Brown v Green [1951] HCA 76; (1951) 84 CLR 285 (20 December 1951)

HIGH COURT OF AUSTRALIA

BROWN v. GREEN [1951] HCA 76; (1951) 84 CLR 285

Landlord and Tenant

High Court of Australia
Dixon(1), McTiernan(1), Williams(2), Webb(1), Fullagar(1) and Kitto(1) JJ.

CATCHWORDS

Landlord and Tenant - Commonwealth regulations - State statute - Validity of regulations - Essentiality - Offence - Guilty knowledge - National Security (Landlord and Tenant) Regulations, regs. 7AA, 25 - The Constitution (63 & 64 Vict. c. 12) s. 51 (vi.) - Defence (Transitional Provisions) Act 1946-1947 (No. 77 of 1946 - No. 78 of 1947) - Landlord and Tenant (Amendment) Act 1948-1949 (N.S.W.) (No. 25 of 1948 - No. 21 of 1949), ss. 1 (2), 4, 35.

HEARING

Sydney, 1951, November 26, 27; December 20. 20:12:1951
REMOVAL from a Court of Quarter Sessions of New South Wales to the High Court under s. 40 of the Judiciary Act 1903-1950.

DECISION

December 20.
The following written judgments were delivered: -
DIXON, McTIERNAN, WEBB, FULLAGAR and KITTO JJ. This is a cause removed under Sydney. The order for removal was made as of course on the application by the Attorney-General of the State of New South Wales. The cause consisted in an appeal from a conviction by a Court of Petty Sessions for a breach of s. 35 of the Landlord and Tenant (Amendment) Act 1948-1949 (N.S.W.). At the time of removal the appeal was pending and the hearing had not begun. Section 41 of the Judiciary Act provides that when a case is removed into the High Court the High Court shall proceed therein as if the cause had been originally commenced in that Court and as if the same proceedings had been taken in the cause in the High Court as had been taken therein in the court of the State prior to its removal but so that all subsequent proceedings shall be according to the course of practice of the High Court. The parties agreed that the matter should be heard upon the depositions taken in the Court of Petty Sessions. (at p288)

2. The defendant in the Court of Petty Sessions was charged by an information laid upon 3rd March 1950, for that she did on 24th October 1949, contrary to s. 35 of the Landlord and Tenant (Amendment) Act 1948-1949, receive as rent for certain premises in Ocean Street, Bondi, the sum of 1 pound 17s. 6d. for a period of a week, which exceeded the fair rent of the premises, namely, 1 pound 13s. 0d. per week, determined on 4th June 1947. The determination was made under reg. 25 of the National Security (Landlord and Tenant) regulations. That regulation relates to the rent of shared accommodation. Under reg. 7AA, which was inserted in the Regulations by S.R. 1948 No. 108, notified on 12th August 1948, an order was made on the same day by which it was declared that the fixing of fair rents in the State of New South Wales should cease to be controlled under the National Security (Landlord and Tenant) Regulations from and including 16th August 1948. By a proclamation published in the New South Wales Gazette the Governor in Council appointed that day as the date on which the Landlord and Tenant (Amendment) Act 1948 should commence: see s. 1 (2) of that Act. Section 4 (1) of the Act provides that all determinations of fair rents made before the commencement of the Act under the Commonwealth Regulations and having force or effect in the State immediately before such commencement shall be deemed to have been made under the Act and, subject to the Act, shall continue to have force and effect accordingly. By s. 8 (1) the expression "Commonwealth Regulations" means the regulations having the title of the National Security (Landlord and Tenant) Regulations as in force immediately before the commencement of the Act under the Defence (Transitional Provisions) Act 1946-1947 of the Parliament of the Commonwealth. (at p289)

3. The defendant contended in the Court of Petty Sessions that before the commencement of the Landlord and Tenant (Amendment) Act the Commonwealth Regulations had gone out of force and consequently there were no determinations of fair rents under the Commonwealth Regulations having force or effect in the State immediately before the commencement of the Act. The ground for this contention was that the legislative power of the Commonwealth with respect to defence (s. 51 (vi.)) did not, in the conditions by that time prevailing, enable the Commonwealth Parliament by the Defence (Transitional Provisions) Act 1947 to maintain the Landlord and Tenant Regulations in force up to 16th August 1948. This is the question arising under the Constitution or involving its interpretation by reason of which the Attorney-General of New South Wales applied under s. 40 of the Judiciary Act for the removal of the cause into this Court. (at p289)

4. Section 35 (1) of the Landlord and Tenant (Amendment) Act 1948-1949 provides that a person shall not - "(a) let premises . . . at a rent exceeding the fair rent thereof; or (b) demand, receive or pay any sum as rent exceeding the fair rent thereof." Section 95 (1) provides that any person who contravenes or fails to comply with any provisions of the Act shall be guilty of an offence against the Act. The penalty for an individual is a fine not exceeding 250 pounds or imprisonment for a term not exceeding six months or both: s. 95 (2). SEction 8 (1) defines "determination" to mean a "determination of the fair rent of any premises . . . made or continued in force under the Act". It was under these provisions that the defendant was prosecuted for receiving rent in excess of the fair rent. (at p289)

5. It will be seen from the foregoing that the liability of the defendant under s. 35 cannot be made out unless a determination of the fair rent was carried over by s. 4 (1) so as to be binding under the State Act. The denial that it was effectually carried over depends upon two steps. The first concerns the meaning of s. 4 (1), and next the continuing validity of the Commonwealth Regulations. If upon the true construction of s. 4 (1) the constitutional validity of the Commonwealth Regulations is made an essential condition of the operation of the provision to take over the determinations made under the Commonwealth Regulations, then unless the Commonwealth Regulations were valid on 16th August 1948, s. 4 (1) would not maintain them in force. The question, however, of the valid operation of the Commonwealth Regulations as on 16th August or immediately prior thereto does not arise unless upon the proper interpretation of s. 4 (1) their constitutional validity at that time is made an indispensable condition of the operation of that provision. For the contention that it is such a condition the defendant relies upon the words "and having force or effect in this State immediately before such commencement" which qualify the words "all determinations of fair rents" in s. 4 (1). The contention is that the determinations could not have force or effect in the State unless the Commonwealth Regulations were themselves valid. If the words "force or effect" refer to the binding legal obligation imposed by the determinations this is of course true. But a consideration of the legislation and of the circumstances under which it was passed suggest that the words were used in a more restricted sense. The purpose of the Landlord and Tenant (Amendment) Act 1948-1949 is well known. With the passage of time it had become clear that for not much longer could the operation of the defence power sustain such regulations as the National Security (Landlord and Tenant) Regulations. All six States therefore passed legislation relating to the control of the relations of landlord and tenant, and reg. 7AA was adopted to enable the transition of control to take place from Federal to State authority. In the case of most States the legislation took substantially the same form as the Landlord and Tenant Regulations. They consisted of little more than a redraft of their provisions. The Landlord and Tenant Regulations had not been declared invalid and were in de facto operation. What decision would be reached if they were challenged was probably felt to be in doubt. The Defence (Transitional Provisions) Act 1947 was, however, so framed as to purport to keep them in force until the end of the year 1948. (at p290)

6. The Landlord and Tenant (Amendment) Act 1948 (N.S.W.) is divided into parts, and Part II. is entitled "Fair Rents". The leading provision, authorizing the fixing of fair rents is s. 15 (1). Section 15 (1) fixes the rent as at 31st August 1939 (see s. 8 (1), definition of "the prescribed date") as the "fair rent" unless the rent has been increased or decreased by a determination made before the commencement of the Act under the Commonwealth Regulations and in force immediately before such commencement. The whole of Part II. is based upon the supposition that a fair rent is thus ascertained. If there were no determinations under the Commonwealth Regulations that were carried over the fair rents of all premises in existence on 31st August 1939 would be the rent payable for them upon that date. By virtue of an exception contained in s. 15 (1) premises not in existence on that date would not be governed by a fair rent, until a fair rent was fixed under the Act, unless the determinations under the Regulations were carried over. It is plain, therefore, that if the determinations under the Regulations are not made applicable under the Act the effect of the Act would be very different from that which its provisions appear to contemplate, and very different from the effect which a priori one would suppose the legislature would intend. The definition in s. 8 (1) of the Act of the Commonwealth Regulations speaks of "the regulations having the title of the National Security (Landlord and Tenant) Regulations as in force immediately before the commencement of this Act under the Defence (Transitional Provisions) Act 1946-1947 of the Parliament of the Commonwealth." In this definition the words "as in force" obviously imply an assumption that by the Defence (Transitional Provisions) Act 1946-1947 they were continued. From such an assumption a condition might be implied that unless the assumption were correct the definition should not operate. But in the conditions in which the Act was enacted it would, in our opinion, be erroneous to make such an implication. The assumption did not represent an intention that the operation of the State Act should depend upon the actual valid operation of the Commonwealth Regulations. It expressed no more than a belief based upon the common experience of those who witnessed the actual operation and enforcement of the regulations from day to day without their validity being called in question in this Court. When s. 4 (1) speaks of the determinations made before the commencement of the Act under the Commonwealth Regulations it assumes that the Commonwealth Regulations have the operation described and does not imply that it shall be a condition of the operation of s. 4 (1) that the operation of the Regulations shall be constitutionally valid. The words which follow "and having force or effect in this State immediately before such commencement" are necessary in order to ensure that a determination which was made but had since been rescinded or varied or the operation of which had expired shall not be included in the description. They are words which are attached to the word "determinations" and refer to the force or effect of the determinations on the footing or assumption that the Commonwealth Regulations are operative. They do not import the necessity that the Commonwealth Regulations themselves possess a valid constitutional force or effect. If a determination was made in point of fact but exceeded the power which the Commonwealth Regulations purport to confer or because of some other disconformity with the Commonwealth Regulations fell outside the authority they purport to confer it could not be considered to have force or effect under the Regulations. Sub-section, (2) of s. 4 confirms this view of the Regulations, for it provides that applications to and other proceedings before the Commonwealth Rent Controller under the Commonwealth Regulations which are pending immediately before the commencement of the Act may be continued and may be determined by the controller. There are no words in sub-s. (2) which could make the validity of the regulations a condition of the application of this provision. Sub-section (3) deals with proceedings before a Fair Rent Board under the Commonwealth Regulations and provides for their continuance under the Act. Sub-section (4) relates to proceedings for the recovery of possession of prescribed premises under Part III., but it is to the like effect. Sub-section (5) provides that the generality of the section shall not be affected by any saving in any other section of the Act nor shall the section limit any saving in the Interpretation Act of 1897 as amended by subsequent Acts. It is not easy to apply this sub-section because s. 4 relates to the effect of the Commonwealth Regulations, which were going out of force. But whatever its precise application, it indicates a general intention that the arrangements found in effect de facto under the Commonwealth Regulations should not be disturbed. In s. 71 (2) there are provisions for giving effect to orders and warrants made or issued under the Regulations showing the same intention to take up the instruments on foot before the Act came into operation. A very general consideration affecting the question is that it would be contrary to the known purpose of the Landlord and Tenant (Amendment) Act 1948 if its operation on the existing controls was made dependent upon the answer to the question which caused the steps to take over the control of fair rents, namely, the question whether and at what date the Commonwealth Regulations might be considered constitutionally to go out of operation. The language of the Act does not require that it shall be supposed that their constitutional operation was an essential condition of its application to existing determinations and there is not sufficient reason why it should be construed as importing such a condition. (at p292)

7. It follows that the question whether, prior to 16th August 1948, the defence power had so contracted in its operation as no longer to support the National Security (Landlord and Tenant) Regulations in operation does not arise. (at p293)

8. The defendant raised two defences which do not depend on any constitutional consideration but entirely on the provisions of the legislation. Under reg. 25 (8) of the National Security (Landlord and Tenant) Regulations when a determination of rent for shared accommodation had been made the controller was required to give notice in writing thereof and of the date fixed as the date on which the determination should come into force to the lessor and the lessee concerned. By reg. 55 a notice required or permitted by that part of the regulations to be given to or served upon any person might be given by delivering the notice to him personally or by forwarding it by post to him at his usual last known place of abode or business or at any address notified to the Board. An attempt was made on behalf of the informant to establish that notice had been given in conformity with these provisions, but the proof failed. The defendant denied in evidence that the notice had ever been actually received by her. In these circumstances she contends that she was not liable under s. 35 of the Landlord and Tenant (Amendment) Act 1948-1949 under which she was prosecuted. The contention might be put in two ways. First, it may be said that a determination of fair rents was not binding unless reg. 25 (8) was complied with. Secondly, it may be said that compliance with reg. 25 (8) was a condition precedent to liability under s. 35 (1) (b). The first of these contentions cannot be maintained because sub-reg. (6) of reg. 25 provided that every such determination should come into force on a date fixed by the controller but the date so fixed should not be earlier than the date upon which the application for the determination was received or in the case of an inspection not earlier than the date of the inspection. Sub-regulation (9) provided that where any rent has been determined in pursuance of the regulation it should, as from the date upon which the determination comes into force and until varied, be the rent of the shared accommodation in respect of which it is fixed. These provisions are inconsistent with the view that notice is a condition precedent to the operation of the regulation. The second of the two ways of expressing the contention is not supported by any of the language of s. 35 (1), nor by any context. Moreover, s. 57 (1) says that it shall be the duty of the lessor of any prescribed premises to take all reasonable steps to ascertain whether the fair rent thereof is fixed by or under that Part and if so the amount of the fair rent. It does not seem possible to import into the provisions of the Act any qualification which will make a failure to serve notice an answer to the prosecution. (at p294)

9. The second of the two further defences relied upon by the defendant was that she in fact possessed no knowledge that the fair rent had been fixed and that she was not liable to conviction under s. 35 (1), either on the ground that she was under a mistake of fact or that guilty knowledge was essential. According to her evidence as it appears from the depositions, certain tenants occupying part of the premises early in 1947 made an application for the fixing of the fair rent of so much of the premises as they occupied and an officer of the Fair Rents Board came to see the defendant. She placed the matter in the hands of a fair rents agent to whom she paid a fee. The tenants vacated the premises on 28th April 1947 and she heard no more about the matter. In point of fact the fair rent was determined on 4th June 1947 as from 12th May 1947 at a sum of 1 pound 13s. Od. weekly. She, however, received rent for a number of rooms at a sum exceeding the fair rent fixed. She said that she subsequently learned in a dispute with a tenant that she was receiving rent in excess of the fair rent and that thereupon she returned the excess to such tenants as she was able to find. (at p294)

10. It is unnecessary to decide whether under s. 35 (1) it is a defence that the landlord honestly believed on reasonable grounds that no determination of the fair rent had been made. For the defendant has not established that she honestly believed on reasonable grounds that no determination of the fair rent had been made. She knew that proceedings to fix a fair rent had been commenced and she made no inquiry as to how they had terminated. It is, however, contended that under s. 35 (1) guilty knowledge forms part of the offence. This view, however, of s. 35 (1) does not appear to be correct. (at p294)

11. Section 35 (1) forms part of a series of provisions designed to regulate the rights and duties of landlord and tenant and to ensure that the landlord does not depart from the terms upon which he is bound in respect of the amount of rent he is entitled to receive. It is not for the purpose of punishing acts criminal in an ordinary sense but to protect a civil right by a drastic means of enforcement. Under s. 35 (4) averments on the part of the prosecutor of certain facts, including the rent payable in respect of prescribed premises at the prescribed date, are prima-facie evidence of the matter or matters averred. Ensuing sub-sections deal in detail with the manner in which averments may be rebutted and with the conditions governing their operation. These provisions suggest that the legislature did not contemplate guilty intent as an additional element in the offence. The legislation does not deal with a branch of the criminal law, but with a matter of economic and social regulation, and there is no rule of construction raising a prima-facie presumption in such a case that guilty intention is an element in an offence of this character. There is not sufficient ground for introducing into s. 35 (1) guilty intent as an element in the offence. (at p295)

12. For these reasons all the grounds of defence fail and the defendant's appeal ought not to succeed. Under ss. 40 and 41 of the Judiciary Act we should or at all events may make the same order as the Court of Quarter Sessions ought to have done had the appeal been heard by that Court. The appeal should therefore be dismissed. The proceedings were removed at the instance of the Attorney-General because of the general importance of the first question dealt with in this judgment, and on the whole it seems the better course to allow the Crown to bear its own costs of the proceedings in this Court. There should be no order as to costs. (at p295)

13. Since these reasons were prepared the Landlord and Tenant (Amendment) Act 1951 of New South Wales has been passed. The effect of s. 2 of the Act is to express in terms the proposition at which we have arrived by construction. Sub-section (2) (a) of s. 2 provides that the amendments which produce this result shall be deemed to have commenced on 16th August 1948 but par. (b) of the sub-section goes on to say that a person shall not be guilty of an offence by reason of the amendments if he would not have been guilty had they not been made. The Act therefore does not relieve us of the necessity of deciding the question with which the judgment first deals. (at p295)

WILLIAMS J. I agree with the conclusions in the joint judgment of my brethren just delivered and with the order they propose, but in one respect I reach the same result by a different path. In my opinion determinations made under the National Security (Landlord and Tenant) Regulations could only have force and effect in New South Wales so long as those regulations remained valid. Once they ceased to be valid, determinations made under them would become mere pieces of paper and could have no legal force or effect whatever. They could not be determinations within the meaning of s. 4 (1) of the Landlord and Tenant (Amendment) Act 1948 (N.S.W.). (at p295)

2. The Landlord and Tenant Regulations came within Federal power during hostilities because the diversion of manpower to war activities caused a restriction of building operations in that period and helped to create a shortage of homes and business premises. This shortage tended to inflate rents. It was a shortage which was bound to continue for some time after the fighting had ceased. Other causes arising since the cessation of hostilities have contributed to make the housing problem continue to be an acute problem right up to the present time. But the defence power during the transition period would only be wide enough to continue the regulations in force for a sufficient period to overcome the shortage of houses and business premises so far as it was due to hostilities. (at p296)

3. The question is whether the defence power was wide enough to support the regulations until 16th August 1948. The Defence (Transitional Provisions) Act 1947 was assented to on 11th December 1947. It purported to continue the regulations in force during 1948. If the defence power was wide enough for the purpose when the Act was passed it could not be said that a further period of twelve months was beyond the wide latitude of discretion that Parliament has to decide whether to extend such legislation. (at p296)

4. I am not prepared to hold that the Landlord and Tenant Regulations could not be validly continued during 1948. These regulations are different in character from the legislation under review in the three cases reported sub nomine R. v. Foster; Ex parte Rural Bank of N.S.W. [1949] HCA 16; (1949) 79 CLR 43 . The legislation there in question closest in character to the Landlord and Tenant Regulations was the Liquid Fuel Regulations. They dealt with the distribution of petrol but not with its price. I would have been disposed to give those regulations a longer life if they had provided a scheme of distribution ensuring that priority of supply was afforded to persons engaged in activities useful for the purpose of restoring the community to conditions of peace. But in that respect they suffered from the same defect as that pointed out in Crouch v. The Commonwealth (1948) 77 CLR 339, at p 361 . (at p296)

5. Control of the prices of the necessities of life, particularly food, clothing and shelter, so as to prevent inflation, was an integral part of the economic organization of the nation for war, and laws on this subject of war economy were well within the limits of the defence power during hostilities. And the power, so far as it authorized legislation to prevent inflation, could be expected to wane more slowly during the transition period than it would with respect to laws on other economic subjects. In Hume v. Higgins [1949] HCA 5; (1949) 78 CLR 116, at p 140 I saw no reason to doubt the power of the Commonwealth Parliament to provide in the Defence (Transitional Provisions) Act 1947 that the Economic Organization Regulations should continue in force during the year 1948. These regulations controlled prices and therefore had some affinity to the Landlord and Tenant Regulations. I think that it could be said of all regulations relating to the control of inflation, and of the Landlord and Tenant Regulations and the Prices Regulations in particular, that such regulations had, in the language of insurance, good transition lives. In my opinion they were not quite senile when the Commonwealth suddenly repealed them in August and September 1948. (at p297)

ORDER

Appeal dismissed. No order as to the costs of the appeal.