Re Glynn;
[2003] WASCA 122
•13 JUNE 2003
RE GLYNN; EX PARTE ROYLE & ORS [2003] WASCA 122
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2003] WASCA 122 | |
| THE FULL COURT (WA) | |||
| Case No: | CIV:2364/2002 | 13 MAY 2003 | |
| Coram: | MURRAY J WHEELER J MCKECHNIE J | 13/06/03 | |
| 23 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed | ||
| A | |||
| PDF Version |
| Parties: | JAMES WILLIAM ROYLE CHRISTOPHER JAMES ROYLE PATRICIA WENDY ROYLE GUY ROYLE PERSONS INTERESTED |
Catchwords: | Leases and licences Residential tenancies Whether agreement for holiday purposes Whether within the Residential Tenancies Act Prerogative writs Excess of jurisdiction Whether prohibition will lie Courts and Judges Small disputes division Whether rules of evidence apply |
Legislation: | Local Courts Act 1904 (WA) Residential Tenancies Act 1987 (WA), s 5(2)(e), s 5(5), s 15, s 26(2), s 32 |
Case References: | Buchmann v May [1978] 2 All ER 993 Hamersley Iron Pty Ltd v Roberts, unreported; FCt SCt of WA; Library No 960530; 19 September 1996 Horford Investments Ltd v Lambert [1976] Ch 39 Palser v Grinling [1948] AC 291 Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147; [1969] 1 All ER 208; [1969] 2 WLR 163 Craig v State of South Australia (1995) 184 CLR 163 Malaysian Airline System v Wood [1985] WAR 294 Public Service Association (SA) v Federated Clerks Union of Australia (1991) 173 CLR 132 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : RE GLYNN; EX PARTE ROYLE & ORS [2003] WASCA 122 CORAM : MURRAY J
- WHEELER J
MCKECHNIE J
JAMES WILLIAM ROYLE
CHRISTOPHER JAMES ROYLE
PATRICIA WENDY ROYLE
GUY ROYLE
Applicants
Catchwords:
Leases and licences - Residential tenancies - Whether agreement for holiday purposes - Whether within the Residential Tenancies Act - Prerogative writs - Excess of jurisdiction - Whether prohibition will lie - Courts and Judges - Small disputes division - Whether rules of evidence apply
(Page 2)
Legislation:
Local Courts Act 1904 (WA)
Residential Tenancies Act 1987 (WA), s 5(2)(e), s 5(5), s 15, s 26(2), s 32
Result:
Appeal allowed
Category: A
Representation:
Counsel:
Applicants : Mr P G McGowan
Persons interested : Mr S K Shepherd
Solicitors:
Applicants : Paiker & Overmeire
Persons interested : Mallesons Stephen Jaques
Case(s) referred to in judgment(s):
Buchmann v May [1978] 2 All ER 993
Hamersley Iron Pty Ltd v Roberts, unreported; FCt SCt of WA; Library No 960530; 19 September 1996
Horford Investments Ltd v Lambert [1976] Ch 39
Palser v Grinling [1948] AC 291
Case(s) also cited:
Anisminic Ltd v Foreign Compensation Commission [1969] 2 AC 147; [1969] 1 All ER 208; [1969] 2 WLR 163
Craig v State of South Australia (1995) 184 CLR 163
Malaysian Airline System v Wood [1985] WAR 294
(Page 3)
Public Service Association (SA) v Federated Clerks Union of Australia (1991) 173 CLR 132
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1 MURRAY J: I am in entire agreement with the reasons now published by McKechnie J. For those reasons I too would make an order absolute for prohibition.
WHEELER J:
The applications
2 This is an application for both a writ of certiorari and a writ of prohibition. The writ of certiorari seeks to quash the finding of the Magistrate to the effect that a number of agreements entered into between the applicants and certain tenants were not entered into bona fide for the purpose of conferring a right to occupy the premises in question for a holiday. His Worship therefore considered that he had jurisdiction pursuant to the Residential Tenancies Act 1987 ("the Act") to hear the applications of the tenants, made pursuant to s 32 of the Act, for an order declaring that the rent payable in respect of those premises was excessive. The application for prohibition seeks to prevent his Worship from further hearing the application.
Certiorari
3 The application for a writ of certiorari can be dealt with briefly. So far, all that his Worship has purported to do has been to enter on an inquiry as to whether or not he has jurisdiction. At the end of that inquiry he determined that he did. Because questions of fact were involved in determining whether he had jurisdiction, he heard evidence. Some of that evidence would no doubt be relevant to the merit of the application pursuant to s 32, were he to hear it. However, the hearing of evidence should not obscure the nature of his Worship's inquiry, which was into the question of whether he had jurisdiction under the Act to hear the application in question.
4 Argument before us referred to s 26 of the Act which effectively ousts certiorari and prohibition "unless the court before which such writ … is sought is satisfied that the Magistrate … had or has no jurisdiction conferred by or under this Act to take the proceedings." For the applicants, it was argued that his Worship had no jurisdiction to enter on the inquiry at all. For the tenants it was noted that s 15 of the Act provides that where a tenant under a residential tenancy agreement claims that a dispute has arisen under the agreement, he may make application. Because it was not in dispute that the relevant tenancies are residential
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- tenancy agreements, the tenants submitted that neither certiorari nor prohibition would lie.
5 In my view both contentions are incorrect. So far as the applicants are concerned, the relevant principle is, I think, clear enough for me to be able to refer to it simply by quoting from a basic text book on the subject matter ("Judicial Review of Administrative Action" by Aronson & Dyer, 2nd Ed, 560):
"… a decision maker has power to consider or hear argument as to its own power or jurisdiction, even where its decision on that question can be second guessed by a superior court on judicial review. This has been acknowledged in the case of inferior courts, courts of limited jurisdiction and tribunals … in other words, decision makers usually have the power to entertain matters in respect of which they lack power or jurisdiction to render a final decision."
6 The present is such a case. There is nothing in the Act to suggest that his Worship was unable to entertain the question as to whether or not he had jurisdiction to hear the application. Indeed, as a general rule, it would be absurd to suggest that a body which has limited jurisdiction is unable to consider the question of whether a particular matter falls within its jurisdiction. Having the power to decide, it has the power to decide erroneously. The question then arises as to what is the consequence of such an erroneous decision.
7 It is perhaps desirable to mention at this point another passage from the same text at 560 - 561. The authors note that although the court has power to intervene and to prevent a decision-maker from undertaking such an inquiry even before it is complete, on the basis that the only possible decision would be to the effect that there was no jurisdiction, the courts are increasingly reluctant to grant judicial review (including prohibition) against inferior courts and tribunals until the matter has been finally determined. The reasons for that include the fact that, as the learned authors note "a wait and see policy can save superior court time". They note that the relevant court or tribunal might decline on the merits to decide in a certain way, thereby making the jurisdictional point irrelevant. It appears to me that those reasons might well be applicable here. Had the point been taken, it seems to me that there might be much to be said for the view that it would have been desirable to allow his Worship to continue to hear the application in question, and to determine it on the merits. The jurisdiction which his Worship had under the Act is a jurisdiction to hear matters speedily and informally. Generally it seems to
(Page 6)
- me undesirable to hear questions of jurisdiction as a preliminary matter in such a tribunal, at least unless they can be determined without the calling of any evidence. It is also undesirable that proceedings of this kind be interrupted with applications for judicial review. However, the point was not taken. Rather, it was argued that this Court lacked jurisdiction to grant either certiorari or prohibition.
Prohibition
8 The question then arises as to whether prohibition should issue, assuming the applicants are right in their jurisdictional argument, to prevent his Worship from hearing the matter further. The applicants rely upon the exclusions contained in s 5 of the Act in order to establish that his Worship lacks jurisdiction. Section 5(2) relevantly provides:
"(2) This Act does not apply to any residential tenancy agreement -
…
(e) where the agreement is bona fide entered into for the purpose of conferring on a person a right to occupy premises for a holiday;" (Emphasis added)
"For the purposes of subsection (2)(e) an agreement conferring a right to occupy premises for a fixed term of 3 months or longer shall be deemed, in the absence of proof to the contrary, not to have been entered into bona fide for the purpose of conferring a right to occupy the premises for a holiday."
10 If the agreements in question here are agreements bona fide entered into for the purposes defined by s 5(2)(e) then, as the section itself provides, the Act "does not apply" to those agreements. If the Act does not apply, then there is no other source of jurisdiction for his Worship to hear an application purportedly brought pursuant to s 32 of the Act. If his Worship did proceed to hear an application in respect of such an agreement, he would lack jurisdiction to do so. It would be appropriate for prohibition to issue (subject to any discretionary considerations) to prevent a threatened exercise of such jurisdiction.
(Page 7)
The premises
11 I turn now to consider the basis of the applicant's argument that s 5(2)(e) does apply to the agreements in question here. The agreements in question relate to premises at a caravan park known as Orleans Bay Caravan Park which is situated some 80 kms from Esperance on the Duke of Orleans Bay. By reason of s 5(5) of the Act, it applies to sites at a caravan park "as if the site was residential premises for the purposes of this Act". It appears that some sites are permanently occupied by people who reside year round at the caravan park. The tenants in question in this application are not residents of that kind. Over a period of years they have leased sites within the caravan park, on some of which some of them have erected substantial structures.
Legal issues - Whose purpose?
12 The agreements between the applicants and the tenants appear to have begun as parole agreements between the tenants and the previous proprietors of the caravan park. The parole agreement was said in each case to be an agreement for an annual tenancy with rent paid yearly in advance.
13 There are two issues which I think arise in relation to the application of s 5(2)(e). The first is that of what or whose "purpose" is relevant. In this context I should note that the grounds for the application for prohibition are simply that the agreements are not subject to the Act by virtue of s 5(2)(e) and that the Magistrate should have rejected the application on the basis on lack of jurisdiction. The "grounds", properly so called, all appear as grounds for the grant of certiorari. Notwithstanding that defect in form, it is appropriate to consider the grounds advanced under the certiorari heading by the applicants. The first of those is to the effect that his Worship was wrong in law in considering that s 5(2)(e) required proof by the applicants as to the intention of the lessor in granting the leases.
14 In relation to this issue, it seems to me that his Worship did not construe the Act in the way contended for by the applicants. His Worship did note that he had no evidence before him as to the intention of the lessor. He also noted that there was nothing to indicate that the original lessor intended to limit the use of the premises to simply occupation for the purpose of holidays; in that connection his Worship referred to a statement from counsel conceding that there were sites which were permanently occupied.
(Page 8)
15 In the absence of any express stipulation of the purpose of the agreement, it seems to me that this is one of the matters which it was open to his Worship to consider. Section 5(2)(e) refers to the intention of neither the lessee nor lessor. Rather, the question is whether the agreement itself has as its purpose the conferring of the relevant right. It is appropriate to apply to this section, the dictum of Scarman LJ, also in a case dealing with tenancy legislation, although of a different type:
"The section directs attention to the letting, that is to say, the terms of the tenancy. The courts have proceeded on the basis that the terms of the tenancy are the primary consideration: see Wolfe v Hogan [1949] 1 All ER 570. In my opinion there is here a principle of cardinal importance: whether a tenancy of a house … is protected depends upon the terms of the tenancy, not on subsequent events." (Horford Investments Ltd v Lambert [1976] Ch 39 at 52).
16 There is in this case of course, no express lease and therefore no express stipulation as to purpose. Whether there was anything said at the relevant time from which an implication as to the purpose can be derived, is a matter I will consider in a moment. However, in the absence of express stipulation, it is enough to note for the moment that anything said or done by either lessee or lessor, and agreed to or not contradicted by the other, which gives an indication as to the purposes of that party, would be a relevant consideration.
Legal issues - holiday or holidays
17 The finding of his Worship which was the subject of the principal discussion at the hearing of the return of this order nisi was as follows:
"Clause (2)(e) is expressed in the singular. I concede the provisions of the Interpretation Act that the singular includes the plural but, of course, the assertions made by the Interpretation Act are always subject to the contrary being expressly intended in the particular instance. I believe that 5(2)(e) is directed at short stay transactions, short stay and one off transactions. I believe that it is directed at the chalet at Kalbarri or at Margaret River or wherever that a person might rent for a short period of time to occupy during a vacation period for a holiday.
(Page 9)
- That is not the character of these sites. The character of these sites is that they are effectively permanent subject to the rights of the parties to terminate, that they provide not just the facility for a person to have a short stay holiday, even though they may be used for that purpose, but they also provide the facility for people to keep their property that they might use on holiday at the holiday site, for them to permit others to use their property, and to permit them to live there permanently, subject to caravan legislation and regulation, as they see fit.
They are for longer than 3 months. I am not satisfied on the basis of the evidence that these agreements were entered into bona fide for the purpose of conferring a right to occupy just for a holiday."
18 It was suggested that his Worship's confining of the expression "a holiday" to a transaction of a "one off" nature was in error. The argument forcefully put by counsel for the applicants was to the effect that the Act was protective legislation, that its primary purpose therefore was to protect a principal place of residence, although it was not expressly so limited, and that premises which were merely used for recreational purposes, whether short or long stay accommodation, on a "one off" basis or otherwise, did not need the protection of the Act. It was further stressed that as his Worship had noted, the Interpretation Act provides that, subject to context, expressions used in the singular encompass the plural.
19 It is true that the Act is protective legislation, although it should be noted that it protects both landlord and tenant, affording each protections and remedies which had been hitherto absent from the law: Hamersley Iron Pty Ltd v Roberts, unreported; FCt SCt of WA; Library No 960530; 19 September 1996 per Steytler J at 8. The protection which the Act affords landlords includes a relatively simple and clear procedure for the termination of a tenancy, the precise procedure varying depending upon the landlord's intended future use of the premises. Protections for the tenant include a limit on the amount of rent which is required to be paid in advance during the first two weeks of the tenancy agreement, and a limit on the amount of security bond payable. As a matter of policy, one can see that provisions of this kind would be inappropriate to a relatively short term "one off" holiday letting. Persons using holiday premises may normally reside a long way from the holiday premises - perhaps even out of the country - and the difficulties of recovering unpaid rent may make it appropriate to require rent in advance. For similar reasons, and also
(Page 10)
- because a person in short term holiday accommodation, who does not propose to live in it, has a very limited interest in ensuring that the premises are kept in good order, it may be appropriate to require a very substantial bond. Because of the relatively short term nature of the stay, and the likelihood that the occupier will shortly return to his or her ordinary residence, the procedures for termination of the tenancy would be inappropriate.
20 For all of those reasons one can see why as a matter of policy a "one off holiday" would be excluded from the Act. It is not so clear as a matter of legislative purpose that it would be necessary or desirable to exclude premises which were rented, for example on an annual basis, by those who regularly returned to them and who therefore for some purposes might be regarded as in a position closer to that of the ordinary residential tenant.
21 More important than questions of policy however, it appears to me that the legislative history of the Act suggests that it is appropriate to draw a distinction between "a holiday" and "holidays". The Act was based closely upon the South Australian Residential Tenancies Act 1978 as amended in 1981 ("Hansard", Legislative Assembly, 29 October 1987, p 5390). Prior to 1981, the wording in the South Australian Act was different from that in s 5(2)(e). It excluded premises "where the rented premises are ordinarily used for holiday purposes". That is, it looked to the character and use of the premises, rather than to the agreement. However, between the enactment of the original South Australian legislation and its amendment in 1981, there was a perceived problem with landlords converting their premises into holiday homes, but creating long term tenancy agreements for them ("Residential Tenancy Law and Practice", Bradbrook MacCallum and Moore (1983) p 100 - 101). The South Australian amendments, which were designed to put a stop to that practice, were almost identical to s 5(2)(e) and (4), save that the deeming provision in South Australia refers to a fixed term of two rather than three months or longer.
22 It appears to me that in adopting the South Australian wording, the Parliament was intending to make it clear that it was the purpose of the tenancy, rather than the use of the premises, which was important and, that it was contemplated that "a holiday" would indeed be, as his Worship suggested, a relatively short term and one-off transaction rather than an agreement for the use of premises over a long period of time.
(Page 11)
The evidence
23 Before I turn to the evidence I should note that before his Worship there was a great deal of cross-examination of the tenants by counsel for the applicants as to the purpose for which they actually used the premises when they were there. As Scarman LJ suggested in the passage I have quoted from Horford Investments in the absence of a "sham", this is a matter of peripheral, if any, importance. Where there is no other indication, actual user subsequent to the entry into the agreement may be relevant. Also, since the intention of the parties may be derived from looking at what they have said and done against the objective background - that is the background of circumstances known to each - if the objective background included the use of premises for holiday purposes by those who then sought to enter into a formal tenancy agreement, that user at the time of entry into the agreement would form part of the background. I now turn to consider very briefly the evidence which was given.
Mr Sayers
24 Mr Sayers had already been visiting the Duke of Orleans Bay for seven or eight years prior to 1992. At that time he had a discussion with Wayne Rogers (also known as Buck Rogers) "as to the availability of land to build a facility there for myself opposite a friend of mine". That in general terms was the purpose for which he told Mr Rogers he wanted the land. The reply was: "Wayne, or Buck, at the time said that was fine. He said there was a rental amount of approximately $1000 … and I was subject to the rules of the park …". He had made certain improvements to the property, being a large shed and other things. The only other thing he could remember about his discussion with Mr Rogers was: "A comment that was made that in the event that I ever wanted to sell the place I had to give him first right of refusal to buy it."
25 Prior to taking up the site, he had obviously gone to the Bay for a holiday. When asked why he wanted a site, he said:
"Well when you have to travel down from Kalgoorlie and if you were renting a chalet … you have to cart all the equipment with you and it makes a lot of sense to have it all there at your fingertips, turnkey. You walk in, use it, walk out, and you are able to use it more often in that situation."
26 He indicated that his agreement with Mr Rogers included an agreement that if he took other people onto the site other than immediate
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- family, he would pay $5 a head per night for them. He said in re-examination that his agreement with Mr Rogers was that "I could come and go as I pleased".
Mrs Lang
27 Mrs Lang had been going to the Duke of Orleans Bay for over 20 years and had a long stay site since 1998. Prior to having a long stay site she had taken a caravan down to the bay, usually at Christmas and Easter. She entered into a verbal agreement with Mr Rogers and the only evidence she gave about that was that it was just a verbal agreement that rent was to be paid on 1 January every year and paid a full year ahead. She had erected certain improvements on the site. She uses it for "stress release" although occasionally she takes some bookwork down to the site.
Mr Davies
28 Mr Davies has been going to the caravan park for over 20 years in either December or January. Prior to obtaining a long stay site he used to rent a chalet and then later purchased a caravan. The only evidence he was able to give of his agreement with Mr Rogers was that:
"When we purchased the caravan and annex and then we decided to build and we moved the van and the annex, we approached Buck Rogers and he told us to go ahead, the site was ours as long as we wanted it."
- He too uses the site for recreational purposes.
Mr Mann
29 Mr Mann's agreement was apparently not with Mr Rogers but with another owner prior to Mr Rogers (Mr Burgess). It appears that he has been occupying the same site for approximately 20 years, and the agreement may have been made as long as 20 years ago. His account of the agreement was as follows:
"We originally visited the place just on holidays. The then owner, Mr Ron Burgess, encouraged us to put a permanent site there so that, in his words, it was something he didn't have to maintain and it was guaranteed income."
(Page 13)
30 He has transportable units on the site with verandahs all the way around and keeps property there. He too uses the site for the purpose of holidays.
Dr Friend
31 Dr Friend for the first 10 years had a caravan or rented a rental site. In about 1996 he said "We bought a third share into the site which we're in at the present time." That was a site apparently in relation to which there was already an agreement between a Mr Bower and the then owner Mr Burgess. Mr Bower had purchased a cottage and transported it down to the site "at Mr Burgess' request". It appears to be a substantial cottage with a pot belly stove, verandahs and so on. Dr Friend entered into the lease in order to "get away from the stress of work" or alternatively for "holiday".
Conclusion
32 So far as the express evidence directed to purpose is concerned, it is very thin. Mr Burgess' purpose was apparently was to avoid ongoing maintenance. The purpose of some others, such as Mr Bower, Mr Davies and Mr Sayer appears to have been to ensure permanency of occupation so that improvements of a substantial nature could be effected. It was of course apparently contemplated that those improvements would be used for the purpose of holidaying. There was however, no express limitation to that purpose. As his Worship noted, the agreement would appear to permit any of those tenants who gave evidence to remain at the site permanently if they wished to do so. Although I have not detailed the evidence, it seems clear enough that none of the tenants who gave evidence used to any great extent the facilities ordinarily provided at caravan parks, such as the ablution blocks. One could infer that part of the purpose of the agreement, from the owner's point of view, was to enable him to avoid obligations of that kind to the tenants. Although therefore the purpose of the agreements certainly included the purpose of making the site available to the tenants for use for recreational or holiday purposes, it seems to me that the agreement was wider in character.
33 It appears to me that his Worship was essentially correct in describing s 52)(e) as directed to a short stay or one off holiday; another way of characterising it would be to suggest that the subsection is directed at an agreement the exclusive purpose of which is making available the premises for a holiday, and that it does not contemplate agreements with
(Page 14)
- broader and mixed purposes, such as those agreements which include a purpose of enabling a tenant to effect significant improvements to the premises. In either event, it does appear to me that the applicants have failed to discharge the burden which subs (4) of s 5 casts upon them, of establishing that these agreements were entered into bona fide for the purpose of conferring a right to occupy the premises for a holiday. I would therefore discharge the orders nisi.
34 MCKECHNIE J: The Magistrate had jurisdiction to entertain the application and determine the preliminary question as to whether he had jurisdiction in the Small Disputes Division to declare that the rent payable in respect of the premises is excessive. There is a power inherent in a court of limited jurisdiction to hear and determine the issue of jurisdiction and if necessary, in the course of that hearing, to find jurisdictional facts. The question of jurisdiction in these circumstances is a mixed question of fact and law. Because the Magistrate had jurisdiction to determine the question, I would not grant certiorari to quash his decision.
35 If the Magistrate's decision in that respect was wrong, then a writ of prohibition would lie to prevent him from determining the ultimate issue and making orders.
Background to the application
36 The Magistrate was not able to be satisfied on the basis of the evidence that the agreements were entered into bona fide for the purpose of conferring a right to occupy the site just for a holiday and that accordingly the tenancies come within the terms of the Residential Tenancies Act 1987 (WA).
37 The Magistrate's conclusion gives rise to a question of law as to the proper construction of the Residential Tenancies Act and its application to the facts. The Magistrate's finding of jurisdictional facts is not conclusive. It is to the facts that I first turn.
38 The applicants are now the proprietors of a caravan park known as Orleans Bay Caravan Park which is situated some 80 kms from Esperance on the shore of the Duke of Orleans Bay.
39 The contradictors to the applications are persons interested in the outcome in that over a period of years they have leased sites within the caravan park. As will appear, some of them have erected substantial structures.
(Page 15)
40 Sometime after purchasing the caravan park, the applicants proposed increases of rent. The contradictors objected and filed application under the Residential Tenancies Act in the Esperance Local Court Small Disputes Division. They sought orders under s 30 that no increase of rent can take effect until the date on which rent is due to be paid and an order under s 32 that the increased rent proposed in the notice dated 20 December 2001 is excessive.
41 Some of the contradictors gave evidence and were cross-examined. It seems to have been accepted on all sides that their evidence was typical or representative of the balance of the contradictors who did not give evidence.
42 The application by Mr and Mrs Lang in the Small Disputes Division is said to be representative of the applications:
"The applicants have a parole lease over the rented premises. Rent is paid yearly in advance at the beginning of each calendar year. By notice dated 20 December 2001 the owners purported to substantially increase the rent for the rented premises as from 5 March 2002. The owners are partly motivated in their approach to the level of rent by a desire that the tenancy be terminated."
The evidence
Mr R Sayers
43 Mr Sayers had been visiting the Duke of Orleans Bay for seven or eight years prior to 1992 when he had a discussion with the then proprietor, Mr Wayne Rogers (also known as Buck Rogers), as to the availability of land to build a facility for himself. Mr Rogers said that was fine. The rent would be approximately $1,000. The agreement was oral. In the 10 years thereafter rent increases have been imposed and paid.
44 Mr Sayers had added improvements to the original lot:
"Basically, it's a large shed with two 40-foot by 10-foot accommodation units inside it with a kitchen area built at one end, with a barbecue and so on inside it. It's got two large sliding doors at the front and allows me to park my boat and a Toyota Land Cruiser that I leave there …
(Page 16)
- It's turnkey. When we go there we can drive down in the car with a few food items. Everything else is there - cooking utensils, bedding, everything. It's the same as your house basically."
45 In cross-examination Mr Sayers said that prior to taking up the site, his family used to go down to Orleans Bay on holiday. When asked why did he want a site, he said:
"… Well, when you have to travel down from Kalgoorlie and if you're renting a chalet or staying in a caravan you have to cart all the equipment with you and it makes a lot of sense to have it all there at your fingertips, turnkey. You walk in, use it, walk out, and you are able to use it more often in that situation."
46 He described his use as rest and recreation, fishing, drinking and stress relief. Although he agreed he could go down there 365 days a year he never has. In re-examination he indicated that if he took other people on site, other than immediate family, he paid $5 a head per night for them.
Mrs R U Lang
47 Mrs Lang gave evidence that she had been going to the Orleans Bay Caravan Park for over 20 years and has had a long stay site since 1998. She entered into an oral agreement for the occupation of Lot 97 with Mr Rogers, who said the rent was to be paid on 1 January every year, and a full year ahead. Lot 97 has a caravan with a solid annexe and a small shed, the value being about $14,000. In cross-examination when asked her reason for going to the site she said it was for stress relief:
"… When you have a business it's nice to get away from your own home and go to your second place of residence."
- Mrs Lang uses the site with her husband and two children who swim, fish and play games.
Mr B Davies
48 Mr Davies has being going to the caravan park for 20 years or more, every December or January, never missing a year.
49 He entered into an oral agreement with Mr Rogers for Lot 105 about 10 years ago and has spent $40,000 to $50,000 building a unit.
(Page 17)
50 Prior to having Lot 105 he would rent a chalet. Once he purchased the site he left the equipment there. Mr Davies conceded in cross-examination that he was on holiday when at the caravan park doing holiday activities such as fishing and driving at the beach.
Mr B Mann
51 Mr Mann rents Lot 108 and has been in occupation for approximately 20 years:
"The then owner, Mr Ron Burgess, encouraged us to put a permanent site there so that, in his words, it was something he didn't have to maintain and it was guaranteed income. … From memory, it was 1982."
52 In cross-examination, Mr Mann said his residential address was in Kalgoorlie and the purpose of entering the agreement was for the purpose of holidays.
Dr C R Friend
53 Dr Friend has been going to the caravan park since 1982. For the first 10 years he just had a caravan on a rented site, but in 1996 he bought a one-third share into Lot 120. The purchase price of his share was $10,000 and since then improvements of around $20,000 have been added to the site.
54 In cross-examination he said the purpose of entering into the lease was to get away from the stress of work.
The Residential Tenancies Act 1987
55 I now turn to the construction of the Residential Tenancies Act 1987 to determine whether the residential tenancy agreement in each case is one to which the Act applies.
56 The Residential Tenancies Act defines "residential premises" as meaning "premises that constitute or are intended to constitute a place of residence" and the "residential tenancy agreement" is:
"… any agreement, whether express or implied, under which any person for valuable consideration grants to any other person a right to occupy, whether exclusively or otherwise, any
(Page 18)
- residential premises, or any part of a residential premises, for the purposes of residence".
57 Neither of these two matters are in issue. It is obvious that the premises are residential premises and that the agreement or lease, even though oral, is a residential tenancy agreement.
58 The Act does not apply to all residential tenancy agreements. There are a number of agreements which are excluded from its provisions by s 5.
"5. Application of Act
(1) Subject to this section and sections 6 and 7, this Act applies to any residential tenancy agreement entered into, renewed, extended, assigned or otherwise transferred after the commencement of this Act.
(2) This Act does not apply to any residential tenancy agreement -
(a) where the tenant is a party to an agreement for the sale and purchase of the premises;
(b) where the agreement arises under a mortgage in respect of the premises;
(c) where the agreement arises under a scheme under which ¾
(i) a group of adjacent premises is owned by a company; and
(ii) the premises comprising the group are let by the company to persons who jointly have a controlling interest in the company;
(d) where the tenant is a boarder or lodger;
(e) where the agreement is bona fide entered into for the purpose of conferring on a person a right to occupy premises for a holiday;
(Page 19)
- (f) where the agreement is entered into as owner, whether generally or in prescribed circumstances, by any prescribed person or agency being a person or agency that is acting on behalf of the Crown; or
(g) where the agreement is a prescribed agreement, or is an agreement of a prescribed class.
- (3) This Act does not apply to or in relation to -
(a) any part of a hotel or motel;
(b) any part of an educational institution, college, hospital or nursing home;
(c) any premises used for the purposes of a club;
(d) any premises used as a home for aged or disabled persons by an eligible organization within the meaning of the Aged or Disabled Persons Homes Act 1954 of the Commonwealth Parliament;
(e) any prescribed premises or premises of a prescribed class.
(4) For the purposes of subsection (2)(e), an agreement conferring a right to occupy premises for a fixed term of 3 months or longer shall be deemed, in the absence of proof to the contrary, not to have been entered into bona fide for the purpose of conferring a right to occupy the premises for a holiday.
(5) This Act applies to a site at a caravan park, within the meaning of the Caravan Parks and Camping Grounds Act 1995 (whether or not a caravan, within the meaning of that Act, is situated on that site) as if the site was residential premises for the purposes of this Act."
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59 If the Residential Tenancies Act applies the Small Disputes Division has jurisdiction: s 12(1):
"(1) Subject to this section, a magistrate sitting in the Small Disputes Division of a local court as provided by Part VIB of the Local Courts Act 1904 has exclusive jurisdiction to hear and determine any matter that may be the subject of an application under this Act and that matter is not justiciable by any other court or tribunal."
60 The proceedings are final by s 26(1) and (2):
"(1) An order made by a magistrate under this Act, or by the clerk acting under section 12A, is final and binding on all parties to the proceedings in which the order is made and on all persons who under this Act could have become entitled to be joined as a party to the proceeding in which the order is made, and no appeal shall lie in respect thereof.
(2) No writ of certiorari, or prohibition, or other prerogative writ shall issue and no declaratory judgment shall be given in respect of proceedings taken or to be taken under this Act before a magistrate, or before the clerk acting under section 12A, in respect of any order made therein unless the court before which such writ or judgment is sought is satisfied that the magistrate or clerk had or has no jurisdiction conferred by or under this Act to take the proceedings or that there has occurred therein a denial of natural justice to any party to the proceedings."
61 In order to make good a claim for a writ of prohibition, the applicants must show the Magistrate had no jurisdiction conferred by or under the Residential Tenancies Act to take the proceedings.
Construction of the Residential Tenancies Act 1987, s 5(2)(e) and s 5(4)
62 I return to the construction of s 5(2)(e) and s 5(2)(4). If the residential tenancy agreement is in each entered into bona fide for holiday purposes, then the Act does not apply
63 The Magistrate concluded:
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- "Clause (2)(e) is expressed in the singular. I concede the provisions of the Interpretation Act that the singular includes the plural but, of course, the assertions made by the Interpretation Act are always subject to the contrary being expressly intended in the particular instances. I believe that 5(2)(e) is directed at short stay transactions, short stay and one off transactions. I believe that it is directed at the chalet at Kalbarri or at Margaret River or wherever that a person might rent for a short period of time to occupy during a vacation period for a holiday.
That is not the character of these sites. The character of these sites is that they are effectively permanent subject to the rights of the parties to terminate, that they provide not just the facility for a person to have a short stay holiday, even though they may be used for that purpose, but they also provide the facility for people to keep their property that they might use on holiday at the holiday site, for them to permit others to use the property, and to permit them to live there permanently, subject to caravan legislation and regulation, as they see fit.
They are for longer than 3 months. I am not satisfied on the basis of the evidence that these agreements were entered into bona fide for the purpose of conferring a right to occupy just for a holiday. Accordingly, in my view, the tenancies do come within the term of the Residential Tenancies Act."
64 It is convenient to consider s 5(2)(e) first. It is permissible to look at the subjective intention of the parties to determine the purpose of the agreement. The mere terms of the agreement while important, do not conclusively determine the purpose of the agreement: Buchmann v May [1978] 2 All ER 993. Regard must be had to other factors. This is clear by the use of the expression "bona fide". The honesty of an agreement must be judged by consideration of the overall circumstances. The section invites this consideration. A written agreement may apparently be entered into for holiday purposes. However, it may not be bona fide for that purpose because the intention of the parties may be a different purpose, that of long term accommodation. The words bona fide govern the whole of the words which follow. The Residential Tenancies Act is not to be evaded by a merely colourable use of words which do not correspond with what is really provided: see Palser v Grinling [1948] AC 291 per Lord Simon at 310 in a similar context to the Residential Tenancies Act. The agreement in a particular case may, or may not, of
(Page 22)
- itself indicate the purpose. However, the surrounding circumstances may clearly indicate the purpose. The focus of attention is not the purpose of the agreement, but the purpose of entry into the agreement. The purpose must be the dominant or principal purpose. This is a question of fact in each case. The Residential Tenancies Act s 5(4) is in effect a rebuttable statement of fact as to the bona fides of the agreement.
The evidence provides proof to the contrary
65 The evidence I have set out earlier in this judgment was effectively unchallenged or non-contentious evidence. It was all to the effect that the purpose of the residential tenancy was for holidays. There is no evidence that any of the witnesses intended to do other then attend at the premises and occupy them for a holiday with the ability to leave possessions under lock and key. There were undoubted conveniences to them in having a permanent holiday destination, but this does not deprive the agreement of the character of having been entered into for the purposes of a holiday.
66 Because the agreements conferred a right to occupy the premises for a fixed term longer than three months s 5(4) had to be considered. However, s 5(4) is satisfied by proof to the contrary that the agreements were bona fide. No witness suggested otherwise and there is no evidence to draw another conclusion.
67 It does not matter whether the lessor produces proof to the contrary or whether proof to the contrary can be found within other evidence, so long as there is evidence providing proof to the contrary.
68 The Magistrate, in my respectful opinion, erred in his construction of s 5 by confining holidays to short stay transactions. There is no warrant for interpreting holiday in the singular without allowing for the possibility of holiday in the plural. Indeed the Residential Tenancies Act recognises that premises may be rented for a period longer than three months for holiday purposes within s 5(4). As a result of his conclusion as to the definition of "holiday", the Magistrate also erred in the characterisation of the sites as "permanent", thereby distracting attention from the purposes of entry to the agreement.
69 The sites, or some of them, had a substantial character and had been improved. They were, however, subject to an annual lease. They were not permanent. Their use for storing equipment, including holiday equipment, was very much ancillary to the principal purpose, that of holiday premises.
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70 All the evidence was to the effect that each agreement was bona fide entered into for the purpose of conferring on a person a right to occupy premises for a holiday. The deeming provision of s 5(4) no longer applied because there was proof to the contrary. The Residential Tenancies Act does not apply to such agreements and the Small Disputes Division has no jurisdiction to hear and determine the applications. The Magistrate having no jurisdiction to make an order under the Act, the privity provisions of s 26 do not apply.
71 I would make the order absolute for prohibition.
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