Supreme Court of the ACT|2015-01-30|Before: Mossop M

Commissioner for Social Housing v Moffatt [2015] ACTSC 4 (30 January 2015)

1. The question of law referred is answered, "No".

LANDLORD AND TENANT - termination of tenancy operation and effect of conditional termination and possession order (CTPO) pursuant to the Residential Tenancies Act 1997 (ACT) s 49(4) breach of CTPO - meaning of "terminates" - whether, following termination under a CTPO, the residential tenancy agreement continues to operate until a warrant for eviction is issued - alternatively, whether the residential tenancy agreement is terminated but may be statutorily revived by order of the ACAT - need for review of legislation

ACT Civil and Administrative Tribunal Act 2008 (ACT)

National Security (Landlord and Tenant) Regulations (Cth)

Anderson v Bowles [1951] HCA 61; (1951) 84 CLR 310

Andrews v Hogan [1952] HCA 37; (1952) 86 CLR 223

Bonnington & Co Pty Ltd v Lynch [1952] HCA 46; (1952) 86 CLR 259

Butler v Attorney General (Vic) [1961] HCA 32; (1961) 106 CLR 268

Commissioner for Social Housing v Lowe [2013] ACAT 49

Dickstein v Kanevsky [1947] VicLawRp 29; [1947] VLR 216

Fry v Metzelaar [1945] VicLawRp 9; [1945] VLR 65

Krupa v Zacabag Pty Ltd [1950] NSWStRp 26; (1950) 50 SR (NSW) 304

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

Read v Morris (1952) 53 SR (NSW) 39

The Community Law Reform Committee of the Australian Capital Territory, Report No. 8 (1994), Private Residential Tenancy Law

Harrison, The Problem of the Statutory Tenancy (1952) 26 ALJR 232

Lewis and Cassidy's Tenancy Law New South Wales (Butterworths 1966)

Commissioner for Social Housing in the ACT (Initiating Party)

Welfare Rights and Legal Centre (Other Active Party)

1. On 11 June 2014 Appeal President Stefaniak ordered that the following question of law be referred to the Supreme Court for determination pursuant to s 84 of the ACT Civil and Administrative Tribunal Act 2008 (ACT):

Did the Tribunal, in its decision of Commissioner for Social Housing in the ACT v Moffatt [2013] ACAT 83, err in determining that the operation and effect of the conditional termination and possession order made pursuant to section 49(4) of the Residential Tenancies Act 1997 was that the respondent's tenancy was terminated in accordance with the terms of that order following a breach of the conditions of that order?

2. The parties prepared a special case pursuant to r 5802 of the Court Procedure Rules 2006 (ACT) which set out the background facts in the following terms.

The [Commissioner for Social Housing] applied to the ACAT (Tribunal) on 15 May 2013 for an order pursuant to section 42A of the Residential Tenancies Act 1997 on the basis that [Ms Moffatt] had not complied with the conditional termination and possession order made by the Tribunal on 17 May 2012 and remained in possession of the property no. 7/5 Tenison-Woods Circuit, Bonython, ACT 2905.
Ms Moffatt failed to make the payment of rent on 28 May 2012 as required by the order of 17 May 2012.
As at 28 May 2012, a rental amount of $5,582.10 was shown to be outstanding.
The application for a warrant for eviction was filed on 15 May 2013, that is, almost 12 months after 28 May 2012. In the intervening period, Ms Moffatt had twice applied for, and been granted, a rebate of future rent payments. The correspondence and actions of both parties during this period indicate that both parties understood Ms Moffatt's residential tenancy agreement was still operative.
Member Daniel held (Commissioner for Social Housing in the ACT v Moffatt [2013] ACAT 83) that the residential tenancy agreement terminated on 29 May 2012, and that a new implied residential tenancy agreement commenced on 29 May 2012, by operation of section 7 of the Residential Tenancies Act 1997. The Member also concluded that under the implied agreement, Ms Moffatt was obliged to pay rent in relation to her occupation of the property from that time. She also considered that the rental rebates granted to Ms Moffatt were related to this implied tenancy.
Member Daniel dismissed the [Commissioner's] application for the issue of a warrant for eviction of Ms Moffatt for failure to comply with the conditional termination and possession order.
On 17 January 2014, the [Commissioner] appealed to the appeal tribunal on a question of law, being whether the Tribunal erred in its interpretation of the operation and effect of conditional termination and possession orders made pursuant to section 49(4) of the Residential Tenancies Act 1997.
After consideration of the matter, Appeal President Stefaniak on 11th June 2014 ordered that the matter be referred to the Supreme Court pursuant to section 84 of the ACT Civil and Administrative Tribunal Act 2008 on the question of law.
The Tribunal has not made any directions pursuant to Rule 5803 of the Court Procedures Rules 2006.

3. Relevant documents were also included with the special case.

4. The issue between Ms Moffatt and the Commissioner for Social Housing (the Commissioner) turned on the effect of a "termination" of Ms Moffatt's lease by a conditional termination and possession order made under s 49 of the Residential Tenancies Act 1997 (ACT) (RT Act). Although the RT Act uses the term, "residential tenancy agreement" (see s 6A), I will refer to it simply as a "lease" in these reasons. Prior to amendments to the RT Act in 2005, the position was clear: if a conditional order of the Tribunal relating to rent was not complied with the landlord could apply to the Registrar of the then Residential Tenancy Tribunal and, if it was found that the tenant had not complied with the order, a warrant for eviction would issue. This position was consistent the lease terminating in accordance with the Tribunal order at the point of breach and any application for a warrant for eviction being simply a matter of recovering possession. In the absence of other circumstances, the tenant, upon termination of the lease, became a trespasser.

5. Amendments made in 2005 impliedly permitted a relationship of landlord and tenant to continue notwithstanding that the lease between the parties had been "terminated" by operation of a conditional termination and possession order (CTPO). This could occur at the point where a landlord made an application for a warrant for eviction, potentially well after "termination" by a CTPO. The Tribunal was then empowered to make or continue a CTPO or even set aside such an order. The provision empowering this did not say so expressly but necessarily implied that a tenancy of some form would be on foot if such orders were made. As a consequence, upon any ordinary understanding of the meaning of "terminates", there was a conceptual inconsistency between the termination of a lease at one point in time (by operation of a CTPO) and the making of an order (on application for a warrant for eviction) at a later point in time, which assumed that a tenancy of some kind could exist once the order was made. As a consequence, in order to achieve a harmonious interpretation of all of the provisions of the Act, it is necessary to read "terminates" in those provisions relating to CTPO's with a modified meaning. The issue in the present case is whether the statutory concept of termination is so modified that, following termination under the terms of a CTPO, the lease continues to govern the relationship between owner and occupier up until a decision is made by the Tribunal to issue a warrant for eviction or, alternatively, whether the lease in fact is terminated but subject to the possibility that it may be statutorily revived in some form by a later order of the Tribunal. While neither interpretation is satisfactory, the latter is to be preferred. That is because it gives a less unnatural meaning to the word "terminates" and is more consistent with other provisions of the RT Act, in particular ss 36 and 56. This means that the original lease does not continue to govern the relationship between owner and occupier between the termination and a decision by the Tribunal whether to issue a warrant for eviction. The question referred should therefore be answered, "No".

6. The interpretive problem faced this case is similar to the problems that arose in cases in the 1940s and 1950s under the National Security (Landlord and Tenant) Regulations (Cth) and subsequent State Acts that incorporated similar provisions. That legislation permitted the giving of a notice to quit on certain specified grounds but, if the tenant did not vacate, prevented a landlord from taking possession without a court order which could be refused on discretionary grounds. Cases decided in relation to that legislation ultimately concluded that a notice to quit did in fact terminate the contractual tenancy that was in existence and a "statutory tenancy" continued after a lease had been terminated by a notice to quit. Consideration of this body of authority may influence the conclusion as to the relationship between owner and occupier both in the period after the termination of a lease by a CTPO and in the period after an order is made under s 42B dismissing the application for a warrant for eviction. Because neither party referred to or made submissions in relation to this substantial body of authority it is not appropriate to attempt to go beyond answering the particular question referred by the Tribunal and embark upon a consideration of the relationship that existed in this case, after termination of the lease.

7. The relevant provisions of the RT Act are as follows.

Part 4 Termination of residential tenancy agreements

Division 4.1 General

Despite anything to the contrary in any territory law, a residential tenancy agreement must not terminate or be terminated other than in the following circumstances:

(d) if the ACAT makes a termination and possession order in relation to the premises that are the subject of the agreement under division 4.4 or division 4.5;

(e) if the tenant abandons the premises that are the subject of the agreement;

(1) A person must not enter premises or any part of premises of which someone else has prescribed possession for the purpose of recovering possession of the premises or part except in accordance with a warrant issued by the registrar, an order or a warrant of the ACAT or an order or judgment of the Supreme Court.

(5) For this section, the following possession is prescribed:

(a) possession under a residential tenancy agreement;

(b) possession as a former tenant continuing to reside in the premises.

Content of termination and possession orders

(1) If the ACAT makes a termination and possession order the order must specify the following:

(b) that the tenant must vacate the premises on or before the date of termination;

(i) the lessor may request the registrar to issue a warrant for the eviction of the former tenant; or

(ii) the termination and possession order has effect as if it were a warrant for eviction.

(2) If a termination and possession order specifies that it has effect as if it were a warrant for eviction issued by the ACAT under division 4.2, the order must comply with section 40.

(a) authorise any police officer to take appropriate action, with any necessary and reasonable assistance, to evict a named person, or a named person and everyone else on the premises, within the period stated in the warrant; and

(b) require a police officer to give the named person not less than 2 days notice of the proposed eviction.

(2) Subsection (1) (b) does not apply if the registrar believes on reasonable grounds that -

(b) it would be inappropriate to give the notice required by subsection (1) (b).

(3) A regulation may prescribe what is, or is not, appropriate action to be taken under a warrant.

On request, the registrar must issue a warrant for the eviction of a person if -

(a) the ACAT has made an unconditional termination and possession order; and

(b) the person continues to reside at the premises in contravention of that order.

(1) This section applies to a conditional termination and possession order.

Note A conditional termination and possession order is made under s 49 (4) (see also dict).

(2) The order expires on the date stated by the ACAT in the order.

(3) The expiry day must not be more than 1 year after the day the order is made.

(4) However, subsection (3) does not apply if the ACAT believes on reasonable grounds that -

(b) it would be inappropriate to state an expiry day in accordance with subsection (3).

42A Failure to comply with conditional order

(1) A lessor may apply to the registrar for a warrant for the eviction of a person if -

(a) the ACAT has issued a conditional termination and possession order; and

(d) the person to whom the order was directed continues to live at the premises.

(2) On receiving an application for a warrant, the registrar must -

(a) list the application for hearing before the ACAT not earlier than 1 week after the day the notice under paragraph (b) is given to the person; and

(b) give notice to the person to whom the conditional termination and possession order is directed stating -

(i) that an application for a warrant for eviction has been made; and

(ii) the time when, and the place where, the application is to be heard; and

(iii) that the person should seek legal advice about the application if the person wants to continue to live at the premises.

(1) An application under section 42A must be decided as if it were an application under section 49 for a termination and possession order.

(2) After considering the application and hearing the parties who attend the hearing, the ACAT must -

(3) If the ACAT allows the application, the ACAT must direct the registrar to issue a warrant for the eviction of the person.

(4) If the ACAT dismisses the application, the ACAT may -

(a) confirm the conditional termination and possession order; or

(b) make another conditional termination and possession order; or

(c) set aside the conditional termination and possession order.

Division 4.3 Termination initiated by tenant

...

Division 4.4 Termination initiated by lessor

No breach of standard residential tenancy terms

Certain breaches of standard residential tenancy terms

(1) On application by a lessor, the ACAT may make a termination and possession order if -

(a) the tenant has failed to pay rent that has become payable under the residential tenancy agreement; and

(b) the lessor has served a termination notice on the tenant on the basis of the failure to pay rent; and

(2) If a lessor has made an application under subsection (1), the ACAT may refuse to make a termination and possession order if -

(a) the tenant has paid any rent that has become payable and is, in the ACAT's opinion, reasonably likely to pay future rent as it becomes payable; and

(b) the ACAT considers it just and appropriate to do so.

(a) the tenant is, in the ACAT's opinion, reasonably likely to pay the rent that has become payable as well as pay future rent as it becomes payable; and

(b) the tenant agrees to pay the rent that has become payable, and undertakes to pay future rent as it becomes payable, as required by the ACAT.

(4) Instead of making a termination and possession order under subsection (1), the ACAT may order (conditional termination and possession order) that if the tenant fails to pay the rent that has become payable, or future rent as it becomes payable, as required by the ACAT -

(a) the tenancy terminates at a stated hour on the day after the day when any rent becomes payable and is not paid; and

(b) the lessor becomes entitled to possession of the premises and all rent payable is payable immediately.

(a) the ACAT makes an order under subsection (1); and

(i) were the order not suspended for a specified period of no more than 3 weeks the tenant would suffer significant hardship; and

(ii) that hardship would be greater than the hardship that would be suffered by the lessor if the order were suspended for the specified period;

the ACAT may suspend the operation of the termination and possession order for a specified period of no more than 3 weeks.

8. The Dictionary to the RT Act included the following definitions:

conditional termination and possession order means a termination and possession order under section 49 (4).

termination and possession order means an order of the tribunal terminating a residential tenancy agreement and granting vacant possession of the relevant premises to the applicant for the order.

9. The Tribunal identified for itself a number of questions that needed to be answered. As a result of the submissions made by the parties the Tribunal considered whether or not, upon breach of the rental payment condition in the CTPO the tenancy was in fact terminated. This was articulated by the Tribunal as asking whether or not the CTPO was "self-executing", in the sense of automatically bringing the tenancy to an end. The relevant portion of the Tribunal's decision is as follows.

Did the failure to comply with the arrears payment schedule as directed by the conditional termination and possession order terminate the tenancy?

The starting point for this inquiry must be a consideration of the conditional termination and possession order that was made on 17 May 2012.
Order 1 required repayment of the arrears at $30 per fortnight, commencing on 28 May 2012, as well as payment of rent in accordance with the residential tenancy agreement.
Order 2 of the order provided:
1. If the tenant fails to comply with any of the conditions set out in order 1 above:
  - (i) the tenancy terminates at 12:00 noon on the day after the tenant's failure to comply with the condition;
  - (ii) the lessor is entitled to vacant possession of the premises on termination of the tenancy;
  - (iii) all rent payable including any rent which has accrued from the date of this order, is payable immediately.

"THE TRIBUNAL NOTES THAT if the tenant continues to live at the premises after the termination of the tenancy, the lessor may apply for a warrant for the eviction of the tenant. A warrant for the eviction of the tenant may issue if the criteria set out in section 42A of the Residential Tenancies Act 1997 are met."

A conditional termination possession order is an order made pursuant to subsection 49(4) of the RTA_,_ in relation to unpaid rent. That section provides:
1. Failure to pay rent

_(4) Instead of making a termination and possession order under subsection (1), the ACAT may order (conditional termination and possession order) that if the tenant fails to pay the rent that has become payable, or future rent as it becomes payable, as required by the ACAT - _

(a) the tenancy terminates at a stated hour on the day after the day when any rent becomes payable and is not paid; and

(b) the lessor becomes entitled to possession of the premises and all rent payable is payable immediately.

There are two aspects of the order of 17 May 2012 which should be noted. First, it is clearly expressed in self-executing terms. Secondly, it complies with the requirements of the RTA as set out in subsection 49(4) and section 39 (which sets out the required content of a termination and possession order). On its terms, the order of 17 May 2012 (as set out at paragraph 34 above) is self-executing.
Both the Commissioner's and Ms Moffatt's solicitors submitted that the order, despite its clear terms, was not self-executing. Nonetheless, the Tribunal is not bound by the views of the parties as to the operation of the statute, but must independently satisfy itself as to the correct operation of the order and interpretation of the law (Coleman v Power [2004] HCA 39; (2004) 220 CLR 1).
In recent matters before this Tribunal the question has been raised whether a conditional termination and possession order is truly self-executing, or whether it operates only after the Tribunal has found that the relevant facts have occurred, in the course of a hearing of an application under section 42B of the RTA. There have been a number of different views expressed by the Tribunal.
In ACT Housing v Mildwater [2006] ACTRTT 3, which has in some subsequent cases been referred to approvingly, the Tribunal stated "where there is a breach and the lessor takes no action the tenancy does not end, and, the rights and obligations created by the termination and possession order on condition remain in force."
There are recent cases which take a contrary view. In Fisher and Commissioner for Social Housing in the ACT [2012] ACAT 32 at paragraphs 25 and 26, and in Mangubat & Commissioner for Social Housing in the ACT [2013] ACAT 6 at paragraph 86, it was stated that a conditional termination and possession order operates, when the condition is satisfied, to terminate the tenancy. Paragraph 86 of Mangubat is as follows:
1. Section 49(4) is intended to operate as a self executing order. The further intervention of the Tribunal, once a conditional termination and possession order is made, is usually only necessary when a tenant does not vacate the premises as required. Obviously, if a tenant does not agree with the lessor's assertion that the tenant has failed to pay rent as required by the Tribunal, then the tenant would resist the section 42A application on that basis and the Tribunal is able to make appropriate orders under section 42B.
In Commissioner for Social Housing in the ACT v Lowe [2013] ACAT 49, the Tribunal, after noting that no contrary argument was put by the tenant on this point, concluded at paragraph 64 that "The Tribunal is satisfied that a breach by the tenant of his or her obligations under a CTPO does not, of itself, terminate a residential tenancy agreement for all purposes." Similar wording was used by the Tribunal in Maloney v Commissioner for Social Housing in the ACT [2013] ACAT 74.
While there is consensus that a conditional termination and possession order does not terminate the tenancy for all purposes, there is no binding authority on whether a conditional termination and possession order made under subsection 49(4) of the RTA is self-executing. It is therefore necessary to go back to first principles and consider the question afresh.
Much of the reasoning proffered in the cases cited above, and repeated in the Commissioner's submissions in this matter, involved the posing of hypothetical fact scenarios and querying the results of adopting differing interpretations of the law to those scenarios. It is a long accepted principle of statutory interpretation that one may have regard to the consequences of adopting a particular interpretation in order to determine which of competing interpretations should be preferred. However, this tool should be used cautiously, as it provides the potential for the court or tribunal to inadvertently substitute its preferred policy or procedural outcome for that intended by the legislature.
The starting point to interpretation of a statute should be with words of the provision itself. The interpretation which promotes the purpose of the legislation must be preferred. Reference should be had to the broader legislative context of the Act, and, where relevant, also to extrinsic materials which provide evidence of the legislature's intended operation or purpose. It is only after conducting such a rigorous examination that one is in a position to properly consider whether a particular interpretation gives rise to perverse, unexpected or unintended consequences.
I turn first, then, to the language of section 49. Section 49 provides for the making of a termination and possession order in cases of rental arrears. As an alternative to making a termination and possession order under subsection (1), subsection (3) provides that in specified circumstances the ACAT may make a conditional termination and possession order under subsection 49(4).
When one considers subsection 49(4), the order described appears to be a self-executing order. This is made particularly clear by the requirement of subparagraph (a) that the order itself provide for termination to occur at a specified time on the day following default.
As noted by the Full Court of the Supreme Court in Devenport v Commissioner for Housing in the ACT and Residential Tenancies Tribunal [2007] ACTSC 30 subsection 49(4) is the only provision in the RTA for the making of a self-executing order:
1. This is an express power to make a conditional order that will have the effect of obliging the tenant to act in a particular way - by paying the rent - and will provide that the termination order becomes effective at some future time if the tenant fails to comply with this condition. The section is based on the recommendations of the Community Law Reform Committee Report pars 854-858. ...
That such an order is self-executing is consistent with the recommendations of the Community Law Reform Committee (CLRC) Report on Private Residential Tenancy Law (The Community Law Reform Committee of the Australian Capital Territory,

Report No. 8 (1994), Private Residential Tenancy Law), at paragraph 857:

The Committee considered procedures for termination and eviction in cases where the tribunal refuses termination on the condition that the tenant repay the rent owing over time and the tenant fails to make the repayments required by the tribunal. The Committee considers that in this case the lessor should be able to obtain possession of the premises with little further delay. It should not be necessary for the lessor to have to give further notice of termination to the tenant and return to the tribunal for a termination order. The Committee recommends as follows:

Recommendation 159: Where the tribunal refuses to terminate the tenancy on the grounds of failure to pay rent on the condition that the tenant repay rent owing and the tenant fails to meet the repayment schedule of the tribunal then the following should apply:

The lessor need not apply to the tribunal for a termination order;
The tenancy should terminate and the lessor should be entitled to possession of the premises at 5:00 pm the day after the day on which the rent was due and not met;
All rent owing at this time shall fall due;
If necessary the lessor may apply to the registrar for authorisation of eviction.

The similarity between recommendation 159, and the subsequent drafting of subsection 49(4) of the RTA, is telling.
The Commissioner invited the Tribunal to disregard the clear words of the order made in this matter, and the clear words of subsection 49(4) which prescribe what such an order should say, and instead find that a conditional termination and possession order does not itself operate to terminate tenancy agreement until the Tribunal, in relation to an application filed under section 42A of the RTA, finds that the condition precedent has been met. The Commissioner submitted that this interpretation was supported by a reading of the provisions of the RTA as a whole.
In support of this 'context' argument, the Commissioner referred to section 36 of the RTA which prohibits termination of a residential tenancy agreement except in specified circumstances. One of those circumstances is specified by subsection 36(d) as where "the ACAT makes a termination and possession order", another is subsection 36(e) where 'the tenant abandons the premises'. The Commissioner argued that where a condition precedent of a conditional termination and possession order is met, and the tenant vacates the premises, the residential tenancy agreement ends upon the tenant leaving the premises because of subsection 36(e). The Commissioner submitted that in all other cases of operation of the condition precedent, where the tenant does not leave the premises, the residential tenancy agreement would not terminate until a finding by the Tribunal that the condition precedent was made out, and the Tribunal then making an unconditional termination and possession order.
I am not persuaded by this submission, for a number of reasons.
First, the reference to 'abandonment' in subsection 36(e) is clearly a reference to abandonment under sections 60 - 63 of the RTA.
Secondly, and most significantly, the phrase "termination and possession order" is defined in the dictionary to the RTA as meaning "an order of the tribunal terminating a residential tenancy agreement and granting vacant possession of the relevant premises to the applicant for the order." A conditional termination and possession order made in accordance with subsection 49(4) meets the requirements of this definition just as an unconditional termination and possession order does. If it had been intended to limit subsection 36(d) to unconditional termination and possession orders only, the word 'unconditional' would have been included in section 36(d).
The Commissioner submitted that a conditional termination and possession order could not be a 'termination and possession order' as envisaged by subsection 36(d), as it lacks both the finality and certainty required for termination. I am not persuaded by this somewhat circular argument. The order under subsection 49(4) being both self-executing, and certain in its application, was the subject of comment by the Supreme Court in Devenport:
1. It also seems to us that the legislature here has distinguished between applications for eviction based on failure to pay rent where an express power is made for a conditional order, and applications based on other breaches. The reasons for this distinction may be thought clearly apparent, in that a form of conditional order based on future compliance to pay both arrears of rent on specified days and ongoing rent as it falls due is clear and easily determined. It is a simple factual question as to whether the due amount was paid on the due date.
The Commissioner asserted that if a condition precedent under a conditional termination and possession order operated and the tenant did not vacate the premises, this sequence of events was insufficiently certain or final to satisfy subsection 36(d). The reasoning provided by the Commissioner was that the lessor, for any number of reasons, might choose not to exercise the right to apply for a warrant for eviction, or that the Tribunal might be satisfied by the tenant that the condition precedent was not met, or the tenant might remedy the default and the Tribunal exercise discretion to dismiss the application, or the tenant might satisfy the Tribunal that it was appropriate to make a further conditional termination and possession order.
None of these hypothetical situations are unable to be accommodated within an interpretation of the order as having been self executing, nor is an unworkable result produced by such an interpretation. Similar fact situations currently occur where an unconditional termination and possession order has been made - a lessor may choose not to apply for a warrant, a tenant may apply to the tribunal to set aside an unconditional termination and possession order made in their absence.
There is no doubt that in cases where a lessor has failed for a significant period of time after termination of a tenancy agreement to take action to seek a warrant for eviction, the factual and consequently legal matrix may become complicated. However, the difficulty in unravelling the legal relationship that has evolved is insufficient justification for disregarding the plain language of the conditional termination and possession order, which is prescribed by the legislation.
Although the Commissioner submitted that subsection 49(4) of the RTA should be interpreted in its legislative context, the Tribunal was not taken by the Commissioner to any provisions of the RTA other than section 36. For completeness, it is important to note the following provisions of the RTA:
First, section 49(4) itself requires that the order specify that the tenancy agreement terminate at a specified time on the day following default, and that the lessor is thereafter entitled to possession. If the order is not self-executing, then these words are unnecessary as it would be open to a subsequent tribunal to determine that the tenancy agreement terminated at any time after default.
Secondly, section 39 of the RTA provides the content of a termination and possession order. This content is consistent with the content of an unconditional termination and possession order prescribed by subsection 49(4).
Thirdly, section 42A provides that application may be made to the registrar for a warrant for eviction upon the condition precedent of a conditional termination and possession order being satisfied. If that order was not self executing, the appropriate application to be made in such a case would, presumably, be an application for an unconditional termination and possession order with effect as a warrant of eviction.
Fourthly, there is no provision in the RTA for an unconditional termination and possession order to be made as a consequence of a condition precedent of a conditional termination and possession order being satisfied.
Finally, section 42B expressly provides that after hearing the application under section 42A, if the application is allowed, the ACAT must direct the registrar to issue a warrant for eviction. If the Commissioner's proposed interpretation is adopted, the ACAT after allowing an application should be required to make an unconditional termination and possession order. Section 42B does not include provision for such an order.
The entirety of the RTA, as I have considered it, is consistent with a conditional termination and possession order being self-executing. I have been unable to find any provision in the RTA which is inconsistent with a conditional termination and possession order being self-executing. While I do not consider that there is any ambiguity in subsection 49(4) to be resolved by reference to extrinsic material, I note that reference to the CLRC report confirms that such an order was intended to be self-executing.
It follows that I am satisfied that a conditional termination and possession order is self executing in the sense that it terminates a residential tenancy agreement, although this does not mean that all of the rights and obligations of the parties under that agreement end at the time of termination.

10. The Tribunal then went on to describe the manner in which rights or obligations of the parties continued notwithstanding the termination, giving as examples, the obligation under clause 64 of the standard residential terms to leave the premises in the same state of cleanliness and condition as at the commencement of the tenancy. It also referred to s 56 of the RT Act which permitted, where the premises were not vacated, recovery of an amount equivalent to the rent that would have been payable and the expenses associated with obtaining a warrant for eviction. It pointed out that the recovery of compensation by the lessor under s 56 was consistent with the recovery of mesne profits at common law and referred to the judgment of Brennan J in Progressive Mailing House Pty Ltd v Tabali Pty Ltd [1985] HCA 14; (1985) 157 CLR 17 at 39.

11. The conclusion of the Tribunal that a CTPO was "self-executing" and hence terminated the lease left it open to the Tribunal to find, as it did, that the conduct of the parties following termination gave rise to a new "residential tenancy agreement" and hence meant that the Commissioner's application for a warrant for eviction could not succeed.

12. Counsel for the Commissioner submitted that where a lease was "terminated" by operation of a CTPO it was only terminated "for the purposes of section 49(4)". Counsel for the Commissioner explained the submission as follows (T7):

All that happens is that the lessor is in a circumstance where the lease has terminated for the purposes of 49(4) and then the lessor has options. The lessor can elect to allow the tenant to remain in occupation and, in our position, in accordance with the terms of the tenancy agreement in place. Or, alternatively, it can say, "Well, you have at this point breached the CTPO. I now rely upon the termination as provided for under section 49(4) and I apply for a warrant for your eviction under section 42A." At which point, it reverts to an application under 42A to be decided under 42B.

13. He submitted that the termination of the lease pursuant to a CTPO was only for the purposes of s 49(4) because the lease remains subject to the whole of the statutory scheme in the RT Act and, if the lease was terminated for all purposes, then there would be no purpose in having s 42B.

14. He explained that the benefit of a CTPO was that when the matter came back to the Tribunal it was not necessary to prove again the original breach or the giving of the termination notice and the only issue for determination was whether there was non-compliance with the CTPO and what consequences should flow from that.

15. He gave examples of the circumstances that might exist in relation to breaches of a CTPO which might make it appropriate for the tenancy to remain on foot and hence more consistent with giving limited scope to the word "terminates" in a CTPO.

16. He pointed to a number of decisions of the Tribunal which had addressed the issue that arises in the present case. He placed particular reliance upon the reasoning in Commissioner for Social Housing v Lowe [2013] ACAT 49 which he submitted was consistent with the position adopted by the Commissioner in the present case.

17. He submitted that, pending the Commissioner deciding what action it would take and, if it sought a warrant, the decision of the Tribunal, the original tenancy agreement continued to govern the relationship between the Commissioner and Ms Moffatt.

18. The effect of the Commissioner's submission was that the reference to "terminates" in a CTPO made under s 49(4) has no real effect. Instead, non-compliance with a CTPO satisfies one of the preconditions in s 42A and permits the making of orders under s 42B. While it would provide a gateway for an application for a warrant for eviction it would not in any ordinary sense terminate the relationship of landlord and tenant. In substance, it would be the warrant for eviction that actually terminates the tenancy.

19. Counsel for Ms Moffatt made submissions which emphasised the two stage process of (a) termination of the lease and (b) obtaining possession by means of a warrant for eviction.

20. He submitted that the termination effected by the breach of the CTPO was one which could be undone. He described the process as one by which the termination that had taken effect was "expunged, unterminated, the bomb has exploded but its been put back, whichever way you look at it". This process involved restoration of a terminated lease. He placed emphasis on the fact that under the RT Act termination of a lease can only be by one of the means set out in s 36, relevantly s 36(d). Section 36(d) refers to a termination and possession order under Division 4.4 or 4.5 of the RT Act. As a consequence, the termination of the lease has to be under s 49(4), which was in Division 4.4 of the Act and not under s 42B which was in Part 4.2.

21. He then submitted that "terminates" must have a meaning consistent with the statutory context, in particular a context where the tenancy could be revived or, amending his explosive analogy to that of a hand grenade, "it is not over for all purposes because you can put the pin back in". This meant that any consideration of whether the acceptance of rent after termination gave rise to a new tenancy needed to be considered in the light of the somewhat modified concept of termination. He expressly made no submission on whether or not the potential for a new tenancy to be implied from the tender and acceptance of rent or other conduct was impliedly excluded by the statutory scheme. Having regard to the question referred to this Court he submitted that it should be answered "No".

22. The submissions of the parties have a great deal in common. Both parties accept that it is necessary to attempt to achieve a workable scheme consistent with the statutory text. Both parties proceeded on the basis that because s 42B picks up the operation of s 49, the regime permits a lease which has been "terminated" by operation of a CTPO to be, in effect, continued or restored by the making of an order under s 42B. There is, however, a difference between the parties as to precisely how attenuated the concept of termination is under a CTPO. The Commissioner's submissions have it as a very attenuated concept so that the relationship between the occupier and owner after "termination" remains that of landlord and tenant governed by the terms of the "terminated" lease. Ms Moffatt's submission is that, although the lease is "terminated" in a meaningful sense, it could be restored to existence by an order under s 42B. Acceptance of the submissions of the Commissioner would almost certainly exclude the possibility of a new tenancy being implied from conduct such as the tender and acceptance of rent, whereas the submissions of Ms Moffatt would leave open the possibility of a new tenancy being implied by conduct because the lease was terminated even if statutorily subject to being restored at some later date.

23. The essential problem to be worked out arises from the fact that there are conflicting indications in the RT Act as to the effect of a failure to comply with a CTPO. Some provisions indicate that the tenancy agreement is terminated while others appear to be only consistent with it remaining on foot.

24. Where there is a conflict between provisions of a single enactment the principle of harmonious construction creates "a very strong presumption that the ... legislature did not intend to contradict itself, but intended that both ... should operate": Butler v Attorney General (Vic) [1961] HCA 32; (1961) 106 CLR 268 at 276. It has the effect that "[w]here conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions": Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [70]. In undertaking that adjustment, "such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent": Project Blue Sky at [71].

25. Attempting to apply the principle of harmonious interpretation is difficult in this case.

26. The present interpretative problem arises from the insertion of ss 42A and 42B by the Residential Tenancies Amendment Act 2005 (ACT) (2005 Amending Act). Prior to the 2005 Amending Act s 42 of the RT Act provided:

(a) the tribunal has issued a termination and possession order subject to a condition precedent; and

(b) the applicant satisfies the registrar that the condition precedent has been satisfied; and

the registrar must give the person a notice including the following:

(d) notice of the application for the issue of a warrant;

(i) the person may, if the person believes that the condition precedent to which the termination and possession order is subject has not been satisfied, apply to the tribunal within 2 days after the date of the notice; and

(ii) should the person not so apply, a warrant for the eviction of the person will issue on or after the end of 2 days after the date of the notice.

(a) the registrar issues a notice under subsection (1); and

(b) before the end of 2 days after the date of the notice, the person to whom the notice is issued applies to the tribunal for a stay of the eviction proceeding;

the registrar must list the application with the tribunal for hearing as a matter of urgency and must not issue a warrant for the eviction of the person.

(a) the registrar issues a notice under subsection (1); and

(b) the person to whom the notice is issued has not applied to the tribunal for a stay of the eviction proceeding before the end of 2 days after the date of the notice;

the registrar must issue a warrant for the eviction of the person.

(4) An application under this section for stay of an eviction proceeding may be oral or in written or electronic form.

27. The points to note about this provision are that:

(a) the power was given to the Registrar rather than Tribunal to determine, in the first instance, whether the condition precedent had been satisfied;

(b) the tenant was given the opportunity to apply either orally or in writing for a stay within two days, in which case the matter would be listed before the Tribunal urgently: s 42(2), (4);

(c) if that occurred then it would be for the Tribunal to determine whether the condition precedent had been satisfied; and

(d) if no application was made then the Registrar was obliged to issue a warrant: s 40(3).

28. The 2005 Amending Act replaced s 42 and inserted ss 42A and 42B. The amended provisions were in relevantly similar form to the form in which they currently appear which have been set out above. Amendments in 2008 clarified some of the drafting of s 42(1) to make it clear that what was being referred to was a CTPO and changed the identity of the Tribunal which heard residential tenancy matters to the ACAT.

29. The points to note about the provisions following the amendment are that:

(a) upon the satisfaction of the Registrar, the proceedings are to be automatically listed for a hearing before the Tribunal, whether or not the tenant has made any application; and

(b) the application for a warrant that is referred to the Tribunal "must be decided as if it were an application under s 49 for a termination and possession order".

30. Of the amendments made by the 2005 Amending Act, the Explanatory Statement for the relevant bill said:

Clause 15 Section 42 - inserts new sections 42, 42A and 42B into the Act dealing with conditional orders. The current legislation allows a warrant of eviction to be issued by the registrar on the untested assertions of the lessor about a condition precedent having been met. While the legislation attempts to avoid this result (a tenant having received a notice from the registrar may apply to the tribunal for a stay and both parties then have an opportunity to be heard), it remains the case that the current legislation permits the tribunal to effectively delegate a core function to the registrar. Having regard to the general functions of the registrar (s117) and the manner in which functions are subject to direction (s118) this delegation is undesirable. For this reason, this clause changes the procedure for eviction following a conditional order.

New section 42 - provides that termination and possession orders that are subject to an 'enforcement condition' expire on the date specified in the order, but that unless there are exceptional circumstances, the period shall not be longer than one year after the order is made.

New section 42A - changes the procedures for dealing with a failure to comply with a conditional termination and possession order. In the new procedures the Residential Tenancies Tribunal, rather than the Registrar will consider the issue of whether the enforcement condition has been met.

New section 42B - sets out the procedure for the Residential Tenancies Tribunal hearing an application for eviction following an enforcement condition being met. The tribunal may dismiss an application or allow an application and direct the registrar to issue a warrant for eviction.

31. It should be noted that there is no reference in the Explanatory Statement to the significance of the statement in s 42B(1) that the application was to be dealt with as if it was an application for a termination and possession order or the variety of orders that could be made under s 42B(4). Nor does it address the relationship between the types of orders contemplated by s 42B (which proceed on the basis that there is a tenancy that remains on foot) and the statutorily mandated terms of a CTPO set out in s 49(3)(c) and (d) of the RT Act which then provided that the Tribunal order had to state:

(c) the tenancy terminates at a specified hour on the day after the day when any rent was due and payable and not paid; and

(d) the lessor becomes entitled to possession of the premises and all rent due is payable immediately." (emphasis added)

32. Thus, the Explanatory Statement provides no assistance in determining the effect of termination by a CTPO under the Amending Act or the relationship between the parties between the termination by the CTPO and any decision by the Tribunal under s 42B. Probably as a result of the terms of the Explanatory Statement, there is no relevant discussion of the effect of the amendments in the debates of the Legislative Assembly before the 2005 Amending Act was passed.

33. The position prior to the 2005 Amending Act was relatively clear. Section 42 gave effect to recommendations 159 and 162 of The Community Law Reform Committee (CLRC) of the Australian Capital Territory Report No 8 Private Residential Tenancy Law which provided:

Recommendation 159: Where the tribunal refuses to terminate the tenancy on the grounds of failure to pay rent on the condition that the tenant repay rent owing and the tenant fails to meet the repayment schedule of the tribunal then the following should apply:

the lessor need not apply to the tribunal for a termination order;
the tenancy should terminate and the lessor should be entitled to possession of the premises at 5.00 pm the day after the day on which the rent was due and not met;
all rent owing at this time shall fall due;
if necessary the lessor may apply to the registrar for authorisation of eviction.

...

Recommendation 162: Where the tenant fails to meet rental repayments required by the tribunal then the proposed Residential Tenancies Act should provide that:

the lessor may apply to the registrar for execution of a warrant for the eviction of the tenant;
if the registrar is satisfied that:

"the tenant has not paid the rent by the due date and time as required by the tribunal; and

the tenancy has subsequently terminated pursuant to the order of the tribunal"

the registrar may execute a warrant for the eviction of the tenant;

the registrar must provide for the tenant to receive notice of the pending eviction at least two clear working days before the police evict the tenant;
upon receiving notice of pending eviction, the tenant may dispute the eviction but only on the basis that the tenant has in fact paid the rent as required by the tribunal;
if the tenant wishes to dispute the eviction then the tenant must notify the registrar of the dispute within two days of receiving the notice of pending eviction;
if the tenant notifies the registrar of a dispute the registrar must list the matter for urgent hearing by the tribunal and the warrant is suspended until the tribunal makes its decision; and
if there is no notification of dispute the eviction takes place in accordance with the order of the tribunal.

34. Although the Explanatory Memorandum for the bill which became the RT Act is not as clear as it might be as to the enactment of the recommendations of the CLRC, the correspondence between the terms of the recommendation and the terms of the RT Act make the position clear enough.

35. Where a CTPO was made under s 49 and then breached, either the Registrar was required to issue a warrant for eviction or, if the breach of the condition was contested, the Tribunal would decide whether to issue a warrant for eviction. It is possible that the power of the Tribunal extended beyond determination of whether or not there was compliance with the condition to, for example, permit a stay of the issue of a warrant. However, if it did so extend (a point which I do not need to decide) there is nothing in the text or structure of s 40, as it then was, that would permit a general reconsideration of the merits of the termination.

36. The regime had the effect that a CTPO gave a tenant one final chance to comply with his or her obligation to pay rent in full and on time. In doing so it provided the potential for some finality to the process where a tenant failed to pay rent in accordance with the rental agreement. Where a conditional order was breached then it was clear that the tenancy agreement was terminated and that it was only recovery of possession by the landlord that remained.

37. Nothing in the extrinsic material relating to the 2005 Amending Act indicated an intention to alter this position. Rather, the policy basis for the amendments as explained in the Explanatory Statement related to the appropriate allocation of responsibilities between the Registrar and Tribunal. Yet the terms of s 42B are inconsistent with the hearing before the Tribunal being solely concerned with recovery of possession. The statement in s 42B(1) that the application "must be decided as it if were an application under s 49 for a termination and possession order" is inconsistent with the hearing being solely concerned with determining whether a breach of the enforcement condition occurred. That is because s 49, both in the form that it existed immediately following the 2005 Amending Act and currently, contemplates that even if there has been a failure to pay rent, a conditional termination and possession order may be made. Those are orders which are expressly contemplated by s 42B(4). Such orders are ones which could only be made if there was a tenancy of some kind in existence to which a CTPO could apply. The problem arises because the drafter appears to have given no consideration to the relationship between the broader process contemplated by reason of s 42B(1) and a CTPO which, by order, by order "terminates" a lease upon non-compliance with the payment condition.

38. It is important to note that following a breach of a CTPO there is no time limit within which a landlord is required to make an application for a warrant of eviction. Therefore, the application may be made immediately upon the failure to comply with the CTPO condition or, as in this case, there may be a substantial period after the tenancy is "terminated" before the Tribunal makes a decision under s 42B. It is in this latter situation that the question of the relationship between owner and occupier becomes more important. The problem arises because it is necessary to determine what relationship exists between owner and occupier after the breach of the CTPO and the date when the Tribunal determines the application under s 42B.

39. The question is therefore how to interpret the reference to "terminates" in a conditional termination and possession order in a manner that gives the provisions a harmonious operation.

40. No difficulty arises if, following the breach, the tenant vacates the premises because, consistently with the terms of the CTPO, the lease is then at an end. This means that "terminates" in s 49(4) and a CTPO must mean "terminates" in the ordinary sense.

41. If, following the breach, the tenant does not vacate then, notwithstanding the reference to "terminates" in s 49(4) and the CTPO, there is the capacity, by reason of s 42B picking up the operation of s 49, for a tenancy of some kind to exist in the future, either subject to a CTPO or not. This means that instead of a CTPO operating in the fashion of a guillotine order, the operation of the order is in a sense conditional because of the incapacity of the landlord to recover possession until the Tribunal has had the opportunity to consider making an order under s 42B that would have the effect of maintaining a tenancy of some sort. On any view, because of the provisions in s 42B(4), "terminates" cannot exclude some continuing relationship after an order under that subsection is made.

42. The legislative problem that exists in the present case is not without precedent. Under the National Security (Landlord and Tenant) Regulations (Cth) and State legislation in similar terms such as the Landlord and Tenant Amendment Act 1948 (NSW) (NSW Act) which followed it, restrictions were placed upon the capacity of landlords to recover possession of premises. The NSW Act, which governed "prescribed premises", substantially interfered with a landlord's capacity to recover possession of those premises. The legislation prevented the landlord from ejecting the tenant at the expiry of the contractual term and required the landlord to serve a notice to quit containing one or more specified grounds and then to satisfy a court of competent jurisdiction that those grounds in fact existed. Further, even where the statutory grounds for recovery of possession were made out, the court had power, after considering the competing hardships of the parties, to refuse to make an order for possession in favour of the landlord.

43. The Full Court of the Supreme Court of New South Wales initially considered that where the landlord failed to recover possession because an order was refused on discretionary grounds, the tenant continued to hold a tenancy under the terms of the original lease: Krupa v Zacabag Pty Ltd [1950] NSWStRp 26; (1950) 50 SR (NSW) 304 at 310-311; Furness v Sharples [1950] NSWStRp 33; (1951) 51 SR (NSW) 13 at 14-15. The notice to quit had the effect of identifying the date upon which the lease was taken to have terminated if the lessor was ultimately successful in recovering possession. However following the decisions of the High Court in Anderson v Bowles [1951] HCA 61; (1951) 84 CLR 310, Andrews v Hogan [1952] HCA 37; (1952) 86 CLR 223 and Bonnington & Co Pty Ltd v Lynch [1952] HCA 46; (1952) 86 CLR 259, the Full Court of the Supreme Court held, in Read v Morris (1952) 53 SR (NSW) 39 at 43, 45, and 53 that Krupa and Furness were wrongly decided. Thus, the position was that where an effective notice to quit was given, the original lease was at an end. The only entitlement that the former tenant had was the protection from eviction given by the statute.

44. Although there was some dissatisfaction with the term, the status of the former tenant was described as that of a "statutory tenancy". That picked up the description of the status of tenants of controlled dwellings under the post-war rent restriction Acts in the United Kingdom whose leases had been lawfully terminated but who remained in possession: see Halsbury's Laws of England 3rd ed vol 23 at [1586]ff. In contrast to the Australian laws, under that legislation it was expressly stated that the tenant remained in possession subject to the terms and conditions of the previous contractual tenancy: Halsbury's at [1588] fn (d). Therefore, the term "statutory tenancy" made some sense even though it was only a personal right and subject to various limitations: see Halsbury's at [1586]-[1587]. Notwithstanding the fact that there was no similar statutory provision in the Australian laws, the concept of a statutory tenancy became accepted after it was adopted by Fullagar J in Andrews v Hogan [1952] HCA 37; (1952) 86 CLR 223 at 246: see Lewis and Cassidy's Tenancy Law New South Wales (Butterworths 1966) volume 1 at 508.

45. Notwithstanding that the legislation did not say so, a body of authority established the proposition that the statutory tenancy was governed by the terms and conditions that existed under the terminated lease. This convenient conclusion, which had been reached by lower courts such as in Dickstein v Kanevsky [1947] VicLawRp 29; [1947] VLR 216 and Gargaro v Moore [1948] VicLawRp 65; [1948] VLR 365, was noted by the High Court in Anderson v Bowles [1951] HCA 61; (1951) 84 CLR 310 at 320, accepted by Dixon CJ and Fullagar J in Andrews v Hogan [1952] HCA 37; (1952) 86 CLR 223 at 232, 246 and then adopted as correct by the Court in Bonnington & Co Pty Ltd v Lynch [1952] HCA 46; (1952) 86 CLR 259 at 268. As a consequence of the decision in Bonnington, Herron J said in Read v Morris (at 51) that the approach "may be taken as well settled". The result was that both in the period following termination of the lease by the notice to quit and following a refusal of an order for ejectment on discretionary grounds, the statutory tenant remained in possession of the property and obliged to comply with the terms and conditions of the terminated lease. However, because what the tenant had was a personal right, the tenant would not be able, for example, to assign any interest in the property.

46. There can be no doubt that the RT Act creates a right, pending an order of the Tribunal, to not be evicted after a lease is terminated by a CTPO. Adopting the terminology from the landlord and tenant legislation referred to above, that right can be described as a "statutory tenancy". However, there is also absolutely no indication that the legislature intended to pick up any of the jurisprudence on statutory tenancies, either from the United Kingdom or Australia. Therefore, caution must be exercised to ensure that any reliance upon earlier authorities is only to the extent that it is consistent with the terms of the RT Act.

47. As the decision in Read v Morris demonstrates, the concept of a statutory tenancy is consistent with the ending of the previous lease. Thus, characterising the protection against eviction as a statutory tenancy is a useful shorthand method of describing the relationship that exists post termination. It would be convenient to conclude that the statutory tenancy was governed by the same terms as the previous tenancy (at least to the extent that those terms were not inconsistent with the circumstances of the statutory tenancy: Gargaro v Moore [1948] VicLawRp 65; [1948] VLR 365). However, an implication that the terms of the previous lease continue to govern the relationship should only be made if it is a necessary implication from the statutory regime. If, based on the specific terms of the legislation, there are other equally plausible characterisations of the relationship then it could not be said that the implication of the previous terms is a necessary one, even if it might be convenient. The fact that such an implication was made under somewhat similar legislative regimes which impeded a landlord's capacity to recover possession is not, of itself, a proper basis for making an implication under the RT Act. I would observe that the earlier authorities on the National Security (Landlord and Tenant) Regulations and its derivatives appear to place more weight on the English authorities than on precisely what implications must be drawn from the text of the legislation. Indeed, Professor Harrison in his article "The Problem of the Statutory Tenancy" (1952) 26 ALJR 232 at 235 propounded the view that, notwithstanding the English authorities, the terms of the legislation were not sufficient to give rise to the implication that the terms of the previous lease were incorporated in the statutory tenancy, although this view was not ultimately accepted by the High Court. However, when interpreting the RT Act the terms of the Act itself must govern the scope of any necessary implication. While an implication of a statutory tenancy governed by the conditions of the earlier lease has many attractions, there are at least some indications that the legislature did not consider that the terms of the earlier lease would govern the relationship. For example, s 56 proceeds on the basis that there is no obligation arising by implication from the statute that rent was payable but rather provides a statutory entitlement that exists only in a limited time period to recover compensation for lost rent.

48. The submissions of the parties made no reference to the significant body of authority arising under the National Security (Landlord and Tenant) Regulations and subsequent State legislation. The interpretive options that were identified in the parties' submissions can be explained as follows.

49. Termination that permits the continuation of the tenancy ("the continuation interpretation"): This was the characterisation contended for by the Commissioner. Upon this interpretation, "termination" is given a highly attenuated meaning, namely, notwithstanding the termination of the lease in accordance with the terms of the CTPO, the tenancy was not in fact ended because the tenant did not vacate and the potential, pursuant to s 42B(4), for an order continuing the tenancy. This would mean that the tenancy was only terminated in some abstract and contingent sense which would become absolute upon either the tenant vacating the premises or the Tribunal directing the issue of a warrant for eviction. Pending a decision of the Tribunal under s 42B, the tenancy would in fact continue on the same terms. There would therefore be an existing tenancy upon which orders under s 42B could operate.

50. This interpretation makes more sense of s 42B because the orders under s 42B(4) can operate on an existing tenancy rather than by reviving a non-existent tenancy. On the other hand, it gives such a constricted and artificial meaning to "terminates" that the term is almost without content.

51. The interpretation is consistent with the general intention to give tenants a further opportunity to maintain the tenancy notwithstanding non-compliance with the CTPO. It means that termination is, in the case of a tenant who does not vacate the property, merely a gateway to the granting of relief to a landlord rather than something altering the relationship of landlord and tenant.

52. The interpretation would mean that, because there was an existing tenancy that continued after "termination", there was no room to imply a new tenancy from the conduct of the parties such as the tender and acceptance of rent.

53. Actual termination that permits subsequent revival ("the revival interpretation"): This was the characterisation contended for by Ms Moffatt. A tenancy, although terminated at the point of non-compliance with the CTPO, can be "revived" in some manner by operation of an order under s 42B. This interpretation would mean that the existing tenancy ended. The terminated lease would therefore not directly govern the relationship between occupier and owner after the date of "termination" pursuant to the CTPO.

54. In favour of the "revival" interpretation are the following matters.

55. First, the use of the word "terminates" is clear language which has a known meaning in the context of landlord and tenant.

56. Second, the revival interpretation means that the word terminates has the same meaning whether or not the tenant vacates. On the other hand, the continuation interpretation means that terminates means terminates only where the tenant vacates. Where the tenant does not vacate it means "terminates only if at some time in the future the landlord successfully obtains a warrant for eviction". It would be anomalous to give the word a meaning which varied depending upon the response of the tenant to the Tribunal's order.

57. Third, the revival interpretation is consistent with two important aspects of the statutory context in which s 42B appears, s 36 and s 56.

58. Section 36 requires that tenancy agreement only be terminated in one of the ways set out. The only relevant paragraph is s 36(d). That paragraph provides:

Despite anything to the contrary in any territory law, a residential tenancy agreement must not terminated or be terminated other than in the following circumstances:

...

(d) if the ACAT makes a termination and possession order in relation to the premises that are the subject of the agreement under division 4.4 or division 4.5;

59. Having regard to the definitions in the Dictionary of "termination and possession order" and "conditional termination and possession order", the latter is a species of the former and hence the termination of a lease by a CTPO can be "a termination and possession order in relation to the premises" for the purposes of s 36(d).

60. Section 42B is within Division 4.2. Section 49 is within Division 4.4. Therefore if it is to be consistent with s 36 then the termination of a tenancy agreement must be under s 49 rather than s 42B. The revival interpretation is consistent with s 36 because it has the effect that the agreement is in fact terminated (subject only to a future contingency that a power may be exercised at the point of an application for a warrant for eviction that revives the agreement). Thus, the termination is achieved by the CTPO made under s 49, which is within Division 4.4. On the continuation interpretation it is not terminated in any ordinary sense until a warrant for eviction is issued under s 42B, which is not in either of the divisions of the RT Act required by s 36(d).

61. Section 56 is consistent with "terminates" bearing something closer to its ordinary meaning and hence more consistent with the revival rather than continuation interpretation. The section provides that if a person to whom a termination and possession order is directed fails to vacate the premises in accordance with the order, an application may be made within four weeks of the date the person was required to vacate for an order that the person pay to the applicant:

an amount equal to the rent that would have been payable to the applicant if the premises had been tenanted during the period for which the person was in possession of the premises after termination of the residential tenancy agreement.

62. Thus, the section is clearly based on the assumption that following "termination", no rent is payable and that the premises are not "tenanted" following termination. That is inconsistent with the tenancy continuing in the period between it being terminated by operation of the CTPO and the making of a decision by ACAT under s 42B.

63. Fourth, the revival interpretation makes more sense of the process for the application for a warrant for eviction. That is because if an application under s 42A is allowed, then consistently with the lease already being at an end, a warrant issues: s 42B(3). The warrant is about the recovery of possession rather than termination of the lease, which has already occurred. If the continuation interpretation was correct, then it would make sense to somehow address the issue of termination at the warrant stage rather than simply issue a warrant to, in effect, terminate the continued lease.

64. In this case the text of the RT Act is more consistent with the revival interpretation rather than the continuation interpretation. It means that "terminates" means what it says, subject to the possibility that, in appropriate circumstances, some form of tenancy going beyond a bare right to avoid eviction will be revived upon the determination of the tribunal under s 42B. It is also more consistent with the terms of s 36(d) and s 56 of the Act.

65. Although I have reached this conclusion based solely on the terms of the RT Act I note that it is consistent with the decision in Read v Morris.

66. Returning to the question that has been asked, the parties recognised during the course of argument the question of law posed by the Tribunal did not capture the point sought to be agitated. It asked whether the Tribunal erred in concluding that "the respondent's tenancy was terminated in accordance with the terms of that order". Having regard to the terms of the order and the terms of s 49(4) the answer, at one level, must be "No". That is because it is clear that the tenancy was "terminated" in the statutory sense. The real question was whether the statutory sense in which the tenancy was "terminated" involved a termination only in a limited sense that would preclude, as a matter of law, any new tenancy arising in the period between "termination" and the decision of the Tribunal on the application for a termination order.

67. On the interpretation I have favoured the tenancy was terminated in the ordinary sense of that word. That means that the Commissioner cannot succeed simply on the basis that because there was a continuing tenancy there was no room, as a matter of law, for the new tenancy found to exist by the Tribunal.

68. However, there are a number of other questions that arise in the circumstances which are not required to be answered by the question referred and which, in my view, I am not in a position to answer. In particular:

(a) is it a necessary implication from the RT Act that the same terms govern the statutory tenancy created following termination of the lease by the CTPO as governed the previous lease, or is the effect of the RT Act to provide a bare protection from eviction pending a determination under s 42B?

(b) if an order is made under s 42B consistent with the continuation of a tenancy is it a statutory tenancy created by the Act or a statutory revival of the terminated contractual tenancy?

69. The answer to the first question will have a significant influence the characterisation of acceptance of rental after the termination of the lease by the CTPO or the processing of rent rebate applications, both live issues in this case. For example, cases under the NSW Act held that acceptance of rent or even the making of an application for the determination of fair rent did not create a new contractual tenancy because of the existence of a statutory tenancy: see Lewis and Cassidy's Tenancy Law New South Wales (Butterworths 1966) volume 1 at 512; see also Arnold v Mann [1957] HCA 64; (1957) 99 CLR 462 at 475. The answer to the second question will be fundamental to the ongoing relationship between the parties if a warrant for eviction is not granted, including for example, the entitlement of the Commissioner to recover past unpaid rent and the capacity of the Tribunal to incorporate past unpaid rent in the terms of a new CTPO.

70. The reason that I decline to go further than I have and attempt to answer these questions is that neither party made any reference to the historical cases to which I have referred and hence I have not had the benefit of argument based on a proper review of those authorities and the influence that they might have in the light of the specific provisions of the RT Act. While it would be possible to have the matter reargued, it appeared to me, particularly in the light of my comments below about the need for legislative reform, to give my decision on the question referred and leave it to the parties to address the issue as they see fit in the light of my reasons: cf Fry v Metzelaar [1945] VicLawRp 9; [1945] VLR 65 at 69-70.

71. The conclusion that I have reached answers only one of the many questions that must arise as a consequence of the 2005 amendments to the RT Act. It leaves open many fundamental questions about the nature of the relationship created by the operation of ss 49(4) and 42B of the RT Act. Although it will be possible by a variety of orthodox legal techniques to interpret and give effect to the terms of the Act and hence to the purpose of the legislation, it is highly unlikely that the operation of the RT Act, when ultimately so worked out, will reflect any actual purpose of the legislature or, indeed, anybody else. Unless the legislation is amended it will be necessary to give some effect to the statutory scheme no matter how artificial or unsatisfactory an exercise it is because there is undoubtedly a relationship of some kind between parties as a result of, and following the operation of, a CTPO and there are undoubtedly statutory provisions which apply. The level of obscurity in the statutory text appears to be the result of a failure to consider in advance, in a practical way, the consequences of the 2005 amendments to the legislation. Given the ubiquity of residential tenancies and their importance in the lives of many residents of the Territory, the legislature should, in my view, urgently review the provisions of the RT Act relating to termination of residential tenancies for non-payment of rent.

72. The parties agreed that they would pay their own costs of the proceedings. The orders of the Court therefore are:

1. The question of law referred is answered, "No".

Commissioner for Social Housing v Moffatt [2015] ACTSC 4

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (203 paragraphs)

Commissioner for Social Housing v Moffatt [2015] ACTSC 4 (30 January 2015)

Parties

Legislation Cited (16)

Cases Cited (9)