Phuong Mai Greenfield Pty Ltd v Commonwealth of Australia

JAGOT J: 1 On 2 September 2016 the primary judge declared that a licence granted by the respondent to the appellant over land at Badgerys Creek had expired and ordered the appellant to give the respondent vacate possession of the land forthwith, in default of which a writ of possession was to be issued forthwith and the respondent empowered to dispose of any goods or animals remaining on the land. The declaration and orders were consequential on reasons for judgment published as Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development) v Phuong Mai Greenfield Pty Ltd [2016] FCCA 2228 (the principal judgment). 2 With admirable brevity the primary judge dismissed a number of arguments said by the appellant to arise under the Commonwealth of Australia Constitution Act (the Constitution) in these terms: 7. Section 10AA of the Federal Circuit Court of Australia Act 1999 (Cth) ("FCCA Act") confers original jurisdiction on this Court in respect of "Commonwealth tenancy disputes". A Commonwealth tenancy dispute is relevantly a matter involving a licence to possess, occupy or use land and a dispute about the termination of that licence and possession of the land to which the Commonwealth is a party: s.5 FCCA Act. 8. In this matter there is clearly a dispute between the parties that falls within the description of "Commonwealth tenancy dispute". 9. In a notice prepared and served by the respondent dated 27 May 2016, under s.78B of the Judiciary Act 1903 (Cth), the respondent contended that: i. the Parliament has no power to make s.10AA of the FCCA Act; ii. its enactment was an attempt to confer the general discretionary powers of the NSW Civil and Administrative Tribunal ("NCAT") on a Federal court; and iii. the law is a law with respect to the acquisition of property other than an unjust terms. 10. Similar arguments were raised in Commonwealth v Hevers (2015) 301 FLR 83; [2015] FCCA 1814 and Commonwealth v Rigney (No 3) [2015] FCCA 3133 amongst others. They are rejected for the reasons given in those judgments. 11. In summary, the Commonwealth Parliament has power under s.77(i) of the Constitution to make laws defining the jurisdiction of any Federal Court other than the High Court with respect to any of the matters in ss.75 and 76. The matter here is one in which the Commonwealth is a party: s.75(ii). As noted above, the definition of "Commonwealth tenancy dispute" requires the Commonwealth to be a party. For that reason, it was competent for the parliament to enact s.10AA of the FCCA Act. Secondly, s.10AA does nothing to effect the acquisition of property. Thirdly, s.10AA confers judicial power on the Court. In any event, there being no residential tenancy in these proceedings, the argument concerning the NCAT and the Residential Tenancy Act 2010 (NSW) is irrelevant. 12. For those reasons, the respondent's argument that the Court has no jurisdiction to determine the dispute between the parties is rejected. 3 At the hearing of this matter, Commonwealth v Hevers (2015) 301 FLR 83; [2015] FCCA 1814 and Commonwealth v Rigney (No 3) [2015] FCCA 3133, amongst other matters, were the subject of an appeal to the Full Court. The present appeal was listed for hearing on the basis that both parties would be given an opportunity to make further submissions, either orally or in writing as seemed appropriate at the time, to address the reasons for judgment of the Full Court once available (referring to one such matter, Patrick Kenney v Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development) [2017] FCAFC 16). The Full Court published reasons for judgment in all of the related appeals on 2 March 2017. Consistently with the basis on which this matter was fixed for hearing, on 6 March 2017, I directed the appellant to file and serve any further written submissions based on Kenney by 13 March 2017. I extended the time for the appellant to do so thereafter twice. Despite the limited scope of the leave to make further written submissions, and my agreement to the appellant's request also to make oral submissions, nothing said for the appellant after the initial hearing related to the reasoning of the Full Court in Kenney. To the contrary, the further written and oral submissions simply repeated or reworked what had already been put or consisted of new points which seem to have occurred to the appellant as a result of applications to stay the orders of the Full Court, made to and rejected by each of the Full Court and the High Court (see, respectively, Dattilo v Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development [2017] FCA 329 and Dattilo v Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development [2017] HCATrans 067). 4 As a result it is fair to say that the adjournment of the hearing on 28 October 2016 to enable the appellant to make further submissions based on Kenney has been productive of nothing but delay and cost to the respondent. Everything the appellant has said could and should have been raised on 28 October 2016. At that time, moreover, the position would have been no different from the position today, which is that the submissions are outside the scope of the remaining grounds of appeal (let alone what was put to the primary judge). 5 In short, the appellant withdrew all grounds of appeal other than grounds 1 and 4. Ground 1 is that the primary judge erred in holding that the Federal Circuit Court had jurisdiction to determine the appellant's claims. Ground 4 is that the primary judge erred in not holding that the Federal Circuit Court of Australia Act 1999 (Cth) (the FCC Act) is invalid "as conferring jurisdiction on the Court to determine disputes between the parties". I also granted the appellant leave to add another ground of appeal to the effect that the primary judge erred in ordering that a writ of possession be issued forthwith. In case there be any misunderstanding, this grant of leave concerned only an issue of timing, in that the appellant wanted a period of time to vacate the premises, rather than the requirement being to vacate forthwith. In written and oral submissions purporting to be pursuant to my orders permitting further submissions based on Kenney, the appellant sought to raise a variety of arguments, including that the Federal Circuit Court had no power to issue a writ of possession at all. These arguments are not encompassed by the grounds of appeal and should not have been put. They are without merit in any event based, as they are, on the confused notion that the Federal Circuit Court was purporting to exercise powers under the Residential Tenancies Act 2010 (NSW) when, as explained below, that Act is immaterial as it does not apply in this case. 6 As explained below, the primary judge made no error and the appeal must be dismissed. 7 Grounds 1 and 4 are without merit. The primary judge found, and it was common ground between the parties, that the licence was for the purpose of the operation of a market garden (at [2] of the principal judgment). As a result, the Residential Tenancies Act did not apply to the licence. The appellant accepted this to be so, but then said s 7(h) of that Act meant the licence involved a tenancy within the meaning of that Act. This is incorrect. By s 6 of the Residential Tenancies Act, the Act applies to "residential tenancy agreements in respect of residential premises…". By s 3(1) "residential premises" means any premises or part of premises…used or intended to be used as a residence". By s 13(1), a residential tenancy agreement is one under which a right is granted to occupy residential premises. By s 3(1), a "tenancy" within the meaning of the Act means the right to occupy residential premises under a residential tenancy agreement. The fact that s 7(h) refers to "premises used for residential purposes, if the predominant use of the premises is for the purposes of a trade, profession, business or agriculture" does not mean that these premises, used for agricultural purposes, are (or were) subject to the Act in any way. The Residential Tenancies Act is simply immaterial. 8 There is no suggestion that the land in question was used or intended to be used as a residence. Such a use would not have been authorised by the licence, as the only use approved under the licence was as market gardens. The primary judge so found (at [2]) and there is no appeal against that finding. Accordingly, the argument that the land is subject to the Residential Tenancies Act by reason of s 7(h) is wrong. The land is not subject to that Act because, by the terms of s 6, the Act does not apply to any land other than land used or intended to be used for residential premises, and under the licence the land could never satisfy that description. Of particular relevance, as explained below in rejecting the appellant's case, is that there was never a "tenancy" within the meaning of the Residential Tenancies Act because such a tenancy is one in respect of residential premises. 9 As a result, a consequential argument of the appellant, which had to be considered in Kenney where the land was residential premises, does not arise in the present case. Section 10AA(2) of the FCC Act, which provides that the Minister may, by legislative instrument, confer jurisdiction on the Federal Circuit Court in respect of any other specified Commonwealth tenancy dispute, is irrelevant. It is irrelevant because the present case involves a tenancy dispute within the meaning of s 10AA(1) and thus is not "any other specified Commonwealth tenancy dispute" within the meaning of s 10AA(2). Section 10AA(1) is the relevant provision. To the extent relevant, it provides that the Federal Circuit Court has jurisdiction to hear and determine a Commonwealth tenancy dispute between the parties to a lease, licence or other arrangement in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is the licensor (other than as a sub-licensor) and a person other than the Commonwealth is the licensee (other than as a sub-licensee). A Commonwealth tenancy dispute, by s 5 of the FCC Act, means a matter involving a lease, licence or other arrangement to possess, occupy or use land and a dispute about (relevantly) the possession, occupation or use of the land, in which the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is a party. As the primary judge found, the present case is a Commonwealth tenancy dispute within this definition. 10 The appellant suggested that the sub-licensor and sub-licensee exception might be engaged, but this is not so. The licence was from the Commonwealth as the registered proprietor of the land (albeit the relevant emanation of the Commonwealth was identified as the Department of Infrastructure, Transport, Regional Development & Local Government) to the appellant. The Department does not exist as a legal entity as cl 2 of the licence recognised by providing that the grant of the licence is from the Commonwealth. No sub-licence was involved. 11 Why, it might be asked, does any of this matter? As far as I can understand the appellant's case, it matters because if s 10AA(2) of the FCC Act was engaged (which it is not), then the legislative instrument referred to in s 10AA(3) would become relevant. The instrument is the Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015 (Cth) (the instrument). The instrument provides that the relevant Part (Part 2) does not apply in relation to a Commonwealth tenancy dispute involving land in New South Wales unless the dispute involves a tenancy within the meaning of the Residential Tenancies Act (cl 5(2)). If Part 2 of the instrument does apply, however, then applications may not be made to the NSW Civil and Administrative Tribunal (NCAT) under the Residential Tenancies Act if the party is a tenant within the meaning of that Act and the Federal Circuit Court has jurisdiction to hear and determine the dispute (cl 6). In any such case, by cl 7 of the instrument the law to be applied by the Federal Circuit Court in resolving the dispute is the Residential Tenancies Act and regulations made under it, subject to certain modifications as set out in cl 8 of the instrument. These provisions were challenged in Kenney, but the challenges were rejected. 12 In any event, relevant to the present case is that the instrument does not apply "unless the dispute involves a tenancy" within the meaning of the Residential Tenancies Act (cl 5(2)). As explained above, the licence did not involve a tenancy under the Residential Tenancies Act so the instrument is irrelevant. The appellant, by wrongly characterising the licence as involving a "tenancy" under the Residential Tenancies Act which is merely exempted from application of the Act by s 7(h) because the land is agricultural, is attempting to make the same argument as in Kenney. For the reasons given, the argument does not arise in the present case and was rejected in Kenney in any event. The argument having been rejected in Kenney, the further oral and written submissions for the appellant in the present matter appear to involve an illegitimate attempt to put other arguments, outside the scope of the remaining grounds of appeal and of the leave, not put in Kenney and thus not considered in the Full Court's reasons for judgment. The attempt to characterise the new arguments as being based on Kenney, in that Kenney should be distinguished because it did not consider these new arguments (which, the respondent says, is because no such arguments were put in Kenney), is inventive to say the least, but still illegitimate given the limited scope of the grounds of appeal and the leave to make further submissions. 13 For present purposes it is sufficient to say that the appellant's argument that the Federal Circuit Court did not have jurisdiction to determine the case is wrong. Section 10AA(1) of the FCC Act involved an exercise of Commonwealth power under s 77(i) of the Constitution to make laws defining the jurisdiction of any federal court other than the High Court with respect to matters in ss 75 and 76. One such matter in s 75(iii) of the Constitution is a matter in which the Commonwealth or a person being sued on behalf of the Commonwealth is a party. By definition, a Commonwealth tenancy dispute within s 10AA of the Federal Circuit Court is a matter in which the Commonwealth or a person being sued on behalf of the Commonwealth is a party. Accordingly, the challenge to the validity of s 10AA(1), which is the source of jurisdiction, and the jurisdiction of the Federal Circuit Court is baseless. Ground 1 must be rejected. 14 Ground 4 is also without merit. To some extent it overlaps with ground 1 and thus must be rejected for the same reasons. Otherwise, it is not the case that the Federal Circuit Court was exercising the powers which, but for s 10AA of the FCC Act, NCAT would have had under the Residential Tenancies Act when it determined the present case. For the reasons given above, the licence in this case was not one to which the Residential Tenancies Act applied. The instrument referred to in s 10AA(3) was irrelevant, with the result that cl 7, specifying the law to be applied was not engaged. Section 10AA(1) did nothing more than vest the Federal Circuit Court with jurisdiction to determine Commonwealth tenancy disputes. The law to be applied was then regulated by s 80 of the Judiciary Act 1903 (Cth) so that the common law regulated the exercise of the Federal Circuit Court's jurisdiction. The primary judge applied the common law and dismissed the appellant's case as a result. No error was made by the primary judge in this regard. 15 Otherwise, insofar as the argument was made despite the relevant appeal ground having been abandoned, notions of the acquisition of property other than on just terms in contravention of s 51(xxxi) of the Constitution cannot arise in the present case. Section 10AA(1) of the FCC Act conferred jurisdiction on that Court to determine the dispute. The primary judge did so. Section 10AA(1) took nothing from the appellant and conferred no benefit on the Commonwealth. The primary judge correctly found that the licence had expired and no common law rights arose in the appellant to found its continued occupation of the land. Unlike the circumstances in Kenney, s 10AA(2) and the instrument referred to in s 10AA(3), which apply provisions of the Residential Tenancies Act to certain disputes, was not engaged and thus none of the arguments made are available here. Ground 4 must also be rejected for these reasons. 16 The new ground, challenging the primary judge's exercise of discretion to require vacant possession forthwith, is also without foundation. No error of principle was made in requiring the appellant to vacate the land forthwith. As the Commonwealth submitted, given the terms of the licence agreements and their expiry, the facts that the appellant has occupied the land for many years (before and, pursuant to licences, after acquisition of the land by the Commonwealth), and had chosen to plant crops on the land which would not have been harvested until February 2017, are not a good reason to enable the appellants to continue to occupy the land.. 17 After the Commonwealth acquired the land, the appellant was granted a licence on 1 April 2009 to occupy the land for a market garden. That licence was terminable without cause on six months' notice by the Commonwealth (cl 29a.1). It expired on 31 December 2009 and the appellant continued in occupation with consent of the Commonwealth. On 29 October 2014 the Commonwealth notified the appellant that the licence under which the appellant was holding over would be terminated in the near future to enable work to start on the Badgerys Creek airport. On 9 December 2014, as a result of the appellant's request, the Commonwealth agreed to permit the appellant to continue to occupy the land under a new licence until 22 September 2015. On the same date the Commonwealth gave notice that the licence under which the appellant was holding over would terminate on 22 June 2015. On 1 June 2015 the Commonwealth sent the new licence, for the period 23 June to 22 September 2015, to the appellant. The new licence was executed on 16 June 2015. The new licence provided that it would terminate on 22 September 2015 (cl 6.1.1), at which time the appellant had to yield up the land free from all fixtures, fittings, structures and other things that the appellant had brought onto the land (cl 6.4). 18 The expiry date of 22 September 2015 came and went. The appellant continued in occupation. On 9 October 2015 the Commonwealth notified the appellant that if it did not vacate the land as required the Commonwealth would apply to the court for an order for possession. The Commonwealth filed an application in the Federal Circuit Court seeking orders for vacant possession on 30 October 2015. The appellant has remained in possession at all times. Despite knowing that the licence had expired and the Commonwealth obtaining an order for vacant possession forthwith on 2 September 2016, the appellant remained in possession and, apparently, chose to plant crops which would not be ready for harvest until February 2017. The appellant is thus the cause of its own circumstances. The appellant knowingly continued to occupy and use the land despite always knowing it was meant to give vacant possession on 22 September 2015, its arguments to the contrary having been found to be without merit by the primary judge. 19 The Commonwealth indicated that it would agree to the appellant being given a period of 14 days after dismissal of the appeal to vacate the land. This offer is more than reasonable in the circumstances. Because there was no error made by the primary judge, it is not appropriate to set aside any of the primary judge's orders. Instead, the appeal should be dismissed, the appellant ordered to pay the respondent's costs of the appeal, and I will do no more than note the agreement of the Commonwealth for the 14 day grace period. I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.