Young & Anor v Chief Executive Officer (Housing)

[2022] HCATrans 159

[2022] HCATrans 159

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Darwin  No D2 of 2022

B e t w e e n -

ENID YOUNG

First Applicant

PETRIA CAVANAGH IN HER CAPACITY AS ADMINISTRATOR OF THE ESTATE OF ROBERT CONWAY (DECEASED)

Second Applicant

and

CHIEF EXECUTIVE OFFICER (HOUSING)

Respondent

Application for special leave to appeal

KEANE J
EDELMAN J
STEWARD J

TRANSCRIPT OF PROCEEDINGS

AT CANBERRA AND BY VIDEO CONNECTION

ON FRIDAY, 16 SEPTEMBER 2022, AT 12.34 PM

Copyright in the High Court of Australia

KEANE J:   As the Court is sitting remotely, I will announce the appearances for the parties.

MR M.L.L. ALBERT appears for the applicant.  (instructed by Australian Lawyers for Remote Aboriginal Rights)

MR N. CHRISTRUP, SC, Solicitor‑General for the Northern Territory, appears for with MR H.H. BADDELEY for the respondent.  (instructed by MinterEllison)

KEANE J:   Yes, Mr Albert.

MR ALBERT:   If your Honours please, the core legal question which we say arises in respect of the two grounds of the application that are still in contention could be framed as follows:  whether a statutory power to award compensation for breach of a residential tenancy agreement is qualified by general contract law principles of remoteness on its own terms or by reference to principles from Baltic Shopping Co.  The Court of Appeal below concluded, as your Honours will be aware, that the statutory compensation power is limited by concepts of remoteness and foreseeability and, on that basis, concluded that there could be no compensation awarded for disappointment or distress arising from a breach of the tenancy agreement.

In our submission, their Honours, with respect, were wrong and the conclusion that they reached is inconsistent in material respects with what this Court concluded in the matter of Moore v Scenic Tours, and we say that on two primary bases referrable to the two grounds of the application.  The first is that nothing in the words chosen by Parliament embraced or accommodated such a limitation being imported into section 122 of the Residential Tenancies Act.  Parliament instead elected to adopt a causation touchstone, that is, if loss or damage is caused by the breach, then compensation can be awarded relevantly including for disappointment or distress.  Even if ‑ ‑ ‑

EDELMAN J:   Mr Albert, does that mean that there is no remoteness criterion at all?  I mean, causation in the sense of a but for criterion can be extremely broad.  It can extend to a chain of consequences that can reach back to the Norman Conquest.

MR ALBERT:   Yes, your Honour.  In our submission, the limitation provided by causation is sufficiently clear.  Where questions of remoteness may have a role is when one were to get to the question of quantification.  So, your Honours might be aware that there were two appeals that arose from the judgment of Justice Blokland.  One of them dealt with whether there could be compensation for distress and disappointment; that is the one that was resolved and is the subject of this special leave application. 

The second was an appeal dealing with quantification, and it is in that respect that your Honour’s concerns, in our submission, could properly be accommodated.  Considerations relating to remoteness as a broad concept might arise in that context.  Having said that – and it is one of the reasons why we submit this is an unusually good vehicle for this Court to explore the issue – the breach in this case is anything but remote, as it is connected to the statutory obligation to provide reasonable security.  That obligation was, to use the words of Justice Blokland, fundamentally breached on a long‑term basis by the landlord in this case.

In our submission, while we understand your Honour’s concern about remoteness and there being some limitation, that is not something that, in our submission, would arise in the factual context that would be before the Court if the special leave application was allowed.  As to the second ground ‑ ‑ ‑ 

STEWARD J:   Just before you go on – I am sorry, Mr Albert.  Does that mean that quantification of the damages is not an issue anymore if leave is granted and you succeed?  I am thinking of the $10,200.

MR ALBERT:   The answer to your Honour’s question is no.  If we were to succeed on appeal, then the second appeal – our appeal on behalf of Ms Young – would be pursued on the basis that it was manifestly inadequate.  Now, that has not been heard in any way, shape, or form by the Court of Appeal and is not before your Honours, but it is awaiting the outcome of this process.

EDELMAN J:   There was agreement below, was there not, as to an amount of – I think it was double the $10,000.  Had not the parties reached some agreement that that is how it should be quantified?

MR ALBERT:   Yes, your Honour.  The position of the respondents has been unusual in that respect, in that they put to Justice Blokland a figure that was double the figure that her Honour landed on.  We have then appealed that on the basis that, even if you go with the respondent’s figure, we should have got double, but we say even double is not an adequate amount.  Your Honour is quite right to point out that the position of the respondents has been slightly incoherent on that point, but, again, I emphasise that that is a matter still before the Court of Appeal.

EDELMAN J:   But if you were to be granted special leave, and were it to be successful, you would only seek a remitter in order to quantify that amount either by agreement or by determination?

MR ALBERT:   Your Honour, I have not thought through the mechanics, but I am not even sure we would need a remitter in the sense that the extant appeal and the Court of Appeal is, on whole, pending the outcome of this application.  So, I am not sure we would need a remitter; it is more that the existing appeal would proceed as it had always been intended to proceed.

If I might, by way of headline, move to the second ground – I am happy to develop these things further as time permits.  In our submission, even if the general principles of contract law apply, residential tenancies agreements are of the kind covered by so‑called second limb dealt with this Court’s decision in Baltic Shipping v Dillon; namely, that they are a contract for peace of mind, freedom from molestation, fixation, or anxiety, and so on. 

As I have mentioned in our submission, the facts of this case presented to the Court as having been found are unusually good as a vehicle for exploring precisely that point in circumstances where the relevant breach was a breach of a mandatory term required by statute, namely, an obligation on the way of law to provide reasonable security which was breached fundamentally over a period of about five‑and‑a‑half years in circumstances where the relevant tenant was on the findings of . . . . . court below, unusually vulnerable.  Vulnerable because of her age, because of her location, and because on the evidence as it was before the tribunal, vulnerable by reasons of there being a lot of wild horses in the area, there being snakes and there being thieves.  That was the evidence before the tribunal and, in those circumstances, as we say, the facts present as an unusually clean mechanism by which to explore the legal issues that we would seek to put before the Court.

Can I address your Honours on the criterion section 35A, because we, in our submission, are in the unusual position of being able to satisfy each of the three criteria set out in the Judiciary Act, and do so in our submission with some force.  As to the question arising being a question of public importance, it is, in our submission, because it concerns a right to compensation arising from a contract that we would describe as an everyday sort of contract; not a Baltic Shipping cruise once‑in‑a‑lifetime‑type contract, but a contract which, on the evidence, a majority of Northern Territorian households are a party, and therefore, a significant majority of Northern Territorians are a party.

EDELMAN J:   Is there any authority at common law, rather than under statute, either in this jurisdiction or in England or elsewhere that treats a contract for a residential tenancy or a tenancy agreement as when breached in a manner that deprives the tenant of the full suite of rights of peaceful enjoyment falling within the notion of Baltic Shipping or Farley v Skinner‑type breaches concerning a contract for the provision of enjoyment, relaxation, freedom of mind?

MR ALBERT:   The answer to your Honour’s question is yes, but it is entirely British.  In Farley v Skinner itself there is a passing reference – I can put it no higher – to tenancy agreements being a contract of the kind that would fit within the second limb of our Baltic Shipping but, in addition to that, can I refer your Honour to the case of Chiodi, which was one of the cases that we cited as being relevant to this application, which helpfully deals expressly with a residential tenancy context and finds that it falls within what we would call the second limb of Baltic Shipping.  In Chiodi, it is not a House of Lords decision, but it is an appellate decision.  In Chiodi, they also helpfully bring together other authorities – British authorities – which stand for precisely the proposition that we would urge this Court to adopt were special leave to be granted.

As to authorities within Australia, the authorities are the ones that we have cited, in particular at paragraph 28 of our special leave application.  Most notably, there are five single‑judge decisions of the New South Wales Supreme Court which stand firmly behind the position that we would urge this court to adopt, if special leave is allowed.  In addition to that, of course, you have the judgment of Justice Blokland, and there is passing endorsement of that position in the South Australian Supreme Court.

That really takes us to the second reason why we say special leave should be granted in this case, and that is to resolve a difference of opinion between courts, because what courts are faced with at present on a Farah Constructions basis would be the Northern Territory Court of Appeal sitting, with respect to their Honours, on their own as compared with five judgments of the New South Wales Supreme Court.

Now, obviously enough, it is a judgment of three judges and has its precedential weight adjusted accordingly, but there is a tension between what their Honours found in this case as a bench of three and five judgments of the New South Wales Supreme Court, one judgment of the South Australian Supreme Court and, of course, the judgment that was appealed:  the judgment of Justice Blokland.  So, in our submission, that meets the second criteria under section 35A and is a separate basis upon which the special leave application should be allowed.

Your Honours, in a sense, get additional comfort in that respect because even on their Honours’ reasoning, the only authorities that are supportive of the position that they reached are authorities exclusively dealing with retail, not residential, leases.  Those authorities are plainly distinguishable in the way that we urged before the Court of Appeal and would urge upon this Court, were special leave to be granted.

The final criteria which I do seek to address directly is the interests of the administration of justice.  Your Honours, unusually, have an application for leave to rely on an affidavit in this Court in support of the special leave application.  The singular purpose of us seeking to rely on that affidavit is that it provides evidence of the fact that there are 94 extant applications in the Tribunal awaiting the resolution of this case and all of them seek compensation under section 122 of the Residential Tenancies Act, so there is that immediate interests of justice aspect.

There is a second aspect, which is, again, going to the point of the nature of the contract being an everyday form of contract, and that is that approximately a third of Australian households are dependent on the protections provided by a residential tenancy agreement and, as we sought to develop in writing, the guarantee is the statutory guarantees and mandatory terms of the Northern Territory legislation are far from unique to the Northern Territory.  Indeed – and we have spelt it out at some length in footnote 54 of our special leave application – there are equivalent terms in every, or almost every, jurisdiction across the country.

So, in that context, in our submission, the Court ought appropriately to grant special leave in order for this Court to consider again a contract of an everyday nature that affects about a third of Australian households and, therefore, a substantially larger number of Australian people.

Can I seek to develop this briefly and as time allows our submissions on the two grounds that are in contention ‑ ‑ ‑

STEWARD J:   Just before you go on, can I ask you a small point of detail?  Has anything happened about order number 5?

MR ALBERT:   Yes, your Honour.  Can I address that briefly?  As at yesterday, there was agreement between the parties as to a form of orders that we would seek from this Court.  There is one additional order that our learned friends would seek, and I will leave my learned friend to develop that.  As to logistics, I am really in your Honours’ hands.  I am happy to read into transcript the proposed consent orders or to provide it to the Registry, but the position is a consent position very substantially, but not entirely.

STEWARD J:   I had thought that this was something you were going to get the Supreme Court to do under the slip rule.

MR ALBERT:   An application was made in April to that effect.  That application was the subject of submissions by both parties, and the Court of Appeal has not yet ruled on that application.  Can I make clear that our position in the Court of Appeal was to raise questions as to whether the court continued to have power, and also raised the question of whether, even if they had power, it was appropriate to deal with it in circumstances where the very same order was before this Court.

STEWARD J:   All right.  Thank you for that.

MR ALBERT:   In either court, the substantive orders are by consent from the parties.

KEANE J:   Just for good order that means, I take it, that for our purposes, we do not need to concern ourselves at all with paragraph 1(c) on page 200 of the court application book.

MR ALBERT:   Your Honour, that is correct.

KEANE J:   Thank you.

MR ALBERT:   In respect of ground 1, if I might just develop that a little further, the ground is, in our submission, unusually simple.  The Court of Appeal concluded that because the statute engages in some respects with some contract law principles, most especially set‑off and mitigation, the other principles not identified in the legislation also applied, and it was on that basis that they “imported” considerations of foreseeability and remoteness.  I have heard the alarm.  I am not sure if that is the 17‑minute or the 20‑minute alarm.

KEANE J:   That is the orange light, Mr Albert.

MR ALBERT:   Thank you, your Honour.  Our submission on ground 1 is that section 122 defines when the Tribunal can and cannot award compensation, and what compensation can be awarded for.  It expressly carves out some aspects, namely in respect of personal injury or death.  But it leaves the remaining effects of breach untouched.  That, in our submission, most obviously includes distress and disappointment.

Because the Tribunal is a creature of statute and its powers are limited as such – as the Court of Appeal itself recognised – in our submission, section 122 operates effectively as a code.  It is the terms of that which define the limits of compensation most relevantly – the limit is those forms of loss and damage that arise because of the breach, without further limitation being added or words added by the Court of Appeal or indeed any other court in that respect.

On ground 2, in my remaining time, if I might just briefly mention that, in our submission, really the error has two intertwined elements.  The

first is the mischaracterisation of a residential tenancy agreement by reference to the touchstones identified in Baltic Shipping in respect of which we have had an exchange already.  The second is to misapply the test for determining the nature of a contract for the purposes of the second limb, most especially the importance of the object that was breached, that is the reference point by which to determine whether the second limb of Baltic Shipping applies.

In our submission, Parliament again was crystal clear as to the forms of protection that it was offering tenants, particularly in sections 48, 49, 65 and 66.  In this respect, the Court of Appeal got, respectfully, distracted by quiet enjoyment being the pivot of our case – which it was not before the Court of Appeal, and would not be before this Court.

Rather, we say that when one looks at the effect of those provisions 48, 49, 65 and 66, one comfortably reaches the conclusion that the residential tenancy agreement contemplated – indeed, mandated by Parliament through the Residential Tenancy Act – is a contract of the kind identified by this Court in Baltic Shipping as being covered by the second limb.  If your Honours please.

KEANE J:   Thanks, Mr Albert.  Yes, Mr Solicitor.

MR CHRISTRUP:   If the Court pleases, starting with ground 1, can I make two preliminary observations in relation to section 122.  First of all, it provides for three types of plans to be made:  either one is where a party has failed to comply with a tenancy agreement; secondly, where a party has failed to comply with an obligation under the Act in relation to tenancy agreement; and then thirdly, where the applicant has paid more than he or she should have pursuant to the terms of the tenancy agreement. 

The second point I wish to make is that the applicant’s claim in this proceeding has always been confined to a claim of the first kind that I mentioned, that is, compensation for a failure to comply with a term of the tenancy agreement, the relevant terms in this proceeding being those that are implied into the contract by sections 48, 49 and 57.  To be clear, the applicant’s claim has never been one based on the respondent’s failure to comply with an obligation under the Act or a claim for payment.

Now, turning to why leave should not be granted in relation to ground 1, the contention is by the applicant that the Court of Appeal erred in finding that the Residential Tenancies Act by section 122 imports considerations of foreseeability and remoteness.  Our primary submission – not our primary – one of our submissions is that it is not a question of sufficient public importance and really is question of no general application.  In the universe of Australian residential tenancies legislation, section 122 is unique to the Northern Territory.  Section 210 of the Victorian legislation comes somewhat closer, or is somewhat close, but there are still substantial differences both between the two provisions and also the Acts generally.  So we say that the resolution of ground number 1 would really only have application in the Northern Territory and the construction of that provision, being section 122, really should be left to the Northern Territory Court of Appeal.

EDELMAN J:   Unless, Mr Solicitor, that you are correct on ground 1.  If your legal argument is correct on ground 1 and it is not a code, then the question of what is loss or damage for failure to comply with a residential tenancy agreement is one of enormous widespread importance because it is no longer a code and they are ordinary words that apply to every residential tenancy agreement at common law.

MR CHRISTRUP:   We would say, no, your Honour, and the reason being that section 122 demonstrates that it piggybacks or picks up on various concepts known to contract law and that section 122 must be taken to have incorporated those.  I am not talking about ground 2 here as to whether a tenancy agreement could give rise to a claim for damages for distress and disappointment under Baltic Shipping, but rather the question of whether the proper construction of section 122 is a matter of general application, and we say it is not.

When your Honours turn to section 122, it is apparent that it picks up various concepts of common law – sorry, of common law relating to contracts – and I can point to the following five matters, your Honour.  First is, it relies on NTCAT applying the common law principles in determining whether there is an agreement in the first place. The definition of tenancy agreement in section 4, for example, defines a tenancy agreement as one:

under which a person grants to another person for valuable consideration a right . . . to occupy premises –

Secondly, section 122 confines the claim that can be made under the provision to one between a tenant and a landlord.  Therefore, no person who is not privy to the tenancy agreement is able to bring a claim under that provision.

Thirdly, there can only be a claim for a breach of a tenancy agreement where there has been a breach of that agreement, and that, we say, necessarily involves consideration of the common law principles concerning when an agreement has been breached.

As I mentioned – this is the fourth point – the Act itself incorporates a provision that incorporates certain terms into the tenancy agreement.  And, finally, the section provides that compensation can only be made where a claimant has suffered loss and damage.  So, the conclusion that the section, insofar as it concerns a claim for breach of a tenancy agreement, is piggybacking on the law of contract – we say that conclusion is, with respect, irresistible. 

That must, we say, where a claim is made for a breach of a tenancy agreement, those principles must include the principles concerning remoteness as understood by Hadley v Baxendale.  The other way of looking at it, your Honours, is that by the applicants focusing on the question of causation, as they do in paragraphs 13 and 20 of their application, what that does is that, if it is simply a question of causation, well then there is the prospect – or not just the prospect, but then the damages, essentially, the loss and damage can essentially run indefinitely.  That is an extraordinary result, and one that it would be unlikely for Parliament to have intended.  So, there must be some element of remoteness, at least in relation to claims for breach of a tenancy agreement.

So, we say there are very sound reasons why those principles should apply.  And we also say that, because the section is piggybacking on the common law concepts, the submission that section 122 is a code is plainly wrong.  The applicants cite no authority either in respect to this particular provision or any interstate provisions as to why there are codes; that is the compensation sections are codes.  No real analysis is offered as to why that is so.

EDELMAN J:   Well, Mr Solicitor, much may depend on what is meant by a “code”.  If the words “loss” or “damage” are to be understood as words that import common law ideas – which is not a notion that is entirely foreign to codes as, in other words, they are words of legal meaning – then your submission might be entirely consistent with the notion of this being a code.

MR CHRISTUP:   Well, with respect, I do not believe that that is how the applicants are using the word “code”.  When they say that it is a code in their application, I take them to be saying a court should not have regard to any concepts or principles, unless they are set out in section 122, hence their reliance on section 120 concerning mitigation ‑ ‑ ‑

EDELMAN J:   The real question may be not whether or not one uses the word “code”, but whether the words “loss” or “damage” are words that are entirely unencumbered by any principle of remoteness; whether derived from the common law or otherwise.

MR CHRISTUP:   Indeed, your Honour.  And we say that the Court of Appeal plainly got it right when, insofar as a claim concerns breach of a tenancy agreement, which is the one that has been before the Court of Appeal, and has been before all the courts below in this proceeding, that would be the idea, it would be the common law concept of loss and damage in relation to that, and therefore it cannot be a code.

STEWARD J:  Mr Solicitor, may I ask you a question?  Was there any argument below at any level put concerning the meaning of the word “suffering” in section 122(5) when it says:

The Tribunal is not to make an order under this section:

(a)for the payment of compensation in respect of death, physical injury, pain or suffering –

Has the word “suffering” been given a meaning in the Northern Territory?

MR CHRISTRUP:   Not to my knowledge, certainly not at a Supreme Court level, but I cannot speak for all the NTCAT decisions that are out there, but it was not an issue that was addressed in the courts below in this proceeding.  And this takes me to the next point that the way the proceeding has been run so far is that the applicants were entitled to damages for distress and disappointment because the tenancy agreement was one which fitted within the principle in Baltic Shipping, that is, being an agreement whose object is enjoyment and relaxation.

So that is how it has been put, so the positions by both parties is that, because that is the relevant test for whether the – or that is how the applicants put their case as to why they should be entitled to these damages, it has always been put on the premise that we were squarely within Baltic Shipping and that it was squarely within principles of remoteness of damage.

So, this particular question about how section 122 should be construed and how it fits with that has not been reasoned or determined below.  And, if your Honours were to grant special leave in relation to ground 1, it would be on the basis that your Honours would not have the benefit of any analysis as to that question, either from the Supreme Court or from the Court of Appeal.  That does not mean your Honours cannot determine it, of course, you can but I think we would say at least that is a factor that works against granting special leave on that ground.

Can I move on to ground 2?  This is the one concerning whether this particular tenancy agreement is one which is a contract for enjoyment and relaxation or freedom from molestation.  The applicants are not seeking to argue that Baltic Shipping and Moore are wrong, nor are they submitting that the principles stated in those cases should be widened.

The argument is simply that the Court of Appeal misapplied the principle in relation to this particular tenancy agreement.  So, that means the starting point is the principle itself, which is that a court can award damages for distress, vexation and frustration where the object of the contract is to provide enjoyment or relaxation or freedom from molestation.  We take that from both Baltic Shipping and also from the decision in Moore.

Now, the conclusion of the Court of Appeal that this particular tenancy agreement is not such a contract is, in our submission, not tainted with any sufficient doubt.  The Court of Appeal’s reasons readily reveal that the Court of Appeal correctly stated this test and the general rule to which it is an exception.  That is in the Court of Appeal’s reasons at paragraph [56].  Then, at paragraph [60], their Honours recognise the physical inconvenience exception to the general rule prohibiting damages for distress and disappointment.

Having stated that rule, the Court of Appeal in paragraphs [59] and [61] then proceed to apply this test to the actual terms of this contract, with a view to determining its object.  Looking at those paragraphs, it is obvious that the Court of Appeal is asking themselves the right questions.  They are asking themselves whether an agreement affording the tenant right to exclusive possession, quiet enjoyment, and to provide and maintain locks and security devices have, as its object, the provision of pleasure, enjoyment and relaxation, or freedom from molestation.

EDELMAN J:   Mr Solicitor, why is a contract or a tenancy agreement which has as its object – or as one of its core objects – “quiet enjoyment” not a contract for enjoyment?

MR CHRISTRUP:   Because, your Honour, “quiet enjoyment” in the lease context is used in a very different way to the concept of enjoyment where one ‑ ‑ ‑

EDELMAN J:   It is unimpaired possession.

MR CHRISTRUP:   It is.  It prohibits the landlord, firstly, from entering the premises unless there is a right to do so, and secondly, it prohibits the landlord from in any way interfering or otherwise questioning the tenant’s right to be in the premises.

EDELMAN J:   Freedom from molestation.

MR CHRISTRUP:   The freedom from molestation cases, your Honour, they are quite unusual but those are the sort of cases where one party promises another in a contract that “you will not be harmed”.  That is what the freedom from molestation promise is about.  There is no promise coming even close to that in this particular tenancy agreement.  The highest it gets to is that there is a promise by the landlord, one of the implied terms into the contract:

to provide and maintain locks and other security devices –

That, with respect, is a far cry from a promise that “you will not be harmed”.  In our submission, there was no impermissible narrowing of the principle in Baltic Shipping, contrary to what is put by the applicants in paragraph 22 of their application.

The applicants will have it that Baltic Shipping and Moore dictates that all accommodation agreements are contracts whose object is to provide enjoyment and relaxation and freedom from molestation.  That much is apparent from paragraph 24 of their application.  And they say that this is so by reason of the passage of his Honour Justice Brennan in Baltic Shipping which this Court approved in Moore at paragraph 45.

But the applicants have, with respect, entirely misconceived the meaning of that passage.  They have done so by focusing on the word “accommodation” and ignoring not just the rest of the paragraph but also the legal principles set out in Baltic Shipping itself.  By that passage of Justice Brennan, and also as it was picked up by this Court in Moore, is not expanding Baltic Shipping so that it extends to all accommodation agreements, far from it.

The paragraph as it appears in Justice Brennan’s judgment is the statement reflecting the application to a contract to a cruise holiday off the principle in Baltic Shipping that damages for distress and disappointment can be awarded where the object of the contract is one for enjoyment and relaxation or freedom from molestation.  It was used in Moore to explain why distress and disappointment arising from a breach of contract to provide enjoyment and relaxation is not a claim for personal injury.

Neither of those paragraphs are so understood – have the effect of extending the rule in Baltic Shipping to all accommodation agreements.  It should be noted that the passage from Justice Brennan’s judgment, which is set out in application paragraph 24, leaves out the words “to holidaymakers”.

It is plainly the case, we say, your Honours, that sections 48, 49 and 65 of the Residential Tenancies Act containing terms, as they do, concerning habitability, quiet possession, exclusive possession and maintenance of locks and security devices do not have the effect of – within

the – of giving the tenancy agreement the effect that the object of it is to provide enjoyment and relaxation or freedom from molestation.

A landlord, by undertaking those promises, is not promising to provide the tenant with any of those things and is not promising that the tenant will not be harmed.  It is a promise as to the state of the premises, not the experience that the tenant will have.  Peace, quiet and relaxation in a home is something for a tenant to arrange, not the landlord.

Finally, in the time remaining, there has been reference to the New South Wales single judge Supreme Court decisions concerning this particular question.  We have set out what we say about those decisions in our written submissions and we do not depart from what we say there.

I do wish to make the point that the Court of Appeal decision that is currently before your Honours is now the leading authority on the question.  That decision expressly – and correctly – disapproves the reasoning in Offe, which is one of the first cases that led to the string of cases in New South Wales.

Finally, the question concerning ground 2 is not one of public importance or general application.  Whilst it may be correct that the effect of the reasoning of the Court of Appeal is that where a common law residential lease contains terms similar to those that are present in this particular case, that the Court of Appeal decision would be persuasive in finding that Baltic Shipping does not apply, and that is so.  But the Court of Appeal is not saying in its reasons that a tenancy agreement could never be one, which falls for them, or has the object of relaxation and enjoyment.  The Court of Appeal leaves open the possibility, indeed their reasoning in paragraph [59], where they discuss – sorry, your Honours – their reasoning when they discuss the actual provisions or terms of this particular agreement make it clear that they leave open the possibility that terms can be agreed, which brings a tenancy agreement within Baltic Shipping.

Lastly, of course, the Court of Appeal did not disturb the rule that it remains open to a tenant, including the tenants that are in the cases currently before NTCAT to claim damages for distress and disappointment as a result of physical inconvenience.  Unless your Honours have any questions, those are our submissions.

MR KEANE:   Thanks, Mr Solicitor.  Mr Albert, anything in reply?

MR ALBERT:   Your Honours, if I might make three brief points.  The first is to respond to the submission that section 122 is in some way unique.  Our learned friends have just identified five features of section 122 and its context that they say mean that the general law of contract applies. 

Can I respond to that by saying the five features identified are features that were in common with the very statutory scheme that led the New South Wales Supreme Court to conclude that distress and disappointment compensation was available.  So, the very features that were identified are absolutely common, including to the statutory scheme that was considered by the Supreme Court of New South Wales in which they reached the conclusion that distress and disappointment compensation was available.

The second is to respond to the suggestion that this question arising under ground 1 is in some way new.  The way that the Tribunal dealt with the question of section 122 is precisely the way in which we say it can be properly dealt with by way of ground 1, that is, the question that it asked was whether there was loss and damage as a consequence of the breach regardless of the form of that loss or damage and with no regard whatsoever to questions of remoteness or foreseeability. 

Now, it is unsurprising that that was the approach taken by the Tribunal indeed you see no reference to remoteness or foreseeability in the Supreme Court either.  And that it is because it is the respondent who has altered its position markedly from that which was put before the Tribunal as compared with that which it pushed in the Northern Territory Supreme Court.

The first time that you have engagement with the question of remoteness or foreseeability being a qualification on section 122 read in its context is . . . . . appeal.  And there, your Honours here and the Full Court, if the matter was granted special leave, would have the benefit of reasons, most especially at paragraphs [54] and [55] of the Court of Appeal’s reasons which engage directly and expressly with this relatively new question of remoteness or foreseeability that emerged in the Supreme Court but was not addressed by the Tribunal.

If your Honours are against us on the characterisation of the newness of the issue of remoteness or foreseeability, in our submission, that does not stand in the way of ground 1 being the subject of special leave because it is in the interests of justice that the matter be dealt with.  As your Honours are aware, there are a significant number of cases awaiting the outcome of this case in NTCAT and they will otherwise be determined by reference to paragraphs [54] and [55] of the Court of Appeal’s reasons which, if that is the case, may very well lead us to be back before this Court in a year or two’s time with the very same question arising as it does in all of those cases.  If your Honours please.

KEANE J:   Thanks, Mr Albert.  The Court will adjourn briefly to consider the course it will take in this matter.  Adjourn the Court, please.

AT 1.18 PM SHORT ADOURNMENT

UPON RESUMING AT 1.20 PM:

KEANE J:   There will be a grant of special leave in this matter.  Mr Albert, how long will the argument take?

MR ALBERT:   I would expect it could safely be done within half a day.  I would anticipate we would need an hour or an hour and a half and no more than that.

KEANE J:   Well, if you need an hour and a half, we are talking about a day.  Well, sorry, we could not be confident of finishing it in a morning.

MR ALBERT:   Your Honour might be right in that respect, yes, your Honour.

KEANE J:   Yes.  Mr Solicitor, what do you think?

MR CHRISTRUP:   Yes, a day would be the safest, absolutely.

KEANE J:   Okay, thanks very much for that.  Very well then, there will be a grant of special leave in this matter and the parties should follow the directions of the Registrar in order to bring the matter to a hearing.  Adjourn the Court until 1.30 pm, please.

AT 1.21 PM THE MATTER WAS CONCLUDED