FEDERAL COURT OF AUSTRALIA

Dattilo v Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development) [2017] FCA 329

ORDERS

THE COURT ORDERS THAT:

1.    The interlocutory application filed on 29 March 2017 is dismissed.

2.    The appellants pay the respondent’s costs, as agreed or assessed.

3.    Orders 2 and 3 of the primary judge and the orders of the Full Court dated 2 March 2017 be stayed until 5:00 pm on Wednesday, 5 April 2017.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

GRIFFITHS J:

1    The appellants seek a stay of the orders made by the Full Court on 2 March 2017. The Full Court’s reasons for judgment are reported as Dattilo v Commonwealth of Australia (as represented by the Department of Infrastructure and Regional Development) [2017] FCAFC 17 (Full Court Dattilo). Relevantly, the appellants’ appeal was dismissed.

2    Broadly, the proceedings relate to the termination of a residential tenancy agreement between the Commonwealth and the appellants. The proceedings were heard by the Full Court together with 16 other similar proceedings. Ten of the proceedings, including this proceeding, involved tenants who have been in continual possession of the same residential premises for a period of 20 years or more. The remaining proceedings concern tenants who have been in continual possession for a period of less than 20 years. The distinction is relevant to the operation of some provisions of the Residential Tenancies Act 2010 (NSW). The Commonwealth, as landlord, sought to terminate the relevant residential tenancies and obtain vacant possession of the land which formed part of the proposed site for the Sydney West Airport. In the Federal Circuit Court of Australia, the Commonwealth succeeded in obtaining orders for vacant possession in respect of each of the tenants in the 17 proceedings, including the Dattilos. The tenants, including the Dattilos, appealed to the Full Court. With one small qualification (which does not affect the Dattilos) all the appeals were dismissed.

3    The interlocutory application seeking a stay was brought on the basis of this case being a sample case, the outcome of which would affect the other 16 matters. The formal stay application was commenced with only two full days remaining before the 28 day period for seeking special leave to appeal to the High Court expired. Accordingly, these reasons are necessarily less detailed than might otherwise have been the case.

4    The interlocutory application was accompanied by a brief affidavit affirmed by the appellants’ solicitor. Annexed to that affidavit is a copy of a proposed application for special leave. I will return to highlight some relevant features of that proposed application shortly. Mr King, who appeared for the appellants, told the Court that the special leave application had now been filed in the High Court.

The relevant legislative provisions

5    It is desirable to set out s 10AA of the Federal Circuit Court of Australia Act 1999 (Cth) as inserted by the Federal Courts Legislation Amendment Act 2015 (Cth:

10AA    Original jurisdiction—Commonwealth tenancy disputes

(1)    The Federal Circuit Court of Australia has jurisdiction to hear and determine a Commonwealth tenancy dispute between the parties to a lease, licence or other arrangement in which:

(a)    the Commonwealth, or a person suing or being sued on behalf of the Commonwealth, is:

(i)    the lessor (other than as a sublessor); or

(ii)    the licensor (other than as a sublicensor); or

(iii)    the grantor of a right or permission to possess, occupy or use land owned by the Commonwealth; and

(b)    a person other than:

(i)    the Commonwealth; or

(ii)    a person suing or being sued on behalf of the Commonwealth; or

(iii)    a Commonwealth officer or employee;

is:

(iv)    the lessee (other than as a sublessee); or

(v)    the licensee (other than as a sublicensee); or

(vi)    the grantee of the right or permission.

(2)    The Minister may, by legislative instrument, confer jurisdiction on the Federal Circuit Court of Australia in respect of any other specified Commonwealth tenancy dispute.

Note: For specification by class, see subsection 13(3) of the Legislative Instruments Act 2003.

(3)    The Minister may, by legislative instrument, make provision for and in relation to all or any of the following matters in respect of a Commonwealth tenancy dispute:

(a)    the rights of the parties to the Commonwealth tenancy dispute;

(b)    the law (whether a law of the Commonwealth or a law of a State or Territory) to be applied in determining the Commonwealth tenancy dispute (the applicable law);

(c)    any modifications of the applicable law that are to apply in relation to the Commonwealth tenancy dispute;

(d)    the powers that the Federal Circuit Court of Australia may exercise under the applicable law;

(e)    if the Federal Circuit Court of Australia makes an order when exercising jurisdiction over the Commonwealth tenancy dispute—the powers that may be exercised when executing the order or a class of orders.”

6    It is also desirable to set out the relevant terms of the Federal Circuit Court (Commonwealth Tenancy Disputes) Instrument 2015 (Cth) (the Instrument):

4    Definitions

In this instrument:

Act means the Federal Circuit Court of Australia Act 1999.

…

applicable NSW law has the meaning given by subsection 7(2).

…

Part 3 – Provisions relating to Commonwealth tenancy disputes

Division 1—Commonwealth tenancy disputes involving land in New South Wales

5    Operation of this Division

(1)    This Part makes provision in relation to the following matters in respect of a Commonwealth tenancy dispute involving land in New South Wales:

(a)    the rights of the parties to the dispute;

(b)    the law to be applied in determining the dispute;

(c)    the powers that the Federal Circuit Court of Australia may exercise under that law;

(d)    the powers that may be exercised when executing an order made by the Court.

(2)    This Part does not apply in relation to a Commonwealth tenancy dispute involving land in New South Wales unless the dispute involves a tenancy within the meaning of the Residential Tenancies Act 2010 (NSW).

(3)    Nothing in this Part has effect so as to confer non-judicial power on the Federal Circuit Court of Australia, unless the non-judicial power is incidental to the exercise of judicial power by the Court.

6    Rights of the parties

(1)    This section applies to a party to a Commonwealth tenancy dispute involving land in New South Wales if:

(a)    the party is a tenant within the meaning of the Residential Tenancies Act 2010 (NSW); and

(b)    the Federal Circuit Court of Australia has jurisdiction to hear and determine the dispute.

(2)    The party must not make an application to the Civil and Administrative Tribunal under the Residential Tenancies Act 2010 (NSW) in relation to a lease, licence or other arrangement to possess, occupy or use land that is the subject of the dispute.

7    Law to be applied

(1)    In determining a Commonwealth tenancy dispute involving land in New South Wales, the Residential Tenancies Act 2010 (NSW) and any regulations made under that Act are to be applied:

(a)    to the extent necessary to determine the dispute; and

(b)    subject to the modifications set out in section 8 of this instrument.

(2)    The law mentioned in subsection (1) is the applicable NSW law.

8    Modifications of applicable NSW law

(1)    The applicable NSW law is to be applied as if:

(a)    a reference to the Tribunal were a reference to the Federal Circuit Court of Australia; and

(b)    a reference to the principal registrar of the Tribunal were a reference to a Registrar of the Federal Circuit Court of Australia; and

(c)    a reference to the Sheriff, or to a sheriff's officer, were a reference to the Sheriff of the Federal Circuit Court of Australia.

(2)    The Residential Tenancies Act 2010 (NSW) is to be applied as if it included the following section:

Despite anything else in this Act, if the Federal Circuit Court of Australia makes a termination order in respect of residential premises, the Court may make such orders as it considers appropriate in relation to the day vacant possession of the premises is to be given to the landlord.

9    Powers of the Court

In determining a Commonwealth tenancy dispute involving land in New South Wales, the Federal Circuit Court of Australia may exercise any powers that are:

(a)    powers of the Civil and Administrative Tribunal under the applicable NSW law; and

(b)    relevant to determining the dispute.

10    Powers when executing orders made by the Court

(1)    If the Federal Circuit Court of Australia makes an order when exercising jurisdiction over a Commonwealth tenancy dispute involving land in New South Wales:

(a)    the Federal Circuit Court of Australia may exercise any powers of the Civil and Administrative Tribunal under the applicable NSW law; and

(b)    a Registrar of the Federal Circuit Court of Australia may exercise any powers of the principal registrar of the Civil and Administrative Tribunal under the applicable NSW law; and

(c)    subject to subsection (2), the Sheriff or a Deputy Sheriff of the Federal Circuit Court of Australia may exercise any powers of a sheriff's officer under section 7A of the Sheriff Act 2005 (NSW);

to the extent that those powers are relevant to the execution or enforcement of the order.

…

Disposition of the interlocutory application

7    It is desirable first to outline the relevant principles applicable to an application for a stay pending an application for special leave to appeal to the High Court. Those principles are well settled. They were recently reaffirmed by the Full Court in National Road Transport Association Ltd v Road Safety Remuneration Tribunal (No 2) [2016] FCAFC 58. The principles are reflected in the following extracts from Buchanan J’s judgment in that matter (with whom Jessup and Rangiah JJ agreed):

8.    In Burgundy Royale, Brennan J also said at 685:

In exercising the extraordinary jurisdiction to stay, the following factors are material to the exercise of this Court's discretion. In each case when the Court is satisfied a stay is required to preserve the subject-matter of the litigation, it is relevant to consider: first, whether there is a substantial prospect that special leave to appeal will be granted; secondly, whether the applicant has failed to take whatever steps are necessary to seek a stay from the court in which the matter is pending; thirdly, whether the grant of a stay will cause loss to the respondent; and fourthly, where the balance of convenience lies.

9    In Obeid v The Queen [2016] HCA 9, Gageler J observed that the additional considerations arise when the requirement of necessity has first been established saying (at [14]):

14    Since Jennings Construction Ltd v Burgundy Royale Investments Pty Ltd [No 1], judicial exposition of the conditions under which a stay will be granted in the context of an application for special leave to appeal has uniformly emphasised the need for the existence of ‘exceptional circumstances’. The standard exposition has gone on to emphasise the relevance, even where the Court or a Justice is satisfied that a stay is required to preserve the subject matter of litigation, of consideration of whether there is a substantial prospect that special leave to appeal will be granted, of whether the grant of a stay would occasion prejudice to a respondent, and of where the balance of convenience might lie in the circumstances of the case. Those factors, however, do not always arise for consideration and collectively they do not exhaust the considerations that may be relevant in every case.

8    These principles were recently reaffirmed and explained by Kiefel J (as her Honour was then) in Mercanti v Mercanti [2017] HCA 1 at [11]-[13] (footnotes omitted):

11.    In Jennings Construction, Brennan J stated as a first condition for a stay made by this Court, that there be a “substantial prospect that special leave to appeal will be granted”. This should not be understood as requiring that the prospects of success on the application for special leave be high. In applying that test, his Honour held that, in that case, he did not “think that the prospect of a grant of special leave is insubstantial”.

12    It is not necessary to state the arguments for and against the grant of special leave. They essentially come down to whether this case involves more than an application of settled principles to the facts of this case, for example, by providing an opportunity for clarification or amplification of a principle by reference to the particular facts of the case.

13    It does not seem to me that the prospects of a grant of special leave can be said to be insubstantial. As to the other considerations referred to in Jennings Construction, the applicant has not failed to take steps necessary to seek orders from the Court of Appeal, even though the term of the orders sought should have been longer in order to obviate the need for an application to this Court. It is not apparent that the grant of a stay or injunction will cause any loss to a respondent. Without a grant of a stay or injunction any appeal rights may be rendered futile. The balance of convenience clearly favours the continuation of the regime of injunctions which has been in place for some time.

9    The draft special leave application identifies the following three grounds:

(a)    the Parliament of the Commonwealth has no power under section 77 of the Constitution or otherwise to make a law delegating to a Minister of the Commonwealth the power to define the jurisdiction of a Chapter III court in this case the Federal Circuit Court of Australia [‘FCCA’];

(b)    the Parliament of the Commonwealth has no power under section 77(iii) of the Constitution or otherwise to define the extent to which the jurisdiction of any federal court shall be exclusive of that which belongs to or is invested in an administrative tribunal of a state that is not a court of a state;

(c)    in so far as the 2015 Instrument made by the Minister by Clause 6(2) purported to deprive NSW parties/citizens of the right to approach the NSW Civil and Administrative Tribunal (NCAT) it was neither “investing” the FCCA with jurisdiction nor was it “defining” the jurisdiction of the FCCA within the meaning of s.77 of the Constitution.

10    As will shortly emerge, there is a live issue whether the first and third grounds were run below. In any event, it might be noted at this point that there were numerous other grounds, raising mainly constitutional law or administrative law points, which were run below, were rejected and are not included in the draft special leave application.

11    It was not seriously disputed that the subject matter of the litigation could be lost if a stay is not granted. That is because the Commonwealth intends to obtain vacant possession of the relevant land and clear it as soon as it can as part of the construction of the proposed Sydney West Airport. Apparently there are some further legal steps which the Commonwealth may need to take to obtain vacant possession for this purpose and it is unclear how long those steps may take, but plainly the subject matter of the litigation is at risk absent a stay.

12    As is emphasised in the authorities, even where it is demonstrated that a stay is required to preserve the subject matter of litigation, it is necessary to consider other relevant matters, including whether there is a substantial prospect that special leave to appeal will be granted.

13    The amended notice of appeal in Full Court Dattilo contained the following three grounds which raised Constitutional issues (without alteration):

1.    The primary Judge erred in not holding that the Federal Court Legislation Amendment Act 2015 [Cth] is invalid as involving the imposition of administrative power of a State tribunal upon a Chapter III court.

2.    The primary Judge erred in holding that the Respondent was empowered to make Federal Circuit Court [Commonwealth Tenancy Disputes] instrument 2015 [Cth].

3.    The primary Judge erred in not holding that the Federal Court Legislation Amendment Act 2015 [Cth] is invalid as a law for the acquisition of property of the Appellant (sic) other than on just terms.

14    Ground 1 raised a separation of powers argument, which was considered and rejected by the Full Court in Full Court Dattilo at [93]-[128]. It is not entirely clear from the draft special leave application and, in particular, the three proposed grounds of appeal, that the appellants seek to challenge the Full Court’s rejection of their separation of powers argument. To the extent that they do, I am not persuaded that the draft application raises any matter relating to this subject which has substantial prospects of success (in the relevant sense as described by Kiefel J), nor was anything said in oral address which causes me to change that assessment.

15    I turn now to consider proposed grounds 1 and 3 in the special leave application. For the reasons which follow I consider that neither of these grounds was run below.

16    The Full Court noted at [78] that there were six common issues identified by the appellants:

1.    a separation of powers issues;

2.    that there was no “matter” before the FCCA;

3.    that there was no power in s 51 of the Constitution or other legislative power to make the amendments to the FCCA Act;

4.    that the Instrument was invalid;

5.    that there was an impairment of a constitutional guarantee in s 51(xxxi) of the Constitution; and

6.    that there was apprehended institutional bias.

17    The third and fourth issues are the subject of [133] to [161] in Full Court Dattilo. The parties’ submissions on these issues were summarised by the Full Court in [133] to [139] and [143] to [149] respectively. The Full Court’s consideration and rejection of the appellants’ contentions on the two issues are at [141] to [142] and [150] to [161] respectively. Proposed grounds 1 and 3 in the special leave application bear no relationship to these paragraphs in Full Court Dattilo, nor to any other part of those reasons for judgment. That is because, as the respondent submitted, the proposed grounds were not raised before the Full Court. That is why there is no explicit consideration of those issues in Full Court Dattilo.

18    There was no complaint by Mr King that the Full Court failed to deal with a submission made by him in respect of these matters. I consider that there is only a negligible prospect, if any, of the High Court granting special leave to appeal in respect of grounds which were not run below and which, therefore, were not dealt with by the intermediate appeal court. I do not accept Mr King’s contention that this is not a problem because the issues, he said, were “pure questions of law”. That disposes of proposed grounds 1 and 3.

19    As to proposed ground 2 (which Mr King described as the “critical ground”), it is accepted that part of this ground broadly reflects contentions which were made on behalf of the appellants in the Full Court (but not the contentions made in [32] of the Summary of Argument). The appellants’ contentions are summarised in [133] of Full Court Dattilo. The Full Court’s reasons for rejecting the appellants’ contentions are set out in [141] and [142]:

141    In our opinion, the source of legislative power to make laws regarding land tenure matters with respect to Commonwealth tenancies is plain. In the present case, it is s 51(i) of the Constitution, that is, the same power as enabled the Parliament to make a law for the acquisition of the real property, the subject of the tenancy, in order to reserve the land for an airport, as was reflected in the tenancy agreement. Before the making of the amendments to the FCCA Act and the Instrument it may be taken that the 2010 RTA applied to the tenancies. On the making of that Commonwealth legislation, including the Instrument, provision was made for the law to be applied in determining a Commonwealth tenancy dispute. Section 109 of the Constitution then applied so that the law of the Commonwealth prevailed and the law of the State was invalid to the extent of any inconsistency. At the same time the Commonwealth legislation, by s 10AA(1) of the FCCA Act, defined the jurisdiction of the FCCA (s 77(i) of the Constitution) with respect to matters in which the Commonwealth was a party (s 75(iii)) and arising under any laws made by the Parliament (s 76(ii)).

142    We reject the appellants' submission that the legislation “was an attempt to get round the decision of the High Court in Henderson.” In that case it was held that the Commonwealth legislation, the Defence Housing Authority Act 1987 (Cth) did not create an inconsistency between that Act and the Residential Tenancies Act 1987 (NSW) to attract the operation of s 109 of the Constitution. In the present case the Commonwealth legislation, including the Instrument, expressly applies the law of New South Wales, subject to express modifications.

20    To the extent that the proposed second ground of appeal also raises an issue concerning the validity of the Instrument, the Full Court summarised the appellants’ submissions relevantly at [143]-[144] and then explained in [151]-[155] why those submissions were rejected:

151    The starting point must be the terms on which the power to make a legislative instrument was conferred. Section 10AA of the FCCA Act had two relevant subsections although each operated by reference to the defined term “Commonwealth tenancy dispute”. Relevantly, the tenancy must involve a lease and a dispute about the termination of the lease or the possession, occupation or use of the land. Further, the dispute must be one in which the Commonwealth is a party. Section 10AA(1) dealt with the jurisdiction of the FCCA to hear and determine a Commonwealth tenancy dispute between the parties to a lease in which the Commonwealth was the lessor and a person other than the Commonwealth was the lessee. It defined the jurisdiction of the FCCA, the power to do so being conferred by s 77(i) of the Constitution by reference to one of the matters mentioned in ss 75 and 76 (here being a matter in which the Commonwealth was a party within s 75(iii)). Section 10AA(3) which was the regulation-making power, thus, for present purposes it was the central provision.

152    Section 10AA(3) provided that the Minister may, by legislative instrument, make provision for and in relation to all or any of certain specified matters in respect of a Commonwealth tenancy dispute. We have set out this provision above at [82]. It is also significant that, by s 5, the amendments made by the Part, which included s 10AA, apply in relation to a lease entered into before the day item 4 of Sch 2 to the Federal Courts Legislation Amendment Act commenced on 26 February 2015 and a Commonwealth tenancy dispute between the parties to the lease that arose before, on or after that day.

153    The Instrument was registered on 5 March 2015. Turning to the terms of the Instrument, s 5 stated that the Part makes provision in relation to specified matters in respect of a Commonwealth tenancy dispute involving land in New South Wales: the rights of the parties to the dispute, those rights being the subject of s 6; the law to be applied in determining the dispute, that law being the subject of ss 7 and 8; the powers that the FCCA may exercise under that law, those powers being the subject of s 9; and the powers that may be exercised when executing an order made by the FCCA, those powers being the subject of s 10. We see no basis for a conclusion that the Instrument is ultra vires the power in s 10AA(3) of the FCCA Act.

154    We do not accept the appellants' submission that the power conferred by s 10AA(3) did not include the power to adopt by Instrument the 2010 RTA. Nor do we accept the appellants' submission that s 10AA(3) was a power only to define the court's jurisdiction with respect to a Commonwealth tenancy dispute. We also do not accept the appellants' submission that the law-making power “for and in relation to … a Commonwealth tenancy dispute” was not a law-making power since the legislation contemplated a legislative instrument-making provision for and in relation to, amongst other things, the law to be applied in determining the Commonwealth tenancy dispute. We do accept the appellants' submission that there must be a dispute to which the Commonwealth is a party and a dispute must be about the termination of a lease, or the possession or use of land but, in our view, there was such a dispute in the present case.

155    We reject the submission that the reference to “the applicable law” in s 10AA(3) refers to an existing Commonwealth law as that submission is directly contrary to the express words of s 10AA(3)(b): “whether a law of the Commonwealth or a law of a State … ”. We have considered already and rejected the submission that the legislative scheme is invalid as conferring non-judicial power on a Ch III court.

21    Having regard to the relevant contents of the draft application for special leave and the oral submissions made by the parties today, I am not satisfied that the appellants have substantial prospects (in the sense explained by Kiefel J) that special leave to appeal would be granted in respect of the second proposed ground of appeal. Indeed, for the following reasons, I consider that the prospects could only be described, at best, as slight or insubstantial.

22    First, the Full Court’s reasoning in rejecting the appellants’ contentions was orthodox and is reflected in [141] and [151] of Full Court Dattilo, which relied not only on s 51(i) of the Constitution, but also on ss 71(i) and (iii) and 76(ii) of the Constitution.

23    Secondly, the appellants’ reliance upon the maxim expressio unius in support of this argument is revealing. It is well established that that maxim is one which is to be used with extreme caution, at least in a statutory interpretation context (see, for example, Carr v Finance Corporation of Australia Ltd (No 2) [1982] HCA 43; 150 CLR 139 at 150-151 per Mason, Murphy and Wilson JJ). It is difficult to see why the position is any different with regard to Constitutional interpretation.

24    Thirdly, it is evident from the Summary of Argument that the appellants continue to rely upon Re Residential Tenancies Tribunal (NSW); Ex parte The Defence Housing Authority [1997] HCA 36; 190 CLR 410. But they have not demonstrated any arguable error in the Full Court’s reasoning in [142] as to why that authority is distinguishable. In particular, the facts in that case did not attract the operation of s 109 of the Constitution, whereas the Full Court found, for reasons which are set out in [141], that this provision applied here.

25    Fourthly, to the extent that the second proposed ground of appeal relates to the Full Court’s reasoning at [151] to [155] (which is by no means clear because there is no express reference in the Summary of Argument to any of those paragraphs), no arguable error has been identified in that reasoning.

26    Fifthly, the appellants’ contention in [25] of the Summary of Argument, (i.e. that the Commonwealth Parliament has no power to vest jurisdiction in a Ch III Court which is given exclusively by a State to an administrative tribunal and which is executive in character), fails to confront the Full Court’s reasoning as to why the jurisdiction conferred upon the FCCA did not involve non-judicial power (see [112]-[128]).

27    Sixthly, I do not consider that the appellants’ prospects are materially assisted by the recent decision of the Court of Appeal of NSW in Gaynor v Burns [2017] NSWCA 3. The facts there are distinguishable from those here.

28    That is probably a sufficient basis to dismiss the interlocutory application. For completeness, however, on the issue of where the balance of convenience lies I make the following observations. First, although both parties submitted that the balance of convenience favoured their respective positions, the evidence in support was scant. Mr King relied upon the fact that stays had previously been granted by Robertson J in January 2016 and by me on 2 March 2017. But Robertson J’s order related to a stay of the primary judge’s orders and the order made on 2 March 2017 was made in very different circumstances to those which exist now.

29    The Commonwealth sought to rely upon a 96 page affidavit by a Commonwealth officer, which had not been filed or served. A copy was provided to Mr King at the commencement of the hearing. He objected to it being relied upon on the ground of prejudice, which objection was upheld. The Commonwealth tendered a letter dated 27 March 2017 and relied upon it on the balance of convenience. I give that letter little weight. The statement made in it to the effect that the Commonwealth had repeatedly stated that the need for vacant possession is urgent was unsupported. The matters raised in the letter concerning arrears of rent and/or occupation fees are not particularly compelling on balance of convenience.

Conclusion

30    For these reasons, the interlocutory application should be dismissed with costs.

31    Mr King sought a stay of a further 14 days to enable his clients to make whatever application they wish arising from my decision. This was opposed by the respondent. In circumstances where the Court was told that the Commonwealth needed a warrant to obtain vacant possession and that this would not occur before 5:00 pm next Wednesday, 5 April 2017, I consider that it is appropriate to grant a stay for that shorter period.

32    Orders will be made accordingly.

Associate:

Dated:    29 March 2017