By Summons filed 22 May 2017, the plaintiff (a Queensland resident) sought a declaration that the second defendant, the NSW Civil and Administrative Tribunal (NCAT), has jurisdiction to hear and determine proceedings (16/46454) in which the plaintiff applied for termination of a tenancy in respect of premises in Doncaster Ave Kensington which are occupied by the first defendant.
In the alternative, the plaintiff relies on an Amended Statement of Claim of the same date which seeks judgment for possession of those premises, a declaration that the plaintiff is entitled to vacant possession of the premises, a grant of leave to the plaintiff to issue a writ of possession, damages, mesne profits (being unpaid rent since August 2017) and interest.
The substance of the first defendant's defence is that he entered into possession of the premises following a representation by the plaintiff to him that he could live there indefinitely and that the premises would be bequeathed to the first defendant in the plaintiff's will. The first defendant denies that there is a residential tenancy pursuant to the Residential Tenancies Act 2010, but if that be the case, the first defendant invokes the exclusive jurisdiction of NCAT to terminate possession, pursuant to s 119 of the Residential Tenancies Act (on the assumption that the court finds that there is no life tenancy).
The Cross Claim filed by the first defendant mirrors the defence, in that the first defendant pleads a contractual basis to his occupation, which is enforceable by way of part performance. He pleads proprietary estoppel on the basis that the defendant relied upon the plaintiff's representations to his detriment, and pleads a remedial constructive trust of which the first defendant is the beneficiary. All three bases for relief under the Cross Claim rely upon the existence of a representation by the plaintiff that the defendant could live in the property forever and that the plaintiff would leave the property to the defendant and his sister upon his death. The equitable relief sought by way of the Cross Claim can only be provided by this Court.
The Attorney General for NSW intervened, on the basis that, if the Residential Tenancies Act applies in the circumstances of this case, consequent upon a finding that the first defendant does not enjoy a life tenancy, an issue as to the validity of ss 81, 83, 85, 187 and 119 of the Residential Tenancies Act arises in the light of the decision in Burns v Corbett; Gaynor v Burns [2017] NSWCA 3. The application of that decision to the circumstances of this case would result in the determination of the dispute between the plaintiff and the defendant in this Court on the basis of the Amended Statement of Claim, because NCAT would lack jurisdiction to determine it. On 18 April 2018, the High Court dismissed an appeal from that decision; Burns v Corbett [2018] HCA 15.
It was common ground in Burns v Corbett in the Court of Appeal that NCAT exercised judicial power in adjudicating a dispute between residents of different States under the Anti-Discrimination Act 1977 because the complainant was able "to obtain a binding, authoritative and curially enforceable judgment independently of the consent of the person against whom his complaint had been brought." (at [30]) It was also common ground that NCAT was not a court of the State (at [29]). The position of the parties did not change in the High Court.
Whether ss 81, 83, 85, 187 and 119 in Part 5 of the Residential Tenancies Act confer judicial power on NCAT and whether NCAT is a court are in issue in these proceedings. The plaintiff's position is that NCAT exercises judicial power. The defendant's and the Attorney General's position is that NCAT exercises administrative, not judicial power. The defendant maintains that NCAT is a court, whereas the Attorney General acknowledges that it is not a court. It is therefore necessary to address those questions in this judgment before considering the application of Burns v Corbett.
To complicate matters further, on 14 February 2018 the Appeal Panel of NCAT published a decision in relation to a tenancy dispute between residents of Queensland which held that NCAT exercised judicial power and was a court of a State for the purposes of proceedings under the Residential Tenancies Act; Johnson v Dibbin; Gatsby v Gatsby [2018] NSWCATAP 45. That decision is under appeal to the Court of Appeal, which heard argument on 12 April 2018 and reserved its decision.
[3]
The Factual Background
The plaintiff and the defendant are brothers. The plaintiff is the eldest of six children, the defendant is the youngest. The plaintiff and a sister were the first of the family to immigrate to Australia. About three years later, the plaintiff assisted the remainder of the family to follow them. From time to time since then, the plaintiff has provided financial assistance to members of the family, in particular to his brother Terry.
The plaintiff has never married and has no children. He purchased the property at 165 Doncaster Ave Kensington in about 1985. It is his only asset.
The plaintiff is now 81 years of age and in declining physical health. He lives in Surfers Paradise in the house of his friend and carer, Deidre Downey, who cleans, cooks and provides general housekeeping.
The defendant, now 74 years of age, married at 19 and had four children. He divorced in 1982 and married his current wife in 1999. In 1986, after he sold his matrimonial home, he moved back to the family home in Mascot which had been purchased by the defendant's three older brothers, but was registered in their mother's name.
Following their mother's death in August 2006, the family home was left to one of the three sons who had funded the purchase. The defendant undertook to challenge the mother's will so that the family home could be sold and the proceeds divided amongst his brothers. The defendant funded that litigation but was reimbursed by the plaintiff and another brother, after the property sold in October 2009. The defendant did not pay rent for the 20 years he lived in the family home, although he paid the rates and other expenses.
In December 2006, the plaintiff and the defendant had a conversation about the defendant living at 165 Doncaster Ave Kensington. The terms of that conversation are at the heart of the dispute with which these proceedings are concerned.
The defendant moved into the premises in January 2007 on the basis that he would pay $250.00 per week, as well as council and water rates and all utilities. The plaintiff paid the insurance and stayed in the house every six months or so when he was required to come to Sydney for medical appointments. On those occasions, the plaintiff would collect cash from the defendant. Otherwise, the defendant would deposit monies into an account to which the plaintiff had access in Queensland. That much appears uncontroversial.
The defendant undertook renovations to the property of his own volition. They included removing carpet, polishing floor boards, installing a new kitchen and wardrobes, and renovating one of the bedrooms into an office space. The plaintiff neither requested these renovations, nor was he informed of them in advance. When the plaintiff came to Sydney, he commented occasionally on the appearance of the house but did not complain that his permission to carry out the works had not been sought. The defendant claims that he spent $35,000.00 on these improvements.
The defendant also claims to have spent about $15,000.00 renovating two granny flats at the rear of the premises. One was rented through a real estate agent and the other was occupied by the defendant's son for a period of time and by an employee of the defendant's business, both rent-free.
For reasons that are immaterial to the matters in dispute, during 2013 Randwick Council became aware that the granny flats were being leased without the requisite approval. The real estate agent who managed the property on the plaintiff's behalf, Mr Efrossynis, communicated with the council in an attempt to resolve the problem. It was put to and denied by Mr Efrossynis that at about this time, he said to the defendant "You must have been promised something by Steve for you to have spent all this money on the house. I told Steve many times he had to spend money on the house to maintain it and he didn't."
In December 2013, the plaintiff decided to sell the property. On 30 December 2013, the plaintiff sent the defendant a letter which simply stated "I want you out of the house and clear the unit". That letter was followed with another letter on 20 February 2014 insisting that the defendant vacate the property by the end of the month.
The defendant ignored the first letter. On 11 March 2014, the plaintiff and the defendant met in the office of Mr Efrossynis. According to Mr Efrossynis, the plaintiff repeated his instruction that the defendant move out, to which the defendant replied "I expect to be reimbursed for the $50,000.00 that I have spent renovating the property. If you pay me this money, I will vacate the property." The plaintiff replied, "You've never spent $50,000.00 on my house. You have lived in the property rent free, your son has also lived in the property rent free, I want you out of the house." This conversation was put in issue by the defendant, who maintained that he left almost immediately upon entering the real estate office because of abuse from the plaintiff.
In May 2014, the defendant responded by email to the second letter through the plaintiff's solicitor, who in turn passed it on to Mr Efrossynis. In this email, the defendant said he had spent $55,000.00 renovating the property and that he did so because the plaintiff said he could live there "for as long as [he] liked." The defendant wrote "I was misled and I have through renting Steve's house for the last 8 years lost opportunities of purchasing my own property and profiting just to help Steve. ….. I asked Steve if he was interested in selling the house to give me until mid of (sic) 2014 for me to get myself organised (sic) purchase the house. …. I would like to be reimbursed only for the renovations."
In a further email of 4 November 2015 the defendant refused to move from the house unless he received payment for the renovations and a sum equal to the market value increase in properties in Wolli Creek, near to his place of work. On 1 December 2015, Mr Efrossynis rang the defendant and asked him what it would take for him to leave the property. According to Mr Efrossynis, the defendant nominated the sum of $200,000.00. This is denied by the defendant.
On 16 May 2016, the plaintiff's solicitors wrote to the defendant putting him on notice that the termination date of the periodic tenancy was 20 June 2016 and that in the absence of a mutually agreed short extension to the tenancy or vacant possession, court proceedings would follow. The letter referred to the payment of rent of $250.00 per week. The defendant replied that the proposal "totally ignores our previously continuous and mutually beneficial and thus far satisfactory agreement."
The plaintiff's solicitors enquired by way of email on 8 June what the "mutually beneficial" agreement was, according to the defendant. In his reply to that email, the defendant requested "that you first present me with his [the plaintiff's] written version of our mutually beneficial verbal agreement of some ten years ago."
A further letter of 15 June from the plaintiff's solicitors to the defendant confirmed that the defendant was a tenant, enclosed copies of the notices of 30 December 2013 and 24 February 2014 and noted that rent had not been paid since late 2014. Notice was given under s 85 of the Residential Tenancies Act terminating the periodic tenancy as at 23 September 2016.
On 27 June, the defendant emailed the plaintiff's solicitors. The email stated "our agreement was never to be a tenant." However, it also referred to "the rent" in relation to the premises a number of times.
The plaintiff's solicitors' response on 2 August sought details and receipts for the asserted cost of renovations carried out by the defendant and requested the "unpaid rental monies" in the defendant's account to be transferred to a nominated account, in addition to the resumption of payment of $250.00 per week until vacation of the premises. The letter further noted that the plaintiff had always been clear that the property was an investment in lieu of superannuation and that he now wished to access those funds. The termination date was confirmed.
On 29 August, the defendant stated that he would produce the evidence of the cost of the renovations "at the appropriate time" and that he would not vacate the premises "until we reach amicable resolution."
The plaintiff applied to NCAT for the termination of the tenancy on 21 October 2016. In the course of preparing for the hearing, the plaintiff lodged a statement of evidence (dated 4 November 2016) setting forth his account of the conversation in December 2006, which is consistent with his account in the proceedings before this Court. In summary, the plaintiff stated that the defendant asked if he could move into the property, the plaintiff agreed provided the defendant paid rent of $250.00 per week, and paid council and water rates, in addition to utilities. The plaintiff was to pay the insurance.
The defendant's response was dated 30 November. It stated (inter alia) that the plaintiff first suggested that the defendant reside in the premises and that the defendant "subsidise" the plaintiff's pension by $250.00 per week, that he did not consider himself a tenant and that the plaintiff had represented to him that the house would be bequeathed to the defendant and his sister (Maria) on the plaintiff's death. As a result of that representation the defendant undertook the renovations.
I pause to note that it took the defendant three years, since the plaintiff first requested that he vacate the property, to assert that he was not paying rent, and was acting pursuant to an expectation that he would inherit the property.
The application was heard on 13 December 2016. On 3 February 2107 the Court of Appeal handed down its decision in Burns v Corbett. On 24 March, the Tribunal directed that the parties file further submissions. The plaintiff then commenced proceedings in this Court. On 20 June 2017, the Tribunal dismissed the application for want of jurisdiction.
On 24 August 2017, the plaintiff filed a Notice of Motion seeking summary judgment or judgment consequent on the admission by the defendant that he owed the plaintiff "rent". On 27 September 2017, Fagan J ordered the defendant to pay to the plaintiff the sum of $47,500.00, with interest, being the "accrued debt" arising out of the non-payment by the defendant of the sum of $250.00 per week since November 2013: Steve Zistis v George Zistis [2017] NSWSC 27 September 2017 (unreported).
Fagan J found it unnecessary for the purposes of the proceedings before him to determine the nature of the agreement between the parties. His Honour commented that:
It is significant that even as the defendant endeavours to characterise his relationship with the plaintiff as something other than a tenancy at will, he has acknowledged that the $250 per week is a promise on his side, and one of the matching promises on the plaintiff's side is that the defendant may occupy the property.
[4]
Tenancy at Will or Life Interest?
For the reasons which follow, the plaintiff's account of the conversation with the defendant should be accepted. Where the plaintiff's evidence and the defendant's evidence conflicts, I am more than satisfied that the plaintiff is the more credible witness, given that his account of the arrangement has always been consistent and his evidence more closely conforms to the objective facts.
I add for completeness that the plaintiff presented as a reliable and competent witness, notwithstanding his age, his deafness and a degree of confusion arising out of the form in which certain questions were put.
The plaintiff's affidavit dated 19 September 2017 sets out the terms of the conversation in December 2006, consistent with his account before NCAT in his statement dated 4 November 2016. According to that account, the defendant requested that he move into the property, to which the plaintiff replied "I am prepared for you to live in the property but only on the basis that you pay rent and cover the expenses related to the property." The defendant agreed. The plaintiff further said "You can live in the property provided that you pay rent of $250 per week in addition to the council and water rates for the property." The defendant agreed. The plaintiff further said "You will be responsible for the payment of all utility expenses such as gas and electricity." Again, the defendant agreed. The plaintiff further said "I will pay the insurance for the house and that would be my responsibility. Further, I would like to stay in one of the bedrooms in the house when I travel to Sydney. Is this acceptable?" The defendant replied "Yes".
In the course of the plaintiff's evidence, the plaintiff related a conversation wherein the defendant said that he would fix the property, put a gazebo out the back, rip the carpet out and manage the house. In response to this the plaintiff said "Look, for God's sake don't do too much because the council, Randwick Council, is very, very hard". The plaintiff also told the defendant that his real estate agent would manage the back unit. The plaintiff said that he left the defendant alone and over the course of a number of years, the plaintiff noticed a number of changes to the house. The defendant did not request permission to carry out the renovations. When the plaintiff asked the defendant why he had done so, the defendant replied that "it's nicer like that".
With regard to the renovations, the plaintiff agreed that an air-conditioner and a second-hand kitchen had been installed, including a new stove. The plaintiff was not impressed with the quality of the polishing to the floors. The plaintiff also maintained that he had asked the defendant on at least two occasions whether he wanted money for the renovations, which the defendant declined. In the estimation of the plaintiff, the defendant spent $20,000.00 at most.
A number of times in cross-examination, the plaintiff insisted that the defendant said to him "Anytime you want me, I'm out."
The plaintiff's repeated denials in cross-examination that he and the defendant had any "discussions" prior to the defendant moving into the property are relied upon in order to suggest that the plaintiff's accounts of the conversation were unreliable. However, those denials are equally consistent with the absence of any extensive negotiations surrounding the defendant's occupation of the property. The plaintiff understood and answered questions seeking details of "conversations" or an account of "what happened". His denials of "discussions" do not, in my view, materially detract from his evidence. It was never made clear to the plaintiff that the term "discussions" was being used to signify any conversations between himself and the defendant relating to the defendant's occupation of the property. Even on the defendant's account, what was said between himself and the plaintiff on this subject was on one occasion, was very succinct and did not warrant the characterisation of "discussions".
In any event, the plaintiff strenuously denied that he ever said to the defendant that the defendant could live in the house forever. The plaintiff also strenuously denied that he said to the defendant that he would leave the property to the defendant and his sister Maria on his death.
According to the cross examination of the plaintiff, it was asserted that the plaintiff had a number of reasons for effectively conferring on the defendant a life estate in the property and allowing him to undertake renovations. Those reasons included that the plaintiff had always accepted responsibility for the welfare of the members of his family and that responsibility extended throughout his life to the defendant, and that the plaintiff was grateful for what the defendant had done by way of challenging their mother's Will.
Much of the defendant's affidavit of 22 August 2017 sets out the circumstances said to justify and support the defendant's contention that the plaintiff intended to bequeath him the property. The defendant contends that the family was very close and that he formed a particularly close relationship with the plaintiff. That relationship was said to have been strengthened by a joint business venture in a seafood shop on Wynyard Station ramp in the 1970s. The plaintiff and the defendant jointly operated that business until the defendant bought out the plaintiff's share in the sum of $7000.00.
The defendant also contends that following his separation from his first wife the plaintiff "helped [him] through this difficult period [and they] rekindled the close relationship that had developed during [his] childhood." The defendant also sets out at length his efforts in successfully appealing a Centrelink decision in relation to his mother's benefits and his efforts in relation to the challenge to his mother's Will. The defendant notes that he received nothing from his mother's estate and when asked by the plaintiff whether he needed any money from the estate, the defendant denied that he did.
Putting to one side whether the relationship between the plaintiff and the defendant was as close as the defendant describes, none of the personal and family history related by the defendant was disputed. The effect of all of that evidence is that the defendant undertook certain responsibilities on behalf of members of his immediate family, was largely successful and was compensated according to his wishes. The fact that the defendant has an expectation that his efforts would incline the plaintiff to make further provision for him is not to the point.
Similarly, the fact that the defendant undertook internal renovations to the property to the knowledge of the plaintiff, and the fact that the defendant paid the bulk of the expenses on the property (rates and utilities) do not warrant the inference that he did so in reliance upon a testamentary promise from the plaintiff. Those facts are equally consistent with the plaintiff's account of the terms of the occupancy. The starting point is to determine whether the plaintiff or the defendant's account of the relevant conversation should be accepted. Whether the plaintiff encouraged or induced in the defendant an expectation of obtaining an interest in the property, to the knowledge of the plaintiff, is subsidiary to that critical finding of fact.
The defendant's affidavit contains the following account of the conversation between the plaintiff and the defendant :-
Plaintiff : Would you like to live in the property at Doncaster Ave? Terry's out of the place if you would like to move in there.
Defendant : OK, that could work.
Plaintiff : I would just like $250 to subsidise my pension. You can live there forever as long as I can use it and stay there when I come down to Sydney.
Defendant : OK, I am more than happy for you to come down and stay with us for as long as you like.
Plaintiff : Sounds good. If I pass away first, the property will go to Maria and yourself anyway. I just ask that you look after it.
Defendant : OK, thank you. The place needs to be renovated. It is a mess. I will renovate it and then I will move in.
Plaintiff : Go ahead.
The defendant seeks to bolster this account of the conversation by pointing out that his residency in the family home over 20 years rent-free had enabled him to save money to eventually purchase his own home and he had "no reason to believe that [he] had to vacate the Zisti family home at any point in the immediate future, or at all", and therefore had no reason to approach the plaintiff to find alternative accommodation (at [76] of his affidavit).
I reject the defendant's account of this conversation on the basis that his credibility generally was significantly damaged in the course of the proceedings. The defendant's evidence is internally inconsistent in a number of respects and inconsistent with other independent and objective evidence :-
1. At [73] of his affidavit of 22 August 2017, the defendant states that, in about August 2006, he was living in the family home whilst in the middle of the dispute over his mother's Will. "[He] knew that once the matter was finalised [he] was going to have to find alternate accommodation as the Zisti family home would most likely have to be sold to resolve the dispute." This contradicts [76] of the same affidavit (see [49] above).
2. At [94] and [95] of the affidavit, the defendant claimed that in October 2006 he had $81,000.00 available for the purchase of a unit in Wolli Creek. The bank records produced by the defendant did not support this assertion. The defendant disclosed copies of one account statement (a St George account) which was the operating account for his business "Right Price Conversions" relating to two periods, namely, 12 December 2006 to 11 January 2007 and 12 February 2007 to 11 March 2007. On 8 March 2007 a balance of $81,512.63 appears. However, the closing balance on 11 March 2007 is $46,160.00. The closing balance for 11 January 2007 is $56,007.20. No evidence was produced that savings (or for that matter, any fluctuating balance on a business account) in the order of $80,000.00 existed in October 2006, and no other bank account records were produced by the defendant to establish that temporal claim.
3. The defendant's Cross Claim particularised savings "to acquire real property and … cash funds available of at least $210,000.00 by March 2008", notwithstanding that the ANZ bank account statement (the successor to the St George account), produced in answer to a subpoena issued on the plaintiff's behalf, disclosed that an amount of $213,178.69 standing to the credit of the defendant's business operating account on 14 March 2008 reduced to $177,278.64 by the end of March 2008 and further reduced to $81,000.00 by the end of April 2008. That is, of course, consistent with the dissipation of the funds on business expenses. The defendant's claim that the funds in this account were available to be used by him towards the purchase of residential property at any time, even to the point of emptying the account, is inconsistent with the necessity to maintain access to funds in order to operate the business. The defendant specifically denied that he had access to a loan account.
4. The defendant's characterisation of his payments to the plaintiff as a contribution to the plaintiff's pension is inconsistent with the defendant's email in May 2014 (see [18]); is inconsistent with a St George bank account statement for the period June to November 2014 in the defendant's name, which records a debit on 30 September of $5,000.00 nominated as "rent"; is inconsistent with the defendant's email to the plaintiff's solicitor of 29 August 2016 wherein the defendant says "the rent money has been left in the account which was set up for Steve to from it (sic) collect the rent"; and is inconsistent with Annexure I to the defendant's affidavit of 15 January 2018 wherein the defendant states "I paid rent for 2 years in 165 Doncaster Ave which was $26,000."
5. The defendant did not disclose in his affidavit the fact that he had purchased a property (an industrial unit) as a tenant in common at Wolli Creek in May 2008 for $700,000.00. As at January 2010, the defendant had purchased the remaining share for $350,000.00. That purchase was elicited from the defendant in cross examination by the plaintiff, who submits that the omission reflects very poorly on his credit, in circumstances where the defendant asserted in his affidavit of 20 March 2017 that he was unlikely to be able to purchase a property in Sydney in his lifetime. The defendant maintained that the undisclosed purchase of an industrial unit was irrelevant to any issue in the proceedings. That is a disingenuous claim, given that a significant plank in the defendant's case was that the "lost opportunity" was constituted by financial choices he made (expenditure on renovations, payment of "rent" to the plaintiff, application of "savings" to his business operations) which put the purchase of residential property in Wolli Creek out of his reach. However, those choices did not put the purchase of property beyond his reach. Moreover, in the defendant's Cross Claim, it was particularised that the defendant "refrained from purchasing real property since January 2007, notwithstanding having the financial means to do so during the period January 2007 to early 2013."
6. The defendant's admission in his email of May 2014 that he had asked the plaintiff for time to allow the defendant to purchase the property is inconsistent with a genuine belief on his part that he was to inherit the property, and therefore inconsistent with a representation by the plaintiff to that effect. The defendant said in evidence that he was referring to the purchase of his sister's "half share" of the property, yet that is not what was said, nor is it a sensible construction given that the effect of such an offer was to potentially deprive the plaintiff's sister of a testamentary gift which, on the defendant's case, was intended for her by the plaintiff after his death.
7. The evidence of Mr Efrossynis, which is independent of both the plaintiff and the defendant, establishes that the defendant offered on 11 March 2014 to move out of the property if he was paid $50,000.00. Such an offer is also inconsistent with the defendant's claims arising out of an alleged testamentary promise.
8. A contemporaneous business record of a conversation between Mr Efrossynis and the defendant on 1 December 2015 establishes that the defendant required payment of $200,000.00 to leave the property. Once again, this is inconsistent with the defendant's claim of a testamentary promise.
The implausibility of the defendant's account is further reinforced when one has regard to the advanced age of the plaintiff, his physical frailty and ongoing health needs, his dependency upon Ms Downey, and his long history in business, the culmination of which is one asset that is capable of providing for his future care. I do not accept that the plaintiff ever represented to the defendant that he would effectively divest himself of his only form of superannuation.
The terms of the plaintiff's 2007 Will do not support any testamentary promise. The Will effectively divides the whole of the plaintiff's estate into thirds, one third going to each of the defendant, another brother and the plaintiff's sister and her husband. There is no provision in the Will for the title of the property to be transferred to the defendant and the plaintiff's sister.
Moreover, the only source of the plaintiff's alleged promise to bequeath the house to the defendant and his sister occurs in the course of a conversation in December 2006. At no stage, before or during the dispute about the terms of the defendant's occupancy of the premises did the defendant state to the plaintiff (or to any of his agents) that this was his understanding. The first reference to this claim occurred in his statement to NCAT in November 2016. The plaintiff submitted that this was eloquent of a recent invention, in order to defeat the plaintiff's right to possession. The defendant's counsel submitted that no adverse inference should be drawn from this seeming delay, in circumstances where the defendant did not know what he was legally entitled to and was focussed instead on maintaining his occupancy of the premises.
In my view, the plaintiff's submission should be accepted. It would appear obvious to anyone, whether legally trained or not, that in the face of a threat of eviction by the very person who is said to have made the promise, and who intends to sell the property, that it would be at least highly relevant to "remind" the promisor of the undertaking. When this consideration is taken together with the defendant's offers to purchase the property, the inference that the defendant fabricated the testamentary promise by the plaintiff is justified.
The evidence overwhelmingly establishes that the defendant was subject to a tenancy at the will of the plaintiff and that the tenancy was terminated as at 23 September 2016, being the date nominated by the plaintiff's Queensland solicitors in their letter of 15 June 2016 to the defendant, pursuant to s 85 of the Residential Tenancies Act 2010.
It follows from these factual findings that the defendant's Cross Claim fails. I turn to the issue of jurisdiction.
[5]
Does the Residential Tenancies Act Confer Judicial Power on NCAT?
The accepted criteria for the characterisation of a power as a judicial power include the following (acknowledging that there is no definitive list of features); Love v Attorney General (NSW) (1990) 169 CLR 307; Precision Data Holdings Ltd v Wills (1991) 173 CLR 167 (Precision Data):-
1. The power to deliver a binding and authoritative decision in determining a dispute between parties; Brandy v Human Rights & Equal Opportunity Commission (1995) 183 CLR 245 (Brandy).
2. The capacity to enforce those decisions, albeit that is not a necessary attribute of judicial power. The inability to enforce judgments is a factor weighing against the characterisation of the power as judicial; Brandy.
3. The ascertainment of existing rights and liabilities by the determination of issues of fact and law, as opposed to a determination of what legal rights and liabilities should be created; Brandy; Precision Data.
4. The observance of open justice principles and the rules of procedural fairness; TCL Air Conditioner (Zhongshan) Co Ltd v Judges of the Federal Court of Australia (2013) 251 CLR 533. Where a tribunal is not bound by the rules of evidence, this may indicate that the exercise of the power is administrative; K-Generation Pty Ltd v Liquor Licensing Court (2009) 237 CLR 501.
In view of the Attorney General's position on this issue in these proceedings, it is worth noting the following passage from Leeming JA's judgment in Burns v Corbett [2017] NSWCA 3 at [30] (Bathurst CJ and Beazley P agreeing):-
All parties agreed that NCAT, in hearing and determining Mr Burns' complaints, was exercising judicial power. They were correct to do so. NCAT was determining whether there had been a contravention of the Anti-Discrimination Act, and, if so, whether a remedy should issue (which could include damages, an injunction, or an apology). If NCAT made such an order, Mr Burns could unilaterally obtain a certificate from NCAT's registrar which, when registered in a court, then "operates as a judgment of the Court": Civil and Administrative Tribunal Act, s 78 (monetary orders); Anti-Discrimination Act s 114 (non-monetary orders). In that way, Mr Burns would be able to obtain a binding, authoritative and curially enforceable judgment independently of the consent of the person against whom his complaint had been brought. Indeed, the pending prosecution of Ms Corbett for contempt starkly illustrates the enforceability of such orders.
The Attorney General's submissions in these proceedings, in summary, contend that several features of the Civil and Administrative Tribunal Act 2013 (NCAT Act) militate against the conclusion that the Tribunal determines existing rights and liabilities according to law, that some aspects of the manner of the exercise of the Tribunal's functions under the NCAT Act and the Residential Tenancies Act support the conclusion that the Tribunal's functions are administrative in nature, and that the termination and possession orders made under ss 83 and 85 of the Residential Tenancies Act are not "binding and authoritative" in the requisite sense. The defendant adopts these submissions.
Nothing in the NCAT Act, including s 38 which provides that the Tribunal is not bound by the rules of evidence and requires the Tribunal to act with as little formality as the circumstances permit and according to equity, good conscience and the merits of the case, was considered by the Court of Appeal in Burns v Corbett as adverse to the conclusion that the Tribunal determines existing rights and liabilities according to law. Sections 38, 45 and other provisions (such as clause 10 of Schedule 4 of the NCAT Act) allow the Tribunal to control its own proceedings. They do not qualify the essential characteristics of the Tribunal's core functions.
The fact that hearings before the Tribunal are in public and that the Tribunal generally delivers written reasons for its decisions support the judicial nature of its functions, notwithstanding that matters under the Residential Tenancies Act need not be heard by a legally qualified member.
Section 81 of the Residential Tenancies Act sets out the circumstances relating to termination, one of which is where the Tribunal makes an order terminating the tenancy (s 81(3)). Section 83 provides that if the Tribunal makes an order terminating the tenancy, it must make an order for possession. Sections 84 and 85 provide that where a landlord gives the requisite termination notice to a tenant, the Tribunal must make a termination order in relation to a fixed term or periodic tenancy respectively. Section 187(1) empowers the Tribunal to make a number of orders relating to both existing and terminated tenancy agreements, including an order for possession of the subject premises, orders for the payment of money, rent that is owing and compensation.
There are a number of provisions in the NCAT Act that go to the issue of enforceability. They include :-
1. non-compliance, without lawful or reasonable excuse, is either an offence under s 72(1) of the NCAT Act or a contravention of s 72(3) which the Tribunal can punish by the imposition of a civil penalty under s 77;
2. non-compliance with a Tribunal order can amount to contempt of the Tribunal by operation of s 73(2) of the NCAT Act and a person who does not comply is liable to be dealt with for contempt under s 73(5) and (6);
3. money orders can be enforced as judgment debts by registration in the registry of an appropriate court under s 78; and
4. in the case of possession orders, these can be enforced by the issue of a warrant for possession under s 121 of the Residential Tenancies Act;
These provisions are not concerned with the creation of legal rights and liabilities. They provide a framework whereby the Tribunal may determine that there has been a breach of a tenancy agreement that warrants an order for termination and, in the event of non-compliance with such an order, an order for possession. Where the alleged breach is disputed by the tenant, the Tribunal may nonetheless make such enforceable orders without the consent of the tenant. There is no relevant distinction between what Leeming JA described as an exercise of judicial power in Burns v Corbett and the exercise of the Tribunal's powers under these provisions of the Residential Tenancies Act.
Lastly, the plaintiff relies upon Silk Bros Pty Ltd v State Electricity Commission of Victoria (1943) 67 CLR 1 as authority for the proposition that the "power to make an order in favour of a landlord against a tenant for the recovery of the possession of leased land is plainly a judicial power according to any definition of judicial power which can be suggested": per Latham CJ at 9, citing Griffith CJ in Huddart, Parker & Co. Pty. Ltd v Moorehead (1908) 8 CLR 330 at 357. The attributes of judicial power (the power to decide controversies between parties exercised by a tribunal that is able to give a binding and authoritative decision, whether subject to appeal or not) were held to be vested by Regulation 15 of the National Security (Landlord and Tenant) Regulations under the National Security Act 1939-1940 to the Fair Rents Board. A landlord could apply to the Board for an order for possession, on prescribed grounds, and the order was enforceable in the same manner as if the order was made by a court.
The terms of Regulation 15 considered in Silk Bros. are relevantly similar to the powers exercised by NCAT under the Residential Tenancies Act. I can discern no material difference between them that would justify distinguishing Silk Bros on this issue.
In conclusion, I am satisfied that the powers exercised by the Tribunal under the Residential Tenancies Act are judicial in nature.
[6]
Is NCAT a Court?
The weight of authority is against the characterisation of the Tribunal as a court. Only the defendant submits that this Court should follow Johnson v Dibbin; Gatsby v Gatsby [2018] NSWCATAP 45 in preference to the decisions that precede it and are to the contrary: Trust Company of Australia Ltd v Skiwing Pty Ltd [2006] NSWCA 185 (Skiwing); 66 NSWLR 77; Sunol v Collier [2012] NSWCA 14; 81 NSWLR 619 at [8].
Notwithstanding that these Court of Appeal authorities were concerned with the previous incarnation of the Tribunal before the passage of the NCAT Act, the analysis undertaken remains valid. At [26] and [27] of Spigelman CJ's judgment in Skiwing, his Honour lists those features of the Tribunal (as constituted then) consistent with, and inconsistent with, its characterisation as a court of a State (the "balance sheet" approach). With the possible exception of the power now available to punish for contempt of the Tribunal, the power to enforce its monetary orders, and the enlarged jurisdiction, the features articulated by Spigelman CJ predominantly still apply.
The Appeal Panel in Johnson v Dibbin; Gatsby v Gatsby placed a degree of emphasis upon the existence of a power in NCAT to punish for contempt as a signifier of NCAT as a "court of record". When determining whether NCAT could properly be characterised as a court of a State, the Appeal Panel relied heavily upon the fact that the majority of the Tribunal's work now involves the exercise of judicial power (at the [209] to [217]), it is a court of record, notwithstanding that it has not been designated as a "court of record" by the State legislature (at [219]), and it has the necessary decisional independence and impartiality, notwithstanding the appointment of its members for fixed terms at a salary fixed by the Minister, and provision for the appointment of occasional members ([237] to [246]). The attributes of procedural fairness, providing reasons for decisions and conducting proceedings in public were also considered important signifiers. This analysis largely adopted and followed the Queensland Court of Appeal decision in Owen v Menzies & Ors; Bruce v Owen; Menzies v Owen [2012] QCA 170, which determined that the Queensland Civil and Administrative Tribunal (QCAT) was a court of a State.
Two relevant matters should be noted. The Queensland legislation establishing QCAT designated that Tribunal as a court of record, a significant criteria for the purposes of determining whether a tribunal is a court of a State. There is no such provision in the NCAT Act. The Court of Appeal in Owen v Menzies (and the Appeal Panel) rejected "the balance sheet" approach undertaken by Spigelman CJ in Skiwing and emphasised the exercise of judicial power. However, this consideration does not enjoy determinative weight: Skiwing at [19] and [20].
I am unpersuaded that NCAT is a court of the State, having regard to the analysis undertaken in Skiwing which I regard as authoritative for the purposes of these proceedings.
[7]
Conclusion and Orders
Consistent with Burns v Corbett [2018] HCA 15, sections 81, 83, 85, 187 and 119 of the Residential Tenancies Act are invalid as an attempted conferral of judicial power on a body which is not a court of a State, with respect to the resolution of disputes between residents of different States. They should be read down to avoid that invalidity. It follows that NCAT has no jurisdiction to resolve this matter.
The appropriate jurisdiction for the determination of the instant dispute being this Court, the plaintiff's Amended Statement of Claim succeeds. I make the following orders and declaration :-
1. Judgment for the plaintiff.
2. The plaintiff is entitled to vacant possession of the premises at 165 Doncaster Avenue, Kensington.
3. The plaintiff has leave to issue a writ of possession with respect to those premises.
4. The plaintiff is to file and serve short minutes of order setting out the amount of mesne profits accrued since August 2017 plus interest, within 14 days of the date of this judgment.
5. Costs are awarded against the defendant.
[8]
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: 21 May 2018