NSW Land & Housing Corporation v Quinn (No 2)

[2018] NSWDC 161

District Court

New South Wales

Medium Neutral Citation:	New South Wales Land and Housing Corporation v Quinn (No 2) [2018] NSWDC 161
Hearing dates:	28, 29 May; 30, 31 July; 3, 4, 5, 12 August 2015;13, 14 September; 12, 13, 16, 17, 18, 19, 23, 25 October 2017; 11, 15 and 24 May 2018 (written submissions)
Date of orders:	31 May 2018
Decision date:	31 May 2018
Jurisdiction:	Civil
Before:	P Taylor SC DCJ
Decision:	(1)   Judgment for the plaintiff in the sum of $8,767.82. (2)   Costs reserved.
Catchwords:	LEASE – public housing – rental rebates - statutory right of termination - lease terminated – cancellation of rental rebates – backdating of cancellation – recovery of past rebates and subsidies – recovery of rent – recovery of occupation fee – decision of Civil and Administrative Tribunal – issue estoppel – whether necessary and fundamental finding of fact – whether actually decided – whether within general jurisdiction of Tribunal – whether special circumstances – collateral review on administrative decision – ambit of collateral attack – jurisdiction of District Court – statutory rebates permitted - retrospective cancellation permitted – whether retrospectivity extends to rebates prior to enactment – whether pre-enactment rebates were taken to be granted under enactment – statutory basis for grant of rebate – transitional provisions – was rebate in force immediately before enactment – what was “corresponding provision” – effect of purported cancellation of earlier subsidies – whether decision made by the Corporation – identity of decision maker – authority of decision maker – delegation – agency – discretion to requirement repayment – prior investigation into weekly income – decision to recover more than amount permitted – correct amount of rebate recoverable – effect of error on decision – whether claim statute-barred – date cause of action arose – whether notice of increased rent required – date of vacant possession
Legislation Cited:	Building and Construction Industry Security of Payment Act 1999 District Court Act 1973, s 44 Evidence Act 1995 s 48, s 69 Housing Act 1912, s 9, s 10 Housing Act 1976, Pt 3, s 9, s 10, s 14 Housing Act 2001, Sch 3, Pt 3, Pt 4, Pt 7, s 6, s 7, s 8, s 15, s 18, s 55, s 56, s 57, s 58 Law Reform (Law and Equity) Act 1972, s 6 Limitation Act 1969, s 14 Public Sector Employment and Management Act 2002 Residential Tenancies Act 2010, s 3, s 6, s 41, s 87, s 88
Cases Cited:	Abernethy v Deitz (1996) 39 NSWLR 701 ADCO Constructions Pty Ltd v Goudappel (2014) 254 CLR 1; [2014] HCA 18 Amalgamated Engineering Union (Aust Section), Ex parte; Re Jackson (1937) 38 SR (NSW) 13; (1937) 55 WN (NSW) 7 Arnold v National Westminster Bank plc [1991] 2 AC 93 Attorney General For Trinidad and Tobago v Eriché [1893] AC 518 Australian Broadcasting Corporation v Redmore Proprietary Limited (1989) 166 CLR 454; [1989] HCA 15 Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117 Blair v Curran (1939) 62 CLR 464; [1939] HCA 23 Cachia v Isaacs (1985) 3 NSWLR 366 Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378; [2012] HCA 56 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594; [1990] HCA 17 Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 Deputy Commissioner of Taxation v Zammitt [2014] NSWCA 104 Director of Housing v Sudi (2011) 33 VR 559; [2011] VSCA 266 Federal Airports Corporation v Aerolineas Argentinas (1997) 76 FCR 582 Harrington v Lowe (1996) 190 CLR 311 Henderson v Henderson (1843) 3 Hare 100 Hinton Demolitions Pty Ltd v Lower (No 2) (1971) 1 SASR 512 In re Athlumney; Ex parte Wilson [1898] 2 QB 547 Jackson v Goldsmith (1950) 81 CLR 446 Mathieson v Burton (1971) 124 CLR 1 Maurice Blackburn Cashman v Brown (2011) 242 CLR 647; [2011] HCA 22; Maxwell v Murphy (1957) 96 CLR 261 Minister for Natural Resources v Aboriginal Land Council (1987) 9 NSWLR 154 Mulgrave Central Mill Co Ltd v Hagglunds Drives Pty Ltd [2001] QSC 040 New South Wales Land and Housing Corporation v Diab [2015] NSWCA 133 New South Wales Land and Housing Corporation v Navazi [2013] NSWCA 431 New South Wales Land and Housing Corporation v Quinn [2016] NSWCA 338 O'Reilly v Commissioners of State Bank of Victoria (1983) 153 CLR 1 Ousley v The Queen (1997) 192 CLR 69 Pollnow v Armstrong [2000] NSWCA 245 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Re Reference under section 11 of Ombudsman Act 1976 for an Advisory Opinion; ex parte Director-General of Social Services (1979) 2 ALD 86 RS Howard & Sons Ltd v Brunton (1916) 21 CLR 366 Secretary of State for Social Services v Tunnicliffe [1991] 2 All ER 712 Thomas v Metropolitan Housing Corporation Ltd [1936] 1 All ER 210 Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 Trustees for the Roman Catholic Church for the Diocese of Bathurst v Hine [2016] NSWCA 213 Twadell v NSW Land and Housing Corporation [2014] NSWSC 7 Wandsworth London Borough Council v Winder [1985] AC 461 Zistis v Zistis [2018] NSWSC 722
Texts Cited:	Commonwealth of Australia v Cockatoo Dockyard Pty Limited [2007] HCATrans 150 Judicial Review of Administrative Action and Government Liability, Mark Aronson, Matthew Groves, Greg Weeks, 6th edition (2016) Second Reading Speech for Housing Bill 2001
Category:	Principal judgment
Parties:	New South Wales Land and Housing Corporation (plaintiff) Robert Quinn (defendant)
Representation:	Counsel: Mr A Di Francesco (plaintiff) Mr R Dalgleish (defendant)   Solicitors: Legal Services Branch, Housing NSW (plaintiff) John Byrnes & Associates (Legal) Pty Ltd (defendant)
File Number(s):	2014/232539
Publication restriction:	None

Judgment

Table of Contents

Heading	Paragraph
A. Introduction	1
B. Jurisdiction	2
C. The statutory basis of the claim	3
D. The issues	9
E. The nature of the action	15
F. The issue estoppel	18
(a) The principle	18
(b) The Tribunal determination	22
(c) The estoppels that arise	24
(d) Exceptions to issue estoppel	31
G. The collateral attack	39
H. The authority of the Cancellation Notice and November 2012 decisions	53
(a) The extent of the backdating power and rebates “granted under this Part”	54
(b) What rebates are “granted under this Part”?	69
(i) Is there a statutory basis in a former Housing Act for the grants of subsidy to Mr Quinn?	80
(ii) Is a grant of a rebate or subsidy the “execution” of an “approval”?	85
(iii) What subsidy was “in force immediately” before the commencement of clause 5(2)?	88
(iv) “The corresponding provision”	90
(c) Effect of purported cancellation of earlier subsidies	101
(d) Decisions made by the Corporation	117
(i) Documentary evidence	121
(ii) Ms Pickering	132
(iii) Mr Cureton	144
(iv) Mr Fester	148
(v) Analysis	151
(vi) The delegated authority of the General Manager or other officers to cancel rebates	162
(vii) Agency, the Carltona Principle and the authority of the General Manager and other officers to cancel rebates	181
(viii) Which Director-General?	196
(ix) The Recovery Decision	206
I. The prior investigation into weekly income	210
J. Requirement to repay rebated amount	225
K. The correct amount of the rebates	226
L. The limitation period	228
M. Section 41 of the Residential Tenancies Act 2010	233
(a) Prospective rebate cancellation	234
(i) A different date of effect	234
(ii) Severance	238
(iii) A later decision	241
(b) Residential Tenancies Act 2010	244
N. Date of vacant possession	251
O. Orders	260

A. Introduction

1. Robert Quinn was a residential tenant of the New South Wales Land and Housing Corporation from 6 March 1998 until 15 May 2014. Until November 2012, the Corporation granted rebates of rent to Mr Quinn. On 15 November 2012 Housing NSW gave Mr Quinn notice that the rebates of rent were cancelled with effect from 1 July 1998 (“the Cancellation Notice”), and on 22 November 2012, gave notice to Mr Quinn of a debt of $221,062.10, resulting from the rebate cancellation, which Mr Quinn was required to repay (“the Repayment Notice”). The Corporation seeks to recover from Mr Quinn the amount of the cancelled rebates, and the amount of the alleged underpayment of rent from November 2012 until the tenancy was terminated by a decision of the New South Wales Civil and Administrative Tribunal on 15 May 2014. The Corporation also seeks the occupation fee the Tribunal ordered Mr Quinn to pay from 16 May 2014 until the premises were vacated two or three months later.

B. Jurisdiction

2. On 6 December 2016 the Court of Appeal found that this Court had jurisdiction to hear and determine the proceedings, and remitted “the matter…to the District Court for determination”. [1]

   1. New South Wales Land and Housing Corporation v Quinn [2016] NSWCA 338 (“Quinn CA”) at [1], [74] and [96].

C. The statutory basis of the claim

3. The Corporation’s claim to recover the rebates arises out of s 57 of the Housing Act 2001 (“the 2001 Act”).

4. Section 57 of the 2001 Act (as at November 2012) provides:

“57 Cancellation or variation of rental rebate

(1) The Corporation may, after conducting an investigation under section 58, vary or cancel any rental rebate granted under this Part.

(2) The Corporation is to determine the date (being a date occurring before, on or after the making of the determination) on which the variation or cancellation has effect or is taken to have effect.

(3) The Corporation is to give notice in writing to a tenant of any decision to vary or cancel any rental rebate being received by the tenant and is to include in the notice the date on which the variation or cancellation takes effect or is taken to have effect.

(4) If the Corporation reduces or cancels a tenant’s rental rebate under this Part with effect from a preceding date, the Corporation may, by notice in writing to the tenant, require the tenant to pay to the Corporation:

(a) an amount equal to any rental rebate or part of a rental rebate received by the tenant on or after the date that the variation or cancellation took effect to which, because of the variation or cancellation, the tenant was not entitled, and

(b) interest (at the rate prescribed under section 101 of the Civil Procedure Act 2005 in respect of unpaid judgments) on any outstanding amount under paragraph (a) from a date specified in the notice, being a date not earlier than the date on which the notice is issued to the tenant.

(5) Any amount (together with interest) referred to in subsection (4) that is unpaid may be recovered by the Corporation as a debt in any court of competent jurisdiction.”

5. Section 58 provides:

“58 Investigation of application

(1) The Corporation may make an investigation to determine the weekly income of:

(a) a person who is an applicant for, or a recipient of, a rental rebate under this Part, and

(b) any other resident of the house in which that person resides.

(2) The Corporation may require a person who is an applicant for, or a recipient of, a rental rebate under this Part to produce such evidence as the Corporation thinks fit of the person’s weekly income and of the weekly income of any other resident of the house in which that person resides.”

6. Accordingly, the Corporation is entitled under s 57(5) to recover an unpaid amount in a s 57(4) notice. A notice under s 57(4) is a notice by the Corporation requiring the tenant to pay to the Corporation an amount of rebate that has been cancelled retrospectively under s 57(1) and (2), that is, a cancellation with effect from a preceding date so that under s 57(4) “the tenant was not entitled” to that rebate.

7. Subsections 57(1) and (2) require the decision to cancel the rebate (“Cancellation Decision”) to be:

1. by the Corporation;

2. after conducting a s 58 investigation;

3. of a rebate granted under Part 7 of the 2001 Act; and

4. with effect from a specified date, and that date must be prior to the date of the cancellation if the cancellation is to enliven a right of recovery under s 57(4) and (5).

8. The statutory requirements for recovering all or part of the cancelled rebates require a valid Cancellation Decision, and a decision and notice in compliance with s 57(4) (“Recovery Decision”).

D. The issues

9. The proceedings were not at all concerned with whether the financial position or weekly income of Mr Quinn justified him receiving a rebate. Neither party made submissions on this issue, nor did the evidence go to it. That is because the statutory action for recovery of a cancelled rebate does not involve proof of a lack of entitlement to a rebate; Mr Quinn’s wealth or income was not an element of the cause of action. So there was no debate about Mr Quinn’s financial circumstances. But there nevertheless remained a number of issues that arose out of the statutory action.

10. Mr Quinn says that s 57 does not entitle the Corporation to recover the rebates, for a number of reasons:

1. The Corporation did not cancel the rebates under s 57(1) or determine the date of effect of the cancellation under s 57(2) (i.e. did not make a Cancellation Decision) because the November 2012 decisions (the decisions as reflected in the Cancellation Notice and the Repayment Notice) were made without the authority of the Corporation.

2. The Corporation did not conduct an investigation to determine Mr Quinn’s weekly income under s 58(1), as is required by s 57(1), before any Cancellation Decision.

3. The Corporation did not require Mr Quinn to pay to the Corporation the correct amount of the rebates granted under Pt 7 of the Act and purportedly cancelled under s 57(1), but demanded an excessive amount.

4. The proper amount of the rebates is not proved and therefore is unable to be required to be paid under s 57(4)(a).

5. Any debt for rebates prior to six years before the proceedings were commenced is statute-barred under s 14 of the Limitation Act 1969.

6. The rent payable by Mr Quinn (after any rebates) could not be increased except in accordance with s 41 of the Residential Tenancies Act2010 (“RTA”), and that did not occur until September 2013, effective 25 November 2013.

11. The Corporation alleges that Mr Quinn cannot dispute the existence or validity of the November 2012 decisions, but is precluded by an issue estoppel arising from the decision of the Tribunal on 15 May 2014 determining the existence and validity of a Cancellation Decision.

12. The Corporation also alleges that irrespective of an issue estoppel the existence and validity of the November 2012 decisions cannot be challenged in this Court for that would be a “collateral attack” which, in this Court at least, is confined to jurisdictional challenges to decisions. The Corporation submits that purported decisions can only be challenged by an application to the Supreme Court for orders in the nature of prerogative relief.

13. The parties also disagree as to the date Mr Quinn vacated the premises and thereby ended the obligation to pay a daily fee.

14. These are the issues between the parties. They can be listed as:

1. The issue estoppel.

2. The collateral attack.

3. The Cancellation Decision by the Corporation.

4. The prior investigation into weekly income.

5. The requirement to repay the rebated amount.

6. The correct amount of the rebates.

7. The limitation point.

8. The application of s 41 of the RTA.

9. The date of vacant possession.

E. The nature of the action

15. In New South Wales Land and Housing Corporation v Diab,[2] Leeming JA, with whom Beazley P relevantly agreed, [3] stated at [61]:

“The exercise of the power to cancel a rebate with effect from an earlier time gives rise to an obligation to repay a sum of money…the obligation to repay the cancelled rebate is, or is analogous to, a quasi-contractual, or restitutionary, right to recover money paid to the use of Mr Diab.”

2. [2015] NSWCA 133.

3. At [12].

16. The meaning of this passage is informed by the relevant issue in Diab: whether a retrospectively cancelled rebate creates a non-payment of rent. The quoted passage was part of the reasons why no non-payment of rent arises from a retrospective cancellation but was not concerned with the elements of the statutory action. Accordingly, the passage should not be read as authority for a proposition not in issue in Diab, that the mere cancellation of rebates with effect from a preceding date, under s 57(1) and (2), gives rise to an obligation to repay in the absence of a s 57(4) decision to recover the retrospectively cancelled rebates. It seems unlikely that the right not to be arbitrarily deprived of one’s own property would be displaced by the terms of s 57(1) to (3), so as to enliven a common law action to recover rebates, at least because the statutory words make no unambiguous provision to that effect. Rather, the section provides for a statutory right of recovery, not from a retrospective cancellation alone, but from a retrospective cancellation together with a notice to pay under s 57(4) (and non-payment under s 57(5)).

17. It follows that the effective date of a Cancellation Decision is not the date from which all rebates are repayable, nor even the date from which all Pt 7 rebates are repayable. Rather, the repayment of rebates is governed by a date nominated under s 57(4). The date governing recovery under s 57(4) cannot extend beyond the date nominated under s 57(2) because under s 57(4) recovery extends only to cancelled rebates received by the tenant “on or after” the Cancellation Decision “took effect”. Recovery under s 57(4) can only extend to rebates to which the tenant, because of the cancellation, was not entitled, namely cancelled Pt 7 rebates. What “part” of those past, cancelled, Pt 7 rebates is recoverable depends on the terms of the notice under s 57(4).

F. The issue estoppel

(a) The principle

18. The principle of finality of judgments manifests itself in litigation in a number of ways. One of those ways is in the doctrine of issue estoppel. An issue estoppel precludes a party re-agitating an issue in proceedings against another party where that issue has been finally determined between them. To arise, issue estoppel requires identity of parties, identity of subject matter, and a final judicial decision. [4]

    4. Tomlinson v Ramsey Food Processing Pty Ltd (2015) 256 CLR 507; [2015] HCA 28 at [90].

19. The Corporation asserts that an issue estoppel arose from a decision of the Tribunal. It is not disputed that a decision of the Tribunal is sufficiently “final” so that it can give rise to an issue estoppel,[5] even if it can sometimes be difficult to isolate the necessary issues determined. Nor does any issue arise about an identity of parties, for both the Corporation and Mr Quinn were parties before the Tribunal. The present concern is what relevant estoppel arose from the Tribunal’s decision.

    5. Cachia v Isaacs (1985) 3 NSWLR 366, 368F (per Kirby P), 382F (per Hope JA), (contra McHugh JA at 388A).

20. Not all findings of the Tribunal give rise to an issue estoppel, only those determinations of “ultimate facts”[6] which form the “ingredients in the cause of action”. [7] The decision concludes debate not only as to “the point actually decided”, but “[m]atters cardinal” to that decision. [8] These ingredients, the elements of the cause of action, cannot be raised again for that would be “to assert that the former decision was erroneous”. [9] Matters “subsidiary or collateral are not covered by the estoppel”. [10]

    6. Jackson v Goldsmith (1950) 81 CLR 446, 467.

    7. Blair v Curran (1939) 62 CLR 464 at 532; [1939] HCA 23.

    8. Blair at 532.

    9. Blair at 532.

    10. Blair at 532.

21. The majority in Cachia (McHugh JA dissenting) decided that an issue estoppel might include matters not actually traversed in the earlier judgment, [11] although Dixon J in Blair (at 532) specified that the issue estoppel has to be a matter “which was actually decided” as well as being a matter “necessary to decide”.

    11. Cachia at 382 (per Hope JA), 368B, 369D (per Kirby P).

(b) The Tribunal determination

22. On 15 May 2014 the Tribunal Member G Meadows heard an application in respect of the residential tenancy agreement between Mr Quinn and the Corporation. There was no appearance for Mr Quinn. The reasons of Tribunal Member Meadows included the following:

“The respondent tenant has received a rental rebate from about 1998 or possibly 2000. In about 2012 the applicant investigated the tenant's circumstances and concluded that he was not entitled to a rental rebate. The rebate was cancelled in November 2012. Since that date the tenant has been required to pay market rent for the premises but has continued to pay on the rebated rent, as it was at the date of cancellation. This Tribunal has no power to look behind the rebate cancellation but accepts it as a matter of fact…

By letter dated 22 November 2012, the applicant gave notice to the tenant that his rebate was cancelled…

A notice of termination was issued to the tenant on 19 June 2013…

… I find the notice of termination does comply in its exact meaning and is a valid notice.

The evidence provided by the applicant amply demonstrates the tenant has failed to pay his rent on time since the date of cancellation of the rental rebate…

… I am satisfied that I should terminate this tenancy, in which post-cancellation arrears have already reached in excess of $30,000.00 and continue to rise…

… I am aware that a recent decision of the Tribunal to the effect that such a debt is not to be characterised as rental arrears, and that that decision has been appealed to the Tribunal's Appeal Panel. The decision is imminent. In those circumstances it is not appropriate to consider that aspect of the application which should be adjourned until the appeal decision is known at which time the applicant may consider its position.”

23. The Tribunal made orders, including:

“The Residential Tenancy Agreement is terminated in accordance with:

• s 87 of the Residential Tenancies Act 2010 as tenant has breached the agreement.

• failure to pay rent in accordance with agreement.”

(c) The estoppels that arise

24. The orders of the Tribunal indicate that the “right established” [12] is the right to have the residential tenancy agreement terminated. One essential fact, an ingredient of that right specified in the orders, is that rent was not paid in accordance with the agreement.

    12. Blair at 532.

25. The Corporation submits that there are other “necessary and fundamental finding[s] of fact”: the termination “[n]otice was valid”, the rebate “had been cancelled” and the post-cancellation arrears of rent exceeded $30,000. [13]

    13. Plaintiff’s outline of closing submissions (“POCS”), 14/7/17, at [10].

26. Each of these matters was decided. The Tribunal expressly determined that “the notice of termination…is a valid notice”, that the arrears exceeded $30,000, and the Tribunal accepted the rebate cancellation “as a matter of fact”. The Tribunal’s decision that it had “no power to look behind the rebate cancellation” may raise a question about the extent of the Tribunal’s jurisdiction and its consideration of the validity of the purported Cancellation Decision.

27. Mr Quinn submitted that as there was no inquiry by the Tribunal into the validity of the November 2012 decisions, there was no decision of the Tribunal creating an estoppel. However, that reasoning seems to illustrate why the decision of the Tribunal may be wrong, rather than that no decision was made. Once the Tribunal accepted the correctness of the November 2012 decisions cancelling the rebate, a matter essential to the Tribunal’s decision to find unpaid rent and terminate the tenancy, the Tribunal has, in my view, made a decision.

28. The other requirement is that each of these matters was “necessary to decide”. [14] It was not a requirement, an essential “ingredient”, [15] that the rental arrears be in excess of $30,000 in order for the Tribunal to determine the tenancy. The Tribunal had no jurisdiction to make an order for payment of unpaid rent for a sum in excess of $15,000 and the Corporation withdrew any claim for unpaid rent. A determination of the extent of the arrears was thus “subsidiary or collateral” [16] even if a breach of the rental obligation was a necessary finding.

    14. Blair at 532.

    15. Blair at 532.

    16. Blair at 532.

29. A valid termination notice is necessary in order for the Tribunal to issue a termination order. [17] Accordingly, the validity of the termination notice was an ultimate fact cardinal to the Tribunal’s decision. But the validity of this notice is not part of the Corporation’s claim in these proceedings: the Corporation has regained possession of the rental premises, a matter not challenged, so the validity of the termination notice is of no present significance.

    17. Ss 87(4) and 88(4) of the RTA.

30. The validity of the November 2012 decisions was “necessary to decide…as part of the groundwork” of the Tribunal’s decision that there was unpaid rent. [18] The November 2012 decisions were the source of the obligation to pay rent at a higher level than Mr Quinn paid. To assert that the November 2012 decisions were invalid is to assert that the Tribunal’s decision was wrong. Mr Quinn submitted that the rebated rent was not always paid in a timely manner. And, as found later in this judgment, there was a period where, on any view, Mr Quinn underpaid the rent. [19] Nevertheless, it is clear that the Tribunal determined that there was a breach of the obligation to pay rent because the rental obligation had increased once the rebate was cancelled in November 2012, and not because of any dilatory payment or other rental increase. Had the rebate not been cancelled, there was no breach by the tenant of the obligation to pay rent, at least so far as appears from the decision of the Tribunal.

    18. Blair at 532.

    19. See [250].

(d) Exceptions to issue estoppel

31. Two possible exceptions arise in relation to the issue estoppel. First, whether it is necessary that the Tribunal have jurisdiction to determine the validity of the November 2012 decisions in order for such an issue estoppel to arise, and secondly, whether “special circumstances” preclude an issue estoppel.

32. As to the first matter, where a subordinate tribunal must necessarily decide matters solely in order to exercise its jurisdiction, its decision does not conclusively determine those matters between the parties and no issue estoppel arises. This is because the tribunal has no general jurisdiction to determine those appendant incidental matters, but can only determine them in connection with the particular invested jurisdiction. [20] Unless the tribunal has jurisdiction to “decide the matter conclusively and for all purposes between the parties”, no issue estoppel arises. [21]

    20. Cachia per McHugh JA at 387.

    21. Amalgamated Engineering Union (Aust Section), Ex parte; Re Jackson (1937) 38 SR (NSW) 13; (1937) 55 WN (NSW) 7.

33. Thus, a magistrate’s decision about the existence of a criminal offence of digging on Crown land does not determine between the parties for all purposes whether the land was, or was not, Crown land, because that was beyond the magistrate general’s jurisdiction. [22] “[N]o greater ambit of finality should be attributed to” decisions of subordinate bodies than the legislation provides. [23]

    22. Attorney General For Trinidad and Tobago v Eriché [1893] AC 518, 523.

    23. Maurice Blackburn Cashman v Brown [2011] HCA 22; (2011) 242 CLR 647, 662 [40]; Trustees for the Roman Catholic Church for the Diocese of Bathurst v Hine [2016] NSWCA 213 at [24]-[38].

34. The Corporation accepted that the Tribunal had no power either to engage in a judicial review of the November 2012 decisions or to undertake a “collateral review” of their validity. The decision in Director of Housing v Sudi,[24] confirms this limitation. Having no jurisdiction to undertake a collateral review of the November 2012 decisions precludes the Tribunal’s decision giving rise to an issue estoppel as to their validity. Such a decision in the special jurisdiction of the Tribunal “creates no estoppel”. [25]

    24. (2011) 33 VR 559; [2011] VSCA 266 at [20], [43], [62]-[63], [153]-[155], [284].

    25. Amalgamated Engineering Union at 20.

35. Faced with this, the Corporation submitted that the issue estoppel was to the effect that the November 2012 decisions were decisions, if not necessarily valid. The circumstance that someone decided to cancel the rebates is not in dispute. But that gives rise to no relevant issue estoppel to preclude an agitation of the validity of the November 2012 decisions.

36. The second exception concerns “special circumstances”. The House of Lords in Arnold v National Westminster Bank plc [26] determined that where a subsequent decision of a higher court found an earlier decision (not the subject of an appeal) to have been incorrectly decided, the earlier decision should not create an issue estoppel. Arnold referred to the “special circumstances” [27] in Henderson v Henderson,[28] and indicated that there may be special circumstances “where estoppel does not operate”. The Arnold decision was referred to in Pollnow v Armstrong [29] and in Mulgrave Central Mill Co Ltd v Hagglunds Drives Pty Ltd [30] without criticism. In Commonwealth of Australia v Cockatoo Dockyard Pty Limited, [31] the High Court, in a special leave application, expressly refrained from expressing a view on the correctness of the “special circumstances” exception.

    26. [1991] 2 AC 93.

    27. Arnold at 107C.

    28. (1843) 3 Hare 100.

    29. [2000] NSWCA 245.

    30. [2001] QSC 040.

    31. [2007] HCATrans 150.

37. The Tribunal’s decision to accept the validity of the November 2012 decisions has not been found to be incorrect. But there are circumstances in this case which may be regarded as special: the Tribunal simply accepted the November 2012 decisions as a matter of fact without determining validity and thus expressly eschewed any enquiry; the Tribunal was concerned about the termination of a tenancy, not the existence of a significant debt; the Tribunal refrained from making any decision about the backdated component of the November 2012 decisions; the Tribunal’s decision was made ex parte; the Tribunal’s decision could be supported on another basis including the matter at [250] hereafter; and the recovery of the cancelled rebates was not available in the Tribunal but only in a court under s 57(5) of the 2001 Act. [32] While these circumstances appear to me to enliven the special circumstances exception in Arnold, it is not necessary to give a final conclusion on that matter because of my finding in relation to the effect of the Tribunal’s limited jurisdiction.

    32. See generally Zistis v Zistis [2018] NSWSC 722 at [68]-[73].

38. I find that no issue estoppel arose from the Tribunal’s decision in respect of the validity of the November 2012 decisions because the Tribunal had no jurisdiction to determine that matter conclusively and for all purposes.

G. The collateral attack

39. Mr Quinn has not applied for judicial review of the November 2012 decisions. Such an application is beyond the jurisdiction of this Court. [33] Rather, the validity of the November 2012 decisions arises in the proceedings from the denial by Mr Quinn of the prerequisites in s 57 for recovery of the debt claimed by the Corporation. The Corporation seeks to prove the statutory elements for the debt in s 57, and a valid Cancellation Decision is said to be one of those elements. Thus, the challenge to the November 2012 decisions is collateral to the primary claim. The use of the term “collateral” in this context is not altogether the same as the use of that term in respect of decisions that give rise to no issue estoppel.

    33. Quinn CA at [72].

40. The Corporation submitted that Mr Quinn was unable to challenge the validity of the Cancellation Decision in these proceedings because a “collateral attack on the validity of administrative decisions is confined to a consideration of the validity of the decision on its face, that is, patent jurisdictional errors only”. [34] Patent jurisdictional errors were submitted not to be present.

    34. POCS, 14/7/17, at [17].

41. The Court of Appeal in Quinn CA at [73] refrained, it seems, from considering whether a collateral review of the Cancellation Decision was available as any lack of that jurisdiction would not preclude the Corporation from debt recovery proceedings. [35] Yet the Court recognised that Mr Quinn could raise “defences that can be raised in the Supreme Court” because of s 6 of the Law Reform (Law and Equity) Act 1972. [36] Thus, a defence challenging the validity of the Corporation’s decisions by way of collateral attack was permitted if it was available in the Supreme Court.

    35. Quinn CA at [72]-[73].

    36. Quinn CA at [73].

42. So if a defensive, collateral challenge to the November 2012 decisions is available in the Supreme Court (without an application for judicial review), it must also be available in this Court. As the Supreme Court’s jurisdiction is unlimited, the relevant question becomes whether a collateral challenge of this nature, where prerogative relief is not sought, is available in any court.

43. The ambit of a so-called “collateral attack” on validity,[37] although limited,[38] is not altogether clear. It has been described as embracing “validity of the decision on its face”, [39] “‘obvious’ defects”,[40] “facial invalidity”,[41] “patent invalidity”,[42] “ultra vires”,[43] “jurisdictional error” [44] and “lack of power”. [45] Collateral challenge is limited to where the validity of the decision is “merely an incident in determining other issues”. [46] The “relevant distinction” between collateral review and conventional judicial review is “between the ‘validity’ of the order…and the legal propriety of the making of it”. [47]

    37. Quinn CA at [73].

    38. Ousley v The Queen (1997) 192 CLR 69 at 87.

    39. Ousley at 80.

    40. Director of Housing v Sudi (2011) 33 VR 559; [2011] VSCA 266 at [231].

    41. Sudi at [241].

    42. Sudi at [261].

    43. Federal Airports Corporation v Aerolineas Argentinas (1997) 76 FCR 582, 593-596.

    44. Aerolineas Argentinas at 599.

    45. Aerolineas Argentinas at 599.

    46. Ousley at 99.

    47. Ousley at 127.

44. In Sudi,[48] Weinberg JA adopted, with apparent approval, the statement of Wells J in Hinton Demolitions Pty Ltd v Lower (No 2) [49] that a permissible collateral challenge extends to those cases without “even the colour of lawful authority” and “where an authority or public official, who is a party to a civil action, pleads, and relies on his own administrative act”. This second example has application to these proceedings, where the Corporation has pleaded and relies on what it alleges to be its own act of the November 2012 decisions in order to establish the statutory debt.

    48. Director of Housing v Sudi (2011) 33 VR 559; [2011] VSCA 266 at [232].

    49. (1971) 1 SASR 512.

45. The interference with private law rights is another example where collateral review has been found to be available. Executive and administrative acts can adversely affect private rights and interests, and prerogative writs are “inadequate” and “not wholly effective” as general public law remedies. [50] The plurality in the High Court decision of Corporation of the City of Enfield v Development Assessment Commission [51] stated:

“Significant questions of public law, including those respecting ultra vires activities of public officers and authorities, are determined in litigation which does not answer the description of judicial review of administrative action by the medium of the prerogative writs or statutory regimes such as that provided by the Administrative Decisions (Judicial Review) Act 1977 (Cth). Examples of other vehicles are the actions for recovery of moneys exacted colore officii or paid by mistake, and those for trespass, detinue and conversion where the plaintiff challenges the validity of the authority relied upon by the defendant” (underlining added).[52]

50. Corporation of the City of Enfield v Development Assessment Commission (2000) 199 CLR 135 at 156 [54], [56] (per Gaudron J).

51. (2000) 199 CLR 135.

52. At 143 [17].

46. The Corporation is as much subject to the law as those such as Mr Quinn who may be affected by the exercise of its powers and:

“within the limits of their jurisdiction and consistent with their obligation to act judicially, the courts should provide whatever remedies are available and appropriate to ensure that those possessed of executive and administrative powers exercise them only in accordance with the laws which govern their exercise.”[53]

53. Enfield at 157 [56].

47. In the present case, the ambit of collateral review depends upon the proper construction of the statute that supports the Corporation’s claim. [54] As identified earlier, s 57 of the 2001 Act requires the satisfaction of a number of items as preconditions to recovery by the Corporation. The satisfaction of those preconditions is within the ambit of a valid collateral attack.

    54. See Sudi per Maxwell P at [66].

48. If the 2001 Act specifies matters essential to establishing the statutory cause of action, it is unquestionable that Mr Quinn is entitled to challenge the existence of those matters. Where those matters include a decision of the Corporation, that must mean a valid decision of the Corporation. The decision need not be one which would survive judicial review proceedings but it must be one which is shown to have the qualities that are demanded by the statutory provision for recovery of the rebates. This is an application of the “relevant distinction” referred to in Ousley v the Queen [55] between the validity of the order and the legal propriety of the making of it. Those qualities or preconditions specified by s 57 include that it is a decision of the Corporation, that it came after a s 58 investigation, and that it determined its date of effect under s 57(2). The decision of the Corporation must be made by the Corporation acting within its powers. Enquiry into these matters does not involve going behind the decision to consider its merits or the matters relied upon to reach the decision (so long as they are not elements in the statutory cause of action), nor does it involve questions about whether prerogative relief should be granted.

    55. (1997) 192 CLR 69 at 127.

49. The Corporation submitted that the Act was analogous to the Building and Construction Industry Security of Payment Act 1999, which required a “pay now, argue later” regime. It was submitted that the “later” argument was confined to judicial review proceedings for prerogative relief. I do not accept the analogy. The Building and Construction Industry Security of Payment Act involves temporary determination of liability, whereas the s 57(5) debt is recoverable as a final conclusive judgment. This Court is not equivalent to an adjudicator under the Building and Construction Industry Security of Payment Act. The only proper application of the “pay now, argue later” aphorism seems to be that the Corporation (rather than the tenant) pays the rebate at one time, but may later set it aside and argue about recovery.

50. The Corporation in these proceedings seeks to rely upon its own act. It interferes with the private rights of Mr Quinn. These matters support the availability of a collateral challenge. Section 57 of the 2001 Act specifies certain facts that must be established to create the Corporation’s cause of action, and these facts are amenable to challenge.

51. The decision of Wandsworth London Borough Council v Winder,[56] referred to in Federal Airports Corporation v Aerolineas Argentinas,[57] is analogous to the present. There the tenant was sued for a rent increase resulting from a council resolution, a resolution alleged by the tenant to be beyond power. The House of Lords determined that the decision could be impugned because it deprived the tenant of existing private law rights and depended on an invalid resolution of council.

    56. [1985] AC 461.

    57. (1997) 76 FCR 582.

47. For these reasons, I find that Mr Quinn is entitled to challenge the validity of the November 2012 decisions and whether they constitute a valid Cancellation Decision. However, the nature of any particular challenge must be considered to determine whether it is within the ambit of a permissible collateral attack.

H. The authority of the Cancellation Notice and November 2012 decisions

53. This issue in the proceedings raises a number of questions which need separate attention. Those questions include:

1. What is the earliest date to which a Cancellation Decision can validly be backdated?

2. What rebates are “granted under this Part”?

3. The effect of the purported cancellation of earlier subsidies.

4. Did the Cancellation Notice and the Recovery Notice reflect decisions made by the Corporation?

(a) The extent of the backdating power and rebates “granted under this Part”

54. Section 57(2) provides that, as part of the Cancellation Decision, the Corporation “is to determine the date (being…before, on or after…the determination) on which the…cancellation has effect or is taken to have effect”.

55. Section 57 was enacted as part of the 2001 Act, with effect from 1 July 2001. Mr Quinn relied on the presumption against retrospectivity to submit that, as a result, 1 July 2001 is the earliest date the cancellation can be “taken to have effect”.

56. The presumption against retrospectivity has two components. The first is in respect of a provision that might have legal operation from a past date. [58]

“[I]t is a settled rule of construction of Statutes that a law is not to be construed as retrospective in its operation unless the Legislature has clearly expressed that intention”.[59]

58. ADCO Constructions Pty Ltd v Goudappel (2014) 254 CLR 1; [2014] HCA 18 at [45] (per Gageler J).

59. RS Howard & Sons Ltd v Brunton (1916) 21 CLR 366 at 371 (per Griffith CJ), see 373, 375. Adopted in Australian Education Union v General Manager of Fair Work Australia (2012) 246 CLR 117, 135 at [31] (“the AEU decision”).

57. The provisions of Pt 7 of the 2001 Act, including s 57, do not purport to come into operation any earlier than the commencement of the Act on 1 July 2001.

58. However, s 57(2), by the use of the word “before”, plainly grants to the Corporation the power to make a retrospective decision, operating from a date prior to the decision. That does not of itself make the subsection retrospective, so long as the date selected by the Corporation is not prior to 1 July 2001. The law prior to the enactment has not been affected by the 2001 Act, and so there is no retrospectivity in the Act itself. This may be one application of the “further rule” stated in RS Howard & Sons Ltd v Brunton that an Act “is not to be construed as retrospective to any greater extent than the clearly expressed intention of the Legislature indicates”. [60]

    60. (1916) 21 CLR 366 at 371.

59. A second operation of the presumption arises where an enactment might alter rights and liabilities which have already come into existence. As stated by Dixon CJ in Maxwell v Murphy (1957) 96 CLR 261 at 267:

“a statute changing the law ought not, unless the intention appears with reasonable certainty, to be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events”.

60. On the other hand, “Interference with existing rights does not make a statute retrospective. Many if not most statutes affect existing rights”.[61]

    61. The AEU decision at 133 [26], ADCO at [26].

61. A contrary intention to the presumption against retrospectivity is not limited to those “extreme circumstances” where “alteration of an existing right or liability ‘cannot be avoided without doing violence to the language of the enactment’” but rather includes those circumstances where the intention appears clearly or plainly from the text and context. [62]

    62. ADCO at [52], referring to Mathieson v Burton (1971) 124 CLR 1 at 22 and In re Athlumney; Ex parte Wilson [1898] 2 QB 547 at 551–552.

62. The words in s 57(2) of the 2001 Act empower the Corporation in clear terms to backdate the effect of a decision to cancel rebates. Whilst no limitation on the extent of that backdating is expressed, neither is there a plain expression that the backdating can extend prior to the enactment of the Act. As the cancellation of rebates can only extend to rebates “granted under this Part” under s 57(1), there is no apparent utility in backdating the cancellation under s 57(2) to a date prior to the enactment, in the absence of some other provisions.

63. In Diab, Macfarlan JA (apparently agreed to by Beazley P at [12], Leeming JA at [50]) stated at [30] that the Corporation:

“may recover amounts relating to the period after the date which the Corporation decides under s 57 that its rebate withdrawal should be taken to have had effect. The Corporation accepted at the hearing in this Court that that could not be a date prior to the Housing Act 2001’s commencement date (1 July 2001)”.

64. The Corporation expressly refrained from making the same concession in these proceedings.

65. On first reading, the passage quoted indicates that the Corporation conceded that a rebate cancellation could not be backdated to a date earlier than 1 July 2001, a concession which I might infer from the quoted passage was regarded as correct by the Court of Appeal. But the quoted passage has a possible alternative meaning. Rather, the word “that”, second occurring, in the second sentence of the quoted passage might equally be a reference to that date up to which the Corporation may “recover amounts” (rental rebates) as it may be to the date “its rebate withdrawal should be taken to have effect”. They are not necessarily the same date since, as indicated earlier in this judgment, the former is specified under s 57(4), the latter under s 57(2). The recovery decision under s 57(4) may extend to the whole “or part” of the rental rebate “on or after” the date the cancellation “took effect”, even though by the Cancellation Decision under s 57(1) and (2), all the rebates thereafter were rebates to which “the tenant was not entitled” according to s 57(4)(a). Rebates referred to in s 57(4)(a) and elsewhere must be a reference to a rental rebate granted under Pt 7 and cancelled under s 57(1), both because of the terms of s 57(1), and because s 57(4) only extends to rebates “to which…the tenant was not entitled” because of the Cancellation Decision including its date of effect.

66. Accordingly, or in any event, because of the concession made by the Corporation in Diab about the limited backdating power (so that the matter was not truly in issue in Diab) or because of the possible alternative meaning of the Court of Appeal passage quoted or because Diab was decided on other grounds, it is doubtful that Diab is binding authority precluding a date prior to 1 July 2001 being determined under s 57(2).

67. In Amalgamated Engineering Union (Aust Section), Ex parte; Re Jackson,[63] the plurality also adopted the words of Secretary of State for Social Services v Tunnicliffe, that “the greater the unfairness, the more it is to be expected that Parliament will make [the existence and extent of retrospectivity] clear if that is intended”. [64] In the present case, rebates granted in the years shortly prior to 2001 are not subject to a statutory power governing cancellation and recovery because, subject to the consideration of the transitional provisions below, they were not granted under Pt 7. Thus, while there may be no utility in backdating cancellation prior to 1 July 2001, nor is there any particular unfairness: the rebates from an earlier time are not Pt 7 rebates, and are not able to be cancelled or recovered no matter what date is chosen.

    63. (1937) 38 SR (NSW) 13; (1937) 55 WN (NSW) 7 at [31].

    64. [1991] 2 All ER 712, 724.

68. For this reason, subject to what appears below in respect of the transitional provisions, there is no reason why the wide words of s 57(2) should be read down. The backdating could extend to any past date without rendering the decision invalid, including a date prior to 1 July 2001, although, as indicated, the utility of specifying a date earlier than enactment is absent.

(b) What rebates are “granted under this Part”?

69. Although the Corporation relied upon the terms of s 57(2) to justify recovery of pre-2001 rebates, its principal argument was founded on the transitional provisions in the Act.

70. It might be thought unlikely that s 57(2) was given retrospective operation in the transitional provisions. Transitional provisions may be principally enacted to ease the transition from the law as it was to the law as it becomes, rather than enact a substantive change to the earlier law. This policy is reflected in the provisions governing transitional regulations. Clause (1) of Part 1 of Schedule 3 of the 2001 Act indicates that regulations “may contain provisions of a savings or transitional nature”. Clause 1(3) provides:

“1 Regulations

…

(3) To the extent to which any such provision takes effect from a date that is earlier than the date of its publication in the Gazette, the provision does not operate so as:

(a) to affect, in a manner prejudicial to any person (other than the State or an authority of the State), the rights of that person existing before the date of its publication, or

(b) to impose liabilities on any person (other than the State or an authority of the State) in respect of anything done or omitted to be done before the date of its publication.”

Thus regulations are to be construed as not retrospective.

71. Nevertheless, the proper meaning of the specific transitional provision in context is paramount.

72. The principal provisions relied upon by the Corporation are cl 5(1) and (2) of Pt 2 of Sch 3 of 2001 Act. Clause 5 relevantly provides:

“5 Contracts, documents and agreements under former Housing Acts

(1) Any contract executed under any provision of a former Housing Act is taken to have been executed under the corresponding provision of this Act.

(2) Any approval, warrant or delegation executed under any provision of a former Housing Act and in force immediately before the commencement of this clause is taken to have been given or made under the corresponding provision of this Act.”

73. Some historical matters need to be specified to explain the context in which these provisions operate.

74. Mr Quinn entered a residential tenancy agreement with the Corporation dated 6 March 1998, commencing 9 March 1998. That agreement continued in operation until the end of the lease on 15 May 2014, when the Tribunal terminated the lease. Clause 31 of the residential tenancy agreement provided:

“31.    RENTAL REBATE

The tenant acknowledges that the landlord may formulate a policy for the granting of rebates or waiver of rents. The parties agree that in accordance with such policy the Corporation/Department as landlord may grant a rebate or waive rent in its absolute discretion.”

75. Although there were specific provisions dealing with rental rebates in regulations made under the Housing Act 1912 (“the 1912 Act”), those regulations were repealed during the early 1990’s. Thereafter, until 2001, the Corporation submits rental subsidies were granted under the more general powers of the Corporation contained in former Housing Acts. Sections 9 and 10 of the 1912 Act gave the Corporation powers in respect of land, including to “lease” and “deal with land” as it thought fit. Sections 10 and 14 of the Housing Act 1976 (“the 1976 Act”) are similar.

76. It was not in contest that Mr Quinn was granted rental subsidies from 1998, and that the grant of the subsidies was lawful, although the manner in which those subsidies were lawful is not obvious, and is a matter considered below.

77. Nor was it in contest that the residential tenancy agreement was a contract falling within cl 5(1) of Sch 3. Thus, it must be “taken to have been executed under the corresponding provision of [the 2001 Act]”. It was not suggested that the “corresponding provision” was found in Pt 7 of the 2001 Act (which is concerned with rental rebates and not powers to enter leases), but rather in the general powers in ss 7 and 8 of the Act, corresponding to some degree with ss 9 and 10 of the earlier Act.

78. Although the residential tenancy agreement included cl 31 in respect of rental rebates, the circumstance that the contract “is taken to have been executed” under the 2001 Act by cl 5, Pt 2 of Sch 3 of the 2001 Act does not determine whether the rebates granted (in respect of obligations in that agreement) were rebates granted under Pt 7. That question must depend upon the action in granting the rebates, rather than the action in entering the contract. At the time in 1998, rebates, subsidies or a waiver of rent could of course not be granted under Pt 7 since it did not exist.

79. The Corporation submitted that cl 5(2) of Pt 2 of Sch 3 had the effect that prior subsidies were “taken to have been given” under Pt 7 of the 2001 Act. The application of cl 5(2) to subsidies granted to Mr Quinn prior to July 2001 requires that:

1. a former Housing Act provision provided the statutory basis for the grant of the subsidy;

2. the grant of the subsidy or rebate involved an “approval [that was] executed” under that former provision;

3. the “approval” was “in force immediately before” the 2001 Act commenced; and

4. Part 7 of the 2001 Act contains the “corresponding provision” to the provision under which the subsidies were granted prior to 1 July 2001.

None of those matters are obvious.

(i) Is there a statutory basis in a former Housing Act for the grants of subsidy to Mr Quinn?

80. The statutory basis for the subsidies granted to Mr Quinn is not apparent. The evidence of the initial subsidy is a computer printout making no reference to any statutory provision. It gives “subsidy details” indicating Mr Quinn’s income, percentage rate of income payable as rent, and the subsidised rent, and makes reference to codes which are were explained.

81. The Corporation made two alternative submissions as to the basis of the subsidy. First, that the subsidy was granted under the contract. Reference was made to cl 31. But cl 31 merely foreshadows a possible subsidy, it does not empower the Corporation to give it. [65] In any event, cl 5(2), by its terms, can only operate in respect of the subsidy if it is granted under a former Housing Act provision, not under a contractual provision. A finding that the subsidy was granted under cl 31 of the residential tenancy agreement would thus not assist the Corporation.

    65. See generally Australian Broadcasting Corporation v Redmore Proprietary Limited (1989) 166 CLR 454; [1989] HCA 15.

82. The alternative submission is that the subsidy was granted under the general powers of the Corporation dealing with land in ss 9, 10 and 14 of the 1976 Act.

83. The provisions of the 1912 Act and the 1976 Act, as noted above, allowed the Corporation to lease land vested in the Corporation “on such terms or conditions as it thinks fit”. [66] Although these provisions are not specific to rental rebates, there is no reason to read down their width. The conduct of the Corporation, including the grant of subsidies, would be expected ultimately to be rooted in some statutory power. The provisions allowed the lease to Mr Quinn to be granted on terms, including rebated rent or rental subsidies, as the Corporation thought fit. Clause 31 of the residential tenancy agreement imports this power into the contract.

    66. See e.g. s 14 of the 1976 Act.

84. Accordingly, I accept that the subsidies formerly granted to Mr Quinn prior to 1 July 2001 pursuant to cl 31 of the residential tenancy agreement were granted, at least indirectly, under the provisions of a former Housing Act, namely s 14 of the 1976 Act.

(ii) Is a grant of a rebate or subsidy the “execution” of an “approval”?

85. The Corporation submitted that the term “execution” in cl 5(2) also applied to “warrants”, and that as the execution of, say, a warrant for possession would involve the carrying out of the warrant, I should read “execution” as at least including “carrying out”. How such a construction would assist the Corporation was not apparent. Nor do I find the analogy especially persuasive, and would incline to view that the “execution” of a warrant (and an “approval” and “delegation”) may refer to its formal creation.

86. However, it might be supposed that a subsidy granted under a former Housing Act, and current immediately prior to the enactment of the 2001 Act, was intended to continue under the new statutory regime, as in fact occurred. If the subsidy was not continued by cl 5(2), then its legal status would be uncertain. If there was no statutory foundation for Mr Quinn’s pre-existing subsidy when the 2001 Act was enacted, it may be that recovery of it by the Corporation as money had and received, or money paid under a mistake, might potentially have been available, although such an action might long ago have become statute-barred. No such cause of action is part of the current claim of the Corporation.

87. Because of the likely need after the enactment of the 2001 Act for there to be a legislative foundation for the subsidies or rebates already existing in July 2001, I am inclined to the view that a grant of subsidy would be within the terms of an “approval…executed” under a former Housing Act, with the result that Mr Quinn’s entitlement to a subsidy did not evaporate with the passage of the 2001 Act. It cannot be supposed that the intention of the 2001 Act was to end the legal basis for then existing subsidies, and to do so sub silentio, with no express reference. Consideration of fairness and consistency referred to in Project Blue Sky Inc v Australian Broadcasting Authority [67] and other cases[68] support that construction.

    67. (1998) 194 CLR 355 at 381 [69].

    68. Certain Lloyd's Underwriters v Cross (2012) 248 CLR 378 at [23]‑[25]; [2012] HCA 56, and Deputy Commissioner of Taxation v Zammitt [2014] NSWCA 104 at [67].

(iii) What subsidy was “in force immediately” before the commencement of clause 5(2)?

88. Mr Quinn was the beneficiary of a subsidy granted effective 9 March 1998. That continued or was superseded by a subsidy effective 15 June 1998 that preserved the rent at the initial subsidised level. On 3 April 2000 the amount of subsidised rent changed, indicating a new and different level of subsidy. Again on 7 May 2001 the subsidy details changed again, with a new income level, rate of income payable as rent, and subsidised rent level. The inference I draw is that this was the last subsidy granted prior to 1 July 2001. According to evidence tendered by the Corporation, Mr Quinn was asked “to verify household income details” and thereafter, on 13 March 2001, he was provided with the “Subsidy Granted Advice” and advised of the new rent payable effective 7 May 2001.

89. It follows that the subsidy “in force immediately before the commencement” of cl 5(2) was the subsidy granted on 13 March 2001, effective 7 May 2001. This subsidy alone is “taken to have been given or made” under the 2001 Act. Clause 5(2) would preserve the effect of this subsidy, inferentially a purpose of the transitional provisions. There is no apparent utility in preserving prior, expired subsidies, and, in my view, they fall outside the terms of cl 5(2). Mr Quinn did not argue that the phrase referred only to the last fortnightly subsidy amount credited to his rental account prior to 1 July 2001.

(iv) “The corresponding provision”

90. Identifying the “corresponding provision” to ss 9, 10 or 14 of the 1976 Act is also not apparent. The 1976 provisions are in Pt 3, headed “Functions of the Corporation”, and concern functions or powers of the Corporation with respect to and including dealing with land. The most closely equivalent provisions in the 2001 Act are ss 7 and 8 in Pt 3 and s 18 in Pt 4, although other provisions in Pts 3 and 4 have some similarity. It is evident that if a rebate or subsidy could be granted under Pt 3 of the 1976 Act, then it could also be granted under s 18 in Pt 4 of the 2001 Act which empowers the Corporation “subject to such terms and conditions as it thinks fit [to]…lease…the land or any part”. However, after 1 July 2001, when there are express provisions for the granting of rebates in Pt 7 headed “Rental Rebates”, I would infer that rebates were in fact granted under Pt 7.

L. The limitation period

228. Mr Quinn submitted that the rebates recoverable under s 57(4) were those that were received in the six years preceding the cancellation, and that a cancellation that “took effect” at an earlier date did not enable recovery of the cancelled rebate because of the six-year limitation period.

229. Section 14 of the Limitation Act 1969 provides that “a cause of action to recover money recoverable by virtue of an enactment” is “not maintainable if brought after…six years running from the date on which the cause of action first accrues to the plaintiff”.

230. The cause of action accrues to the plaintiff when all the elements of the cause of action are present. As indicated above, the elements of this statutory cause of action include a rebate granted under Pt 7, an investigation under s 58, a cancellation decision by the Corporation, determination of a retrospective date of effect, notice of the cancellation to Mr Quinn and notice of the amount to be recovered. All but the first of these matters occurred in 2012. The fact that one element, the granting of a rebate, might have occurred more than six years before proceedings were commenced says nothing about when the cause of action first accrued.

231. The action first accrued when a valid notice under s 57(4) was given, requiring payment by Mr Quinn. That did not occur before 22 November 2012, when a s 57(4) notice was allegedly given. Until that date, no action could be maintained under Pt 7 for recovery of rebates.

232. Accordingly, the action by the Corporation is not statute-barred.

M. Section 41 of the Residential Tenancies Act 2010

233. The application of s 41 of the Residential Tenancies Act 2010 (“RTA”) depends on the validity of any cancellation of rebates after November 2012 as well as on the terms of s 41 of the RTA. These two matter can be considered separately.

(a) Prospective rebate cancellation

(i) A different date of effect

234. The exercise of the power of the Corporation to cancel a rental rebate granted under s 56 of the 2001 Act is governed by s 57 of the Act, whether the cancellation be retrospective or prospective. To cancel a rebate from a date “on or after the making of a determination”, the Corporation was required to:

1. conduct an investigation under s 58 of the Act;

2. decide to cancel the rebate;

3. determine the relevant date of effect being a date on or after the making of the determination; and

4. give notice to the tenant of the decision and date of effect.

235. Whilst I have doubted whether the Corporation conducted a s 58 investigation, I have decided that the Corporation did not validly cancel the rebate. Even though the authors of the November 2012 notices, Ms Walsh and Ms Pickering had authority under delegation to cancel the rebates prospectively, neither exercised that authority. It was not part of the Corporation’s argument that the authors of the notices were in any respect decision makers cancelling the rebates.

236. Nor did the Corporation determine an effective date of cancellation to be a date occurring “on or after the making of the determination”. Nor did the Corporation give notice of such a date.

237. Thus there was not prospective cancellation of the rebate. Rather, the rebates continued until cancelled or varied in accordance with s 57 of the Act. The November 2012 notices did not effect a cancellation of the rebate, not even for the future.

(ii) Severance

238. At the conclusion of submissions, the Corporation sought to argue that the Corporation had cancelled the rebate for the past and for the future and that the latter can be severed from the former. The argument was not developed. It would require, it seems, two determinations by the Corporation, but this is not supported by the evidence.

239. The administrative law doctrine of severance has been described by the High Court as “notoriously difficult”,[115] particularly where, as here, it was not “developed in the submissions”. Severance cannot be used “to achieve substantial alteration” or “rectification” [116] and it is difficult on the findings I have made to identify a valid, discrete part of the decision dealing with a prospective cancellation. A Cancellation Decision requires a date of effect to be identified, and it is not for this Court to determine a new date if the date chosen is invalid. Section 57 does not provide in terms that the Corporation may provide an earlier or later date of effect but in mandatory language requires that “the Corporation is to determine the date”. A valid date has not been determined.

     115. Harrington v Lowe (1996) 190 CLR 311 at 329.

     116. Aronson et al at [10.470].

240. There is a more fundamental problem. The remedy of severance, to the extent that it may have some application to the November 2012 decisions, is an administrative law remedy. [117] It has not been pleaded. Had it been raised earlier, it may have impacted on the decision of the Court of Appeal in Quinn CA finding that this Court has jurisdiction because the Corporation’s proceedings would then not have been simply a claim for a monetary sum, [118] but for administrative law relief. That may have persuaded the Court of Appeal that the matter, if it had commenced in 1998 in the Supreme Court, would have been assigned to the Administrative Law Division rather than the Common Law Division, and thus the proceedings would not be within the jurisdiction of this Court. [119] The lateness of the issue being raised, after repeated assurances that there was no severance argument, its potential to adversely impact on the jurisdiction of this Court if allowed, its potential impact on the Court of Appeal’s decision in Quinn CA, and the absence of any application to amend the claim to include a claim for severance, all persuade me that it is too late to raise the point, and I do not propose to allow it.

     117. See generally Aronson et al at [10.8].

     118. See Quinn CA at [67], [71].

     119. District Court Act 1973, s 44(1)(a).

(iii) A later decision

241. If the November 2012 notices do not effect a cancellation of the rebate, was there any later notice that did so? None is identified by the Corporation. However, on 14 September 2013, the Corporation gave notice of a market rent increase to $565 from 25 November 2013. The notice stated:

“NOTICE OF MARKET RENT INCREASE

This letter is to advise you that the market rent for your property at 44 SIRIUS, 44 CUMBERLAND ST, THE ROCKS, NSW, 2000 is increasing.

Each year, Housing NSW reviews the market rent of its properties. The new market rent for your property will be $565.00 per week, which commences from 25 November 2013. This is an increase of $20.00 per week from your current rent of $545.00 per week.

As the market rent has increased, you may now be entitled to a rent subsidy. For more information on how to apply for a rent subsidy, please contact your local office on the phone number at the top of this letter.

If you believe the rent increase is excessive you can make an application to the Consumer, Trader and Tenancy Tribunal. You should do this within 30 days of the date you receive this notice. Tribunal fees will apply.

…

Yours sincerely

[signature]

Catherine Stuart

Director Client Service Operations”.

242. While this notice may be effective to satisfy the requirements of s 41 of the RTA, a matter considered below, it does not purport to cancel a rental rebate. There is no evidence of the requirements in s 57 for a valid cancellation of rental rebates: rebate cancellation, date of effect, a s 58 investigation, and notice.

243. It follows that the rebate has not been cancelled.

(b) Residential Tenancies Act 2010

244. The alternative argument relied upon by Mr Quinn is that s 41 of the RTA was not satisfied by the November 2012 notices. Section 41 provides:

“41 Rent increases

(1) The rent payable under a residential tenancy agreement may be increased only if:

(a) the tenant is given a written notice by the landlord or the landlord’s agent specifying the increased rent and the day from which it is payable, and

(b) the notice is given at least 60 days before the increased rent is payable.

(2) This section extends to an increase in the rent payable under a residential tenancy agreement on renewal of the agreement as if the increase were an increase during the term of the agreement.

Note. Notice of a rent increase on renewal is required under subsection (1) before the lease is renewed.

(3) A rent increase is not payable by a tenant unless the rent is increased in accordance with this section or the rent is increased by the Tribunal.

(4) The residential tenancy agreement is varied to specify the increased rent from the date the rent is increased in accordance with this section.

(5) Notice of a rent increase must be given by a landlord or landlord’s agent in accordance with this section even if details of the rent increase are set out in the residential tenancy agreement.

(6) Notice of a rent increase may be cancelled or varied (so as to reduce the increase) by a subsequent written notice given to the tenant by or on behalf of the landlord. Any such later notice takes effect from the date on which the earlier notice was to take effect.

(7) Notice of a rent increase is not required to be given by a landlord or landlord’s agent if the increase arises because of the end of, or a reduction in, a rent reduction.

(8) Subsections (1)–(7) are terms of every residential tenancy agreement.

(9) A landlord or landlord’s agent must not contravene this section.

Maximum penalty: 20 penalty units.

(10) The Tribunal must not make an order that a rent increase is not payable because this section has not been complied with unless the application for the order is made not later than 12 months after the rent is increased. If an application has not been made within that 12-month period, the rent increase is taken to comply with this section.”

245. The November 2012 notices did not provide 60 days’ notice of any rent increase as required by s 41(1)(b), so Mr Quinn argued that by s 41(3), the rental increase is not payable.

246. Mr Quinn’s argument raises the manner in which the two provisions, s 41 of the RTA and s 57 of the 2001 Act, operate together. In Diab, a plurality [120] held that the granting of a rebate by the Corporation was an offer to vary the rental payment under the residential tenancy agreement, which was accepted by the tenant by paying the rebated rent. The Court held that the cancellation of the rebate with effect from an earlier date did result in the tenant having rental arrears. The plurality in Diab was not required to consider the obligations under s 41 of the RTA.

     120. Per Beazley P at [3], [5]; McFarlane JA at [18], [26].

247. The agreement between Mr Quinn and the Corporation is a residential tenancy agreement [121] and the RTA applies to existing residential tenancy agreements. [122] If Mr Quinn’s argument were correct, it would result in an inability of the Corporation to cancel the rebate and thereby increase the rent to the market rent without giving 60 days’ notice. This restriction is contrary to the wide discretion granted to the Corporation in s 57(2) to determine the date of effect of a rebate cancellation. Even though the RTA is a later Act, it seems unlikely that the specific powers of the Corporation to cancel rebates under s 57 would be repealed by a side-wind. [123]

     121. Exhibit A, p 1.

     122. See s 6 RTA.

     123. See e.g. Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at [8]; [1990] HCA 17.

248. The better view may be that any rental rebate does not reduce the “rent” as defined in the RTA, but rather operates as a means of meeting the rent obligation. “Rent” is defined in s 3 of the RTA as “an amount payable by a tenant under a residential tenancy agreement for the right to occupy premises for a period of the agreement”. The rent actually specified in the residential tenancy agreement is the market rent, a figure which was notified to Mr Quinn on each occasion when it was changed. Thus, as the residential tenancy agreement specifies the market rent, this is the rent within the meaning of s 41 of the RTA. On such a construction, there is no inconsistency between s 41 of the RTA and s 57 of the 2001 Act. The powers of the Corporation to effect a cancellation of rebates, recover retrospectively cancelled rebates and (by ending a rebate) charge the market rent would thus be unaffected by s 41. This is the approach which accords with that adopted by the Corporation when increasing the market rent, as those increases appear always to conform with the s 41 RTA requirements. Although this approach does not appear to sit comfortably with the reasoning of the plurality in Diab, that reasoning was not directed to s 41 of the RTA.

249. Because I have found the rebate cancellation to be invalid, it is unnecessary that I reach a final view on the interaction between s 57 of the 2001 Act and s 41 of the RTA.

250. The continuation of the rebate granted in September 2012 did not prevent increases in the market rent. Increases in market rent affected the net rent payable (after rebates). As the last rebate determined was the difference between the market rent of $545 [124] and the net rent payable of $96.25, [125] there was then a rebate amount of $448.75 per week. That rebate was not validly cancelled or varied. The account of Mr Quinn maintained by the Corporation, and other evidence of notices indicated that the market rent was validly increased to $565 on about 23 November 2013. Mr Quinn’s payments did not increase and the rebate was not increased. Thus, Mr Quinn has underpaid the rent by $20 per week from 23 November 2013 until 15 May 2014 (about 25 weeks), when the Tribunal terminated the lease. As Mr Quinn has underpaid the rent by an amount of $500, he must be liable for that sum, plus interest.

     124. Exhibit A, p 40.

     125. Exhibit 1, p 21.

N. Date of vacant possession

251. On 15 May 2014 the Tribunal ordered that Mr Quinn pay $80.71 per day from the day after the date of termination of the lease, namely from 16 May 2014, until “vacant possession is given to the landlord”. The Tribunal also ordered “the order for possession is suspended until 15 July 2014”.

252. Mr Quinn accepts that he must pay $80.71 per day from 16 May 2014 to 15 July 2014 inclusive, which is 61 days, totalling $4,923.31. The Corporation says that a further 21 days, or $1,694.91, is payable because the Corporation did not execute the warrant of possession until 6 August 2014.

253. There is no evidence as to when Mr Quinn ceased occupying the premises or returned the key. Thus, this issue turns on whether “vacant possession [was] given to the landlord” [126] on 6 August 2014, when the Corporation executed the warrant of possession and entered the premises, or 15 July 2014, the date until which the order for possession was suspended.

     126. Exhibit A, p 91.

254. Mr Quinn argues that vacant possession cannot be determined merely by the date that the Corporation chooses to execute the warrant. On the other hand, the Corporation submits that the date until which “the order of possession is suspended” [127] is not the same as the “date vacant possession is given to the landlord”.

     127. Exhibit A, p 91.

255. In Thomas v Metropolitan Housing Corporation Ltd [1936] 1 All ER 210, the English Court of Appeal (Slesser LJ, Scott LJ and Eve J) unanimously found that where a tenant left premises empty and locked up, the provision of the keys to the premises by the tenant to the landlord’s agent constituted the returning of actual possession to the landlord and the time actual possession was returned to the landlord was when the key was delivered to the landlord’s agent. At 216 Scott LJ observed:

“… Actual possession of empty premises, or of chattels which are locked up within a building or in a package of some sort, is retained by retaining the key. Possession of the key gives actual possession. The reason why there is so little law on the point is, I think, that it is difficult to imagine that anything to the contrary could ever have been contended.”

256. Slesser LJ observed at 214:

“There are many cases, of which I will mention only one, to the effect that the giving of a key giving access to the premises may amount to actual possession; and, when this is done with the intention to give possession, that possession will be an actual possession. … ”

257. Mr Quinn gave no evidence to establish the date of the return of the key and the provision of vacant possession. Mr Fester gave evidence about vacant possession as follows:

“By late July 2014, the Defendant had not returned the keys to the Plaintiff for flat 44 of the Property being the front door keys and the letter box keys. Also, there was no record on TRIM of the Defendant having vacated the flat. Accordingly, I caused the Plaintiff to apply for a warrant to take back possession of flat 44 at the property under the Eviction Orders. The warrant was granted before 6 August 2014.

On 6 August 2014, I attended at flat 44 at the Property with Acting Senior Client Service Officer of the Plaintiff, Jacqui O'Brien, and members of the NSW Sherriff’s Office to enforce the warrant obtained under the Eviction Orders. As part of this process the lock to the flat was broken and replaced by a locksmith.”[128]

128. Affidavit of Robin Fester, 5/12/14, [38]-[39].

258. Although Mr Quinn may have vacated the premises earlier, there is no evidence that he returned the key, and, at least until late July 2014, the evidence is to the contrary. Having retained the key, he retained actual possession. Any presumption that he acted in accordance with the order of the Tribunal cannot displace the evidence that he had not returned the key by late July 2014, the presumption of continuity and an available Jones v Dunkel inference arising from his unexplained failure to give evidence on the subject.

259. As there is no evidence that vacant possession was earlier “given to the landlord”, Mr Quinn is liable for the occupation fee until possession was proved to be taken by the Corporation. I will allow the additional $1,694.91, producing a total occupation fee of $6,616.22. Together with the $500 unpaid rent, there should be judgment in favour of the Corporation for $7,118.22 plus interest.

260. I have allowed interest on this sum from 1 July 2014. This amounts to $1,649.60.

261. The parties requested that costs be reserved pending further argument.

O. Orders

262. Accordingly, the orders of the Court are:

1. Judgment for the plaintiff in the sum of $8,767.82.

2. Costs reserved.

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Endnotes

Decision last updated: 21 June 2018