Steak Plains Olive Farm Pty Limited ACN 161 539 153 v Australian Executor Trustees Limited ARSN 093 367 518

NCAT Appeal Panel|2014-11-07

reasons for decision 1Steak Plains Olive Farm Pty Limited ('the appellant') appeals a decision of the NSW Civil and Administrative Tribunal ('the Tribunal') delivered on 13 August 2014 ('the decision'). The decision refused an application by the appellant to transfer proceedings between it and Australian Executor Trustees Limited ('the respondent') ('the principal proceedings') to the Supreme Court of NSW. 2The application to transfer was made on the basis that the Tribunal had no power to grant the remedy of relief against forfeiture, and therefore did not have jurisdiction to determine all issues arising in the proceedings. 3In the principal proceedings, the respondent sought orders that an agricultural lease (registered number AH673929B) of a property known as 'Steak Plains' located at Hillston ('the lease'), which commenced on 1 October 2012, and having an expiry date of 30 September 2030, was terminated by notice dated 4 December 2013 for breaches of the lease. The respondent also sought orders for compensation, and possession of the site. 4The appellant denied that the lease, and an associated Water Transfer Agreement, had been validly terminated by the respondent's notice, and claimed that it should be granted relief against forfeiture, in the event that the breaches alleged against it were upheld. 5The land, the subject of the lease, was used for purposes of an olive grove. The parties acknowledge that the Agricultural Tenancies Act 1990 (NSW) ('the Act') is applicable to the present dispute. 6The primary proceedings were commenced in this Tribunal on 12 February 2014. After several directions hearings, it was fixed for final hearing to commence 17 June 2014. However, on 11 June 2014 the appellant lodged an application in the primary proceedings to transfer them to the Supreme Court, pursuant to clause 6(1) of Schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW) ('NCAT Act'). 7By summons dated 13 June 2014, the appellant commenced proceedings in the Supreme Court, seeking relief against forfeiture. 8The Tribunal's relevant findings in the decision were, in summary: (a) The Tribunal is an inferior court for the purpose of the Law Reform (Law and Equity) Act 1972 (NSW) ('Law Reform Act'); (b) The Tribunal does not generally have a power to grant an equitable remedy, nor a general jurisdiction to grant equitable relief; (c) The Tribunal has therefore no power to grant an equitable remedy to relieve against forfeiture; (d) Despite such conclusion, the question arises whether the Tribunal has jurisdiction to make an enquiry upon the same considerations that might be relevant to the grant of relief against forfeiture, and power to make orders to the same effect; (e) The power of the Tribunal under the Act does not define the nature of the claims that might be brought before the Tribunal for resolution. The Tribunal is given power to determine 'any... dispute arising from or relating to an agreement creating a tenancy or any other dispute... arising from, or relating to, a tenancy' (see s 20(b) of the Act). This power, prima facie, is sufficiently wide to entitle a party to relief against forfeiture; (f) The Tribunal has jurisdiction to determine disputes within the definition provided for by s 20. Regard must be had to the order-making power to decide whether the controversy in which relief against forfeiture is claimed can be finally resolved by the Tribunal; (g) Section 21 of the Act includes a power to make orders giving effect to determinations that may be made by the Tribunal (s 21(a)); power to make an order that restrains any action in breach of a term of a tenancy (s 21(c)); an order that requires an action in performance of a tenancy (s 21(d)); and an order that an owner or tenant perform such work or take such steps as the order specifies to remedy the breach of a term of the tenancy (s 21(g)). Further, s 21(4)(b) allows the Tribunal to make 'any ancillary order the Tribunal thinks appropriate'; (h) The objects of the Act are to provide a mechanism for resolving agricultural disputes by the Tribunal (s 3); matters for determination relate to disputes affecting the rights and obligations conferred by the Act and disputes arising from or relating to an agricultural tenancy agreement (s 20); the power in the Tribunal is to, by order, give effect to its determination; the fact that the legislature has not granted the Tribunal a general equitable jurisdiction is not a reason to interpret the power granted by the Act as ineffective to enable resolution of the dispute; under the Act, jurisdiction is granted by reference to the subject matter of the dispute; (i) Accordingly, the Tribunal has jurisdiction to determine the dispute and to make orders whether, in respect of an agricultural tenancy, there should be relief against forfeiture. 9For the above reasons, the application to transfer the proceedings to the Supreme Court was refused, and such refusal gives rise to this appeal.

Leave 10The question whether leave is necessary to bring this appeal depends upon whether the decision is an 'interlocutory' decision. Section 4 of the NCAT Act defines an interlocutory decision of the Tribunal to be a decision made by the Tribunal under legislation, relevantly: (i) any other interlocutory issue before the Tribunal. 11Since the decision resulted from an application made in the principal proceedings, and did not finally resolve issues between the parties, the decision is interlocutory. Part 6 of the Schedule 4 to the NCAT Act provides that an appeal panel may grant leave under s 80(2)(b) of the NCAT Act for an internal appeal, only if the appeal panel is satisfied the appellant may have suffered a substantial miscarriage of justice because the decision of the Tribunal appealed against was not fair and equitable (clause 12(1)(a)); or the decision was against the weight of evidence (clause 12(1)(b)); or significant evidence has arisen which was not available at the time the hearing took place (clause 12(1)(c)). 12However, since the decision raised a question of the Tribunal's jurisdiction, the decision constitutes an 'ancillary decision' as defined in s 4(1) of the NCAT Act, and leave is not required to appeal from such a decision. An ancillary decision is defined as follows: ancillary decision of the Tribunal means a decision made by the Tribunal under legislation (other than an interlocutory decision of the Tribunal) that is preliminary to, or consequential on, a decision determining proceedings, including: (a) a decision concerning whether the Tribunal has jurisdiction to deal with a matter, and (b) a decision concerning the awarding of costs in proceedings. 13It should be noted that in any event, the respondent would not have opposed the grant of leave had it been required.

Submissions of the appellant 14Counsel for the appellant refined the issues for determination to essentially claim that the Tribunal Member erred in the exercise of his discretion, and wrongly exercised his discretion by refusing the application. The errors are said to be three, namely: (a) Firstly, that the Tribunal Member ought to have concluded that it was appropriate to order the transfer, taking into consideration the fact that the Supreme Court has jurisdiction to determine all the issues arising in the application; that such course would have avoided waste of time, cost, and duplication; (b) The appellant submits that the Principal [Tribunal] Member should not have given lengthy consideration to the question of whether the Tribunal could grant relief against forfeiture, and gave undue weight to such issue; (c) It was not a relevant factor that the Tribunal may have had power to deal with all issues arising in the proceedings.

Consideration 15We deal firstly with the question of whether the Tribunal Member failed to take into account considerations of time and cost performed. 16In Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1985-1986) 162 CLR 24, Mason J said at [15] that: The failure of a decision-maker to take into account a relevant consideration in the making of an administrative decision is one instance of an abuse of discretion entitling a party with sufficient standing to seek judicial review of ultra vires administrative action. 17Although in that decision, the question was an administrative decision, it recognised a decision-maker may err in law if irrelevant considerations are taken into account, or if relevant considerations are not taken into account: see also Craig v State of South Australia (1995) 184 CLR 163. 18Upon reading the decision of the Tribunal Member, it is apparent that he carefully considered that the Tribunal was the appropriate forum for the determination of the dispute. The Tribunal Member considered the question of waste of costs and unnecessary duplication in the preparation of the respective proceedings. The Tribunal Member said at [93]-[97] as follows: 93.Notwithstanding this conclusion, should the proceedings be transferred to the Supreme Court because the respondent has commenced proceedings seeking relief in the Court? 94.The fact that a party asserting an entitlement to relief subsequently commences proceedings in a court does not deprive the Tribunal of jurisdiction. No provision of the Act suggests such consequence. 95.An object of the Act is to provide a mechanism for settling disputes in the Tribunal. Section 36 of the NCAT Act provides the Tribunal is to apply the "guiding principle" in determining any application, namely to ensure the quick, cheap and just resolution of the real issues in dispute. Parties and their representatives have a duty to assist the Tribunal: section 36(3) NCAT Act. 96.No submission was made that if the Tribunal has jurisdiction, it is not a convenient forum. No reason has been put forward as to why the applicant's choice of forum is otherwise inappropriate. 97.Evidence has already been filed and any transfer to the Supreme Court will cause a waste of cost, in part due to the parties having to prepare evidence in a different form. The proceedings are otherwise at a stage where they are ready for final hearing, or could be made ready shortly. 19As to the duplication of findings, we are informed that this issue was not raised before the Tribunal Member. In any event, it is obvious from the above that the Tribunal considered that the Tribunal would be the most convenient forum.

As to Tribunal's power 20As to the issue of the Tribunal Member's consideration of relief against forfeiture, such submission ignores the fact that the question whether the Tribunal could grant such relief was the essential reason relied upon by the appellant as justifying an order for transfer. 21This issue was first raised in correspondence between the parties on 9 May 2014, when solicitors for Steak Plains wrote to the solicitors for the respondent as follows: We refer to the Applicant's Points in Reply, which we received on Friday, 2 May 2014. At paragraph 6 of the Applicant's Points in Reply, the Applicant denies that our client is entitled to r elief against forfeiture. We note that the Applicant has not provided any basis for the denial. For the purposes of ensuring that both parties are aware of the real issues in dispute, kindly confirm whether the denial is based upon any allegation that the New South Wales Civil and Administrative Tribunal (NCAT) does not have the power and/or the jurisdiction to grant the relief against forfeiture. To the extent the Applicant's denial is, partly or wholly, based upon this allegation please explain the Applicant's basis for making such an allegation. 22By letter dated 16 May 2014, the solicitors for the respondent replied, relevantly stating: Our client does not allege that the NSW Civil and Administrative Tribunal lacks jurisdiction to grant relief against forfeiture in these proceedings. It will be a matter for the Tribunal to determine if it has jurisdiction and if so whether or not it is appropriate to grant the relief in the circumstances. 23On 30 May 2014, the solicitors for Steak Plains indicated that their counsel's advice was to the effect that NCAT did not have power to grant equitable relief against forfeiture. 24Steak Plains' points of defence filed in the primary proceedings specifically claimed (in paragraph [61]) that it sought relief against forfeiture as alternative relief. Further, the submissions of the appellant before the Tribunal Member concentrated on the very issue of whether NCAT could grant relief against forfeiture. 25Accordingly, when the proceedings came before the Tribunal Member for determination, it was obvious that the power of NCAT to grant relief against forfeiture was of central importance to Steak Plains. In these circumstances, it is hardly surprising that the Tribunal Member devoted so much consideration to the question of whether the Tribunal could grant relief against forfeiture, or an order to achieve a similar consequence. 26In its written submissions, the appellant submits that the Tribunal was incorrect in its finding that the Tribunal could 'deal with the defence raising an entitlement to relief against forfeiture'. The appellant submits that a claim for relief against forfeiture is not within the Tribunal's jurisdiction to hear and determine because, contrary to the Tribunal's finding, the Tribunal does not possess power to grant relief against forfeiture. The fact that there exists a mechanism for settling disputes between parties to agricultural tenancies is not the equivalent to the ground of relief against forfeiture. Accordingly, the appellant submits that the Tribunal cannot make orders which finally resolve a claim for a grant of relief against forfeiture, and therefore, it lacks the jurisdiction to deal with the claim raised by the appellant for such relief. It submits that s 21(1)(a) of the Act is limited by the phrase 'a determination that may be made by the Tribunal'. Since the Tribunal cannot deal with an application for relief against forfeiture, it cannot give effect to a determination that the appellant would be entitled to such relief. The appealing also submits that the power to make an order restraining any action in breach of a term of the tenancy, as set out in s 21(1)(c) of the Act, similarly does not give power to grant relief against forfeiture since it only operates once a breach is found to have occurred. 27The doctrine of relief against forfeiture arose in equity to prevent a party using its legal rights to take advantage of another party's default, in circumstances where that party could establish the default had been or would be rectified. Equity has traditionally relieved against the consequences of a party's failure to comply with their obligations in respect of leases: see, for example, Austin v United Dominions Corporation Limited (1984) 2 NSWLR 612, especially Priestley JA at 627; and in respect of failure to comply with the provisions of a mortgage: see, for example, Jobson v Johnson [1989] 1 All ER 621 at 631; see also Halsbury's Laws of Australia at [185-1010]; Equity Doctrines & Remedies by Meagher, Gummow and Lehane (4th Edition) at [18-005]. The basis for the granting of relief by equity has been the subject of consideration by the High Court of Australia: see, for example, Legione v Hateley (1983) 152 CLR 406 at 444; 46 ALR 1 at 28. 28The powers invested in the Tribunal by virtue of the Act are very broad. By virtue of s 20(1), power is invested in the Tribunal to determine 'a dispute arising from, or relating to, an agreement creating a tenancy or any other dispute... arising from, or relating to, a tenancy.' This power is supplemented by the Law Reform Act which invests 'an inferior court' with power to give effect to equitable and legal defences as might or ought to be done had the matter been instituted in the Supreme Court (s 6). Further, by s 7 of the Law Reform Act, an inferior court is invested with the power to postpone the grant of relief, or grant relief on terms and conditions as may be required. 29We see no error in the Tribunal Member's conclusion that the power to resolve disputes provided by s 20 and 21 of the Act invests NCAT to resolve the dispute and to grant the necessary relief, including relief to postpone any order for possession in favour of the respondent. We find it unnecessary, on this appeal, to determine whether the Tribunal has jurisdiction to grant relief against forfeiture. Because of ss 20 and 21, the Tribunal has power to grant relief which is sufficient to resolve the dispute between the parties, and to grant relief in the nature of relief against forfeiture. 30In House v The King (1936) 55 CLR 499 the High Court held that a decision-maker must have erred significantly before error in the exercise of the discretion will be established. The court said: If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred. Unlike courts of criminal appeal, this court has not been given a special or particular power to review sentences imposed upon convicted persons. Its authority to do so belongs to it only in virtue of its general appellate power. But even with respect to the particular jurisdiction conferred on courts of criminal appeal, limitations upon the manner in which it will be exercised have been formulated... it must appear that the judge imposing the sentence had proceeded upon wrong principles or given undue weight to some of the facts.

Subsidiary consideration 31The submission was made by the appellant that the power or otherwise of NCAT to grant relief against forfeiture was immaterial, since it had decided not to invoke the jurisdiction of NCAT to seek relief against forfeiture. 32Such submission is puzzling. It is inconsistent with the defence of Steak Plains in these proceedings. Further, the very grounds of appeal against the Tribunal Member's decision raises, as the first issue, an alleged error by the Tribunal Member making his finding. It provides: The Principal [Tribunal] Member erred in: 1.failing to hold that the correct procedure, in the event the respondent was successful in respect of its application, was the postponement of relief pending an application by the appellant to the Supreme Court... 33For all of the above reasons, we find no error in the exercise of the discretion of the Tribunal Member.

Costs 34The Tribunal Member concluded that since the application before him failed, the appellant should bear the costs of the respondent, of the application. The appellant challenges such finding. 3535The appellant submits that the Tribunal Member gave no reasons for his costs order. Section 60(1) of the NCAT Act provides that each party to proceedings in the Tribunal is to pay its own costs. However, pursuant to s 60(2), the Tribunal may award costs in proceedings before it 'only if it is satisfied that there are special circumstances warranting an award of costs'. Section 60(3) then describes those occasions justifying an order for costs. 36It is not suggested that the factors giving rise to a special order for costs as provided by s 60(2) existed. The respondent points to the considerable expense to which it has been placed in preparing the matter for hearing, and referred to the fact that costs were incurred before the application for transfer was made by the appellant. However these costs had not been wasted, since the proceedings will continue in this jurisdiction, and the preparation would have been necessary even if the proceedings had been transferred to the Supreme Court. 37We consider that because the Tribunal Member did not specify the basis upon which the order for costs was made, this order should be set aside, and instead an order should be made that each party bear its own costs of that application, and of the appeal.

Orders 38The orders we make are: (1) The appeal be dismissed; (2) Order number 2 made on 13 August 2014 that the appellant pay the applicant's costs of the application be set aside; (3) That each party pay its own costs of the application for transfer and of this appeal; (4) That proceedings be listed for directions within 7 days for the purpose of a final timetable of directions for the hearing.

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 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 17 November 2014

At a glance

Court

Decision date

Source

Judgment (9 paragraphs)

Parties

Legislation Cited (4)

Cases Cited (4)