Navazi v NSW Land & Housing Corporation

[2015] HCATrans 332

[2015] HCATrans 332

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Sydney  No S226 of 2015

B e t w e e n -

ALI NAVAZI

Applicant

and

NSW LAND & HOUSING CORPORATION ABN:  24960729253

Respondent

Application for special leave to appeal

BELL J
GAGELER J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 11 DECEMBER 2015, AT 12.22 PM

Copyright in the High Court of Australia

MR D.F. JACKSON, QC:   If the Court pleases, I appear with my learned friend, MR G.E. BABE, for the applicant.  (instructed by Salvos Legal Humanitarian)

MS V.A. McWILLIAM:   If the Court pleases, I appear with my learned friend, MR N.M. KELLY, for the respondent.  (instructed by FACS Legal) 

BELL J:   Yes, Mr Jackson.

MR JACKSON:   Thank you, your Honours.  Your Honours, may I deal first and very briefly with the legislative background that is involved.  The applicant was a tenant in property owned by the respondent.  Under section 87 of the Residential Tenancies Act, which your Honours will see at page 71, the Tribunal, which was then called the Consumer Trader and Tenancy Tribunal, may make an order for the termination of the lease on the ground of breach of its terms. 

As is apparent from section 87, the criteria for determining whether a termination order should be made appear in subsection (4) at the bottom of page 71 and they include two things, two provisions of relevance.  One is 87(4)(a) – the fact of breach; and, secondly, the question of seriousness, seriousness of the breach which you will see referred to in 87(4)(b) and 87(5)(a).

There is a further provision which is applicable in cases such as this.  It is found in section 152 which is set out at the bottom of page 72 and the top of page 73.  It applies, as the opening words of section 152(1) indicate, to cases which are social housing tenancy agreement of which this is one, the applicant being, as appears at page 73 in paragraph 28 of the Court of Appeal’s reasons, a wheelchair‑bound paraplegic.

If I could return to section 152 at the bottom of page 72, your Honours will see that in a case to which section 152(1) applies, the Tribunal was required to have regard to the matters in the several paragraphs of 152(1), so far as they were relevant.  One of those matters was in 152(1)(b), namely, whether the breach of the agreement was a serious one.

Your Honours, could I turn then to what the breach was?  In this case, the breach was non‑payment of rent.  The amount of rent said to be owing before the Tribunal was $141,300‑odd and your Honours will see that in paragraph 6 of the Tribunal’s reasons which are at page 1.  Your Honours will see that in paragraph 6, between lines 40 and 50.

Your Honours, one sees also – if I can go to page 2 in paragraph 8 - it is apparent that the quantum of the amount owing was a very significant factor in the Tribunal’s decision to exercise the power to terminate the tenancy.  Your Honours will see that at about line 15 and your Honours will see those arrears amount to a very large sum of money, and so on.

Your Honours, could I just say that an appeal lay to the District Court from the decision of the Tribunal, the decision of the Tribunal having been that in paragraph 9 on page 2, to terminate the tenancy.  The provision giving a right of appeal to the District Court your Honours will see at page 131.  It is section 67(1) of the Consumer, Trader and Tenancy Tribunal Act. 

Now, your Honours, in that court too, the amount of rent said to be unpaid was again the figure of $141,000‑odd.  Could I give your Honours two references in that regard?  Page 13, about line 21 and page 14, about line 40.  The breach upon which the reliance was placed, however, was in that respect erroneously described.  It was erroneous because the amount of rent owed was far less.  It was far less, your Honours, by $128,000‑odd.  Your Honours will see that at page 79, paragraph 54. 

Your Honours, the reason why there was the difference was that the respondent had cancelled a rental subsidy which had been given to the applicant and the cancellation of the rental subsidy was treated as having had the effect that from the time of the retrospective cancellation the unpaid rent increased by $128,000.

Your Honours, as the New South Wales Court of Appeal, however, held after the District Court’s decision, the retrospective cancellation of a tenant’s retail rebate created a debt on the one hand but did not mean that the debt was classified as arrears of rental for the purposes of that legislation.  Your Honours will have seen the case referred to.  It is at paragraph 11 in the Court of Appeal, New South Wales Land and Housing Corporation v Diab. 

Now, your Honours, that meant, if I could return to the provisions earlier referred to, that first of all the breach under consideration for the purposes of section 87(2)(a) and section 87(2)(b) was significantly limited in terms of magnitude and, connectedly, timing.  Similar considerations had applied to section 87(5)(a) and importantly to section 152(1)(b), and perhaps hardly surprisingly in those circumstances and in light of what has been said, if I could take your Honours to page 81, paragraph 59, your Honours will see in the principal reasons that it was held that the Tribunal had made a jurisdictional error for the reasons which are set out in paragraph 60.

Now, if I could pause at that point, it may be noted that the prima facie result in those circumstances, one might have thought, would be an order in the nature of certiorari setting aside the Tribunal’s decision, but there were features, your Honours, which were held to produce a different result, namely, delay in instituting the proceedings to set aside the decision of the Tribunal.

BELL J:   It was more than delay, was it not?

MR JACKSON:   I was going to say, your Honours, it is one feature.  The second feature, your Honours, was perhaps the fact of there having been an appeal to the District Court, and the third feature was a feature about the absence of any offer to pay, to put it shortly.  Now, could I come to those discretionary matters in just a moment and may I go to the challenge in the District Court first, your Honours, because in the end, if I could put it this way, if we were successful in setting aside the decision of the District Court, the matter would then be a further hearing before the District Court which we would hope to have resulting in a remitter to the Tribunal and a further consideration.  Could I just say, your Honours, that section 67(1) confers a right to appeal:

If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision –

Central to the decision of the District Court was the ultimate decision that the decision of the Tribunal be affirmed.  Now, your Honours, it seems apparent – I should say her Honour did not quite use that phrase but she dismissed the appeal which is the obvious result.  I have given your Honours some references already to that decision, but it seems apparent that inherent in her Honour’s reasons was an understanding that the unpaid rent was the larger $143,000‑odd and your Honours will see that at page 47, for example, at the bottom of the page where at about lines 47 to 50:

the breach is such as to justify termination of the tenancy”.

Then, your Honours, at the top of page 48, and I could give your Honours also references to page 17, about point 10, and page 19, about point 18.

BELL J:   Was the closest that the issue of the quantum of the rent was agitated by reference to the grounds of appeal in the District Court the ground that complained – this is application book 78, paragraph 46 – that:

the Tribunal failed to have regard to the matters stated in s 152 of the Residential Tenancies Act.

MR JACKSON:   Yes.

BELL J:   That is as close as it got.

MR JACKSON:   That is as close as it got, I accept that, your Honour, yes.  Your Honours, could I just say, the question which arose then was was there an error on the face of the record in the District Court?  Our submission was that there was because in affirming the decision of the Tribunal, the District Court failed to take into account a matter of central relevance, namely, the amount of the arrears. 

Your Honours, that brought about – I am about to go to the question of discretion now – that brought about a consequence, we would submit, that the decision of the District Court was liable to be set aside and, your Honours, could I just say that in that regard there may be some argument about that but the central views of Justice Sackville on this issue appear to be at page 100 in paragraphs 119 and 120.  Our submission would be that that is erroneous and, your Honours, I do not know that I can say more than say what I have said before. 

Could I go then to the question of discretion?  First of all, as to the District Court, the reasons of Justice Sackville are at page 100 in paragraphs 121 through to 123.  Now, your Honours, the first thing we would say is this.  It is perfectly correct to say that the effect of cancellation of the rebate was not drawn to the attention of the District Court and, if I may say so with respect, by neither side.  Your Honour, I use that expression with some emphasis because if one is applying the Anshun or analogous test, it involves the question of could and should.  Your Honours will see that referred to in paragraph 122, third line, where his Honour said:

The applicant could and should have raised the argument –

Now, your Honours, the correctness of the application of that view is one that has to be considered in the light of the fact that a statutory body which had been a party to the litigation which resulted in the decision of the Court of Appeal and the earlier decision of the appeal Tribunal from which it had decided to appeal was not drawn to the court’s attention and, your Honours, not drawn to the court’s attention in circumstances where that body had been a party to the decision of the appeal Tribunal against it and was party to a pending appeal to the Court of Appeal.

Your Honour, I cannot take it beyond that, but what we would say is that in deciding whether there should be a holding against us because we did not take the point, the fact that the body in the position of the respondent did not raise the point before the court is a factor militating in favour, not against, the exercise of the discretion.  Your Honours, that is the first thing. 

The second thing is that as your Honours will see reliance is placed in paragraph 122 on page 101 and also Justice Leeming, page 64, paragraph 6, on the fact that no offer was made to pay arrears, nor was there evidence forthcoming that the applicant was able to pay the rent in the future.

Your Honours, in our submission, one is talking about the question whether there should be a grant of prerogative type relief.  It is accepted that there is a discretion in the Supreme Court in that regard.  Having said that, your Honours, the approach taken by the court in this regard, in our submission, introduces an undesirable element of bargaining into the question whether an order of that nature should be granted, bargaining in the sense of saying that you will not get an order to which you otherwise would be entitled unless you can demonstrate that you will pay money back that you owe or unless you show that you are able to do it in the future.

Your Honours, it is undesirable also because if the applicant were otherwise successful, the question would fall to be decided on the basis of (a) the correct amount of rent, and (b), the evidence as to his situation at that time and, your Honours, that has not been decided.  That is what I wanted to say about the District Court, your Honours. 

May I deal briefly with the position of the Tribunal?  Your Honours will see that Justice Leeming at page 64, paragraph 5 refused an extension of time and gave reasons for it for challenging the Tribunal’s decision.  The application should have been brought within three months and that appears from UCPR 59.10(1) - page 140 that is set out. 

Now, the Tribunal decision, your Honours, was made on 6 October 2011.  The application to the Supreme Court was made 23 June 2015, getting towards four years.  In that period, however, there had been litigation in which the applicant had sought ultimately unsuccessfully to set aside the decision to cancel the rent rebate.  He had succeeded before Justice Rothman in the first place.  An appeal by the respondent to the Court of Appeal succeeded.  His special leave application failed in September 2014.

Those challenges if ultimately successful were also directed to reducing the rent claimed to be payable.  Your Honours, the matters to which Justice Leeming refers in paragraph 5 and those of Justice Sackville in paragraphs 74 to 76 at page 86, your Honours, should not, for the reasons we have submitted earlier, go against the applicant at this stage.  The short fact, we would submit, is that the proceedings before the Tribunal were based on a totally incorrect version of the rent due and the applicant should have an opportunity to deal with the matter as it truly was and, with respect, as it now appears.

Your Honours, this is a case, we would submit, whether if one looks at it purely as a visitation case, it is an appropriate such case.  On the other hand, it does involve significant aspects as to the position – and I say so with respect – of a body in the place of the respondent relying on a point not having been taken against it in circumstances where - better than anyone else knew of the existence of the point.

BELL J:   In the District Court, the focus of the grounds was directed to considerations other than the quantum of the arrears.

MR JACKSON:   Yes.

BELL J:   So, in those circumstances, one might think it unsurprising that the respondent did not raise the matter of the decision in Diab, the relevance of which was not immediately apparent. 

MR JACKSON:   Well, with respect, your Honour, I took your Honours to the provisions of section 87 and 152 earlier.

BELL J:   Yes.

MR JACKSON:   One is dealing with circumstances where the issue is whether there should be termination for breach, the breach being non‑payment of rent, and those provisions make it extremely important to identify the seriousness of the breach, to put it very briefly.

BELL J:   There was, I think, it was accepted an amount of arrears of rent of the order of thousands of dollars, albeit nothing like the amount ‑ ‑ ‑

MR JACKSON:   Quite, your Honour, yes.  To pick the figures that are, say, $30,000 as against $140,000, there is a gulf really, with respect.  It is a very large difference ‑ ‑ ‑

BELL J:   Well, there is a very large difference of money, but in terms of a consideration of whether or not it is appropriate to terminate the lease for non‑payment of rent there might be an obvious difference between non‑payment over a relatively short period and something of the order here, putting to one side the debt arising out of the rebate.

MR JACKSON:   Well, your Honour, that in a sense, with respect, is the point we are seeking to make in the sense that, if one looked at the situation in the light of what was the actual amount of rent and then in conjunction

with the circumstances of the applicant, one might arrive at a result which perhaps delayed termination, did not result in termination or matters of that kind, but ‑ ‑ ‑

BELL J:   I am sorry, Mr Jackson, but the point I was really raising with you was in the context of arrears of about the order of $30,000, it might be that the criticism of the respondent is ‑ ‑ ‑

MR JACKSON:   I am sorry, I did not answer your Honour directly in relation to that.  What I wanted to say about it is this, that if the situation was that the case was permitted to be conducted in the District Court upon the basis that there was an amount owing of $140,000, let us say, and in reality the amount was, say, $30,000, and in circumstances of that kind where the criteria to which I referred earlier were to be taken into account, it was, in our submission, a circumstance where the respondent should have drawn to the court’s attention the fact that – as sometimes often happens in criminal cases where there is a change in the law – the law has changed.  This is what it is.  Now, maybe it should be adjourned until after the case in the Court of Appeal.  A number of things could have happened.

BELL J:   Well, accepting that for present purposes, you really do need to overcome the unanimous view of the Court of Appeal that there were very strong discretionary grounds for not granting relief here.

MR JACKSON:   Well, your Honour, if we are able to get over the discretionary grounds in relation to the District Court, that is really sufficient, with respect, because the matter if otherwise successful would then go back to the District Court and the issue could be raised there ‑ ‑ ‑

GAGELER J:   But there would be a bit more of a problem with the District Court because you also have to establish that there is, on the face of the record, an error of law.

MR JACKSON:   Yes, that is why we like both, your Honour.  But your Honour will appreciate but, your Honour, I do not know that I can say much more about the discretionary considerations than we have said except to say that it does present, in our submission, an unattractive aspect of bargaining to get the order.  Your Honours, those are our submissions.

BELL J:   Yes.  Ms McWilliam, we do not need to hear from you.

We are of the opinion that if special leave to appeal were granted, the appeal would enjoy insufficient prospects of success.  Special leave is refused with costs.

The Court is adjourned to 10.00 am on Thursday, 17 December.

AT 12.46 PM THE MATTER WAS CONCLUDED