Procedure - Inferior courts - Tasmania - Local Courts - Practice - Trial and judgment - Procedural fairness and natural justice.

Magistrates Court (Civil Division) Act 1992 (Tas), s31AB.

Landlord and Tenant - Residential tenancies legislation - Recovery of possession - Generally.

Residential Tenancy Act 1997 (Tas), ss37, 41.

Judgment Number: [2013] TASSC 45

1 This appeal is against an order made by Magistrate Bartlett on 30 May 2013 that the appellant's tenancy of the house he leased from the respondent at Moina be terminated and that he deliver vacant possession by midnight on 1 June 2013.

2 For the reasons that follow I am satisfied that the appeal should be upheld because the appellant was not afforded natural justice.

3 The respondent, Tracey Lucas, lives with her partner in South Australia. She owns the property at 18 Lake Gairdner Road at Moina and, on 18 June 2012, she entered into a residential tenancy agreement with the appellant Stephen Streets. The agreement was in writing.

4 By an application dated 15 May 2013, Ms Lucas applied to the Magistrates Court (Civil Division) for an order:

"That the tenancy agreement be terminated immediately because of:

(a) serious damage to the premises/contents caused by felling of significant trees; and/or

(b) threats or physical injury to myself and/or Jeff Mockett."

5 The application is on a Magistrates Court (Civil Division) form and specifies that a copy of the residential tenancy agreement is attached to it. In fact, only two pages of the agreement are attached: the schedule to the agreement and one other page containing pars25 to 30 of the agreement. That page also bears what appears to be signatures of Mr Streets and an agent for the respondent.

6 The parts of the agreement that are attached to the application provide:

(b) the tenancy is for the fixed period of six months;

(c) the premises is described as "18 Lake Gairdner Road, Moina, 7310" followed by the printed words "If relevant, describe any area not included in the Premises" (with the word "not" deleted as I have indicated) and then the following words handwritten: "cleared area around home";

(d) clause 30 is headed "Additional Clauses" and some words are then handwritten, including: "No trees to be cut down. ... No firewood to be taken without owners (sic) consent".

7 The application was also accompanied by five photographs or copies of photographs. One of the photographs shows the stump of a tree. Another shows the stump of a tree with what appears to be two or three stumps of much smaller trees nearby. The other photographs depict what I infer to be the house on the property showing stacks of cut firewood in an adjoining cupboard area.

8 The application is stamped as having been filed in the Devonport Magistrates Court on 15 May 2013. The registry inserted 9.45am on Thursday, 30 May 2013 as the time and date for the hearing of the application. It came before the learned magistrate on that day. By then the appellant must have been given notice of the application because he appeared with counsel. Ms Lucas was also represented by counsel.

9 On 30 May 2013 Ms Lucas filed an affidavit sworn by her in South Australia on 28 May 2013. It is apparent from the transcript of the proceedings before the learned magistrate that the affidavit was not shown to Mr Streets or his counsel until that day. Counsel for the respondent asserted that a copy had been sent by post to Mr Streets on 28 May 2013 but did not dispute that he did not receive it before the application came before the court.

10 In the affidavit Ms Lucas deposed that her property consisted of a house, a cleared area around the house and a larger area of natural rain forest. She said that at the end of November 2011 (I infer that this is a typographical error and that she intended to say 2012), as a result of a complaint by an adjoining owner, she phoned Mr Streets who told her that he had been cutting down trees and firewood on the neighbours' property and she asked him to stop. She also deposed that she travelled to Moina with her partner Jeff Mockett on 11 May 2013. When she arrived she saw that "six or seven substantial trees had been felled around the house". She deposed that Mr Streets told her that he had cut the trees down and showed her where he had cleared an area of land on a neighbouring property without permission to "gain access". She said that she saw "10 to 15" other trees in the forested area of her property which had been felled and although Mr Streets did not admit he had fallen these trees, he said he had "cut firewood from already fallen timber on that part of my property". Ms Lucas deposed that a couple of days later she and Mr Streets argued about some track widening work that Ms Lucas and Mr Mockett had undertaken, and during a discussion in her presence Mr Streets said to Mr Mockett, "come outside and I will take you on Jeff", and later that Mr Streets threatened to "fucken bash your head in Jeff".

11 When the application was mentioned before the learned magistrate, counsel for Mr Streets applied for an adjournment. In summary, the grounds for the application were that:

• he had been first instructed by his client earlier that week and was given the application and the attachments;
• the application and attachments gave insufficient information about the basis of the application;
• the affidavit on which Ms Lucas sought to rely had not been served on Mr Streets and it was shown to counsel for the first time that morning;
• his client denied being in breach of the residential tenancy agreement. His instructions were that his client had cut down one dead tree with the consent of the owner but many of the allegations in the affidavit were in dispute;
• he had not had a reasonable time to "prepare his defence and organise his witnesses", one of whom was a real estate agent and another who was a police officer;
• he would seek an undertaking from his client to refrain from cutting trees until the application was determined; and
• his client had given notice to determine the tenancy in any event from 10 June 2013.

12 Counsel for Ms Lucas opposed the adjournment application. He submitted that:

• the legislative provision on which his client relied provided for emergency relief;
• that his client was concerned about the prospect of continuing damage to the property which he described as "extremely significant", her concern was not allayed by any undertaking and she was not prepared to wait the 10 days or so until Mr Streets vacated pursuant to his notice;
• that her Honour could make the orders his client had applied for "without notice" and that Mr Streets was served with a copy of the application "as a matter of courtesy";
• that the court should make orders without hearing from Mr Streets;
• the affidavit was "simply to set out in some detail the allegations that were made in the application itself";
• his client had flown from South Australia in anticipation of the hearing proceeding on that day;
• Mr Streets had sufficient opportunity to "call whatever evidence he can in the short amount of time in response to the application" and that "your Honour ought to hear the application". His submission is recorded in the transcript as follows:

"He's been given a benefit by the applicant in that he has been afforded the opportunity to call whatever evidence he can in the short amount of time in response to the application for emergency relief, and that's what the applicant seeks, so in my submission your Honour ought to hear the application. You Honour has jurisdiction to make the orders sought, so long as you Honour can be satisfied of those matters, and in my submission, on the basis of the application before your Honour of the applicant, your Honour can be satisfied of those matters."

13 Her Honour then adjourned to consider the submissions made to her. She resumed a short time later. On resumption her Honour did not rule on the adjournment application but, instead, determined the substantive application. She said:

"So there is an application for an order for termination of the tenancy agreement under s41 of the Residential Tenancy Act which does provide that the Court can make an order without notice if it's satisfied as to the matters set out in subs(1) in relation to serious damage to the residential premises or contents of those premises or any neighbouring premises, and in this matter notice was given to the tenant, although that is not a requirement of that section.

I do note that some of the allegations set out in the application itself are disputed by the tenant. I also note that the tenant has sent a notice to terminate this tenancy agreement from the 10th of June. In my view these matters are intended to be dealt with summarily. ...

I am satisfied that it was a term of the agreement ...that no trees are to be cut down. I am also taking into account the photographs that are attached which indicate the cutting down of at least two trees and maybe three. The cutting down of trees is clearly a matter of significance to the landlord because it was included in the Agreement and section 41 does refer to serious damage. I am satisfied that the damage that's occurred is serious in the context of this property and this landlord, and I'm satisfied on the basis of the matters contained in the application, and I note also the submissions from Counsel. I'm satisfied that this tenancy agreement should be terminated now and that vacant possession should be delivered to the owner, and that's the order I make."

14 After hearing further submissions from counsel, the learned magistrate ordered that the residential tenancy was terminated at midnight on 1 June 2013 and vacant possession be then delivered to the owner. An application for costs was then made. On 5 June 2013 her Honour ruled that Mr Streets pay Ms Lucas's costs of and incidental to the application and specified the scale of costs to apply.

15 The Residential Tenancy Act 1997 regulates tenancies of residential premises. It governs the formation, operation and termination of such tenancies. A provision of a residential tenancy agreement that is inconsistent with the Act is of no effect, s15, and the provisions of the Act form part of the agreement, s10(3). By s11(2), if a residential tenancy agreement for a fixed period expires and it is not extended by agreement a new residential tenancy agreement for no fixed period is established.

16 Possession of premises subject to a residential tenancy may only be regained by the means specified in s37. One such means is the delivery of vacant possession of the premises by order of the court to the owner; s37(1)(d). An application for an order of the court for termination of a residential tenancy agreement is made under s41 which provides:

(1) A party to a residential tenancy agreement may apply to the Court for an order that the agreement be terminated on any of the following grounds:

(a) that another party has intentionally or recklessly caused or permitted, or is likely to intentionally or recklessly cause or permit, serious damage to -

(i) the residential premises or contents of those premises; or

(b) that another party has caused physical injury, or is likely to cause physical injury, to that party or a person occupying neighbouring premises."

17 If the court is so satisfied it may order that the residential tenancy agreement is terminated on a specified date without notice and that vacant possession of the residential premises is to be delivered to the owner on that day; s41(2).

18 Section 37 provides that another means available to a landlord wishing to terminate a residential tenancy agreement is by service of a notice to vacate. By s42, an owner of residential premises may serve on a tenant of the premises a notice requiring the tenant to deliver vacant possession of the premises to the owner for any of a number of specified grounds, including that the tenant has failed to comply with any provision of the residential tenancy agreement. A notice must contain the information required by s44 and, if served on the basis of an alleged breach of the agreement, takes effect on a date specified in the notice that is at least 14 days after service of the notice. If the notice is not complied with then an owner may apply to the court under s45 for an order for vacant possession of the residential property.

19 Applications under the Residential Tenancy Act are made to the Magistrates Court exercising its civil jurisdiction in the civil division of that court established under the Magistrates Court (Civil Division) Act 1992. By operation of s3 of that Act and the Magistrates Court (Civil Division) (Minor Civil Claims) Regulations 2003, an application under the Residential Tenancy Act to the Magistrates Court (Civil Division) is prescribed to be a minor civil claim. The procedure for minor civil claims is set out in s31AB which provides:

(1) The following provisions apply to a proceeding in respect of a minor civil claim:

(a) the Court is not bound by the rules of evidence but may inform itself on any matter in any manner that it considers appropriate;

(b) the Court may itself elicit by inquiry from the parties and the witnesses and by examination of evidentiary material produced to the Court the issues in dispute and the facts necessary to decide those issues;

(c) the proceeding is to take the form of an inquiry by the Court into the matters in dispute between the parties rather than an adversarial contest between the parties;

(d) the Court may itself call and examine witnesses;

(e) the Court may, at the expense of the Crown, appoint a person to inquire into, and report upon, any question of fact arising in the proceeding;

(f) the proceeding is to be conducted with as little formality and technicality, and with as much expedition, as the requirements of this Act, the rules of court and a proper consideration of the issues in dispute permit.

(4) A contravention of the provisions of this section does not invalidate the hearing of the proceeding in which the contravention occurs or of an order made in that proceeding."

20 Section 31AD is entitled "Representation of parties" and provides that in a minor civil claim a legal practitioner is not to represent a party to a proceeding in respect of a minor civil claim unless another party to the proceeding is a legal practitioner, all parties to the proceeding agree, or the court is of the opinion that the party would be unfairly disadvantaged if not represented by a legal practitioner.

21 The Residential Tenancy Act contains no provision concerning the procedure to be adopted by the court in determining applications nor any appeal provision. This appeal has been brought pursuant to the Magistrates Court (Civil Division) Act, s28(2). Section 28(2)(a) provides that appeals from a determination or order made in a minor civil claim may be made on the ground that:

"(i) that the magistrate lacked jurisdiction or exceeded his or her jurisdiction;

(ii) that the party was denied natural justice in the course of proceedings."

22 An appeal on any other ground requires leave; s28(2)(b).

23 Section 28 says nothing as to the nature of the right of appeal that it confers, but provides that on an appeal the judge may make any orders he or she considers appropriate in the circumstances; s28(3). The terms of that provision suggest that Parliament intended it to have a wide operation; see State of Tasmania v Boyd [2010] TASSC 13 at [26] where Blow J (as he then was) considered the terms of s28 as they were prior to its amendment in 2009. Having regard to the issues in this appeal and the way it has been argued I do not need to consider the nature of the appeal any further.

"1 That the learned magistrate erred in law by denying the applicant natural justice in the course of the proceeding;

1. The learned magistrate erred in law by finding that applications made pursuant to Section 41 of the Residential Tenancy Act 1997 were intended to be dealt with summarily;
2. The learned magistrate erred in fact by finding that 'some of the allegations set out in the application itself are disputed by the tenant', after the Court was advised that the tenant denied that he was in breach of the Residential Tenancy Agreement.
3. The learned magistrate erred in law and in fact by finding that 'I am satisfied that the damage that's occurred is serious ... on the basis of the matters contained in the Application'."

25 Ground 1 of the appeal asserts that the appellant was denied natural justice. The Magistrates Court is a court of record; Magistrates Court Act 1987, s3A(2). In the absence of any statutory provision to the contrary, it has an obligation to comply with the rules of natural justice. Its obligation to do so when determining minor civil claims in the Civil Division is made clear by s28(2) of the Magistrates Court (Civil Division) Act which allows an appeal without leave if a party is denied natural justice in the course of proceedings. Thus the terms of s31AB must, in my view, be read subject to the obligation to afford natural justice.

26 The content of natural justice varies from case to case. In Clarence City Council v South Hobart Investment Pty Ltd [2007] TASSC 16 the Full Court dealt with the obligation of a council to afford natural justice. The lead judgment was written by Underwood CJ. At [27] his Honour referred to Russell v Duke of Norfolk [1949] 1 All ER 109 where Tucker LJ at 118 said:

"The requirements of natural justice must depend on the circumstances of the case, the nature of the inquiry, the rules under which the tribunal is acting, the subject matter that is being dealt with, and so forth."

27 In Commonwealth Conciliation and Arbitration Commission; Ex parte Angliss Group (1969) 122 CLR 546, the High Court said at 553:

"It is plain that when it is necessary to consider a question of fairness in relation to a tribunal the whole of the circumstances in the field of the inquiry are of importance. The nature of the jurisdiction exercised and the statutory provisions governing its exercise are amongst those circumstances."

28 With respect to the exercise of a power conferred by statute the nature and extent of the obligation to provide procedural fairness depends on and will fluctuate according to the nature of the statutory power, the purpose and requirements of the statute and the interests of the individual; Kioa v West [1985] HCA 81; (1985) 159 CLR 550 per Mason J at 584 and Brennan J (as they then were) at 612, Re Minister for Immigration and Multicultural Affairs; ex parte Miah (2001) 206 CLR 57 per Kirby J at 115; White v Ryde Municipal Council (1977) 36 LGRA 400, Reynolds JA at 413; National Companies and Securities Commission v The News Corporation Limited [1984] HCA 29; (1984) 156 CLR 296 per Brennan J at 326.

29 I have concluded that Mr Streets was not afforded natural justice in the proceeding before the learned magistrate. She was informed that Mr Streets had lived in the house he had rented from Ms Lucas for about a year. His furniture and personal effects were inside the house. On expiry of the initial six month term he had the benefit of a residential tenancy for no fixed period that could only have been terminated in a manner authorised by s37. This application put him at risk that his tenancy would be immediately terminated.

30 I express no view about whether it was appropriate for her Honour to refuse the application for an adjournment. The issues in the case were not so complicated that despite the late delivery of the affidavit Mr Streets could not have instructed his counsel quickly. Her Honour was entitled to require that the application be determined expeditiously. However if it was the case, as it appears to be, that the learned Magistrate decided to refuse an adjournment of the application, she was then required to determine the application. The procedure for doing so was in accordance with s31AB of the Magistrates Court (Civil Division) Act. The learned magistrate was not bound by the rules of evidence, could inform herself as she considered appropriate, and conduct the proceeding as an inquiry with as little formality and technicality as a "proper consideration of the issues in dispute permit". However no such determination was undertaken. Instead, the learned magistrate determined the application on the basis of what the application document claimed and on what she had been told by counsel in the course of the adjournment application. That was unfair to Mr Streets and was a breach of natural justice. The terms of s41 of the Residential Tenancy Act required her Honour to satisfy herself that Mr Streets had intentionally or recklessly caused or permitted serious damage to the residential premises. She had been informed that Mr Streets denied doing so. Thus a determination was required about whether Mr Streets had caused or permitted damage, whether he had done so recklessly or intentionally and whether the damage was serious. That necessitated findings of fact and it was apparent that issues of credit may arise. Mr Streets was given no chance to tell his side of the story or have witnesses support his case. The only information in the application was the simple assertion of "felling of significant trees" accompanied by some photographs and an extract from the lease. Her Honour did not say that she had relied on the contents of the affidavit sworn by Ms Lucas. However if she did so it was without allowing any opportunity to test or challenge what Ms Lucas claimed about Mr Streets' conduct or to respond to it.

31 The submission made by counsel for the applicant based on s41(2) of the Residential Tenancy Act that the order could be made without notice of the application to the tenant was misconceived and led her Honour into error. Properly construed and read in context with the other provisions of the Act the reference to "without notice" in s41(2)(a) does not mean that an order can be made without notice of the application to a party to the residential tenancy agreement. It means that the court, if satisfied of one of the grounds in subs(1), may specify a date for termination of a tenancy without a period of notice as would otherwise be required under s37, most likely following service of a notice to vacate. I reject the submission that the reference to "notice" in s41(2)(a) is to notice of the proceeding. The Magistrates Court (Civil Division) Rules 1998 provide only for the commencement of claims and not for the making of applications. Thus the provisions sit rather uncomfortably with the type of application contemplated by the Residential Tenancy Act. Nevertheless, there is no legislative authority permitting the making of an order finally determining the rights of a person who is a necessary party to a proceeding without service of the proceeding on that person. Although a court in some circumstances may make an interlocutory order without service on a party, for example an urgent ex parte interlocutory injunction, the circumstances in which such orders are made are carefully limited. This was not an interlocutory order. It was an order which, subject to appeal, finally determined Mr Streets' contractual and legislative rights.

32 In this case Mr Streets had in fact been served with the application. He attended with counsel. But the heavy emphasis placed by counsel for the respondent on the mistaken construction of s41, specifically relied on and referred to by her Honour in her reasons for making the order, diverted her Honour from the proper course which was to, consistent with s31AB, conduct a hearing, and contributed to her Honour's decision to make an order without a hearing. It is undesirable to attempt to exhaustively prescribe the natural justice requirements of a s31AB hearing. It seems to me that the intent of the section is to allow considerable flexibility in the manner in which such a hearing is conducted but the obligation to afford natural justice remains. What is required will depend on the circumstances of each case. In this case natural justice required that, before reaching a conclusion, the court allow Mr Streets a reasonable opportunity to respond to the allegations made against him and to produce relevant evidentiary material. Effectively no such opportunity was offered.

33 Although the application also asserted threats against Mr Mockett no finding or determination was made about that and the orders made by her Honour were not made on that basis.

35 Having decided that ground 1 of the appeal is to be upheld it is not strictly necessary that I deal with the remaining grounds, but I will mention them briefly. Grounds 2, 3 and 4 require leave.

36 As to ground 2, whilst the learned magistrate stated that s41 applications were intended to be dealt with "summarily", that seems to me to be nothing more than a shorthand way of describing the s31AB procedure for minor civil claims. Even if it is an error, it is of no consequence. Nothing flows from it that is not already dealt with in ground 1. I would refuse leave.

37 Ground 3 alleges that it was an error to find that "some of the allegations set out in the application itself are disputed by the Tenant". That statement discloses no error. The tenant did dispute some of the allegations. I would refuse leave for this ground.

38 Ground 4 adds nothing to the ground alleging a breach of natural justice. The substance of the appellant's complaint is that the learned magistrate made findings of fact without affording natural justice to the appellant. Subsumed within that issue is a complaint that the learned magistrate made a finding that damage was "serious", without evidence and without a proper hearing. I cannot determine whether the finding her Honour made is in error without such evidence. A fresh determination made on the material before the magistrate is not possible because there was no proper hearing. It is unnecessary that I deal with this ground and I would refuse leave.

39 After the application came before the learned magistrate Mr Streets moved out of the house. He had given notice under s39(1)(b) to terminate the tenancy on 10 June 2013 in any event. The parties agree that whatever the result of this appeal the tenancy is now terminated. However, the appellant seeks an order setting aside the magistrate's determination because he is subject to a consequential costs order, and I was informed that the finding of him causing "serious damage" may be relevant in other disputes concerning return of a bond.

40 The appeal is upheld. The order of the learned magistrate made on 30 May 2013 is set aside. It follows that the costs order made on 5 June 2013 is also set aside. Neither party seeks a rehearing. However the original application should be determined one way or another and I will hear counsel before making final orders and any consequential orders.