On 10 February 2023, I heard the parties in respect of an application for a stay of directions made by the Consumer and Commercial Division to prepare for determination of the proceedings between the parties under the Residential Tenancies Act 2010 (NSW) (the RTA). The directions were made in the context of the Tribunal making a preliminary decision that it had jurisdiction to determine the proceedings. In doing so, the Tribunal had dismissed the appellant's application for summary dismissal of the applications against him.
I later made orders which had the effect of delaying the determination of the proceedings at first instance until the appeal is determined. I indicated that I would provide written reasons subsequently, which are set out below.
The appellant, allegedly a tenant of the respondents in the proceedings in the Consumer and Commercial Division (as well as being their adult son and being employed by a company they control which, in part, involves the creation of intellectual property), challenges the decision of the Tribunal in which it found that it had jurisdiction to determine the application made by the respondents at first instance for orders under the RTA. The challenge raised by the appellant at first instance, and repeated in the appeal, is that the proceedings are beyond the Tribunal's jurisdiction because he has raised a matter of federal jurisdiction in defence of the respondents' claims.
It is beyond dispute that this Tribunal is not a 'court of a State' within the meaning of s 77(iii) of the Commonwealth Constitution or, therefore, within s 39(2) of the Judiciary Act 1902 (Cth). It has not been invested with federal jurisdiction by the Commonwealth Parliament. It is also uncontroversial that the State Parliament is incapable of conferring on a body other than a 'court of a State', judicial power in respect of any 'matters' in ss 75 or 76 of the Constitution.
The Tribunal set out a summary of the relevant history between the parties and in respect of the dispute between them in its reasons, from [8] to [19]. In my view, it is unnecessary to repeat those matters verbatim here.
What has been sought by the respondents at first instance is not termination and possession, or an order for rent. Rather, the respondents seek an order under s 11 of the RTA declaring that there is a residential tenancy agreement between the parties pursuant to s 13 of the RTA and that the property is one to which the RTA applies under s 8A. They also seek orders pursuant to ss 55, 56 and 58 of the RTA to access the property and carry out repairs and under s 73 of the RTA for the appellant to provide them with a copy of the keys to the property.
In respect of the claim that federal jurisdiction is engaged by the dispute the Tribunal summarised the appellant's position at [21] - [24] of its reasons, as follows:
21 …
a) "The Equity claim" - the respondent contends that he lives in the Property not under a residential tenancy agreement but he claims to be the beneficial owner of the Property under a common intention constructive trust with payments of "rent" from his wages being mortgage contributions;
b) "The Intellectual Property claims" - the respondent claims copyright and moral rights as the author of creative work he did for the Great Emu in the Sky project;
c) "The Fair Work claims" - the respondent claims entitlements and rights as an employee of the Company, there are also disputes over a loan account including deductions made from his wages/salary and contractor income.
22. The respondent submits that as the Intellectual Property claims arise under the Copyright Act 1968 (Cth) and Fair Work claims under Fair Work Act 2009 (Cth) both being Federal law, they are Federal matters within the meaning of Chapter III of the Constitution and the Judiciary Act 1903 (Cth) and as the Equity claim arises as part of the same justiciable controversy, the Equity claim is also part of the Federal matter. It is submitted that as the Tribunal has no jurisdiction to determine a Federal matter, the Tribunal can not determine the applicants' rights under the substantive claim under the Residential Tenancies Act and the application should be dismissed.
23. The respondent's claim to be the beneficial owner of the Property is bound up in his claims regarding his intellectual property rights, his employments [(sic)] rights and the control of his finances. The Equity claim arise from the same common substratum of facts and forms part of the same justiciable controversy as the Intellectual Property and Fair Work claims. It is submitted by the respondent that if the Equity claim was to be determined in a separate court from the other claims there could be a risk of conflicting findings. Therefore the Equity claim including the respondent's contention that there is no residential tenancy agreement forms part of the same Federal matter.
24. The respondent submits that the Tribunal is not entitled to consider the merits of the Equity claim as a defence to the residential tenancy claim and is only permitted to reject the assertion that it is part of a Federal matter if the Tribunal concludes that the Federal matter claim is colourable in the sense of not being proposed genuinely. The applicants' Counsel confirmed that the applicants did not doubt that the Federal matters were proposed genuinely and as such, I accept the Federal matter is proposed genuinely.
After considering the parties' respective arguments on this issue, the Tribunal found that:
34. I am satisfied from the letter of the respondent's solicitor dated 1 September 2022 that the copyright dispute arises from the Great Emu in the Sky Project which commenced by way of the tender from Transport NSW in about October 2018 (paragraph 9). I am also satisfied from this letter (paragraphs 31 and 43 in particular) that the commencement of the workplace issues was from about July 2013. I find that the timing of each of these disputes significantly postdates the purchase of the Property in 2009 and the basis upon which the respondent moved into the Property at the time it was purchased. The occupation of the Property has been continuous and there was no evidence lead that the initial tenancy agreement had ever been terminated.
35. I am satisfied on the current evidence that there is no reason to doubt the genuineness of the respondent's Intellectual Property claims and Fair work claims. However, I am not persuaded that there is sufficient nexus between those claims, with the Equity Claims to render the dispute over the basis of the respondent's occupation of the Property to not be severable from the Federal matters. The Equity Claims arise from the time of purchase of the Property in 2009 and the claim that the respondent says the Property was purchased for him; and that all payments he has made in connection with his occupation of the Property have been as mortgage payments and not rent. The Intellectual [Property] claims and Fair Work disputes did not commence for a number of years after purchase and even allowing for the fact that rent/mortgage payments were made out of the respondent's income with the Company (which amounts were not disputed), I am not persuaded that the Equity Claims arise under the same common substratum of facts to form part of the same justiciable controversy as the Federal matters.
36. I find the Equity claims and disputes over the respondent's occupation of the Property to be separate and distinct and as such are not part of the federal matters (Philip Morris Inc v Adam P Brown Male Fashions Pty Limited (1981) 148 CLR 457).
[2]
Legislative Foundation and Principles Relating to Granting a Stay
The lodgement of an internal appeal does not affect the operation of the decision appealed against. Nonetheless, under s 43(3) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) the Tribunal has discretion to stay or make another order affecting the operation of a decision pending the determination of the appeal. That discretion must be exercised judicially and the general principles that apply in relation to the exercise of that discretion are derived from the terms of s 43(3) itself. The terms of s 43(3) dictate that the discretion to make an order under that section is constrained, principally, by the need to ensure the orders affect "the operation of a decision to which the […] appeal relates" and are "appropriate to secure the effectiveness of the determination of the […] appeal."
Additional guidance in the application of the relevant principles can be obtained from the considerations applied by the Courts in deciding whether or not to grant a stay pending an appeal, summarised in a decision of the Appeal Panel constituted by the former President of the Tribunal, Justice Wright, in Bentran v Sabbarton [2014] NSWCATAP 37 at [9].
To summarise those principles here, it is sufficient to cite what was said by Slattery J in Beck v Colonial Staff Super Pty Ltd & Ors (No. 2) [2015] NSWSC 1360 at [35], with the citations omitted, that:
[35] The principles governing a stay of a judgment pending appeal are well established. The applicant must demonstrate that there is a reason for the grant of a stay or that a matter is an appropriate case in the exercise of the Court's discretion. It is not necessary for the applicant for the stay to establish special or exceptional circumstances. The stay is likely to be granted if the appeal would otherwise be rendered nugatory. The Court considering the grant of a stay is not required to determine the merits of the appeal but usually considers whether the applicant has at least an arguable case; and the Court may impose conditions on the grant of a stay including that the applicant pay a sum of money […] or otherwise secure the payment of the disputed sum. The central determinant as to whether a stay would be granted, and if so upon what terms, if any, is the Court's assessment as to what is a fair balance of the rights of the parties, given that an appeal does not of itself operate as a stay and the party who has succeeded at trial is entitled to the fruits of its victory.
The overriding principle in an application for a stay is to ask what the interests of justice require: New South Wales Bar Association v Stevens [2003] NSWCA 95 at [83]; Penrith Whitewater Stadium Ltd v Lesvos Pty Ltd [2007] NSWCA 103 at [18].
[3]
Application in the Present Case
In the present case, the respondents should be taken to be entitled to the benefit of the decision at first instance unless the appellant can demonstrate that it is appropriate to grant a stay of the orders made. The appellant must identify the circumstances that warrant a departure from the general rule that the judgment at first instance should be presumed to be correct and is appropriate to be enforced: Hickie v Land and Enviro Corp Pty Ltd [2014] NSWSC 472 at [17]. The appellant must then demonstrate a proper basis for a stay that will be fair to all parties: UGL Rail Pty Ltd v Wilkinson Murray Pty Ltd (No 2) [2015] NSWSC 23 at [10].
The first matter that I should consider is whether the appeal raises serious issues to be determined by the Appeal Panel or, in other words, whether the appellant has a reasonably arguable case on appeal.
I should begin by noting that neither party put before me the evidence and submissions lodged in respect of the central issue at first instance. I had only brief submissions, supplemented by oral argument. As a result, I am at a considerable disadvantage to the member at first instance in considering the matter to the extent necessary to determine the stay application.
The mere fact that a constructive trust is claimed, simpliciter, would not prevent the Tribunal having jurisdiction: Van Someren Boyd v Van Someren Boyd (No 2) [2021] NSWCATAP 126. Nor did the appellant address before me how the existence of a trust is any defence to the claims made by the appellant. It could certainly be a defence to a claim for possession, but it is not clear how it is a defence to a claim that there is a residential tenancy agreement, given the two could be coextensive. One might also think that a trustee would have an inherent right, if not an obligation, to access and maintain trust property, which would be the effect of the balance of the orders sought at first instance. This raises the question of whether the defence itself is "incomprehensible," in the sense used by the majority in Citta Hobart Pty Ltd v Cawthorn [2022] HCA 16 at [43], or "'manifestly hopeless' and not a real question", in the sense there used by Edelman J at [73].
Further, as argued before me, it appeared that the appellant claimed that the constructive trust arose as a result of the discussions between, and actions of, the parties at or around the time the property was acquired in 2009. How the substratum of facts relevant to the fair work claims or the intellectual property claims, which appear to have arisen much later, could coincide with the substratum of facts regarding the existence or nature of the alleged trust was not made clear. On that basis, it would be easy to conclude that the Commonwealth laws are no more than an "incidental consideration", simply "lurking in the background" of the dispute (Felton v Mulligan (1971) 124 CLR 367 at 391 per Windeyer J), and that they are completely disparate claims constituting, in substance, the subject of a separate potential proceeding: Felton at 373. This is, in effect, what the Tribunal found, by reference to similar comments in Philip Morris Inc [1981] HCA 7 (supra).
However, there is notorious complexity involved in determining whether federal jurisdiction is attracted as a result of a defence raised by a respondent: In that regard see the recent example provided by Thurin v Krongold Constructions (Aust) Pty Ltd [2022] VSCA 226. The defence does not need to have been pleaded: Moorgate Tobacco Co. Ltd. V Phillip Morris Ltd. (1980)145 CLR 457. Nor is the question of what is a "matter" co-extensive with a legal proceeding: Palmer v Ayres (2017) 259 CLR 478. Its existence is to be determined by "objective assessment": Agtrack (NT) Pty Ltd v Hatfield (2005) 223 CLR 251; [2005] HCA 38 at [32].
Not without some hesitation, then, given the paucity of the material before me, I will treat the appeal as reasonably arguable for the purpose of the application for a stay. However, I would not be in a position to consider the question of jurisdiction on a final basis in these interlocutory proceedings: contrast Kurt Keller Pty Ltd & Ors v BMW Australia Ltd & Ors (1984) NSWLR 353 at 369.
It is also clear that the appeal will be rendered nugatory, insofar as the appellant seeks to avoid the expense of compliance with the Tribunal's directions to prepare the substance of the proceedings at first instance for determination, if I do not grant the stay sought.
It is the "first duty" of the Tribunal to identify whether or not it has jurisdiction (Federated Engine-Drivers and Firemen's Association of Australasia v Broken Hill Pty Co Ltd (1911) 12 CLR 398, 415; [1911] HCA 31), meaning that, in my view, the determination of that issue within the Appeal Panel (to the extent that will, in itself, involve forming an opinion on the issue in a non-conclusive way: Parisienne Basket Shoes Pty Ltd v Whyte (1938) 59 CLR 369 at 375; [1938] HCA 7; New South Wales v Kable (2013) 252 CLR 118 at 140; [2013] HCA 26) should be given priority wherever appropriate.
Having made that determination, I was satisfied that the balance of convenience warranted granting the stay. I acknowledge the respondents' submission that they have already complied with the direction given to them to prepare evidence and submissions on the substance of the dispute, but that will not be wasted if the appeal fails. Similarly, whilst the respondents submit that a prompt determination of the matter is necessary for them to "address safety issues" and "effect repairs," no evidence as to the nature or significance of those concerns was placed before me.
I have, though, made directions to ensure the prompt preparation of the appeal and will arrange an appropriately timely listing date.
[4]
Orders
My Order was as follows:
1. In respect of the decision made on 16 January 2023 in matter number RT 22/37381 the operation of orders 3 & 5 is stayed until further order of the Tribunal or finalisation of the appeal, whichever is the earlier in time.
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 21 February 2023