Badari & Ors v Minister for Territory Families and Urban Housing & Anor [2022] NTSC 83

[2022] NTSC 42Badari & Ors v Minister for Territory Families and Urban Housing & Anor [2022] NTSC 83 | Case summary | Zoe

[10]

[4] It is accepted that each of the plaintiffs occupy residential dwellings in a remote community pursuant to a lease which names the Chief Executive Officer (Housing) (the CEOH) as the landlord. The first and second plaintiffs jointly lease residential premises in Gunbalanya (also known as Oenpelli). The third plaintiff leases different residential premises in Gunbalayna. The fourth plaintiff leases residential premises in Laramba.
[5] The written lease signed by the first and second plaintiffs does not specify within the document the rent that is payable. A clause in the Remote Public Housing Tenancy Rules,[1] which purported to be part of the terms of the lease, gave the CEOH, as landlord, the right "to vary the Rent from time to time in accordance with any determination made pursuant to section 23 of the Housing Act". As the copy of the lease before the Court has not been executed by or on behalf of the CEOH, the first and second plaintiffs submitted that the terms of the lease are the default terms set out in Schedule 2 of the Residential Tenancies Regulations 2000 (NT) (RTA)[2]. The default terms do not contain a clause equivalent to clause 5.1. Nothing turns upon this point. The only relevance of clause 5.1 is as demonstrating that the first and second plaintiffs were on notice that determinations made by the Minister under s 23 of the Housing Act may result in an increase in base rent for the premises they were occupying.
[6] A similar situation existed with regard to the lease signed by the third plaintiff.
[7] The lease signed by the fourth plaintiff specified the rent payable as $140.00 per week, but included a note to the effect that "the rent is subject to adjustment in accordance with section 23 of the Housing Act 1982 (NT)." The terms of the fourth plaintiff's lease are, as I understand it, identical to the default terms.
[8] The provisions of the Housing Act govern aspects of the provision of public housing in the Northern Territory. The Housing Act establishes an entity by the name of the CEOH. This entity is a body corporate sole and is capable, in its corporate name, of acquiring, holding and disposing of real, leasehold and personal property.[3] The CEOH has power to do all things that are necessary or convenient to be done for or in connection with or incidental to the performance of its functions in the exercise of its powers.[4] The CEOH is, however, subject to Ministerial direction.[5]
[9] One of the functions of the CEOH is to provide, and to assist in the provision of, residential accommodation.[6]. To that end, and without limiting the generality of s 16(1), in carrying out its functions the CEOH may let premises and may acquire, hold and dispose of real property, or any interest therein.
[10] A dwelling for the purposes of the Housing Act means a house acquired and retained by the CEOH. S 23 of the Housing Act addresses the rent payable for dwellings to which the Housing Act applies. The section provides:

[15]

[11] It is apparent from the provisions of s 23 that the base rent payable for occupation of remote dwellings falling within a class of dwellings to which a determination under that section applies is not set by agreement between the parties as recorded in the lease agreement. It is set by statute as the amount determined from time to time by the Minister. This is what I refer to as the base rent. The base rent is not necessarily the rent paid by a tenant, as there exists a rebate system which permits a rebated rent to be charged based on household income. The claim now made by the plaintiffs is that any rent increase, either in base rent or rebated rent, is only permissible if the provisions of the RTA are satisfied, and in particular, that the provisions of s 41 of the RTA are satisfied. I will return to that claim presently. Before doing so, it is appropriate to set out the basis on which the CEOH held an interest in each of the dwellings so as to be able to lease the dwellings to the plaintiff.
[12] In an affidavit made on 22 August 2022, Brent Aaron Warren, the Deputy Chief Executive of Housing Operations in the Department of Territory Families, Housing and Communities stated:
- the townsite of Gunbalanya lies within Northern Territory Portion 1646 (NT 1646), as identified in Survey Plan CP 004181;
- Lots 553 and 699, Town of Gunbalanya, where the first, second, and third plaintiffs reside, are contained within NT 1646;
- NT Portion 1646 is Aboriginal land within the meaning of section 3 (1) of the Aboriginal Land Rights (Northern Territory) Act 1976 (Cth) (ALRA). The Arnhem Land Aboriginal Trust holds an estate in fee simple over NT Portion 1646;
- on 26 August 2009, the Arnhem Land Aboriginal Trust, Northern Land Council, CEOH and the Commonwealth of Australia entered into an agreement through which the Arnhem Land Aboriginal Trust granted to the CEOH a lease under section 19 of the ALRA (the Gunbalaya lease); and
- the Gunbalaya lease remains in force.
[13] As I understand it, the parties agree that the residential dwelling occupied by the first and second plaintiffs, and that occupied by the third plaintiff, are premises that were part of the land leased to the CEOH by the Gunbalaya lease.
[14] In the same affidavit, Mr Warren stated:
- Laramba is an Aboriginal community living area which was excised from the Napperby pastoral lease in 1992 under Part 8 of the Pastoral Land Act 1992 (NT). It comprises NT Portion 4069 over which the Laramba Community Incorporated (LCI) holds an estate in fee simple, subject to various statutory conditions and restrictions which cover the use and occupation of Aboriginal community living areas;
- Lot 51, Town of Laramba, where the fourth plaintiff resides, is situated within NT Portion 4069;
- on 18 July 2014, LCI, the Central Land Council and the Executive Director of Township Leasing (the EDTL) entered into a head lease concerning certain land in Laramba, including Lot 51, to facilitate the provision of public housing; and
- on 6 July 2018, the EDTL entered into a sublease with the CEOH to facilitate the CEOH providing public housing in Laramba. This sublease included the land comprising Lot 51.
[15] Prior to December 2021, the Determination setting out base rent payable for remote dwellings included a Table which specified the base rent payable depending upon whether the dwelling was 1, 2, 3 or 4 bedroom dwelling and whether the dwelling was classified as "new or rebuilt", "refurbished" or an "existing house". Acknowledging that tenants in public housing were often poor, a safety net system existed such that rent for public housing could be set at the lesser of the base rent determined in accordance with the Table or rent calculated based on a percentage of household income (rebated rent). This safety net was implemented as a matter of policy.
[16] Over time, this system was considered to be inefficient, complex and difficult to administer. As household income frequently changed for tenants in remote public housing, due to factors such as changes in Centrelink entitlements and changes to the number of persons occupying a dwelling, the rent payable by the tenant required frequent reassessment and was subject to change. The Northern Territory Government determined to implement a simplified and consistent scheme that was easy to administer, easy to understand, and affordable for all parties. To that end, a new framework for determining rent for remote dwellings was developed throughout 2018. This process included the formation of the Stakeholder Advisory Group (the SAG), comprising representatives from:

[34]

[21] The plaintiffs submitted that none of their leases contain clauses that satisfy the requirements of s 41(1) of the RTA. For present purposes I will assume that to be correct. The difficulty for the plaintiffs is that the landlord, the CEOH, has not purported to increase the rent. The term "landlord" is defined in s 4 of the RTA, relevantly for present purposes, as "the person who grants the right of occupancy under a tenancy agreement". That entity is clearly the CEOH. In the case of the first, second and third plaintiffs, the land in question is owned by the Arnhem Land Aboriginal Trust, which has leased the land to the CEOH, which in turn further let the land to the plaintiffs. In the case of the fourth plaintiff, the land is owned by the LCI, which leased the land to the EDTL, who sub-leased the land to the CEOH, which in turn leased it to the plaintiff. Neither the defendant nor the Northern Territory as a legal entity were involved in granting any of the plaintiffs a right of occupancy of the respective parcels of land under a tenancy agreement. Neither entity can be said to be the plaintiff's landlord either de facto or de jure.
[22] This is not, as counsel for the plaintiffs sought to characterise it, some sort of chicanery. By establishing the CEOH as a corporation sole the legislature has provided that the CEOH is separate to other areas of the Executive and is capable of entering into leases as an entity separate from the Executive. This was clearly a deliberate decision by the legislature.
[23] Much of the plaintiffs' argument on this issue was directed towards demonstrating reasons why the terms of s 41 of the RTA were to apply to each of the leases despite the obvious conflict between the terms of that provision (which could permit rents lower than the Minister's determination to be set) and the requirement imposed by s 23 of the Housing Act that the rent payable for each of the premises is the rent as set by the Minister's determination. It is unnecessary to refer to those submissions in detail. When it is accepted that the legislature in the RTA, a later enactment to the Housing Act, chose to provide that the CEOH could be the entity granting the right of occupancy (effectively the landlord) while retaining the Minister as the person responsible for setting rents, the apparent conflict between the provisions falls away.
[24] Provisions such as s 41 of the RTA are intended to redress inequality of bargaining power in a market-based residential lease system. In considering the likelihood of the legislature intending that s 41(1) would not apply to leases such as those held by the plaintiffs, it is important to remember the differences between a market-based system and a public housing system. Parties entering into a private residential lease are free to agree upon the rent payable under the lease. They are also free to agree on whether the lessor has a right to increase the rent and, if so, the mechanism by which the new rent is to be determined. A private lessor has no obligation to consider the effect that payment of the rent set by the agreement will have on the lessee. A lessee to a private lease may apply to the Civil and Administrative Tribunal for a declaration pursuant to s 42 of the RTA to the effect that the rent payable under such a tenancy agreement is excessive, but the basis upon which the Tribunal may make such a declaration is limited to the features of the leased premises and the cost of services provided by the lessor. The provisions of the RTA are not concerned with consideration of the financial viability of the lessee.
[25] The second way in which the interests of the lessee in public housing are protected is by the adoption by the government of a policy of granting exceptions to the base rent as determined by the Minister in cases where requiring the lessee to pay the determined rent would lead to rent stress. This is referred to as a rental rebate. The content of that policy and how it is administered are also matters upon which the government is answerable to the legislature and to the people of the Northern Territory.
[26] The evidence established that there are in excess of 5,000 remote dwellings affected by the defendant's Determinations. It is obvious that significant public resources would be required to set an individualised "market rent" for each property. It is also apparent that the legislature avoided the necessity of conducting individual rental evaluations by giving the defendant the power in s 23 to determine rent payable for "a class of dwellings".
[27] The substantial differences between private leases and public housing leases, the political nature of the decision of the Minister to fix rents payable for occupancy of remote dwellings, and the similar nature of the decision as to the content of the policy governing rental rebates, provide an explanation (if any is required) for the legislature deliberately confining the operation of s 41 of the RTA to a rent increase imposed by a "landlord". It may be taken that the legislature was aware in enacting the RTA of the process for leasing and setting rents for public housing and deliberately chose to frame s 41 of the RTA in the way it did. While the provisions of s 23 of the Housing Act were amended into their present form after the passing of the RTA, that amendment does not affect the fact that the legislature was aware at the time that the RTA was passed that base rents for classes of remote dwellings were set by Ministerial Determination.
[28] The plaintiffs submitted that s 41 of the RTA performed the function of giving a lessee advance notice of whether the rent for leased premises could increase and, if that be the case, the mechanism for determining the increase. That is undoubtedly correct, but it is hardly to the point. In any event, each of the plaintiffs were on notice by the terms of their written lease document that their base rent could be varied by Ministerial Determination under s 23.
[29] The plaintiffs called in aid of their submission the provisions of s 7 (5) of the RTA which provides that specified provisions of the RTA do not apply to a tenancy or proposed tenancy under the Housing Act. S 41 is not one of the specified provisions. The absence of a reference to s 41 in s 7 (5) is not indicative of a legislative intention that the provisions of s 41 are to apply to a lease under the Housing Act. To the extent that the rent payable by a tenant in public housing under a lease from the CEOH is fixed by a determination under s 21 of the Housing Act, inclusion of a reference to s 41(1) in s 7(5) would be unnecessary.
[30] In addition, s 41 of the RTA is only applicable where rent is "payable under a tenancy agreement". It is arguable that the word "under" is used in this context as meaning "in accordance with", indicating that for s 41 to apply the rent must be determined by the provisions of the agreement itself. That is simply not the case where rent is determined by the Minister under s 23 of the Housing Act. It is, however, unnecessary to finally decide that point.
[31] For these reasons the plaintiff's first claim for relief must fail, both with regard to the challenge to the application of the three Determinations to the plaintiffs' leases and to the challenge to any increase in the rebated rent.

[38]

[33] The plaintiffs submitted that each of them has an obvious and direct interest in any decision to increase the base rent payable for their dwellings. They submitted that, absent plain language to the contrary, the legislature impliedly intends all grants of statutory power to be conditioned by a requirement to afford procedural fairness to a person, like the plaintiffs, whose interests might be prejudiced by the exercise of that power.[7] This is part of what used to be referred to as the rules of natural justice, but is now more frequently referred to as the obligation to provide procedural fairness. The plaintiffs submitted that this implication of statutory construction can only be ousted by clear and plain words to that effect.[8] The plaintiffs submitted that the provisions of the Housing Act did not contain clear words indicating a legislative intention that lessees of remote dwellings were not to be afforded procedural fairness before any Ministerial Determination was made increasing base rent, or before any policy change occurred which may increase the rebated rents paid by them.
[34] In the circumstances of this case, the plaintiffs' claim is that the Minister was obliged to give each of them an opportunity to be heard before making a new Determination.
[35] The plaintiffs submitted that the presumption that they would be accorded procedural fairness by way of an opportunity to be heard before the making of any new Determination is not rebutted by the fact that the power given to the Minister in s 23 of the Housing Act may be exercised in respect of a "class" of dwellings. This is because, the plaintiffs said, the power granted to the Minister in s 23 may equally be exercised in respect of a single dwelling and, in any case, any Determination affects the rights, interests and expectations of the individual citizen in a direct and immediate way.
[36] The plaintiffs' submission on this issue also appeared to draw upon the earlier submission that s 41 (1) of the RTA applied to limit the circumstances in which a valid Determination could be made increasing base rent for each of their dwellings. In that regard, the plaintiffs' written submissions stated: "Read in context with the (RTA), Parliament intended that any attempt to increase rent in spite of s 41(1) of that Act required that all affected persons be afforded procedural fairness". The plaintiffs referred to the provisions of s 7 of the RTA which set out specific requirements for consultation by the Minister where it is proposed to exempt tenancy agreements of a specified class from all or any of the provisions of the RTA, or where it is proposed to modify specified provisions of the RTA in their application to a specified class of tenancy agreement or a specified class a premises. The plaintiffs went on to submit that if the Minister proposed exempting a specified class of tenancy agreement, which included the agreements under which the plaintiff's occupy their dwellings, from the requirements of s 41 of the RTA, the Minister could only do so if he or she followed the consultation process set out in s 7 of the RTA.
[37] The plaintiffs submitted that as none of them had been given an opportunity to be heard before any of the three Determinations were made by the Minister, they had been denied procedural fairness with the result that the making of each of the Determinations was infected by jurisdictional error.
[38] The defendant accepted, as a general principle, that where an administrative decision is apt to affect the rights or interests of an individual there is a common law duty to act fairly, in the sense of according procedural fairness, subject to the manifestation of a contrary statutory intention.[9] The defendant submitted, however, that the decision of the Minister to make the Determinations fell into a category where there was no obligation to accord the plaintiffs a hearing.
[39] The defendant submitted that both the existence and content of an obligation to afford procedural fairness depend on the statutory framework within which a decision-maker exercises their power. In SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs,[10] the High Court (Gleeson CJ, Kirby, Hayne, Callinan and Heyden JJ) said:

[45]

[41] Similarly, in Kioh v West,[12] Mason J, drew a distinction between the exercise of a power to make a decision which directly affects a person individually and that which simply affects an individual as member of the public or of a class of the public. In the latter case, the decision is of a "policy" or "political" character to which a duty to afford a hearing before exercising the power does not apply.
[42] In Castle v Director-General, State Emergency Services,[13] Basten JA, after referring to the above statements of Mason J in Kioh, said:
1. This statement of principle must be applied with due regard to the underlying concepts. Thus, one limitation on the operation of the duty to accord procedural fairness arises from the need to identify the obligation by reference to an individual or class of persons. The obligation must be capable of identification and fulfilment, in a reasonable and practical sense, prior to the making of the decision. Some guidance may be obtained by asking whether it was reasonable to expect the officer exercising a particular power to identify, in advance, the applicant as a person whose rights or interests may be affected and the way in which the proposed affectation would occur. The larger the class of persons reasonably expected to be affected, the less the likelihood that procedural fairness will be attracted and, if it is, the lower the likely content of the duty. Similarly, even though the class of those affected may be small, the duty is less likely to be attracted if membership of the class is variable and not readily ascertained: see, eg, Comptroller-General of Customs v Kawasaki Motors Pty Ltd (No. 1) [1991] FCA 519; 32 FCR 219 at 240-241 (Hill and Heerey JJ).
2. The concept of a "policy" or "political" decision raises a different kind of issue. It suggests a power which is to be exercised in accordance with broader questions of public interest, and not by reference to individual affectation. The imposition of a tax, the striking of a rate or the setting of preconditions to the provision of a benefit would all be likely to fall within that category. The failure to take account of adverse impacts on individuals would not invalidate the exercise of the power and, in that sense, the exercise would not be subject to judicial review. However, care must be taken in equating the availability of judicial review with engagement of the obligation to accord procedural fairness. Nor will possession of a sufficient interest to confer standing to challenge the validity of the exercise of a power necessarily give rise to a prior right to procedural fairness: cf Kioa v West at 621 (Brennan J).
3. Just as it has been said that the application of rules of natural justice cannot usefully be determined by asking "whether or not the power in question should be classified as legislative" - see Bread Manufacturers of New South Wales v Evans [1981] HCA 69; 180 CLR 404 at 415 (Gibbs CJ) - so it may be unprofitable to place too much weight upon classification as a policy or political decision. There are occasions where an established practice cannot be changed, although to do so would clearly be a policy decision of the executive government, without according procedural fairness: see, eg, Council of Civil Service Unions v Minister for the Civil Service [1985] AC 374. In other cases, the obligation to accord procedural fairness may depend upon the basis of a proposed decision. In Kioa v West, a case involving a deportation order made with respect to prohibited immigrants, Mason J stated at 586-587:

[49]

[43] The defendant submitted that Courts have "placed powers which regulate prices in the public interest" into a category of cases that do not attract the obligation to afford a prior hearing. The defendant referred to:
- Bread Manufacturers of New South Wales v Evans [1981] HCA 69; (1981) 180 CLR 404, which determined that the exercise of a power to fix the price of bread, they would affected the sellers of bread, was not conditioned on giving those sellers advance notice of any proposed change and an opportunity to be heard;
- Re Gosling [1943] NSWStRp 20; (1943) 43 SR (NSW) 312, which held that a power to fix the price of milk was a delegated legislative power and that the rules of natural justice did not apply to such a power;
- Bates v Lord Hailsham of St Marylebone [1972] 1 WLR 1373, which held that a power to set and regulate the remuneration of solicitors was not conditioned on those solicitors been consulted; and
- Queensland Medical Laboratory v Blewett [1988] FCA 423; (1988) 84 ALR 615, where Gummow J stated, at 637, that a decision to amend a schedule of fees payable for services provided by pathologists, though it affected the remuneration of those pathologists, did not affect the rights and interests of those pathologists in a sufficiently individual, direct and immediate way as to attract a duty to accord a theory to those persons.
[44] By reference to these principles, the defendants submitted that the decision to make the Determinations was not one which was conditioned on giving the plaintiffs a hearing in advance. The defendants submitted that the Determinations do not affect the plaintiffs individually but as members of a broad class of persons who represent a section of the public at large. In support of that contention, the defendant submitted that the class of persons potentially affected by the making of the Determinations is vast. The Determinations cover approximately 5,313 remote dwellings and, indirectly, approximately 4,850 tenancy agreements. Some of those tenancy agreements may well concern more than one tenant. Implying an obligation to accord a hearing to all of those persons would impose a massive task on the defendant. In addition, the defendant submitted, the class of persons potentially affected is not restricted to current tenants. As the Determinations have prospective application they will also affect the interests of any future tenants who rent dwellings within the class. As such, the class of persons that are or may be covered by the Determinations is indeterminate.
[45] A further matter indicative of a legislative intention that the defendant not be required to afford a hearing to every person potentially affected by the making of a Determination under s 23 of the Housing Act is that the considerations that the Minister may take into account in making the Determination are textually unconfined and do not specifically require the consideration of the position of an individual tenant. The defendants submitted that decisions of this nature are essentially matters of politics or policy, concerning the appropriate level of government funding for public services.
[46] In my opinion, the defendant is correct. In making the Determinations under s 23, the defendant was required to balance the interests of both tenants, and prospective tenants, against the interests of the general public in the expenditure of public funds. Minds may legitimately differ on where the balance should be set, but the fact that the legislature has made the Minister the repository of the power to make a determination is indicative that the legislature understands that the exercise of the power is in the nature of a policy or political decision. The evidence establishes that in setting a base rent the defendant has adopted a model based on the operational cost of maintaining the dwelling, but with the understanding that it is almost inevitable that some public monies will need to be expended even if base rent is paid. This methodology for ascertaining base rent is overlaid by a policy of rental rebates intended to assist individual tenants avoid rent stress. It may be expected that many tenants of remote dwellings will, from time to time, be entitled to a rebate. This will lead to the need to expend further public funds.
[47] The nature of the power being exercised (being a power of a policy or political nature), the number of people as a class potentially affected by the exercise of the power and the fact that the exercise of the power does not affect the plaintiffs other than as members of an affected class convince me that the legislature did not intend that the exercise by the defendant of the power to make the present Determinations under s 23 of the Housing Act with regard to a class of dwellings was conditioned on the Minister affording the plaintiffs a right to be heard before any Determination was made.
[48] The fact that a Determination under s 23 may be made regarding an individual dwelling, as opposed to a class of dwellings, does not alter this position. The same considerations which influence me to find that the defendant was not required to provide the plaintiffs with a hearing before making the present Determinations will very probably not arise with regard to an exercise of the power granted by s 23 to make a Determination concerning a single dwelling, and procedural fairness may imply different obligations on the defendant in such a case.[14] It is, however, unnecessary to determine that issue in the present proceeding.
[49] In the event that I am wrong in determining that the defendant was not obliged to provide procedural fairness to the plaintiffs as part of a class of tenants to whom the Determinations applied, I will add my satisfaction that the consultation process undertaken by the defendant through the SAG was all that was reasonably required of the defendant in the circumstances.
[50] The plaintiffs' application based on procedural fairness fails.

[50]

[51] The plaintiffs submit that the Determinations are legally unreasonable because "the outcome of the exercise of the determination power was blunt: every premises across all remote communities and town camps will be required to pay the same rent per bedroom regardless of the state of that premises or its location". In practical terms, the plaintiffs submitted, this means that the base rent will be set for premises containing a particular number of bedrooms without reference to the state of the individual premises or their proximity to services.
[52] The plaintiffs presented criticisms of the "operational cost model - cost per bedroom" recommended by the SAG and adopted by the defendant. The plaintiffs submitted that I should look behind the Determination and make my own assessment of the rationality of the decision, including inferring the reasoning behind the defendant's decision and considering whether the suggested premises of the defendant's decision were justified. In the absence of undertaking such an exercise, the plaintiffs submitted, the situation remains that there is no intelligible basis for a base rent per bedroom to be imposed absent consideration of the state of the premises and their proximity to services. To put it in another way, the plaintiffs said, the identification of the "class" on which the Determination is based was based on an unwarranted assumption of uniformity across the class.
[53] The defendant accepted that an absence of legal unreasonableness is an essential element in the lawfulness of a determination made under s 23(1) of the Housing Act, because the legislature is taken to have intended that a statutory power will be exercised reasonable.[15] The defendant submitted, however, that this Court's function is not concerned with the merits of the Determinations made by the defendant. The Court's role is supervisory as to the legality of the Determinations.
[54] The defendant accepted that as there was no obligation in s 23(1) to provide a statement of reasons for a Determination, this Court's enquiry is therefore "outcome focused".[16] In such cases, however, a decision will only be found to be unreasonable where it falls outside the zone of rational choices available to the decision-maker. The defendant submitted that by conferring a discretion on her, s 23(1) left to her a zone of "decisional freedom" in which she could act.
[55] As the onus falls on the plaintiffs to establish legal unreasonableness, the obligation also falls on them to prove the facts necessary to prove that the Determinations, or any of them, are unreasonable.[17]
[56] The defendant also submitted that the test for determining whether a decision is legally unreasonable is necessarily stringent and will be rarely satisfied.[18]
[57] I am satisfied that the plaintiffs claim that the Determinations are tainted with legal unreasonableness has not been made out. It must be accepted that the provisions of s 23(1) expressly permit the defendant to make a Determination in relation to a class of dwelling. The plaintiff's submissions would either render nugatory the power thus provided to the defendant, or would make its exercise dependent upon identification of classes of dwelling with similar attributes concerning the state of the dwelling and its proximity to services. The latter consideration raises its own difficulties: what services are to be taken into account in identifying such a class of dwelling? For some lessees, proximity to supermarkets may be important. For others, proximity to health facilities may be important. Younger lessees may place more value on proximity to entertainment facilities, sporting facilities or schools. The range of services or facilities which may be relevant to such an analysis would be vast, and the value which individual lessees may place upon proximity to different services or facilities may also differ.
[58] It is important to again emphasise the differences between a market-based system of determining dwelling rental and a system of providing remote public housing. A lessor offering to lease a property privately may choose the location of that property by reference to proximity to services and facilities. The lessor may expect that such proximity will be reflected in the rent obtained for the premises, but whether the lessor achieves that rent depends upon multiple factors, including the existence of a prospective lessee who was willing to pay that rent bearing in mind proximity to the services and facilities. That dynamic is entirely absent in remote dwelling leases. By and large, remote dwellings for lease by the CEOH are constructed in places where there is a demand, that is, where the prospective occupants are already living or wish to live. This necessarily implies that some lessees want, undoubtedly for good reason, to live in communities that do not have the same access to all services and facilities that other communities do. In other words, to some the place in which they live is more important than its proximity to services and facilities. Undoubtedly, in a perfect world they would have access to all services and facilities, but in reality that is simply not the case.
[59] There was no evidence led by the plaintiffs to the effect that it is cheaper to build and maintain a remote dwelling of a particular size compared to a similar dwelling in an urban location or closer to services and facilities. In fact, the opposite would be expected. The approach taken by the plaintiffs involves selectively excising from the principles applying to assessment of market-based rent two circumstances which may affect that assessment, being the condition of individual premises and their proximity to services, and attempting to apply them in isolation to a public housing system which is not market-based. They do so without consideration of a multitude of other factors that would bear upon the assessment of rent in a market-based system, such as the cost of construction of the dwelling and the availability or otherwise of alternative properties.
[60] It is obvious that a different approach to fixing base rents is justifiable with regard to remote public housing. Policy considerations such as maintaining the economic viability of the scheme of provision of remote public housing and ensuring a degree of consistency across communities may be relevant to rent setting for remote public housing but would have no role in a market-based system. There is simply no logical requirement for this Court to settle upon the factors identified by the plaintiffs as being essential elements of a rational approach to setting base rents for remote public housing.
[61] I agree with the submission made by the defendant that an insuperable hurdle to the plaintiffs' case on unreasonableness is the lack of any evidence that the base rent payable by each plaintiff pursuant to the relevant Determination is unreasonable for each of the three properties. In addition, the reasonableness of the Determinations cannot be assessed without reference to the availability of the safety net, which in many cases will mean that rent actually paid by the tenant (rebated rent) will not be dictated by considerations of cost recovery, but by the tenant's ability to pay.
[62] The plaintiffs have not demonstrated that the outcomes of the Determinations are so unreasonable or irrational that no reasonable decision maker could have made those Determinations. On the contrary, the Determinations are readily explicable by the policy considerations which are relevant to assessing base rents for public housing in a broad geographical range of communities and in a system where rental rebates will be available.
[63] The plaintiffs' case on unreasonableness fails.

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