Dalby v Gazzard [1949] HCA 36; (1949) 78 CLR 375 (18 August 1949)

HIGH COURT OF AUSTRALIA

DALBY v. GAZZARD [1949] HCA 36; (1949) 78 CLR 375

Landlord and Tennant

High Court of Australia
Dixon(1), McTiernan(1), Williams(1) and Webb(1) JJ.

CATCHWORDS

Landlord and Tenant - Weekly tenancy - Termination of tenancy - "Protected person" let into possession by outgoing tenant - No consent by landlord - "Claiming under the lessee" - Defence (Transitional Provisions) Act 1946-1947 (No. 77 of 1946 - No. 78 of 1947) - National Security (War Service Moratorium) Regulations (S.R. 1941 No. 61 - 1948 No. 109), reg. 30 (6).*

HEARING

Sydney, 1949, August 3, 18. 18:8:1949
APPEAL from a Court of Petty Sessions.

DECISION

August 18.
The Court delivered the following written judgment:-
This is an appeal by special leave from portion of an order made by a Court

2. The order was made upon an information exhibited in the name of one, on behalf of both, of the appellants. By the information they seek to be put into possession of an unfurnished flat which they allege had been held by them as landlords by the respondent Sheila Gazzard as tenant upon a tenancy that had been determined. They claimed that the respondent Sheila Gazzard retained possession. It appeared, however, that the respondent John Gazzard was in actual occupation and that he was a "protected person." The magistrate adjudged that the informant was entitled to possession as against the respondent Sheila Gazzard, but ordered that the warrant of possession should not be executed against the respondent John Gazzard, being a protected person. The appeal is by the landlords against so much of the order as directs that the warrant should not be executed against the respondent John Gazzard. (at p381)

3. In giving the direction the magistrate acted under reg. 30 (6) of the National Security (War Service Moratorium) Regulations. That sub-regulation provides that where a tenancy has been lawfully determined and any person claiming under the lessee and actually in possession of the premises or any part thereof is a protected person an order for the ejectment of persons from those premises or for the recovery of possession of those premises shall not be enforced against the protected person, unless the court is satisfied of the existence of one or other of certain states of fact which the sub-regulation defines. (at p382)

4. The respondent John Gazzard is a protected person within the meaning of the definition of that expression in reg. 28A and within the further limitations upon the application of the expression imposed by reg. 30 (1). He is or was in actual occupation of the premises, but the question is whether he is a "person claiming under the lessee" within the meaning of those words in reg. 30 (6). (at p382)

5. The respondent Sheila Gazzard and her husband William Gazzard had occupied the flat until Saturday, 15th May, 1948, when they left it. On the previous day the respondent John Gazzard came into the premises and he remained there. He is a brother of William Gazzard, Sheila Gazzard's husband. William and Sheila Gazzard had lived in the flat for some years. It was held from the appellants on a weekly tenancy in Sheila Gazzard's name. Having obtained in a ballot another place of residence, William and Sheila Gazzard determined to leave the flat and they so informed the appellant J. H. Dalby. On Saturday, 8th May 1948, William Gazzard notified him that they would leave the premises on the following Saturday, that is 15th May, the date on which, in the event, they did leave the flat. The appellant J. H. Dalby then let the premises to another tenant. On Thursday, 13th May, the respondent Sheila Gazzard confirmed the statement that they would leave on the Saturday. She had come to pay the rent. She paid it for the current week ended Monday, 17th May. On Saturday, 15th May, the appellant J. H. Dalby asked William Gazzard to hand the key of the flat to the former's wife when they got the furniture out. William Gazzard then said that he would not do so as he was giving the key to his brother. Dalby sought the assistance of the police, but the respondent John Gazzard and his wife insisted on remaining in possession. From time to time John Gazzard tendered rent to Dalby, but the latter refused it. Afterwards he sent money orders for the rent to Dalby. Dalby did not cash them. On 17th May Dalby gave John Gazzard a notice to quit the flat on 24th May. The notice said that the latter purported to hold the flat of the former as tenant and that he had entered into possession purporting to act under an assignment or transfer of the tenancy from Sheila Gazzard. On 21st June the appellants Dalby gave the respondent Sheila Gazzard notice to quit the flat on 26th July. This notice assigned grounds under reg. 58 (5) (f) and (n) of the National Security (Landlord and Tenant) Regulations, which were then in force and remained in force until 16th August 1948. The notice alleged that Sheila Gazzard as lessee had given notice of her intention to vacate the premises on 17th May and that on or about 14th May she had sublet the premises to John Gazzard without the lessor's consent or approval. (at p383)

6. Sheila and John Gazzard both gave evidence of the arrangement they had made. It amounted to no more than an arrangement by her husband and herself to let him into possession of the flat and hand him the key when they left. John Gazzard and his wife brought some of their furniture there on the night before. William and Sheila Gazzard took their furniture away and John and his wife simply remained in occupation. (at p383)

7. It is clear that there was no sub-lease. John was to deal with the landlord as best he could and pay him the rent. It was not intended that he should be a tenant of Sheila or of William. It is clear also that there was no assignment. There was, of course, neither deed nor writing. There was no contract for valuable consideration. There was, moreover, no intention to assign an estate or interest. The whole transaction between John on the one side and Sheila and William Gazzard on the other rested on the conception that under the regulations he would be able to hold possession of the flat as against the landlord if he once obtained possession. Accordingly he came upon the premises and they gave him the key and left him there. Further, Sheila Gazzard held on a weekly tenancy and the notice given to the landlord of the intention of her husband and herself to vacate on Saturday, 15th May, and the payment of rent to the end of the current week, namely to 17th May, constituted a sufficient notice terminating the tenancy on 17th May. It was an oral notice to quit but a tenant may give an oral notice to quit. (at p383)

8. It is true that under reg. 58 of the National Security (Landlord and Tenant) Regulations proceedings for the recovery of possession could not be maintained by the landlords, that is the appellants Dalby, against the respondent Sheila Gazzard, notwithstanding the termination of the tenancy by the operation of her verbal notice to quit, unless the landlords on their part first served upon her a notice to quit based upon one of the grounds specified in sub-reg. (5). But that does not mean that the tenancy was not terminated. The ground given by par. (f) of sub-reg. (5) shows that. It follows that the only possible subject of assignment, had assignment been intended, was a tenancy with only three days to run. (at p383)

9. This appeal is limited to the question whether in the foregoing circumstances John Gazzard falls within the immunity given by sub-reg. (6) of reg. 60 of the National Security (War Service Moratorium) Regulations to protected persons actually in possession of premises and claiming under a tenant whose tenancy has been lawfully determined. No question is raised as to the correctness of the order for the recovery of possession made against Sheila Gazzard. She is named as a respondent to the landlords' appeal but she does not appeal against the order made against her. We are not, therefore, concerned to inquire whether within the meaning of the Landlord and Tenant Act of 1899 (N.S.W.), s. 23, Sheila Gazzard could properly be said to have refused or neglected to give up possession. It may be that Sheila Gazzard's true defence before the magistrate was that her tenancy had ended and she had vacated possession: see s. 23 (2) (c). But an order was made against her and, apart from the direction that the warrant should not be executed against John, the tenor of the warrant would put the latter in peril of ejectment. For the warrant would be expressed to authorize and command the officers executing it to enter into and upon the land and eject all persons thereout and therefrom and give possession of the same to the appellants. Section 22A (c), it is true, authorizes the execution of the warrant not only against the defendant to an information but also against every person claiming under him who is in actual occupation, but we are not concerned in this appeal with any questions that may be raised under that section as to the operation of the warrant against persons in independent possession of the premises. Probably it ought not to be construed as limiting the effect of the warrant as it is set out in Schedule E. From s. 30 it is to be inferred that if the person in possession has no right as against the landlord he may be ejected. (at p384)

10. The whole question before us turns on the words "claiming under the lessee." The meaning and application of such an expression is governed by the context in which it is found. Here it is found in a context where the subject matter of the "claim" is possession of premises, where the character of the person under whom possession is claimed is that of lessee of the premises and where the person claiming must have actual possession of the premises. The purpose of the provision evidently is to give to the person so in actual possession, provided the other conditions specified are fulfilled, a protection notwithstanding the determination of the lessee's title. The thing which makes the protection of his possession necessary is the determination of the lessee's title. (at p384)

11. Two different views have been taken of what, in these conditions, is necessary to satisfy the requirement expressed in the words "claiming under." One view is that it is enough that the person has been let into possession by the lessee. The other view is that the lessee must have conferred upon or imparted to the person in possession some right or title to possession good against him, that is to say some right or title which but for the determination of the lease would have entitled that person to possession of the premises. The best exposition of the first view is to be found in the judgment of Herron J. in Callaghan v. Norman (1948) 66 WN (NSW) 1 . The second view has been adopted in one form or another by the Supreme Court of New South Wales in Mouton v. Abbott (1949) 49 SR (NSW) 305; (1949) 66 WN (NSW) 129 , in Wilson v. Markham (1949) 66 WN (NSW) 165 , and perhaps in a previous decision of Herron J. himself, Simpson v. Mitchell (1944) 61 WN (NSW) 147 , and by the Supreme Court of Victoria in Fink v. McIntosh (1946) VLR 290 , Lowe J. and Towill v. Bailey (1949) VLR 248 , O'Bryan J. (at p385)

12. The first view is based partly on a wide meaning attributed to the words "claiming under" and partly upon a policy discovered in the regulations of insuring that once a protected person was let into possession of premises his possession should be preserved against disturbance by legal remedies. Some support for a wide interpretation of the words "claiming under" was sought in the cases decided upon covenants for quiet enjoyment. But there the context shows that what such covenants contemplate is an act disturbing quiet enjoyment committed by a person deriving the estate interest, authority or capacity in virtue of which he acts from the covenantor. (at p385)

13. The more limited interpretation of the expression "claiming under" in reg. 30 (6) appears to be the sounder. The sub-regulation bears upon its face evidence of an intention to preserve from the operation of an order for ejectment the possession of a protected person whose right to possession would or might be defeated by the determination of the tenancy of the lessee. Sub-regulation (4) of reg. 30 provides that an order shall not be made for the recovery of possession of premises from a lessee (being a protected person) or for the ejectment from premises of a lessee (being a protected person) unless the court making the order is satisfied of the existence of one or other of certain states of fact. Although the expression "lessee" is used it must be remembered that by sub-reg. (2) the expression is defined to mean the parties to a lease or their respective successors in title and to include a mesne lessee and a sub-lessee. Sub-regulation (4) therefore covers lessees, assignees of a lease and sub-lessees. The purpose of the provision is to control proceedings against protected persons, falling within the categories covered by the expression "lessee" as so defined, for the recovery of possession or for ejectment. For only in proceedings to which they were parties would an order for the recovery of possession from them or for their ejectment be made. Sub-regulation (6) seems to be the counterpart of sub-reg. (4) dealing with proceedings in which an order is made against someone else for the recovery from him of possession of premises or for his ejectment therefrom. The purpose is to safeguard the protected person who is actually in possession from the operation of a warrant granted in such proceedings. But it is made a condition that he must claim under the lessee. It speaks of the tenancy being lawfully determined and "lessee" must mean lessee under the tenancy that is determined. Of course subject to that limitation it will cover persons occupying any of the characters falling within the defined meaning of the expression "lessee." (at p386)

14. But the limitation to persons claiming under the lessee distinguishes between protected persons in under an independent possession and those in under a derivative possession. Now this distinction is made with reference to the determination of a lease and the person protected must derive from the lessee whose lease has determined. When this is considered it almost necessarily appears to follow that he must have a right to possession which is dependent upon the continuation of the lessee's title. It is of course both difficult and unsafe to attempt to make an exhaustive statement of transactions by which such a right to possession may be imparted by a lessee to another person. But it is clear that much more is required than for the tenant merely to let that other person into possession as the next occupier. To make a sub-lease to him whether of the whole or part of the premises, and to place him in possession as sub-lessee accordingly, is a transaction which of course would bring the protected person within sub-reg. (6). Indeed there cannot be much doubt that the interest of a sub-lessee is the case for which the sub-regulation was primarily intended to provide. (at p386)

15. In Wilson v. Markham (1949) 66 WN (NSW) 165 it was decided that an assignee of the residue of a term did not come within the provision; but that seems to have been less because of the meaning of the word "under" than because an assignee becomes the lessee and because it is against him that the proceedings to recover possession should be brought and not against his assignor. In Towill v. Bailey (1949) VLR 248 O'Bryan J. expressed the same view. The present case does not necessarily involve the question. For there was no assignment and little or nothing to assign. But it may be proper to remark that if once it be assumed that notwithstanding the assignee's position as tenant, an order for the recovery of possession of the premises has been made against his assignor as lessee, a situation would arise to meet which it would not seem unnatural to invoke reg. 30 (6). The difficulty really lies in the assumption itself. For if the proceedings are properly framed the case of an assignee should be governed by sub-reg. (4) because he should be the party against whom the order is sought. It must however be borne in mind that the purpose of sub-reg. (6) is to safeguard protected persons against warrants granted in proceedings against others. It does not seem to matter why an order was made or whether the proceedings were properly framed. It is enough that there is a warrant against which a protected person needs to be secured. It is difficult therefore to see any sound ground differentiating the position of an assignee from that of a lessee. The nature of the provision and the context alike point to the conclusion that the typical case reg. 30 (6) contemplates is that of a sub-lessee. That must provide the analogy in other cases that may arise. The characteristic feature of the case of a sub-lessee is that his title to possession depends on the continuance of the head lease and is defeated by its determination. But a further consideration of importance is that the conditions contained in pars. (a), (b) and (c) of reg. 30 (6) seem appropriate only to a sub-lessee. These paragraphs raise difficulties of their own. Paragraph (a) speaks of the protected person failing to pay the rent. Does that mean the rent reserved by the lease that has determined? It is difficult to suppose it refers to the rent of that, the head, lease. For sub-reg. (6) expressly includes the case of a protected person being in possession of part only of the premises. Paragraph (b) is concerned with the failure of the protected person to perform or observe some other term or condition of his tenancy. This must refer to the terms or conditions under which he holds. But par. (c) speaks of "goods the property of his landlord." Does this mean the mesne landlord? That seems improbable because the purpose of the paragraph is to create in favour of the lessor of the lease that has determined an exception to the rule securing the protected person against dispossession. What interest has that lessor in the goods of the mesne landlord? (at p387)

16. On the whole the better interpretation of these three paragraphs appears to be that they intend to make it incumbent on the protected person in possession to fulfil towards the lessor the obligations which the protected person has incurred, if he himself be a sub-lessee, to his sub-lessor, so that he must perform his obligation with reference to rent, terms and conditions, care of the premises and of goods, and waste, as if he were in privity with the lessor, who, in effect, he must treat as his lessor in lieu of the sub-lessor. (at p387)

17. This view of pars. (a), (b) and (c) of sub-reg. (6) derives some support from a consideration of sub-reg. (4), pars. (a), (b) and (c), of which the corresponding paragraphs of sub-reg. (6) seem the counterparts. (at p388)

18. The foregoing considerations seem to strengthen the conclusion that the words "claiming under the lessee" do not extend to persons who are merely let into possession by the lessee whose tenancy is determined. (at p388)

19. The application of reg. 30 (6) is not either expressly or by implication confined to sub-lessees but the provision makes it clear that the possession of the person claiming under the tenant must be founded on a right or title good as against him and depending upon the continued existence of his tenancy. In the circumstances in which he entered and remained in possession of the premises the respondent John Gazzard cannot satisfy this condition. (at p388)

20. The appeal should therefore be allowed as against him and so much of the order of the magistrate as directed that the warrant of possession be not executed against John Gazzard should be discharged. (at p388)

21. There is no difficulty concerning the jurisdiction of this Court to award the costs of an appeal arising out of a case involving the National Security (War Service Moratorium) Regulations and the provisions they incorporate of the National Security (Landlord and Tenant) Regulations: see O'Mara v. Harris [1948] HCA 18; (1948) 77 CLR 490 . The respondent John Gazzard should pay the costs of the appeal to this Court. (at p388)

ORDER

Appeal allowed. So much of the order of the magistrate as directed that the warrant of possession be not executed against the respondent John Gazzard discharged. Costs of the appeal to this Court to be paid by the respondent John Gazzard.