Andrews v Hogan

Andrews v Hogan - [1952] HCA 37 - HCA 1952 case summary — Zoe

[9]

From the death of Mrs. Denahy her sons paid the weekly rent for the premises to the agents of the claimant, who gave them receipts in which the payment was stated to be made by the estate of the late Mrs. Denahy. On 19th December 1949, the claimant served a notice to quit the premises upon the Public Trustee, describing that official as the representative of the estate of the late Mary Denahy. The notice to quit required him to deliver up the premises which, it stated, he held as tenant from week to week, on 23rd January 1950. The notice was expressed to be given pursuant to s. 62 (5) (m) of the Landlord and Tenant (Amendment) Act 1948-1949, on the ground that the claimant reasonably required the premises for reconstruction in certain specified respects. Apparently payment of rent for any week after the expiration of the notice to quit was refused by the claimant. The Public Trustee responded to the notice to quit by sending to the claimant's solicitors a letter in a stock form. It informed them that the Public Trustee was not administering the estate of Mary Denahy, and stated his contentions to be that he had no interest in the premises to assert, that s. 61 of the Wills, Probate and Administration Act 1898-1947 N.S.W. did not vest the estate in him but merely declared that it should be deemed to be vested, that it was merely held during "the hiatus of possession", that he was "merely the repository of the estate", that he would not be a proper party in any contemplated proceedings and that he had no powers to exercise and no active duties to perform in connection with the estate. This letter was written on 18th January 1950, before the expiration of the notice to quit. After the expiration of the notice, namely on 25th January 1950, the claimant's solicitors notified the two sons of the deceased tenant, that "the tenancy of the estate of the late Mary Denahy" of the premises had been terminated by notice to quit served on the Public Trustee and that the claimant revoked their "licence to remain in possession". On 7th February 1950, the claimant issued a writ in ejectment naming the two sons as defendants. They did not defend the action, but sold the furniture of the flat they occupied and on 14th March 1950, vacated it, abandoning all further connection with the premises. The claimant took no further steps in that action of ejectment. The defendants in the present action of ejectment had paid the two sons of their late landlady rent in advance up to 20th March 1950, for their respective flats. They applied to the claimant to continue as his tenants, but to this he would not agree and tenders of rent on their part were refused. Finally the writ in this action was issued.

[11]

The defendants deny the validity of the steps in this argument but they also point to s. 82 (1) (a) and (b) (ii) as a provision applicable to their case which does give them protection. The material part of this provision says that where a lessee has sub-let any prescribed premises or any part thereof in the course of a business of sub-letting carried on by the lessee (and it was in the course of such a business that Mrs. Denahy sub-let to the defendants) and the lessee has ceased to be in possession of the premises following upon the surrender of the lease by the lessee, the sub-lessee shall (if he is in possession of the whole or portion of the prescribed premises sub-let to him) be deemed to have become the lessee thereof from the lessor. The sub-section, which contains much more than has been set out, is very difficult to understand. For after all under the general law a surrender of a head lease does not destroy a sub-lease, and the sub-lessee is in such an event placed in privity with the head lessor (Wilson v. Jolly [1] ). Further, if the claimant is right in saying that under s. 67 the expiration of a valid notice to quit operates to determine a lease, there can be no lease to surrender once a notice to quit expires and what is the practical importance of the provisions if its operation is confined to the duration of the term contracted for? Of course if s. 67 has not the effect assigned to it but is subject to some implied qualification this difficulty disappears. But otherwise it must either be acknowledged that sub-s. 82 (1) (a) and (b) (ii) has a very limited operation in protecting sub-lessees or else the expression "the surrender of his lease by the lessee" must be interpreted as extending beyond the surrender of a lease stricto sensu and including the giving up by a lessee under a lease which has been terminated by notice to quit of the interest he derives from the protection which s. 62, s. 70 and the other provisions of Part III. of the Act combine to give him. A view of this latter kind was adopted in the Supreme Court. One of the difficulties in giving the provision this extended meaning lies in its history. It comes from reg. 73 of the National Security (Landlord and Tenant) Regulations as substituted by S.R. 1947 No. 31, reg. 27. The previous reg. 73 for which it was substituted was expressed in this respect widely enough to cover the situation and yet it was superseded. But whether or not the material part of s. 82 (1) (a) and (b) (ii) is to be confined in its application to surrenders of leases in the proper sense I do not think that the facts of this case fall within it. This conclusion really depends upon the effect of the course taken by the Public Trustee and by the two sons of Mrs. Denahy. The position of the Public Trustee under s. 61 of the Wills, Probate and Administration Act has been very much discussed (See Ex parte Public Trustee; Re Birch [1] ). But it is at least clear that on the death of Mary Denahy the weekly tenancy of the premises vested in him and so did the right which it gave to the reversion upon the sub-tenancies. When the two sons paid rent to the claimant and he gave receipts to the "Estate of the late Mrs. Denahy" it should be inferred, I think, that no new tenancy was formed between them and that the claimant meant only to accept the rent as from the legal personal representative of the deceased whoever that should be or turn out to be. The letter of the Public Trustee appears to me to express no intention of abandoning a possession of the premises to the claimant. It does no more than disclaim legal authority and responsibility as a matter of law. It manifests no intention of affecting rights in any way. Let it be supposed that the two sons may be taken as acting for "the estate" when they vacated their flat. It is an assumption which I think could not be justified unless they afterwards obtained probate and then it could be justified only retrospectively, if at all. But even upon this supposition they vacated only portion of the premises. Mary Denahy had been in possession of the rest of the premises by her tenants and her legal personal representative must be considered as in possession of that part of the premises by the same tenants. Nothing was done to amount to an assumption by the claimant of this relation after an abandonment of it to him. I think that "possession" of the premises in point of law must be attributed to the Public Trustee as the repository of the title to the estate and as I have said I do not think he communicated to the claimant any intention to abandon any possession so attributable.

[37]

Upon receipt of the notice to quit the Public Trustee informed the appellant that he was "not administering" the estate of Mrs. Denahy: that he had "no interest in the premises to assert": that s. 61 did not "vest" the estate in him but declares only "that it is deemed so to be vested" (the words of s. 61 are "shall be deemed to be vested"): that the estate "is merely held during the hiatus of possession and the Public Trustee is merely the repository of the estate": that "in any contemplated proceedings the Public Trustee would not be a proper party": and that "he has no powers to exercise and no active duties to perform in connection with the estate of the deceased". It is not consistent with the Public Trustee's expressed attitude that he was not administering the estate or that he was holding it during the hiatus of possession merely as a repository or that he had no powers to exercise or no active duties to perform, to conclude that what he did was to surrender the tenancy. Whether or not all the assertions made by the Public Trustee are in harmony with s. 61 of the Wills, Probate and Administration Act, it is not necessary to decide. The Public Trustee did not intend to disclaim any capacity truly vested in him by the section: and in so far as what he says denies his competency to be the recipient of the notice to quit, it is erroneous in law, having regard to what is decided in Smith v. Mather [1] . The Public Trustee was in law competent to be served with the statutory notice to quit which the lessor gave him. There would be no reason to give the Public Trustee the notice to quit if the lessor vis à vis him was not subject to the restrictions imposed by the Act upon the rights of a lessor to recover possession of prescribed premises. The requirement under s. 62 to give the prescribed notice to quit cannot be abstracted from the provisions of the Act governing the eviction of tenants and sub-tenants as the only condition of the Act binding the appellant. Neither can s. 67 be abstracted and used to justify the eviction of sub-tenants independently of the Act, upon the basis of the general rule that under-leases determine when the lessor brings the head lease to an end, and sub-tenants therefore have no rights under the Act after the expiration of the time specified in a notice to quit. The tenant and sub-tenants are entitled to remain in possession until an order for recovery of possession is made in accordance with the Act. Unless the Public Trustee surrendered the tenancy, the appellant was not entitled to bring proceedings for the recovery of the possession of the premises otherwise than in accordance with the Act. There is no evidence that the Public Trustee surrendered the tenancy. The Public Trustee was no less competent to be served with a statutory notice to quit given in pursuance of the Act than with the process which the Act requires a lessor to serve upon a lessee in order to bring proceedings for the recovery of possession. It is not necessary to decide whether the Public Trustee would be bound to defend the possession. Obviously there might be cases in which it would be in the interests of the beneficiaries of the estate that he should do so. In the present case, Mrs. Denahy's sons would not be practically affected by an order giving the appellant possession. The Public Trustee had no duty to notify any of the respondents, as sub-lessees, of the receipt of the notice to quit. In the proceedings, however, each of them would have been entitled under s. 82 (4) to be heard. In truth, the appellant's action of ejectment is brought in contravention of the Act, particularly ss. 62, 69 and 70.

[55]

(2) The claimant's next step is to say that, when the notice to quit expired on 23rd January 1950, the lease which had subsisted between him and the Public Trustee was terminated by force of s. 67 of the Act. The correctness of this step can only be conceded subject to a qualification. Section 67 provides that a valid notice to quit given under the Act shall operate so as to terminate the tenancy of the premises at the expiration of the period specified in the notice. Section 67, and its counterparts in other legislation in pari materia, have caused a good deal of difficulty. The reason for the insertion of such a provision in the National Security (Landlord and Tenant) Regulations, which have been more or less closely copied in the existing State Acts, seems to have been that, under certain State laws, certain summary proceedings for ejectment were only available where a tenancy had been "terminated", and it was successfully argued more than once that a notice to quit given under the regulations did not have the effect of terminating the tenancy to which it related. The introduction of a provision in the terms of s. 67 effectively removed this difficulty, but created difficulties of its own. In my opinion, however, the position must now be taken to be that stated in a passage in a judgment in which I joined with my brothers Dixon, Williams and Kitto in Anderson v. Bowles [1] . The view there indicated is that, after a valid notice to quit has been given under the Act and has expired, the tenancy comes to an end by virtue of s. 67, "but nevertheless the lessee remains protected against dispossession by the lessor unless and until an order for possession is made by a court of competent jurisdiction under the statutory provisions and the time for the execution of the order expires, the tenant being liable to pay the rent and observe the other obligations of the tenancy, so far as applicable, in the meantime". This view has the practical effect of assimilating the position to that which exists, by virtue of express provision, under the Rent Restriction Acts Imp..

[60]

Now, if we regard s. 82 (1), so far as it deals with surrenders, as a general attempt to give to under-lessees a protection which they would not otherwise have had, the section seems incomprehensible. Indeed, so regarded, it could only be explained by the supposition that the draftsman was under a misapprehension as to the position under the general law, just as the draftsman of another provision in the corresponding Queensland Act seems to have misunderstood the position at common law: see Massart v. Blight [1] . One would be driven to the conclusion that the draftsman thought that, under the general law, the surrender of a head lease had the effect of destroying an underlease. This, of course, was not so. At common law surrender of a head lease, unlike forfeiture, did not affect the rights of an under-lessee. So far as an under-lessee is concerned, as Coke says, "the estate surrendered hath, in consideration of law, a continuance". "It is clear", said Cockburn C.J. in Mellor v. Watkins [2] "that when a person voluntarily surrenders his lease, he cannot by so doing put an end to an under-tenancy created by himself". And in England since, at latest, the enactment of 8 & 9 Vict., c. 106, s. 9, and in New South Wales since, at latest, the original enactment of s. 122 of the Conveyancing Act 1919-1943, the position has been that a head lessor, upon the surrender of the lease, becomes entitled to the reversion expectant upon any immediate under-lease, the under-lessee becoming his immediate tenant on the terms of the under-lease. The head lessor, vis à vis the under-lessee, "is in the position of an assignee of the reversion" expectant on the under-lease: see Plummer and John v. David [3] . This is the very position which s. 82 (1) of the Landlord and Tenant (Amendment) Act seems to set out to create. The sub-section thus seems entirely unnecessary. It might, no doubt, be suggested that the draftsman was under another and different misapprehension, and that, not knowing what the word "surrender" meant in law, he used it as meaning or including something which fell short of an effective legal surrender. But the provision in question cannot be explained on this basis. So regarded, it would be not less superfluous. For nothing short of an effective legal surrender could affect the relation of landlord and tenant subsisting under a head lease. If on the one hand, there were some "surrender" which fell short of an effective legal surrender, the rights of an under-lessee would, be unaffected because the head lease would simply continue to subsist. If, on the other hand, there were an effective legal surrender, the rights of an under-lessee would, by reason of the special rule of the common law, be unaffected, except that he would henceforth hold as tenant of the head lessor.

[67]

It does, however, seem necessary in this case to consider the more limited question whether the Public Trustee could effectively surrender a lease which was vested in him under s. 61. This question was answered in the negative by Herron J. in Triggs v. Byron [3] . I can only say that I am, with respect, unable to see any reason for denying to the Public Trustee the legal capacity to surrender a lease vested in him. I am well able to understand that he would be most unwilling to do any positive act which would amount to a surrender, or to do anything which might affect the rights of persons really interested in an estate vested in him. It is very unlikely that, without some very special reason, he would do any such thing. In the normal case his position is only temporary and provisional. But his position, while it subsists, is the position of a legal owner, and I can see no reason for saying that, while occupying that position, he is devoid of legal capacity. In Triggs v. Byron [3] it seems clear enough that the Public Trustee did nothing which could be construed as amounting to a surrender, so that the question of capacity did not really matter. In Francis Longmore & Co. Ltd. v. Stedman [4] it seems again impossible to regard the mere inactivity of the Public Trustee as amounting to a surrender, and, if there were no surrender, it is difficult to see how the tenancy could be said to have come to an end. For this reason I think, with respect, that the correctness of the decision in that case must be regarded as very doubtful. Barry J. did not advert in his judgment to the question of the capacity of the Public Trustee to surrender a lease vested in him: indeed he does not appear to have adverted to the question of surrender at all. In my opinion, the Public Trustee - both in Victoria and in New South Wales - is legally capable of surrendering a lease vested in him. And, if he could surrender a "contractual" tenancy for the purposes of the general law, he could surrender a "statutory" tenancy for the purposes of s. 82 (1) of the Landlord and Tenant (Amendment) Act.

[84]

It is important to remember that the Act is not one which protects only a personal occupation. It protects lessees against the termination of their leases whether they have sub-let or not; and when their tenancies have been determined it protects them against deprivation of possession whether they are in possession personally or not. Likewise it protects sub-lessees: whether joined as defendants or not, they are entitled to be heard (s. 82 (4)), and their hardship and the non-availability to them of reasonably suitable alternative accommodation may be urged in opposition to the granting of an order for possession (s. 70). But if the prohibition contained in s. 62 (1) applies only to proceedings in which the lessee is a defendant, a curious, not to say absurd, position exists. Apart from the Act, where a lessee has sub-let and his lease has determined, the lessor suing in ejectment may adopt any of three courses. He may sue his own lessee alone, and if he succeeds the lessee and his sub-lessees will be ejected (Roe v. Wiggs [1] ; Green v. Herring [2] ; Berton v. Alliance Economic Investment Co. Ltd. [3] ). He may join both his lessee and the sub-lessee as defendants. Or he may make only the sub-lessee a defendant, leaving him to give notice of the writ to the lessee (his own landlord) as he is obliged to do by s. 7 of the Landlord and Tenant Act 1899 N.S.W., whereupon the lessee, if he pleases, may apply to a judge under s. 214 of the Common Law Procedure Act 1899 N.S.W., to be allowed to appear and defend. Now it is clear that s. 62 (1) prevents the adoption of either the first course or the second. It is also clear that if the third course is not within the prohibition of s. 62 (1) but the lessee, upon learning of the action, obtains an order giving him leave to defend, the prohibition at once applies and the action ceases to be maintainable. But unless s. 62 (1) is so construed that the action was from the beginning not maintainable, the position is that the lessee in order to get the protection of the Act must get himself made a defendant, and the sub-lessee, although a defendant, does not get the protection of the Act unless the lessee chooses to come in and defend.

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Decision date

Before

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Judgment (87 paragraphs)

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