Consideration
17Putting aside the second defendant's contention that s 71 of the Sydney Harbour Federation Trust Act is constitutionally objectionable and ineffective in this case, her arguments purporting to support the general proposition that the Trust cannot validly terminate, and has not validly terminated, the lease are somewhat difficult to follow. This is primarily, but not solely, because they are to some extent a series of variations upon a single and reoccurring theme. In my opinion, none of them is correct.
18In no particular order of significance, when the notice of termination was served, the second defendant was not in possession of the property pursuant to a periodic tenancy. She remained in possession of the property holding over at the expiration of the original term of the lease and according to its terms. The second defendant's characterisation of the lease following the expiration of the original term as one "being for an initial fixed period of twelve months but with the tenant being able to remain until the Tribunal terminates the agreement" misconceives the significance of the former Tribunal's role under s 64(2)(c)(ii) of the 1987 Act. It is difficult to understand how or in what circumstances the Trust would now ever be able effectively or validly to bring the tenancy to an end if the second defendant's argument were correct and it appears to raise the spectre of some kind of lease in perpetuity.
19The requirement under the 1987 Act that the Tribunal had to make an order terminating the agreement if it was satisfied, having considered the circumstances of the case that it was appropriate to do so, did not give it a discretion to refuse to do so if the formal requirements of the termination had otherwise been established. In Scicluna v NSW Land and Housing Corporation [2008] NSWCA 277; (2008) 72 NSWLR 674, Campbell JA said this at [63] - [64]:
"[63] If the Tribunal is satisfied that the landlord has established the ground, and is also satisfied that the breach, in the circumstances of the case, is such as to justify termination of the agreement, then the Tribunal is required to make an order terminating the agreement. In accordance with section 53, it is only when the Tribunal makes that order that the tenancy terminates.
[64] In my view, the reasoning of the Tribunal shows that it has misapprehended the legal tests that it is required to apply. First, it is wrong to say that the Tribunal has a "discretion to set aside the termination" if it finds special circumstances (or indeed, in any circumstances). There is no termination of the tenancy at all until the Tribunal makes an order terminating the agreement. While the landlord might give a Notice of Termination, that the tenant fails to comply with, those circumstances do not of themselves terminate the agreement. All they do, in accordance with section 64(1), is give the landlord the right to apply to the Tribunal for an order terminating the agreement. The Tribunal does not have any "discretion to set aside a termination", when it is applying section 64(2)."
20Scicluna was a case dealing with a breach to which s 64(2)(b) of the 1987 Act was relevant. In the present case, but for the repeal of the Act, s 64(2)(c)(ii) would have applied. However, the remarks of Campbell JA apply to it with equal force. Even though the service of the notice and the expiration of 60 days would have operated to give the Trust a right to apply for an order terminating the agreement and an order for possession under s 64 of the 1987 Act, there was no demonstrated impediment or reason why that order would not have been made by the Tribunal as a matter of course.
21Moreover, a notice of termination giving not less than 60 days' notice expiring at any time was effective to terminate the lease. Contrary to the second defendant's (apparently alternative) submissions, the tenancy did not become a periodic tenancy at the expiration of the original term of 12 months and it is therefore incorrect to say that any notice that purported to terminate it could only have been effective if fixed to expire at the end of a complete period of the tenancy. In this case there was no "complete period of the tenancy". Cases like Dockrill v Cavanagh and Queens Club Garden Estates Ltd v Bignell, which were concerned with leases granted from week to week or month to month or their equivalent, therefore have no application. The notice of termination was issued in accordance with the terms of the lease agreement, which was not a periodic tenancy, and was effective according to its terms.
22Nor does the fact that the 1987 Act has been repealed mean that there is now no way in which the lease can be terminated, upon the basis that the agreed formula is no longer available. By the operation of s 71(2) of the Sydney Harbour Federation Trust Act, a law of New South Wales relating to "tenancy" is an excluded State law so that the general law applies. The Trust has validly terminated the lease in accordance with the general law.
23Lastly, the lease was always governed by federal legislation because of s 52(i) of the Constitution, as follows:
"52 The Parliament shall, subject to this Constitution, have exclusive power to make laws for the peace, order, and good government of the Commonwealth with respect to:
(i) the seat of government of the Commonwealth, and all places acquired by the Commonwealth for public purposes;..."
24The 1987 Act never applied to the lease by virtue of that provision. The Commonwealth Places (Application of Laws) Act 1970 picked up the 1987 Act and applied it to the lease as a law of the Commonwealth. However, the Commonwealth Places (Application of Laws) Act did not pick up s 64 of the 1987 Act, permitting the Tribunal to make orders for possession, as this would involve the exercise of judicial power. Accordingly, provisions of the 1987 Act, such as s 64, imposing a requirement that the lease be terminated by an order of the Tribunal, where other modes of termination are not available, are void.
25In any event, in so far as the lease is concerned, s 71 of the Sydney Harbour Federation Trust Act excludes, and is deemed always to have excluded, the application of all State laws respecting tenancy, including the 1987 Act. Section 51(xxxi) of the Constitution is therefore not engaged since the second defendant's asserted right to maintain possession of the property until an order is made by the Tribunal under s 64(2)(c)(ii) of the 1987 Act never existed. There was never any thing, and certainly no property, that has been acquired by operation of s 71. Accordingly, the lease is one that can be terminated in accordance with the general law.
26Quite apart from this line of reasoning, in my view the second defendant's so-called right to have the Tribunal deal with the Trust's application to make an order terminating the agreement under s 64(2)(c)(ii) of the 1987 Act is not a right of property which can only be acquired on just terms within the meaning of s 51(xxxi) of the Constitution (see Mutual Pools & Staff Pty Ltd v The Commonwealth of Australia [1994] HCA 9; (1994) 179 CLR 155) on the one hand, and there would not in any event appear to have been an acquisition of it (see Attorney-General for the Northern Territory v Chaffey; Santos Ltd v Chaffey [2007] HCA 34; (2007) 231 CLR 651) on the other hand. The second defendant's "right" was in this case of its very nature susceptible of statutory alteration, modification or extinguishment and its alteration, modification or extinguishment here does not effect an acquisition. Moreover, all of the second defendant's other nominated rights, possessed by her as a tenant whose tenancy was subject to the 1987 Act, are in my view of the same character. Specifically these were identified as a right to contest any increase in rent in ss 45 to 49, a right to apply for recognition of another person to have the agreement vested in him or her in s 35, and a right to limit the landlord to a period of 30 days within which to apply to the Tribunal concerning a breach in s 16. These rights, all said to arise from the provisions of the 1987 Act, are in my opinion, and by way of example, far removed from the leasehold interest that was the subject of the alleged acquisition of property that attracted the operation of s 51(xxxi) with which the High Court was concerned in Minister for State for the Army v Dalziel [1944] HCA 4; (1944) 68 CLR 261.
27Unlike the extinguishment of the right to bring an action for damages considered in Georgiadis, upon which the second defendant relies, the issue at stake in this case is the modification or extinguishment of so-called rights of property that have no existence apart from statute. In this respect I observe that the Trust submitted, and I accept, that the potentially adjustable nature of a lease granted by the Commonwealth in respect of a Commonwealth place is "obvious". As Mason CJ, Deane and Dawson JJ said in Georgiadis at 305-306:
"Accordingly, 'acquisition' in s 51(xxxi) extends to the extinguishment of a vested cause of action, at least where the extinguishment results in a direct benefit or financial gain (which, of course, includes liability being brought to an end without payment or other satisfaction) and the cause of action is one that arises under the general law. The position may be different in a case involving the extinguishment or modification of a right that has no existence apart from statute. That is because, prima facie at least and in the absence of a recognized legal relationship giving rise to some like right, a right which has no existence apart from statute is one that, of its nature, is susceptible of modification or extinguishment. There is no acquisition of property involved in the modification or extinguishment of a right which has no basis in the general law and which, of its nature, is susceptible to that course. A law which effected the modification or extinguishment of a right of that kind would not have the character of a law with respect to the acquisition of property within s 51(xxxi) of the Constitution."
28In Commonwealth v WMC Resources Ltd [1998] HCA 8; (1998) 194 CLR 1, Brennan CJ dealt with this passage at [16] and [17] as follows:
"[16] In this passage, their Honours treat "acquisition of property" as a single concept. I agree that, where a purely statutory right is by nature susceptible of modification or extinguishment, its modification or extinguishment works no acquisition of property. But, in my respectful opinion, it does not follow that a law of the Commonwealth which extinguishes purely statutory rights having no basis in the general law can never effect an "acquisition of property" within s 51 (xxxi). If statutory rights were conferred on A and a reciprocal liability were imposed on B and the rights were proprietary in nature, a law extinguishing A's rights could effect an acquisition of property by B. In the present case, where the rights of the permittee and of WMC, though created by statute, are properly to be regarded as proprietary in nature, a Commonwealth law which purported to effect a compulsory transfer of those rights to a third party would be a law for the acquisition of property. But the Consequential Provisions Act does not have that effect. The present case does not turn on the proprietary nature of the rights of the permittee or of WMC; it turns on a different issue, namely, whether the modification of the rights of the permittee and of WMC amounts to an acquisition by the Commonwealth of the rights which the permittee and WMC respectively possessed before the Consequential Provisions Act commenced.
[17] Where a law of the Commonwealth creates or authorises the creation of a right, a statutory modification or extinguishment of the right effects its acquisition if, but only if, it modifies or extinguishes a reciprocal liability to which the party acquiring the right was subject. Thus in Newcrest Mining (WA) Ltd v The Commonwealth, the law which sterilised Newcrest's right under its mining lease to carry on "operations for the recovery of minerals" on land vested in the Commonwealth was, in my opinion, a law for the acquisition of property because it extinguished the liability of the Commonwealth to have those minerals extracted from its land and thereby enhanced the property of the Commonwealth. But where a law of the Commonwealth creates or authorises the creation of a right that does not impose on the Commonwealth a reciprocal liability, the mere extinguishment of the right effects no acquisition of the right by the Commonwealth. The Commonwealth's position remains unchanged by the extinguishment."
29Toohey J also had this to say at [56]:
"[56] In Mutual Pools and Staff Pty Ltd v The Commonwealth Dawson J and I held that the extinguishment of a right to proceed against the Commonwealth was not an acquisition of property because "when a chose in action is extinguished, the debtor receives merely a financial advantage, not a proprietary interest in the chose in action". However, that was a minority view and, in light of Georgiadis v Australian and Overseas Telecommunications Corporation and Commonwealth v Mewett, it must be accepted that where a distinct financial benefit is conferred upon the Commonwealth, the extinguishment of a cause of action will amount to an acquisition of property[99]. What is clear is that acquisition involves obtaining "some identifiable benefit or advantage relating to the ownership or use of property..."
30I am unable to accept that the second defendant's "right" was relevantly acquired. There does not seem to me to have been some identifiable benefit or advantage relating to the ownership or use of property as described in Mutual Pools that has been conferred on the Commonwealth following the enactment of s 71. This is particularly so having regard to the reasoning in Scicluna referred to earlier. The Tribunal retained no discretion under s 64(2)(c)(ii) of the 1987 Act to do otherwise than to make the order terminating the tenancy. The second defendant has pointed to no basis upon which the order terminating the tenancy would not have been made. Adopting the terminology of s 64(2)(c)(ii) of the 1987 Act, the second defendant has not shown why, having considered the circumstances of this particular case, the Tribunal would not, or could not, have been satisfied that it was appropriate on application by the Trust to make an order terminating the agreement. Far from acquiring some financial benefit or advantage, the Trust is in the same position as a result of the operation of s 71 in practical terms as it was prior to its enactment and, correspondingly, so is the second defendant.
31Nor in my view are any of the other particular rights that are advanced by the second defendant capable of being characterised as property or anything other than statutory rights susceptible of modification or extinguishment. In so saying I take account of the warning to the effect that caution should be exercised when seeking, possibly slavishly, to employ expressions such as "inherently susceptible of modification" without regard to the specific case in point. It is unnecessary in these circumstances to consider the accompanying argument that the second defendant's leasehold interest should have been acquired under the Lands Acquisition Act 1989.
32It follows that s 71 of the Sydney Harbour Federation Trust Act is not constitutionally objectionable and that the Trust has validly terminated the second defendant's lease.