Schaefer v Department of Housing [No 2] - [2012] WASCA 229

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA

TITLE OF COURT : THE COURT OF APPEAL (WA)

CITATION: SCHAEFER -v- DEPARTMENT OF HOUSING [No 2] [2012] WASCA 229

CORAM: PULLIN JA
NEWNES JA
MURPHY JA

HEARD: 7 MAY & 18 OCTOBER 2012

DELIVERED : 14 NOVEMBER 2012

FILE NO/S: CACV 112 of 2011

BETWEEN: ERIC JOSEPH SCHAEFER
Appellant
AND
DEPARTMENT OF HOUSING
Respondent

ON APPEAL FROM:
Jurisdiction              :  SUPREME COURT OF WESTERN AUSTRALIA
Coram  :MURRAY J
Citation  :SCHAEFER -v- HOUSING AUTHORITY [2011] WASC 222
File No  :CIV 1786 of 2011

Catchwords:

Appeal against application for review order - Statutory construction - Whether notice of termination complied with Residential Tenancies Act 1987 (WA) - Jurisdictional error

Legislation:

Interpretation Act 1984 (WA), s 43
Magistrates Court Act 2004 (WA), s 36
Residential Tenancies Act 1987 (WA), s 26, s 38, s 60, s 61, s 62, s 71, s 88
Residential Tenancies Regulations 1989 (WA), reg 18
Rules of the Supreme Court 1971 (WA), O 56A

Result:

Appeal allowed

Category: B

Representation:

Counsel:

Appellant: In person & Mr E M Heenan
Respondent: Ms C J Thatcher

Solicitors:

Appellant: In person
Respondent: State Solicitor for Western Australia

Case(s) referred to in judgment(s):

Craig v The State of South Australia [1995] HCA 58; (1995) 184 CLR 163
Minister for Aboriginal Affairs v Peko‑Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24
Rayney v AW [2009] WASCA 203

PULLIN JA:

Background

This is an appeal against an interlocutory decision of Murray J dismissing the appellant's application for a review order pursuant to s 36 of the Magistrates Court Act 2004 (WA) in relation to a magistrate's decision. The magistrate's decision terminated a residential tenancy agreement between the parties and ordered the appellant to vacate the premises. The appellant applies for leave to appeal and an extension of time in which to appeal.
The appellant is a 72‑year‑old pensioner who, until 13 September 2011, resided in a unit pursuant to the residential tenancy agreement. The tenancy agreement contained cl 13.1, which reflected s 38 of the Residential Tenancies Act 1987 (WA) (RTA) and which read, 'The tenant must maintain the premises in a clean and tidy condition at all times'. According to Murray J, the appellant was 'by no means a bad tenant', paid the rent and generally complied with his other obligations under the lease [2].
The dispute between the appellant and the respondent began when, on 1 June 2010, an officer of the respondent inspected the appellant's property and observed that various rooms in the house contained what were described as 'excessive belongings' consisting of a multitude of different items including records, fishing rods and many boxes filled with various goods, stacked upon one another. On 17 June 2010, the appellant was asked by the respondent to 'clear the excessive belongings from [his] property'. On 16 August 2010, the appellant was given notice that he was in breach of his tenancy agreement by failing to remove the 'excessive belongings' and that he was required to remedy the breach. The notice of breach of agreement read:
I, hereby give you NOTICE that you are in breach of the Residential Tenancy Agreement entered into with me on 29 July 2010.
I claim the breach of the agreement is under Section 38 of the Residential Tenancies Act, which states: 38(1) It is a term of every agreement that the tenant -
(a)shall keep the premises in a reasonable state of cleanliness;
(b)shall notify the owner as soon as practicable but within 3 days of any damage to the premises; and
(c)shall not intentionally or negligently cause or permit damage to the premises.
Specifically; You have failed to rectify Department of Housing work order No. 28558 in which you were requested to remove excessive belongings from the property, as per the letter sent to you by the Manager of Housing Services, dated 17 June 2010.
TAKE NOTICE that I require you to remedy this breach within 14 days of giving this notice.
The respondent alleged that the appellant did not remedy the breach and took steps to terminate the tenancy. Termination of a residential tenancy agreement can only be effected by complying with s 60(1) RTA which reads:
(1)Notwithstanding any Act or law to the contrary, an agreement shall not terminate or be terminated except -
(a) where the owner or tenant gives notice of termination under this Act and
(i)the tenant delivers up vacant possession of the premises on or after the expiration of the period of notice required under this Act; or
(ii)a competent court, upon application by the owner, terminates the agreement under section 71.
Two sections in the RTA contain specifications about the notice of termination. They read:
61.Form of notice of termination by owner
Notice of termination of an agreement by the owner shall -
(a)be in writing and in the prescribed form;
(b)be signed by the owner or his agent;
(c)identify the premises the subject of the agreement;
(d)specify the day on which possession of the premises is to be delivered up by the tenant; and
(e)specify and give particulars of the ground, if any, upon which the notice is given.
62.Notice of termination by owner upon ground of breach of term of agreement
(1)An owner may give notice of termination of an agreement to the tenant upon the ground that the tenant has breached a term of the agreement and the breach has not been remedied.
(2)Where an owner gives notice of termination under this section, the period of notice shall be not less than 7 days.
(3)Where notice of termination is given under this section upon the ground of a breach of the agreement other than the agreement to pay rent, the notice is ineffectual unless a notice specifying the breach and requiring that it be remedied is given to the tenant not less than 14 days before the notice of termination is given.
On 16 September 2010 and again on 16 November 2010, the appellant was given a termination notice by the respondent and warned of legal action if he did not vacate the premises. The termination notice dated 16 September 2010 was not relied upon by the respondent so it may be ignored.
The 16 November 2010 termination notice read:
TO:
Eric Joseph SCHAEFER
I hereby give you notice of termination of your residential tenancy agreement and require you to deliver up vacant possession of the premises at -
Unit 12/2 Dorcas Way, Coolbellup WA 6163
(Address of rented premises)
29 November 2010
(Date on which vacant possession of the premises is to be given)
...
A.This notice of NOT LESS THAN 7 DAYS is given to you on the ground that you have breached a term of the agreement and the breach has not been remedied (See section 62 of the Residential Tenancies Act 1987.)
Particulars of the breach are - Section 38 of the Residential Tenancies Act.
38(1)It is a term of every agreement that the tenant -
(a)     Shall keep the premises in a reasonable state of cleanliness;
(b)     Shall notify the owner as soon as practicable but within 3 days of any damage to the premises; and
(c)     Shall not intentionally or negligently cause or permit damage to the premises.
Specifically; You have failed to rectify the Breach of Agreement issued on 16 August 2010 in which you were requested to remove excessive belongings from the property, as per the letter sent to you by the Manager of Housing Services.
Notice of the breach was given to you on 16 August 2010
...
IMPORTANT INFORMATION FOR TENANTS
•The owner is seeking to terminate your residential tenancy agreement and requires you to vacate the premises on the date specified in this notice.
•If you do not vacate the premises, the owner may apply to court for an order terminating your residential tenancy agreement and requiring you to vacate the premises.
The appellant did not vacate the premises so the respondent then commenced proceedings in the Magistrates Court, Fremantle and applied for an order terminating the tenancy. There was a hearing before Magistrate Lawrence and, on 30 March 2011, Magistrate Lawrence ordered that the tenancy agreement be terminated and that the appellant vacate the premises by 29 April 2011.
The respondent contends that the application was made pursuant to s 71 which reads:
71.Application by owner for termination and order for possession
(1)Where an owner or a tenant under an agreement gives notice of termination to the other under this Act and the tenant fails to deliver up possession of the premises on the day specified, the owner may, subject to section 62(5)(a), within 30 days after that day, apply to a competent court for an order terminating the agreement and an order for possession of the premises.
(2)Subject to this section, a competent court shall, upon application under this section, make an order terminating the agreement and an order for possession of the premises, if it is satisfied -
(a)that notice of termination was given by the owner or tenant to the other and that it complied with and was given in accordance with this Act; and
(b)where the notice was given by the owner upon a particular ground prescribed by this Act, that the owner has established that ground and, in the case of notice upon the ground of a breach by the tenant of a term of the agreement, that the breach is in all the circumstances such as to justify termination of the agreement.

The magistrate's reasons

The magistrate in his reasons said:
This is an application with respect to provisions of the Residential Tenancies Act and in particular premises at 12/2 Dorcas Way, Coolbellup, and it is without doubt on the evidence that the respondent to this application, Mr Schaefer, entered into a tenancy agreement in relation to those premises on 29 July 02, being a three‑bedroom apartment, and has been an occupant of that property since that time; that subsequently - or a breach notice was served upon him on 16 August, or dated 16 August, clearly outlining the claim that he had breached the tenancy agreement and, in particular, section 38 of the Residential Tenancies Act which states, and is quoted in the breach of agreement notice:
It is a term of every agreement that the tenant shall keep the premises in a reasonable state of cleanliness -
for the purposes of these proceedings, and specifically itemised what it was that was claimed as a breach, that being you had failed to rectify the Department of Housing work number 28558 in which you were requested to remove excessive belongings from the property as per the letter sent to you by the manager of housing services dated 17 June 2010.
He acknowledges in his evidence that he received documents to that effect and that he received a breach notice. Subsequent to the breach notice he was given time to rectify the breach or remedy the breach within 14 days of that notice. That was not done and he was subsequently served with a termination notice, which was dated 16 November 2010, detailing that he had failed to rectify the breach specified in the breach notice and that he had to vacate the premises by 29 November 2010, which he acknowledges that he had not done.
Pursuant to the tenancy agreement into which he entered in July of 02 there is a specific clause in the first page of the tenancy agreement which states, at clause 6, for the purposes of these proceedings, 'maintain and keep the premises clean, tidy and free from pests' and it is alleged by the applicant that he has failed to keep the premises clean and tidy by having excessive belongings located at the premises and, to that extent, there is evidence in the form of photographs that have been presented to me which clearly indicates that there are an extensive number of items located in the bedrooms and the rooms at that premises, at those premises.
The photographs clearly demonstrate there are boxes and boxes of items located in the premises and on the evidence of both Ms Barley and Mr Thomas, who have visited the premises, the latest on 14 September by Ms Barley, she could not enter some of the rooms, which is corroborated by Mr Thomas. I accept it as a fact that they were unable to enter the premises in order to carry out their inspections because of the number of items contained within those rooms and which are not shelved but are located or stored and stacked on top of each other.
The respondent has given evidence that he is a collector, he collects items, amongst them being phonograph records and discs, and that he is transferring tapes on to discs and records - music on to discs. That is his hobby and he collects these items and they are stored in his room, that it is not unclean, and he denies that there are excessive belongings in the premises and, therefore, that the premises are not unclean and, therefore, he has not breached the tenancy agreement.
Unfortunately, Mr Schaefer, I do not agree with you. I am satisfied on the evidence that has been presented to me that there are excessive belongings in these premises and that they constitute a health risk and a safety risk, primarily because of the nature of the premises that you occupy, it being in a block of units, and because of the number of items involved. They are stacked on top of each other, they are cardboard, paper, and it seems to be in total disarray. You are obviously a collector and you collect many, many items, but you simply are not permitted to store such items in a residential premises pursuant to the tenancy Act, the tenancy agreement and the Residential Tenancies Act, and I am satisfied on the evidence that by having that excessive number of belongings in that premise that it constitutes uncleanliness and it constitutes a breach of the tenancy agreement into which you entered in July of 2002, and you have failed to rectify the breach which was lawfully served upon you, and you have failed to comply with the termination notice which was also lawfully served upon you.
Accordingly, I am satisfied that the application should be successful (ts 20 ‑ 22).

Appellant applies to the Supreme Court

On 9 May 2011, the appellant applied to the Supreme Court to have the orders of the Magistrates Court set aside. The appellant represented himself and it was not clear from the application whether it was an application for a review order under s 36 of the Magistrates Court Act. The application was not titled as required by O 56A Rules of the Supreme Court 1971 (WA). Nevertheless, Murray J appeared to treat it as an application for a review order and on the hearing of this appeal, both Mr EM Heenan, who appeared pro bono for the appellant, and counsel for the respondent, agreed that the application before Murray J was an application for a review order. Murray J dismissed the application on 26 August 2011.

Right of appeal or review against the decision of the Magistrates Court

Where the Magistrates Court makes an order under the RTA, that decision is 'final and binding on all parties to the proceedings' and there is no right to appeal against the decision notwithstanding pt 7 of the Magistrates Court (Civil Proceedings) Act 2004 (WA): s 26(1) and s 26(3) RTA.
However, this provision does not exclude an application under s 36 of the Magistrates Court Act which provides, not for an appeal from the Magistrates Court, but rather for judicial review.
Section 36(1)(c)(i) and (ii) of the Magistrates Court Act reads:
36.Supreme Court’s powers to control Court
(1)If a person is or would be aggrieved by one or more of the following -
...
(c)an act, order or direction done or made by a Court officer -
(i)on the ground that it was done or made without jurisdiction or power or is an abuse of process; or
(ii)on any ground that might have justified an order of certiorari,
the person may apply to the Supreme Court for an order (a review order) that requires the Court officer and any person who will be affected by the act, order or direction to satisfy the Supreme Court at a hearing that the act, order or direction should or should not be done or made or set aside, as the case requires.
However, this right to review is restricted by the RTA s 26(2), which reads:
No declaratory judgment shall be given and no order shall be made under section 36 of the Magistrates Court Act 2004 in respect of proceedings taken or to be taken under this Act in the Magistrates Court or any order made in such proceedings by that court, unless the Supreme Court is satisfied that the Magistrates Court had or has no jurisdiction conferred by or under this Act in respect of the proceedings or that a party to the proceedings has been denied natural justice.
The appellant in his notice of motion alleged a denial of natural justice and referred to s 26 of the RTA. The appellant did not provide particulars. The originating motion also alleged that the magistrate made 'no apparent attempt' to 'apply the lawful Act'. The respondent chose not to seek further particulars and chose not to attend the hearing which took place before Murray J.

Murray J's reasons

Murray J found that there had been no denial of natural justice [17] ‑ [18], [23], [27]. His Honour also addressed the issue of jurisdiction and discussed the provisions in the RTA which permit a review of the decision of the Magistrates Court. In so doing, his Honour expressed the view that the Magistrate Court had jurisdiction to deal with the dispute [20], [23], [27]. Murray J dismissed the appellant's application and made no order as to costs.

Appeal to this court

There were originally 16 grounds of appeal prepared by the appellant acting in person. After Mr Heenan agreed to act pro bono, he applied and was granted leave to amend the grounds of appeal and to substitute in lieu the following three grounds which read:
(a)the review judge erred in law in holding that the magistrate had jurisdiction under s 15 of the RTA to terminate the appellant's residential tenancy agreement with the housing authority;
(b)the review judge erred in law in holding that the magistrate had jurisdiction to make an order terminating the agreement because, contrary to the requirements of s 71(1) of the RTA, the housing authority had not given notice of termination of the agreement which complied with the requirements of the RTA, and the magistrate's power under s 71(2) of the RTA therefore was not enlivened; and
(c)the review judge erred in law in finding that the magistrate had jurisdiction to make an order terminating the agreement because the magistrate failed to have regard to a mandatory consideration preconditioning the existence of the power under s 71(2) of the RTA, namely the requirement of s 71(2)(b) that the magistrate consider and be satisfied that the appellant's alleged breach of the residential tenancy agreement was in all the circumstances, such as to justify termination of the agreement.

Ground 1 - disposition

The appellant referred to paragraphs in the review judge's reasons for decision which state that the magistrate had jurisdiction under s 15 of the RTA to make the order of termination. In particular reference was made to [15] where his Honour said:
He [the appellant] continued his opposition in the face of that notice, and in the face of an application by the respondent to the Magistrates Court at Fremantle, under s 15 of the RTA, for an order terminating the tenancy and giving possession of the premises to the respondent.
The review judge also said:
I have said that it is clear that the application dealt with by the Magistrates Court was made under the RTA, s 15 [20].
The appellant submitted that if the magistrate was exercising jurisdiction under s 15 then that jurisdiction did not empower him to make an order of termination of a residential tenancy agreement. If the magistrate purported to act under s 15 then it is correct that he did not have jurisdiction to make the orders he made.

However, just because the review judge was under the impression that the magistrate dealt with the application under s 15 does not mean that the magistrate did so. There is nothing in the magistrate's reasons referring to s 15 and the magistrate did not make any orders of the kind set out under s 15(2). It is clear from the nature of the orders made that the magistrate regarded the application as an application under s 71. Thus, while it is correct that the review judge erred when he indicated that he thought the magistrate had jurisdiction under s 15, this point does not justify setting aside Murray J's order.

Ground 2 - the second notice of termination did not comply with the requirements of the RTA

The appellant submits that the second notice of termination did not give seven days' notice of termination. The appellant submitted that the notice of termination properly construed informed the appellant that the agreement was terminated immediately. He submitted that the seven days' notice of the date on which vacant possession was required was a separate period of notice.
The second notice of termination was in the form prescribed as Form 1C in sch 4 to regulations made under the RTA, namely the Residential Tenancies Regulations 1989 (WA) (RTR). See reg 18 of the RTR.
The power to prescribe forms derives from s 88(1) of the RTA which, relevantly, includes power to make regulations prescribing all matters required by the RTA to be prescribed or which are necessary or convenient to be prescribed to give effect to the purposes of the RTA.
It cannot be disputed that the power to prescribe forms is conditioned by the requirement that the form so prescribed meets the requirements of the RTA. Section 43(1) of the Interpretation Act 1984 (WA) provides that subsidiary legislation shall not be inconsistent with the provisions of the written law under which it is made and subsidiary legislation shall be void to the extent of any such inconsistency.
The appellant submits that seven days' notice of termination 'under the RTA' (meaning in accordance with the RTA) had not been given because the notice in Form 1C did not comply with s 62(2) RTA. He also submitted that the giving of such a notice was a jurisdictional fact to be established before a termination order could be made.
The respondent accepts that the prescribed form must be consistent with the requirements of the RTA but submits that termination of a tenancy under s 60(1)(a)(i) is not achieved by the unilateral giving of the notice of termination. The respondent submits that the delivering up of vacant possession is the event that signals termination of the tenancy (absent a court order) and that a notice of termination specifying when vacant possession must be delivered up is a notice of termination specifying termination of the tenancy on that day (that is, the day of delivery up of vacant possession). The respondent's submission should be accepted.
More importantly, s 61(d) RTA requires the notice of termination to specify the day on which possession is to be delivered up by the tenant. Read as a whole, the notice of termination served on the appellant gave seven days' notice of termination. The notice complied with s 61(d). The notes entitled 'important information for tenants' at the end of the notice make it clear that the notice is not to be read as purporting to terminate the agreement forthwith. Ground 2 should be dismissed.

Ground 3 - alleged failure to consider whether the breach justified termination

A court's failure to take into account a mandatory relevant consideration which is a precondition to the existence of any authority to make an order is a jurisdictional error: Minister for Aboriginal Affairs v Peko‑Wallsend Ltd [1986] HCA 40; (1986) 162 CLR 24, 39; Craig v The State of South Australia [1995] HCA 58; (1995) 184 CLR 163, 177. Whether a court is bound to take into account a particular consideration as a precondition to the existence of its authority to make an order is a matter of construction of the statute conferring its jurisdiction.
Section 71(2)(b) of the RTA expressly provides that before a magistrate may grant an order terminating an agreement on the ground that the tenant breached a term of the agreement, the magistrate must be satisfied that the breach is, 'in all the circumstances such as to justify termination of the agreement'. Thus, a magistrate will fail to take into account a mandatory consideration if he or she merely decides that a breach has occurred and then orders termination. Whether the breach, in all the circumstances, justifies termination of the agreement is a matter to be considered in addition to a finding of breach.
The magistrate's reasons reveal that the magistrate found that there was a tenancy agreement that contained a clause requiring the appellant to 'maintain and keep the premises clean, tidy and free from pests', and decided that there had been a breach of that term. In the last major paragraph in the magistrate's reasons, the magistrate turned to consider the appellant's submission that he had not breached the tenancy agreement. The magistrate said that he did not agree with that submission and gave his reasons for reaching that conclusion. The magistrate then concluded his reasons by saying that the appellant had failed to rectify the breach, that he had failed to comply with the termination notice and that accordingly the magistrate was satisfied that the application should succeed.
The magistrate did not refer to s 71 RTA in his reasons and the respondent in submissions to the magistrate did not refer to s 71 or submit to the magistrate that a termination order could only be made if the breach justified termination of the agreement.
It is plain therefore that the magistrate made no express reference to the need to consider whether the breach justified termination. However, the respondent submitted that it should be inferred that the magistrate considered that the breach did, in all the circumstances, justify termination. The respondent pointed to the fact that the magistrate, in the last major paragraph in his reasons, referred to the nature of the premises and the fact that they were a block of units. The respondent submitted that from this it could be inferred that the magistrate was considering whether the breach was serious enough to justify termination in the circumstances of this case. This submission cannot be sustained. Those comments were made by the magistrate as part of his reasoning to a conclusion that the appellant was in breach of the tenancy agreement. The failure of the magistrate to advert to the requirement to consider not just whether there had been a breach, but also whether the breach justified termination, leads to the conclusion that the magistrate failed to take into account a mandatory consideration and therefore lacked jurisdiction. Ground 3 must be upheld.
On an application for a review order under s 36 of the Magistrates Court Act, the judge hearing the application may, relevantly, refuse the application or make a review order and order that it be heard by a judge in chambers or in court, or by the Court of Appeal: see O 56A r 3(2) Rules of the Supreme Court. Accordingly, this appeal, which is an appeal against the review judge's refusal to make a review order, is an appeal against an interlocutory order of the court. As a result, leave to appeal is necessary by reason of s 60(1)(f) Supreme Court Act 1935 (WA). Further, because the appeal was instituted outside the 14 days allowed for appeals against interlocutory orders (see r 26(1) Supreme Court (Court of Appeal) Rules 2005 (WA)) an extension of time is necessary. There was no dispute that if grounds 2 or 3 had merit, then an extension should be granted. Ground 3 does have merit.
As a result, an extension of time in which to appeal should be granted, leave to appeal should be granted and the matter will have to be returned to the magistrate to determine the matter in accordance with law. It is not open to this court to reach its own conclusion about whether, in all the circumstances, the breach justified an order by the magistrate terminating the agreement. That would treat review proceedings as an appeal by way of rehearing. The power of the court conferred by s 36 of the Magistrates Court Act is a judicial review power: see Rayney v AW [2009] WASCA 203 [27].
The orders which should be made are that:
(1)the time for appealing be extended to 16 September 2011;
(2)leave to appeal be granted;
(3)the order of Justice Murray dated 26 August 2011 dismissing the appellant's application for a review order should be set aside and in lieu there should be an order that pursuant to s 36(3) of the Magistrates Court Act 2004 the respondent show cause why the orders of Magistrate Lawrence dated 30 March 2011 in the Magistrates Court case No FRE/RSTN/1586/2010 should not be set aside on the ground that they are vitiated by jurisdictional error;
(4)the review order be treated as heard instanter by this court;
(5)pursuant to s 36(4) of the Magistrates Court Act 2004, the orders of Magistrate Lawrence dated 30 March 2011 in Magistrates Court case No FRE/RSTN/1586/2010 be set aside; and
(6)the matter be returned to the Magistrates Court to be dealt with in accordance with law.
The appellant addressed the question of whether the court should refuse to exercise its discretion to grant leave to appeal or refuse to grant final relief because it would be impossible for the appellant to regain possession of the premises in circumstances where the premises have been re‑let to a third party. The appellant submitted that relief should be granted because there will be real consequences to the appellant and the housing authority.
The discretion to refuse leave or final relief should not be exercised for the following reasons. If, upon a rehearing, the magistrate properly considers s 71 and decides that in all the circumstances, the agreement should be terminated, then that will complete the proceedings in accordance with law. If, upon a rehearing, the magistrate decides that the breach did not in all the circumstances justify termination, then he would dismiss the application.
In this context, in discussing the relief that ought to be granted if the appeal succeeded, there was a submission by the respondent that the tenancy agreement has been terminated by reason of the service of the termination notice and the appellant giving vacant possession, pursuant to s 60 RTA. The appellant submitted that vacation of the premises by the appellant under compulsion did not amount to the giving up of vacant

possession. It is not possible for this court to resolve this debate in these review proceedings because evidence was not given about the circumstances of the appellant's departure from the premises.

NEWNES JA: I agree with Pullin JA.
MURPHY JA: I agree with Pullin JA.