advanced before the Full Court.

Stay of execution

The factors material to the exercise of this Court’s discretion to grant a stay of execution of a judgment pending an application for special leave to appeal are well established[1]. They include, although are not limited to, whether there is a substantial prospect of special leave to appeal being granted; whether the applicants have done what they could to procure a stay from the court below; whether the grant of a stay would cause loss to the respondent; and, otherwise, where the balance of convenience may lie. 

[1]  Jennings Constructions Ltd v Burgundy Royale Investments Pty Ltd [No1] (1986) 161 CLR 681 at 685 per Brennan J; Obeid v The Queen (2016) 90 ALJR 447 at 450 [14]; Mercanti v Mercanti (2017) 91 ALJR 258 at 260 [11]-[13].

Putting aside for the moment the question of whether there is a substantial prospect of special leave to appeal being granted, I accept that the applicants have done all they could to obtain a stay from the Court below.  Despite their best efforts, however, the most that they have been able to achieve thus far is a stay of execution that expires later today.  Griffiths J, who dealt with the applicants’ application for a stay following pronouncement of the Full Court’s orders, concluded that there was only a negligible prospect of this Court granting special leave on the two proposed grounds of appeal that were not advanced before the Full Court and that, having regard to the relevant contents of the application for special leave (then in draft form) and the oral submissions which were advanced before his Honour, the applicants did not have substantial prospects of this Court granting special leave to appeal on the other proposed ground of appeal.  In the result, his Honour was not prepared to grant anything more than a short interim stay to enable the present stay application to be heard and determined.

By contrast, the balance of convenience is more finely poised. As is deposed to in the affidavit of the applicants’ solicitor, Kingsley Liu, affirmed 31 March 2017 in support of the application, the applicants have resided at the Premises for many years, are elderly, and, despite reasonable attempts to obtain similar accommodation in the Western suburbs of Sydney, have not yet been able to do so.  Further, as Mr Liu has deposed, on the basis of his instructions, unless a stay of execution is granted, the application for special leave to appeal and any appeal may well be rendered nugatory because it is the Commonwealth’s practice in relation to the Badgerys Creek airport site that, as soon as it obtains possession of land in the area, it demolishes any premises constructed on that land.  The Commonwealth does not dispute that is so, but has adduced evidence, in the form of an affidavit of Brendan Ewen McRandle affirmed on 29 March 2017, that the Commonwealth would be significantly disadvantaged if judgment were stayed until the determination of the application for special leave.  Given the amounts of money involved, and the public interest in the progress of the new airport, that is a significant consideration.  Of course, such disadvantage as the Commonwealth would suffer by reason of further delay would be purely economic loss, which, in a sense, cannot be compared to the personal prejudice that the applicants would sustain by reason of being evicted from the Premises.  But, at the same time, it is also not without significance that the applicants admit that they are more than $13,000 in arrears in the payment of rent due in respect of the Premises; that they have by their counsel stated that they are not, for the time being, if at all, inclined to pay those moneys; and that they have through their counsel proclaimed that they are unwilling and possibly financially incapable of providing any sort of undertaking as to damages as a condition of a stay being granted.

I turn then to the prospects of special leave being granted.  It is convenient to begin with the second proposed ground of appeal, being the only one of the now three proposed grounds of appeal that was argued before the Court below.  Taken as such, I doubt that the point is seriously arguable.  It is not disputed that the Commonwealth had ample power to acquire the Badgerys Creek area as a Commonwealth place for the purpose of constructing the proposed new airport.  Nor is it disputed that the Commonwealth Parliament had ample legislative power to enact laws with respect to that Commonwealth place, including laws governing the title to land within that place[2] and, in particular, to enact the substantive law applicable to the lease and the conditions on which the lease may be determined.  Subject only to Ground 3, therefore, to which I shall come in a moment, that means that the Commonwealth’s application to the Federal Circuit Court for an order for termination of the lease was a matter between the applicants and the Commonwealth which was governed by the law of the Commonwealth[3] and, for that reason, was a matter within federal jurisdiction. Plainly, the Parliament of the Commonwealth alone has legislative power under s 77(i) of the Constitution to choose the court or courts on which to confer such federal jurisdiction and evidently it was in exercise of that power that the Parliament enacted the amendments to the FCCA Act which resulted in the conferral of that federal jurisdiction on the Federal Circuit Court. Contrary moreover to the applicants’ argument, this was not a case of the Commonwealth providing under s 77(ii) of the Constitution that such jurisdiction shall be exclusive of the jurisdiction of any state tribunal’s jurisdiction. It is simply that the matter is one within federal jurisdiction and, therefore, necessarily beyond the jurisdiction of any state tribunal, or at least will be so until and unless the Commonwealth Parliament chooses to and, having regard to the composition of the tribunal, is validly able to, confer that jurisdiction on that tribunal.

[2]  See Worthing v Rowell and Muston Pty Ltd (1970) 123 CLR 89 at 120 per Menzies J; Bevelon Investments Pty Ltd v Melbourne City Council (1976) 135 CLR 530 at 540-541 per Gibbs J; Allders International Pty Ltd v Commissioner of State Revenue (Vic) (1996) 186 CLR 630.

[3]  Momcilovic v The Queen (2011) 245 CLR 1 at 68-69 [99] per French CJ.

For the same reasons, I doubt that the third proposed ground of appeal is seriously arguable. The relevant provisions of the FCCA Act do not purport to deprive New South Wales parties or citizens of the right to approach the NCAT. There is no right to approach the NCAT in relation to a matter which is governed by the relevant provisions of the FCCA Act.

There remains the first proposed ground of appeal, which, for a time, I was inclined to think might be arguable[4] and, for that reason, might be a sufficient basis on which to grant a stay.  For as Kiefel J (as her Honour then was) observed in Mercanti v Mercanti, an applicant does not necessarily need to demonstrate that a ground of appeal has a high chance of success in order to establish that it has a substantial prospect of success. The threshold is relatively lower than that, or at least it may be depending upon the issue and the balance of convenience. After reflecting on the matter overnight, however, it appears to me to be clear that the first proposed ground of appeal is constructed upon the plainly false premise that the jurisdiction of the Federal Circuit Court to deal with the matter in suit was conferred, or purportedly conferred, under cl 8(2) of the Legislative Instrument issued under s 10AA(3) of the FCCA Act, rather than directly conferred by the Parliament under s 10AA(1).

[4]  See Willocks v Anderson (1970) 124 CLR 293 at 297-298; Ex parte McGuigan (1923) 40 WN (NSW) 129 at 130; cf Empire Waste Pty Ltd v District Court of  New South Wales [2013] NSWCCA 394 at [66]-[77].

The argument which was advanced in support of this ground was that, although general jurisdiction to deal with a Commonwealth tenancy dispute is directly conferred on the Federal Circuit Court under s 10AA(1) of the FCCA Act, the specific jurisdiction to make a termination order is purportedly conferred under cl 8(2) of the Legislative Instrument. But as it appears to me, the argument is directly opposed to the plain and ordinary meaning of the terms of s 10AA(1) and cl 8(2). Section 10AA(1) provides in terms that the Federal Circuit Court “has jurisdiction to hear and determine a Commonwealth tenancy dispute”. Clause 8(2) of the Legislative Instrument provides in terms that, if the Federal Circuit Court makes a termination order in exercise of that jurisdiction, it “may make such orders as it considers appropriate in relation to the day vacant possession of the premises is to be given”. Clause 8(2) thus assumes, and is dependent for its operation in any given case upon, the existence and exercise of the jurisdiction conferred on the Federal Circuit Court under s 10AA(1). In both form and effect, therefore, cl 8(2) of the Legislative Instrument is a provision, promulgated pursuant to the powers conferred on the Minister by s 10AA(3) of the FCCA Act, as to the powers which the Federal Circuit Court may exercise within the ambit of the jurisdiction conferred on it under s 10AA(1). And needless to say, it has not been contended that it is beyond the legislative competence of the Commonwealth Parliament to enact that a Minister of the Commonwealth may provide by legislative instrument for the specific powers of a federal court within the ambit of any federal jurisdiction validly conferred on that court.

So to say, of course, is not necessarily to conclude that any of the proposed grounds of appeal is wholly doomed to failure.  It is perhaps conceivable that, with more time and more development of the arguments in support of them, one or more of the proposed grounds of appeal may be demonstrated to have greater prospects of success than I am at present able to discern.  But, given what I regard to be the minimal prospects of that occurring; the finely poised balance of convenience; the fact that a large number of the grounds agitated in the Court below have now been abandoned; and the fact, which is not without significance, that two of the three proposed grounds of appeal were not agitated in the Court below[5], I am not disposed to grant any further stay of execution.

[5]  See Crampton v The Queen (2000) 2016 CLR 161 at 170‑171 [7]-[10] per Gleeson CJ.

It follows that the application will be dismissed with costs. 

Adjourn sine die.

AT 8.48 AM THE MATTER WAS CONCLUDED