Devenport v Commissioner for Housing in the ACT and Residential Tenancies Tribunal [2007] ACTSC 30

Supreme Court of the ACT|2007-05-02|Before: Higgins CJ, Connolly JJ

1. This is an appeal on a question of law from a decision of the Residential Tenancies Tribunal pursuant to s 125 of the Residential Tenancies Act 1997 (the Act). The appeal raises the question of the jurisdiction of the Tribunal to make orders subject to conditions. Leave was granted to bring the appeal on 8 September 2006 and because both the appellant and the respondent Commissioner indicated that the determination of this appeal would impact on a significant number of determinations by the Tribunal, Connolly J ordered that the matter proceed to a Full Court.

2. The appellant is a tenant of the first respondent in respect of residential premises at Kaleen in the Australian Capital Territory. The Act provides that all residential tenancies must be subject to certain standard terms (s 8), unless the Tribunal endorses an inconsistent term (s 10). Accordingly, public housing tenancies in Canberra are subject to the same terms as other residential tenancies, which include a "quiet enjoyment" clause. Clause 70 of the agreement (being in accordance with the standard terms laid down in the schedule to the Act) provides:

70. The tenant must not:

(a) use the premises, or permit them to be used, for an illegal purpose to the detriment of the lessor's interest in the premises; or

(b) cause or permit nuisance; or

(c) interfere, or permit interference, with the quiet enjoyment of the occupiers of nearby premises.

3. The respondent became concerned at allegations that the appellant had been in breach of these terms. The complaints, which were not fully set out in the appeal book, seem to go to allegations of noise, use of motor vehicles, and consumption of alcohol, all of which could go to establishing such a breach. The respondent accordingly made application to the Tribunal for possession of the property. On 27 June 2006 the Tribunal "found that the conduct of the [tenant] constituted a breach of Clause 70(a), (b) and (c) of the Residential Tenancy Agreement between the parties" (AB 31). The Tribunal then adjourned the matter to allow the tenant to make submissions as to whether or not the established breach justified termination of the tenancy. After receiving certain submissions, the Tribunal made the following order on 10 July 2006 (although the order itself is dated 12 July 2006):

Orders in Chambers

1. That the tenancy agreement has been breached.

2. That the Residential Tenancy Agreement relating to the tenant/s occupancy of the above premises shall terminate, unless the tenant complies with the conditions set out at order 4 below.

3. That the Residential Tenancies Agreement between the parties will terminate and the lessor is to be granted vacant possession of the premises at 10:00 am on the day after default in any of the conditions set out in order 4.

4. That this Order is made subject to the following conditions:

(a) The tenant must not use the premises, or permit them to be used, for an illegal purpose to the detriment of the lessor's interest in the premises; or

(b) The tenant must not cause or permit nuisance.

(c) The tenant must not interfere, or permit interference, with the quiet enjoyment of the occupiers of nearby premises.

(d) The respondent tenant is [to] supply to the Residential Tenancies Tribunal on or before 21 July 2006 a written report stating that she has explained to her resident children the effect of the obligations she has under clause 70 of the Residential Tenancy Agreement.

(e) The respondent tenant is to supply to the Residential Tenancies Tribunal on or before 10 August 2006 a written report from Anglicare setting out the actions undertaken by the tenant in relation to the Sustaining Tenancies Outreach Program.

(f) The respondent tenant is to supply a copy of each report made in accordance with paragraphs 4(d) and 4(e) above to the Applicant lessor, within 24 hours of supplying the report to the Residential Tenancies Tribunal.

5. That where the tenant/s are in default with any of the conditions specified in order 4 of these orders and the tenant/s fail to vacate, the lessor/s are given liberty to apply to the Registrar for a Warrant of Eviction.

6. That, subject to the criteria set out in s 42A of the Residential Tenancies Act 1997, a Warrant for Eviction may issue.

7. The Residential Tenancies Tribunal draws attention of the tenant to clause 73 of the Tenancy Agreement: The tenant is personally responsible for the actions or omissions of visitors, guests or other people on the premises if:

(a) the action or omission would if performed by the tenant have constituted a breach of this tenancy agreement; and

(b) the person is on the premises with the permission of the tenant.

8. This Order shall expire on 10 July 2009.

4. Following the issue of this order, which the appellant contends was beyond the power of the Tribunal to make, the Commissioner for Housing made allegation of a further breach of the conditions of the tenancy, apparently going to nuisance, and made application for a warrant of eviction on 28 July 2006 (AB 34).

The legal question on appeal - Can the Tribunal make a conditional order?

5. The question for determination on this appeal is whether the Tribunal has power under the Act to make a conditional termination and possession order. The appeal was not concerned with the question of whether or not the conduct of the tenant amounted to a nuisance or breach of quiet enjoyment of the neighbours. Clearly these are important issues, and it was common ground that any landlord, including the Commissioner for Housing, may bring an action in the Tribunal against a tenant when there are complaints from neighbours concerning disruptive conduct. The Tribunal will make a finding of fact as to whether such conduct amounts to a breach of the conditions of the Tenancy Agreement and, it was conceded by the appellant, would have the power, if satisfied that the breach had been proved, to issue a termination order and, in effect, evict the tenant from the premises.

6. The appellant's complaint is that the Tribunal has assumed a jurisdiction that it does not possess under the Act. The Tribunal has declared that it is satisfied that the tenancy agreement has been breached but it has then purported to make the issue of a termination and possession order in respect of the premises conditional on the tenant complying with certain conditions and undertakings, effective for a period of three years. Under the terms of those conditions, which, going to issues such as nuisance or interference with quiet enjoyment, are quite subjective, a warrant for eviction may be issued upon failure to comply with them without further adjudication.

7. The appellant argues that, while the Act makes express provision for a form of conditional termination and possession order going to failure to pay rent, it does not permit an order in the terms of the order made in the present case. Accordingly, the order should be set aside and the matter remitted to the Tribunal to be determined according to law.

8. The Residential Tenancies Tribunal is created by s 110 of the Act and given jurisdiction by s 115 of the Act. Like any administrative tribunal, it is a creation of statute, and its powers are to be found in the Act.

9. The Act codifies the law relating to residential tenancies and provides a mechanism for resolving disputes between landlords and tenants. In the explanatory memorandum circulated with the Residential Tenancies Bill 1997, the Attorney-General, Mr Humphries, said that:

The Residential Tenancies Bill implements many of the recommendations made by the Community Law Reform Committee (CLRC) in Report No 8: Private Residential Tenancy Law (December 1994).

The Bill seeks to balance the interests of the parties to a residential tenancy agreement and to provide a framework for residential tenancy agreements. The Bill will apply to public housing ensuring the consistent application of standards in private and public tenancies.

The Bill provides a framework for residential tenancy agreements by prescribing terms which apply to every agreement unless, in a departure from the CLRC's recommendations, the agreement is expressly varied following independent legal advice. The prescribed terms are detailed in the schedule to the Bill and define the rights and obligations of the parties. The Bill incorporates existing procedures relating to the lodgement and management of bond monies.

Eviction proceedings are clarified, recognising the interests of both landlords and tenants, detailing the specific circumstances in which a tenancy may be terminated. While a tenancy can be terminated through agreement, the Bill provides that eviction can only occur by order of the Residential Tenancies Tribunal following a structured process.

10. The Legislation Act 2001 provides that, in working out the meaning of a Territory law, a Court may look at the explanatory memorandum to a Bill and, where the Bill is based on recommendations in a report of a law reform body, that report (s 142). We have found the Community Law Reform Committee, Private Residential Tenancies Law, Report No 8 (1994) of assistance in this appeal.

11. Termination of a residential tenancy agreement is set out in Part 4 of the Act. This provides for termination by agreement between the parties (s 36(g)), and provides separate mechanisms for disputed terminations which may be initiated by the tenant (Division 4.3) or the lessor (Division 4.4). The Act provides three types of application that may be brought by a lessor, being an application based on a ground of termination other than breach of the standard residential tenancy terms (s 47), an application based on a breach of a standard residential tenancy term, other than failure to pay rent, (s 48) and an application based on a failure to pay rent (s 49). It was common ground that in the circumstances of the present case the appropriate form of application was pursuant to s 48. Section 48 provides:

Certain breaches of standard residential tenancy terms

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

(a) the tenant has breached the standard residential tenancy terms (other than by failing to pay rent due and payable); and

(b) the lessor has served a termination notice on the tenant based on that breach; and

(c) the tenant did not vacate the premises in accordance with the notice; and

(d) the breach of the standard residential tenancy terms was not in accordance with a term of the residential tenancy agreement endorsed by the tribunal; and

(e) the breach justifies the termination of the tenancy.

(2) The tribunal may, if satisfied that it is appropriate and just to do so in relation to an application mentioned in subsection (1) -

(a) refuse to make a termination and possession order if -

(i) the tenant has remedied the relevant breach; or

(ii) the tenant undertakes to remedy the breach within a reasonable specified period and is reasonably likely to do so; or

(b) make a termination and possession order but suspend it for a period of no more than 3 weeks if satisfied that -

(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.

12. The appellant argues that, on its face, this provides a scheme whereby if the Tribunal is satisfied that the breach has been made out, and that the breach would justify the termination of the tenancy, it may issue a termination and possession order that would take effect immediately pursuant to s 48(1). Section 48(2)(a) provides a discretion where, although the breach is made out and would warrant eviction, the Tribunal may refuse to make the order if the breach has been remedied, or it is satisfied that the tenant will remedy the breach. Section 48(2)(b) provides a further alternative of making the order, but suspending it for no more than three weeks on grounds of hardship.

13. The statutory scheme provides only for the making of an order, the refusal of an order where the grounds were made out but the breach has been or will be remedied, or the making of, but postponing of the operation of the order for up to three weeks. There is no statutory support for the form of order purportedly made here, which on its face is a termination order, conditional upon further breaches occurring, and effective for three years from the date of the order.

14. The provision of s 48 seem to be in accordance with the recommendations of the Community Law Reform Committee (the Committee). In its report in considering the procedure to apply in applications for eviction for breaches of standard terms, the Committee sought to balance competing submissions from tenants and lessors, particularly in relation to the pre-existing broad discretion in the Magistrates Court to refuse termination if it would cause hardship to a tenant. The Committee said:

850. The committee considers that the current discretion of the Magistrates Court is too wide. A lessor should be able to obtain a termination of a tenancy if the lessor has valid grounds for doing so. The lessor should not be forced to continue to provide accommodation for reasons of hardship. The proposed Act should not require the lessor to provide welfare housing.

851. The committee also considers that termination should not take place in an arbitrary manner. Commission of a breach should not result in termination if the breach is not serious and the lessor suffers no harm. Termination in such circumstances would be arbitrary and inequitable. The committee considers that the tribunal should have a limited discretion to refuse or postpone termination in accordance with the following recommendations.

15. It then set out the recommendation that is the basis of s 48(2)(b), for a postponement of the eviction order for up to 21 days, and the recommendation that is the basis of s 48(2)(a) where the tenant has either remedied the breach or will do so.

16. The recommendations of the Committee, which go to a "limited discretion to refuse or postpone termination" appear to us to be quite inconsistent with the broad nature of the conditional termination order which the Tribunal purportedly made in this case.

17. It seems to us that an order in the form made by the Tribunal in this case is not authorised by, and goes beyond, the powers granted to it pursuant to s 48 of the Act.

18. This view is reinforced by a consideration of the provision going to a lessor's application for a termination order based on non-payment of rent. Section 49 of the Act mirrors s 48, in that it provides that, if the breach is made out, the termination order may be made (s 49(1)), or the order may not be made even if the breach is made out where the breach has been remedied by payment of rent and the Tribunal is satisfied that the tenant will continue to pay rent as it falls due (s 49(2)), or the termination order may be made but suspended for up to three weeks in cases of hardship (s 49(4)). In rent applications the Tribunal is however provided with the specific power to make a form of conditional order. Section 49(3) provides:

(3) Instead of making a termination and possession order under subsection (1), if -

(a) the tenant is, in the tribunal's opinion, reasonably likely to repay the rent due and payable as well as pay rent that becomes due and payable; and

(b) the tenant agrees to repay the rent due and payable , and undertakes to pay rent as it becomes due and payable, as required by the tribunal;

the tribunal may order that if the tenant fails to pay the rent due and payable, or rent that becomes due and payable, as required by the tribunal-

(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.

19. 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. The Committee said at [855]:

The tribunal should be able to make specific orders both for the scheduled payment of rent arrears over a specified period and for the continued payment of ongoing rent. The time which the tribunal allows for rent arrears should be at the discretion of the tribunal. However, any order that the tribunal makes must take account of the likely hardship to the lessor. The tribunal would therefore be unlikely to require repayment over a lengthy period such as one year. The tribunal would also have to take account of the anticipated length of the tenancy to ensure that repayments are complete before the tenancy is likely to come to an end.

20. It seems to us that the express provision in s 49 for a form of conditional order further reinforces our conclusion that no such power is contained in s 48. It seems clear to us that the legislature directed its attention to this matter and determined that the power to make an order in the nature of a conditional order would be limited to an order of the kind contemplated by s 49(3) concerning the repayment of rent. A court is required to interpret an Act to give effect to legislative intent (Legislation Act 2001 s 139, Kingsley's Chicken Pty Ltd v Queensland Investment Corporation and Canberra Centre Investment Pty Ltd [2006] ACTCA 9 at [49]- [53]).

21. 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. In cases where eviction is sought on the basis of nuisance or interference with quiet enjoyment by others, the undertaking not to cause a nuisance in the future or to interfere with quiet enjoyment is necessarily vague and subjective, and could involve a complex future factual determination. The legislature may well have concluded that while it was appropriate to allow for conditional orders in the case of rent, in the case of other breaches the Tribunal should make a final determination. If the Tribunal was of the view that the order should not be made, it would be necessary for the matter to be redetermined on a fresh application if a future allegation is made, but given the nature of the factual enquiry, such an outcome is appropriate.

The provision for enforcement of conditional orders

22. Further reinforcement of the view that the legislature intended a distinction between conditional orders in the case of failure to pay rent and orders in respect of other breaches is also to be found by a consideration of the statutory regime for enforcement of eviction orders in Division 4.2. This draws a distinction between unconditional orders (s 41 of the Act) and conditional orders (s 42 of the Act). Section 42 provides:

Conditional orders

(1) If the enforcement of a termination and possession order is subject to a condition (an enforcement condition) the order expires on a day stated by the tribunal in the order.

...

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

(3) However, subsection (2) does not apply if the tribunal believes on reasonable grounds that -

(a) there are exceptional circumstances; and

(b) it would be inappropriate to state an expiry day in accordance with subsection (2).

23. Section 42A of the Act provides that, where a lessor alleges a failure to comply with a conditional order, the Registrar must list the matter for determination. Section 42B(1) provides that such an application "must be decided as if it were an application under section 49 for a termination and possession order". This takes the Tribunal considering the question back to the powers to make orders dealing only with failure to pay rent, including the express form of conditional order setting out an obligation for future rent payments, both in terms of arrears and rent as it falls due. By referring the application for failure to comply with a conditional order for determination as if it were an application under s 49, the only question for the Tribunal is directed only to the matters relating to the payment of rent. This would be an entirely inappropriate matter in the case of a conditional order purportedly going to future nuisance or interference with quiet enjoyment.

24. It may be noted that s 42(2) provides for an expiry date not more than one year after the day the order containing the enforcement condition is made. Section 42(3) provides for exceptional circumstances or where it would be inappropriate to state an expiry date. The Tribunal in the present case fixed an expiry date of three years. To do so demonstrates the inappropriateness of an enforcement condition about matters other than the payment of rent.

Is there a residual general power to make conditional orders?

25. The plain words of s 48, and the difference between s 48 and s 49 favour the appellant's arguments. The respondent points to a general provision in s 104 of the Act dealing with orders. This provides that the Tribunal may, in addition to any other order it is empowered to make, make the following orders, and a list of orders going to restraining conduct, paying money, paying compensation and the like are set out. The list concludes with "(l) any other order the tribunal considers appropriate".

26. It seems to us that this apparently general form of power ought not be so read as to render nugatory the specific distinction that the legislature has drawn between s 48 and s 49. Where there is an apparent conflict in a statute between a general and a specific provision, the specific provision will prevail. This is a well-settled approach to statutory construction sometimes expressed by the maxim generalia specialibus non derogant. In Leon Fink Holdings Proprietary Limited v Australian Film Commission (1979) 141 CLR 672, Mason J, with whom Barwick CJ agreed, said at 678 that:

It is accepted that when a statute confers both a general power, not subject to limitations and qualifications, and a special power, subject to limitations and qualifications, the general power cannot be exercised to do that which is the subject of the special power. In Anthony Hordern and Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1, Gavan Duffy CJ and Dixon J said:

Extensive and unfettered as the authority of the Court of Conciliation and Arbitration to award preference in settlement of a dispute might have been in virtue of its general power, yet, when s 40 expressly gives a special power, subject to limitations and qualifications, surely it must be understood to mean that the Court shall not exercise an unqualified power to do the same thing. When the Legislature explicitly gives a power by a particular provision which prescribes the mode in which it shall be exercised and the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power.

27. We are of the view that the Tribunal has, in purporting to make a conditional termination and possession order in respect of allegations of nuisance and quiet enjoyment, exceeded its powers. It seems to us that the appropriate order in such circumstances must be that sought by the appellant, namely to set aside the order and remit the matter to the Tribunal for determination according to law. The respondent made the submission that the Court could in effect sever the conditional parts of the order. This would seem to involve a re-writing of the order rather than a clear severance of those orders made in excess or jurisdiction. But in any event, it seems to us that, as the Tribunal clearly was proceeding in the mistaken belief that it had power to make a conditional order, it does not follow that it would, if properly appraised of its powers, have proceeded to make a termination order with immediate effect. It may have delayed making any order until the tenant had complied with the matters that it thought appropriate to be the subject of conditions 4(d) and (e) of the order that was made. It may have exercised its powers under s 48(2) to refuse to make an order even though it was satisfied that there had been a breach on the basis that it believed that the breach either had been or would be remedied, or it may have exercised its power to make the order but to suspend it for a period of up to three weeks if satisfied that not to do so would result in significant hardship to the tenant.

28. The appeal is allowed. The order of the Tribunal of 10 July 2006 is set aside, and the matter is remitted to the Tribunal for determination according to law.

29. The respondents are to pay the appellant's costs of the appeal.

I certify that the preceding twenty-nine (29) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Court.

Counsel for the appellant: Mr D Mossop with Ms C Besemeres

Solicitor for the appellant: Welfare Rights & Legal Centre Limited

Solicitor for the respondents: ACT Government Solicitor

At a glance

Court

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Before

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Judgment (45 paragraphs)

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Legislation Cited (2)

Cases Cited (2)