Jim Foliou Samios v Augustin Petersilka [1993] ACTSC 118 (23 December 1993)

SUPREME COURT OF THE ACT

JIM FOLIOU SAMIOS v. AUGUSTIN PETERSILKA
No. SC438 of 1993
Number of pages - 12
Landlord and tenant - Practice and procedure - Law reform

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MASTER A HOGAN

CATCHWORDS

Landlord and tenant - Notice to quit - Calendar month - Lunar month - Corresponding date rule.

Practice and procedure - Stay of proceedings - Second action - First action discontinued - Not same cause of action.

Law reform - Time - Month - Lunar Month - Calendar month - Reform of common law required.

O'Brien Enterprises v Shell Co (1983) 47 ALR 537 at 543

Amad v Grant [1947] HCA 9; (1946) 74 CLR 327

Turner v York Motors [1951] HCA 52; (1951) 85 CLR 55

Harty v Kolman (1977) 1 NSWLR 674

Dodds v Walker (1981) 1 WLR 1027 at 1029

Kodak (Australia) Pty Ltd v Hally 1960 QdR 452

Phipps and Co v Rogers (1925) 1 KB 14

Redfern and Cassidy: Australian Tenancy Practice and Precedents par (1770)

Interpretation Act 1889

Interpretation Ordinance 1967 s.14;

Interpretation Act 1967 s.14

Law of Property Act 1925 (UK) s.61

Supreme Court Rules O.30 r 4

HEARING

CANBERRA, 23 July 1993
23:12:1993

Counsel for the Plaintiff: J. Purnell

Instructing Solicitors: Malleson Stephen Jaques

Counsel for the Defendant: R. J. Arthur

Instructing Solicitors: Bernard Collaery and Associates

ORDER

THE COURT ORDERS THAT:
1. The plaintiff's Notice of Motion of 15 July 1993 be dismissed.

2. The plaintiff pay the costs of that Notice of Motion.
3. The defendant's Notice of Motion of 12 July 1993 be dismissed.
4. The defendant pay the costs of that Notice of Motion.

DECISION

MASTER A HOGAN There are two Notices of Motion by which relief is sought in this action.

2. The action itself was commenced by Writ issued on 2 July 1993. The Writ was indorsed with a Statement of Claim, by which the plaintiff claimed possession of premises which were the subject of a sublease between the plaintiff as sublessor and the defendant as sublessee.

3. In more accurate detail, the Statement of Claim alleged:

1. The plaintiff was at the date of the issue of the Writ the
registered proprietor of the premises.
2. By a written memorandum of lease Gilroy Investments Pty.
Limited had leased the premises to the defendant.
3. The term of the lease expired, and the defendant held over as
tenant from month to month pursuant to a holding over clause in
the lease.
4. Gilroy Investments Pty. Limited had transferred its right
title and interest in the premises to the plaintiff.
5. By Notice to Quit dated 30 April 1993, served on 30 April
1993, the plaintiff determined the month to month tenancy.
6. The defendant was continuing to remain in possession of the
premises.

4. There had been previous litigation between the parties relating to the premises.

5. In action 43 of 1993 the plaintiff had sought possession of the premises, and on 1 February 1993 had taken out a summons seeking summary judgment for their possession. That application for summary judgment was heard by me on 5 February 1993. The evidence on that application included the sublease from Gilroy Investments Pty. Limited to the defendant, which purported to commence "on and from the date of commencement of business or 1 June 1991, whichever is earlier".

6. Possession was claimed on the basis of a Notice to Quit, which had been served on 30 November 1992, which was alleged to have determined the tenancy as from 1 January 1993.

7. The evidence on the application did not include any evidence of the date on which business had commenced. I held that the Notice to Quit had not been proved to have determined the tenancy. An appeal against that decision was dismissed by Higgins J on 16 April 1993. The plaintiff appellant was ordered to pay the defendant respondent's costs.

8. The plaintiff then, on 30 April 1993, served the Notice to Quit on which he relies in these proceedings, and after its expiry commenced this action on 2 July 1993.

9. The defendant appeared on 9 July 1993. The first Notice of Motion that is before me was filed by the defendant on 12 July 1993. It sought a stay of proceedings of this second action.

10. The second Notice of Motion was filed by the plaintiff on 15 July 1993. It sought an order granting leave to enter summary judgment.

11. Both Notices of Motion came on for hearing on 23 July 1993.

12. It is common ground that on that day the plaintiff filed a Notice of Discontinuance of the first action.

13. I declined to make an order one way or another on the application for stay of proceedings until after the hearing of the application for summary judgment.

14. The basis of the application for a stay was either the inherent jurisdiction to stay proceedings that are an abuse of process, or the power given by O.30 r 4.

15. I am now satisfied that on neither basis should a stay be ordered.

16. The Rule does not operate in terms, since the second action is not a subsequent action brought before payment of the costs of a discontinued action. It was brought before the second action had been discontinued.

17. Further, since the second action alleged the right to possession from a different date, founded upon the service of a different Notice to Quit, I do not think that the cause of action in the two cases is the same or substantially the same, as the Rule requires.

18. The same reasoning applies to the application, so far as it depends upon the inherent jurisdiction. I do not need to decide whether in the circumstances I have power to exercise the Court's inherent jurisdiction. That question turns upon what is meant by "matter" in O.61A r 4. I would be inclined to hold that in the circumstances of this case it meant the action, not just the application for summary judgment in respect of the action.

19. But since it is clear to me that there was no abuse of process involved in the bringing of the second action, because of the essential difference in the cause of action, I would not make the order sought in any event.

20. The evidence in support of the application for summary judgment included a copy of the relevant sublease, which was expressed to be for a term of one year on and from the commencement of business or 1 June 1991 whichever is earlier. In this action however, there was evidence that the defendant commenced business "in or about the middle of the July 1991". It follows that the term of the lease expired on 31 May 1992, and that the holding over from month to month began on 1 June 1992.

21. There was also a copy of the Notice to Quit, dated 30 April 1993, and verification of the allegation that it was served on that day.

22. That Notice required the defendant to quit and deliver up possession "at a time being the expiry of one month following the end of the current period of your monthly tenancy".

23. The plaintiff also tendered evidence that at the time of the service of that Notice to Quit there was delivered to the defendant a letter from the plaintiff's solicitors which purported to withdraw a previous Notice to Quit.

24. The letter continued:

"Our client claims that a monthly tenancy of the premises exists,
with the period of the tenancy commencing on the first day of the
month.
We note you have filed a defence in other proceedings alleging
your lease did not commence until 17 July 1991. Accordingly our
client will regard the Notice to Quit as having been complied
with if you vacate the premises on or before 17 June 1993."

25. At the end of the plaintiff's case the defendant submitted that even if the facts alleged by the plaintiff were accepted the plaintiff would not be entitled to judgment.

26. The first objection was that the letter referred to was to be read together with the Notice to Quit, effectively overriding it and making the date on which the tenant was required to quit 17 June 1993.

27. A Notice to Quit may be read in the light of other documents O'Brien Enterprises V Shell Co (1983) 47 ALR 537 at 543. But I do not think that this particular letter had the effect of overriding the express words of the notice. I read it as being an intimation to the defendant that the plaintiff held the view that the tenancy began on the first day of a month. He noted the defendant's contention in another document that it was the 17th. He said, in effect, "Well if that is so, get out on or before 17 June - that would be the effect of the notice if your contention were correct". It was not even a concession, let alone an assertion, that the 17th was the correct day of the month.

28. Accordingly I overruled that submission.

29. The next submission was based on the specification of the date for giving up possession, applying the verbal formula contained in the notice to quit.

30. The Statement of Claim does not allege in terms a date from which the plaintiff claimed to be entitled to possession.

31. It claimed mesne profits at the rate of $137.19 per day from 18 June 1993 until delivery up of possession, but it was not submitted that such a claim had the effect of specifying the 18th as being the date of the month for giving up possession.

32. The defendant submitted that on the plaintiff's evidence the period on which the lease started, and on which each holding over period started, would be the first of the month. Counsel for the plaintiff concurred.

33. But the Notice to Quit was not drafted upon the basis that the first of the month was the only possible starting day of a period. It was intended to operate on the basis that the period of the monthly tenancy that was current at the time of service began one month before that day, or concluded on that day, or began on any day in between.

34. As counsel for the defendant expressed it, the notice was meant to be "ambulatory", that is, capable of being effective on any day on which the period might have ended.

35. Amad v Grant [1947] HCA 9; (1946) 74 CLR 327 is authority for the proposition that in any periodic tenancy the notice to quit must (unless the parties have otherwise agreed) expire at the end of the period of tenancy.

36. This tenancy was a holding over from month to month. But when he served the Notice to Quit the landlord did not know, or was not confident that he could prove, on what day of the month the periods of one month began or finished.

37. There is ample authority sanctioning the use of an ambulatory formula to meet the needs of a landlord in such a case. It is to demand possession "at the expiration of the month of your tenancy which shall expire next after the expiration of one month from the service upon you of this notice". See Amad v Grant [1947] HCA 9; (1947) 74 CLR 327 per Latham CJ at 339; Turner v York Motors [1951] HCA 52; (1951) 85 CLR 55 per Dixon J and per Kitto J at 91; Harty v Kolman (1977) 1 NSWLR 674.

38. That formula inevitably gives at least one month's notice, and is expressed to operate at the expiration of the tenancy period. A more general form of the formula is given at (1770), page 2233 of Redfern and Cassidy: Australian Tenancy Practice and Precedents. It will be noted that the formulas in Amad v Grant and in Redfern and Cassidy both nominate the end of a period of the tenancy as the expiry date of the notice.

39. The landlord in this case did not use that well tried and infallible formula. He used the phrase "the expiry of one month". The question is whether the formula that he did use has the same effect.

40. There is no doubt that it must result in the tenant's receiving at least one month's notice.

41. But counsel for the defendant submits that it does not inevitably expire at the end of a period of the tenancy.

42. That is because the expiry of the notice is expressed in it to be "the expiry of one month", not "the expiry of the month of your tenancy".

43. Counsel's argument proceeded firstly on the basis that the expiry of one month was to be ascertained by reference to what has been called "the corresponding date" rule.

44. On that basis, since the expiry of the then current period was 30 April, the expiry of one month from then was 30 May. But in his submission the next period of the tenancy expired on 31 May. Therefore the notice was bad.

45. Counsel for the plaintiff agreed that the period which was current when the Notice to Quit was served expired on 30 April.

46. If the "corresponding date" rule is the appropriate rule, and if it has been properly applied to the facts of this case, the defendant's submission would be correct.

47. The "corresponding date" rule is most clearly expounded by Lord Diplock in Dodds v Walker (1981) 1 WLR 1027 at 1029. But, as he there said, "My Lords, reference to a 'month' in a statute is to be understood as a calendar month. The Interpretation Act 1889 says so."

48. That is true also in the Territory: Interpretation Ordinance 1967 s.14; Interpretation Act 1967 s.14.

49. In the United Kingdom the statutory definition was extended to "all deeds, contracts, wills, orders and other instruments" coming into operation after the commencement of the Law of Property Act 1925 (s.61).

50. I hesitate to make any definitive statement about the law in the Territory in this area, but so far as I am aware there is not in force in the Territory any enactment corresponding to that English section.

51. The meaning of the word "month" as used by the landlord in this notice is therefore to be determined according to the common law.

52. At common law the word "month" in writings relating to temporal matters meant lunar and not calendar months, and that meaning has been held to apply to Notices to Quit. Kodak (Australia) Pty Ltd v Hally 1960 QdR 452; Phipps and Co v Rogers (1925) 1 KB 14.

53. In that latter case Atkin LJ said (at 26):

"On the first point I think that the landlords are right.
According to the rule of the common law a month means lunar
month, unless the contrary is indicated by the context, by
statutory provision or by recognised exceptions. What the origin
of the common law rule is I have not been able to discover. Lord
Coke merely states the rule. Blackstone says: 'Not only because
it is always one uniform period, but because it falls naturally
into a quarterly division by weeks.' He proceeds to say:
'Therefore, a lease for "twelve months" is only 48 weeks; but if
it be for a "twelve month" in the singular number, it is good for
the whole year.' 2 Bl. Com. 141. The reason appears inadequate.
The result is to adopt a meaning which is nearly always contrary
to the intention of the parties. The rule is fortunately almost
destroyed by exceptions. It does not apply to mercantile
documents, or to statutes, or to mortgages, or to cases where the
context requires the meaning of calendar months. It never did
apply in ecclesiastical law. In the residue of cases, however,
it clearly does apply, as is established by a series of
authorities which we cannot overrule. I am clearly of opinion
that it is a public disadvantage that the rule should continue;
and it is worth the consideration of the Legislature whether the
prima facie construction of calendar month enacted by the
Interpretation Act should not be applied to all transactions. In
the meantime the rule prevails. I am unable to find anything in
the context which is in any way inconsistent with the common law
use, or tends to show that calendar months was intended. I think
therefore that the tenancy agreement must be construed as though
three months meant three lunar months."

54. Among the conditions of the sublease is clause 1.2 Interpretation, subclause (d) of which provides that "a reference to a month means a calendar month". There are other provisions of the sublease which make it quite clear that in the construction of this particular sublease "month", wherever used, meant "calendar month".

55. Since the defendant was holding over pursuant to clause 16 of that document, he was doing so as tenant "from month to month", meaning thereby "calendar month to calendar month".

56. That clause itself permitted that monthly tenancy to be terminated by either party by one month's notice in writing. That means that the notice, if and when it is given, must specify a calendar month.

57. The context and provisions of the sublease do not necessarily govern the construction of the Notice to Quit.

58. It would be clear, I think, that in construing the phrase in the Notice to Quit, "the end of the current period of your monthly tenancy" it would be understood to refer to the tenancy from calendar month to calendar month provided for by clause 16 of the sublease.

59. But that is not sufficient to displace the presumption of the common law that the "one month" which was to follow the end of that current period meant a lunar month. If anything, the very juxtaposition of "the expiry of one month" and "the current period of your monthly tenancy" supports a distinction between the two periods.

60. In that case the notice would expire before the last day of the relevant period.

61. I can not pretend that this result gives me any satisfaction. In this particular case the result is, as Lord Atkin said, to adopt a meaning which is contrary to the intention of the parties. Reform of the law on the point happened in England in the same year that Atkin LJ called for it in Phipps and Co v Rogers (supra). But it took an Act of Parliament to do it. Legislation is obviously needed to reform the law in the Territory.

62. I would suggest that wider language is called for than that used in the English legislation. But my place in the judicial hierarchy is such that I am not able to effect any reform myself.

63. The only consolation that I can take in this case comes from my opinion that, if I am wrong in deciding that the phrase in the Notice to Quit meant "the expiry of one lunar month", then it meant "the expiry of one calendar month", and the "corresponding date" rule applied.

64. As Lord Diplock said in Dodds v Walker (supra):

"The corresponding date rule is simple. It is easy of
application. Except in a small minority of cases, of which the
instant case is not an example, all that the calculator has to do
is to mark in his diary the corresponding date in the appropriate
subsequent month. Because the number of days in five months of
the year is less than in the seven others the inevitable
consequence of the corresponding date rule is that one month's
notice given in a 30 day month is one day shorter than one
month's notice given in a 31 day month and is three days shorter
if it is given in February. Corresponding variations in the
length of notice reckoned in days occur where the required notice
is a plurality of months.
This simple general rule which Cockburn CJ in Freeman v Read
(1863) 4 B and S 174, 184 described as being 'in accordance with
common usage ... and with the sense of mankind,' works perfectly
well without need for any modification so long as there is in the
month in which the notice expires a day which bears the same
number as the day of the month on which the notice was given.
Such was the instant case and such will be every other case
except for notices given on the 31st of a 31 day month and
expiring in a 30 day month or in February, and notices expiring
in February and given on the 30th or the 29th (except in leap
year) of any other month of the year. In these exceptional
cases, the modification of the corresponding date rule that is
called for is also well established: the period given by the
notice ends upon the last day of the month in which the notice
expires."

65. Lord Russell of Killowen explained the application of the rule to the facts of Dodds v Walker as follows:

"My Lords, it is common ground that in this case the period of
four months did not begin to run until the end of the date of the
relevant service on September 30--ie at midnight September
30/October 1. It is also common ground that ordinarily the
calculation of a period of calendar months ends upon what has
been conveniently referred to as the corresponding date. For
example in a four month period, when service of the relevant
notice was on September 28, time would begin to run at midnight
September 28/29 and would end at midnight January 28/29, a period
embracing four calendar months. It is to be observed that the
number of days in the four month period in that example is in one
sense inevitably limited by the fact that September and November
each contains but 30 days. But the application of the
corresponding date principle inevitably produces variation in the
number of days involved, depending upon the date upon which a
four month notice is served and the irregular allotment of days
to different months. Sometimes it is not possible to apply
directly the principle, for instance if a four month notice is
served on October 30 (the time beginning to run at midnight
October 30/31), there being in February but 28 (or 29) days it is
not possible to find a corresponding date in February and plainly
a corresponding date cannot be sought in March: the application
of the corresponding date principle in such case can only lead to
termination of the four month period at midnight February
28/March 1 (or midnight February 29/March 1 in a leap year).
That is an inevitable outcome.
Bridge LJ in his dissenting judgment in this case adopted a
simple stance. Time he said (correctly) began to run at midnight
September 30/October 1. Stretching ahead were the four calendar
months of October, November, December and January: the tenant
was allowed the whole of those four calendar months including the
whole of January: therefore the application made on January 31
was made in time. I am with respect unable to accept this
departure from the corresponding date principle simply because
the period starts to run at the outset of the first of a month:
a departure from the sound and well established rule is not
required in that one instance, as it is required in the example
given of there being no corresponding date in February. ...
Accordingly I am of opinion that the corresponding date principle
is applicable in this case, that the four month period expired at
midnight January 30/31, and that the application made on January
31 was out of time and could not be entertained."

66. Counsel for the plaintiff submitted that the notice allowed the tenant the whole of the next succeeding month, namely May, because May was a calendar month.

67. That seems to me to be precisely the error into which Bridge LJ fell, in the opinion of Lord Russell of Killowen.

68. The application of the corresponding date rule means that the Notice to Quit given on 30 April, expired on 30 May. The period of the tenancy that was then current expired on 31 May. To be effective, it was necessary that the notice expire on 31 May or 1 June. It expired one day earlier. Therefore it was not effective.

69. I dismiss the defendant's Notice of Motion of 12 July 1993. I order the defendant to pay the costs of that Motion.

70. I dismiss the plaintiff's Notice of Motion of 15 July 1993. I order the plaintiff to pay the costs of that Motion.