Ian Robert Turner and Lynette Shirley Turner v Leda Commercial Properties Pty Limited ACN 008 613 447

The appeal concerned Ian Robert Turner and Lynette Shirley Turner (the appellants) and Leda Commercial Properties Pty Limited (the respondent). The dispute arose from a guarantee and indemnity provided by the appellants in respect of a sub-lease granted to Classic Gourmet Sausages Pty Ltd. Classic Gourmet Sausages Pty Ltd defaulted on its rent and outgoings, leading to the respondent commencing proceedings in the Magistrates Court. The appellants contended that the Magistrates Court lacked jurisdiction because a dispute concerning the lease was already before the Tenancy Tribunal. The Court of Appeal of the Australian Capital Territory was asked to determine whether the Magistrates Court had jurisdiction to enter a consent judgment against the appellants.

The central legal issues before the Court of Appeal were: (1) whether the application lodged with the Tenancy Tribunal constituted a "dispute" within the meaning of section 6 of the Tenancy Tribunal Act 1994 (ACT) such that the Magistrates Court was divested of jurisdiction under section 7 of that Act and section 12 of the Magistrates Court (Civil Jurisdiction) Act 1982 (ACT); and (2) if the Magistrates Court lacked jurisdiction, whether the consent judgment entered against the appellants was void ab initio.

The Court of Appeal, affirming the decision of the primary judge, held that the initial application to the Tenancy Tribunal, which sought interim orders restraining re-entry and alleged unconscionable conduct, did not, in itself, constitute a "dispute" as defined by section 6 of the Tenancy Tribunal Act. The court distinguished between a "claim" and a "dispute," noting that section 6 enumerates specific types of claims that are considered disputes. A claim for rent arrears and indemnity, without a contest going to the heart of that claim, did not fall within the enumerated paragraphs of section 6. Consequently, the Tenancy Tribunal Act did not apply to divest the Magistrates Court of jurisdiction. The court reasoned that the filing of a defence in the Magistrates Court, which pleaded set-off based on alleged harsh and oppressive conduct and wrongful distraint, did not retroactively render the initial claim for rent arrears and indemnity a "dispute" under the Tenancy Tribunal Act at the time the Magistrates Court proceedings were commenced.

The appeal was dismissed. The Court of Appeal ordered that the appellants pay the respondent's costs of and incidental to the appeal.