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Valerie Clegg v Gandangara Local Aboriginal Land Council& Ors [2011] NSWSC 28 (9 February 2011)
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Valerie Clegg v Gandangara Local Aboriginal Land Council& Ors [2011] NSWSC 28 (9 February 2011)
Last Updated: 26 May 2011
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Case Title:
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Valerie Clegg v Gandangara Local Aboriginal Land
Council & Ors |
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Decision Date:
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Decision:
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The Amended Summons is dismissed. The plaintiff
is to pay the first defendant's costs of these proceedings. |
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Catchwords:
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ADMINISTRATIVE LAW - review of decision of CTTT
pursuant to s69 Supreme Court Act 1970 - Application of s48 of the Residential
Tenancies Act 1987 - What matters relevant to whether rent increase excessive -
Refusal by a Tribunal to consider financial circumstances of tenant
- no
jurisdictional error. |
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Parties:
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Valerie Clegg (Plaintiff) Gandangara Local
Aboriginal Land Council & Ors (Defendant) |
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Representation
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Counsel: Mr J Smith/Ms Jane Maconachie
(Plaintiff) Mr A Stafford (First Defendant) |
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- Solicitors:
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Solicitors: Tenants' Union of NSW Co-op
Limited (Plaintiff) Baker & McKenzie (First Defendant) IV Knight,
Crown Solicitor (Second Defendant) Submitting Appearance |
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Judgment
- HIS
HONOUR:
Nature of Claim
The plaintiff brings
proceedings by way of an Amended Summons filed in Court on 1 February 2011 for
an order in the nature of certiorari
to quash a decision of the NSW Consumer
Trader and Tenancy Tribunal (the Tribunal) handed down on 10 May 2010.
The Amended Summons raises the following grounds of review:
(1) The [Tribunal] constructively failed to exercise its jurisdiction.
Particulars:
(a) Its determination was based on a misconstruction of s48 of the
Residential Tenancies Act 1987 (Act), namely that:
v. Section 48 imposes an obligation on the Tribunal to take the general
market level of rent for comparable premises as the overriding
and predominant
consideration; and
vi. The personal financial circumstances, and in particular, the
affordability of the increased rent to an applicant is not a matter
to which the
Tribunal may have regard in determining whether a rent increase is excessive
under s49 of the Act.
- Its
misconstruction of the Act led [the Tribunal] to ignore relevant material
namely:
(a) The level of rent charged by other Local Aboriginal
Land Councils for comparable premises; and
(b) The affordability of the rent increases to the plaintiff.
- Proceedings
were originally brought in the District Court pursuant to s67 of the Consumer
Trader and Tenancy Tribunal Act 2001 (CTTT Act). Those proceedings were
discontinued. This application is brought pursuant to s69 of the Supreme
Court Act 1970 (SC Act). It is alleged that the errors to which the
plaintiff refers in the Amended Summons amounted to jurisdictional error. The
Tribunal was joined as the second defendant, has filed a submitting appearance
and took no active part in the proceedings.
Factual and
Statutory Background
- The
plaintiff is a tenant of the defendant in premises at Wattle Grove NSW pursuant
to a residential tenancy agreement dated 21 June
2001. In April 2009 the
defendant issued a notice to the plaintiff under s45 of the Act seeking to
increase the rent payable by the
plaintiff by $50 per week. The plaintiff
applied to the Tribunal for a determination under s49 of the Act that the
proposed increase
was excessive.
- The
proceedings before the Tribunal involved a large number of applicants, 23 of
whom have been joined as defendants to these proceedings.
They have taken no
active part in these proceedings.
- On
10 May 2010 the Tribunal made a determination that the rent increase was
excessive by an amount of $8.00 per week. The reason for
the Tribunal's decision
was that the defendant was not entitled to charge in advance for water usage
(the matter to which the $8.00
increase related) but, in the circumstances, the
increase was not otherwise excessive.
- Fundamental
to the Tribunal's determination was its construction of s48 of the Act. The
Tribunal found that the predominant consideration
for it was the general market
rent and that the affordability of the rent increase was not relevant to its
decision. An issue in
this application is whether in doing so, the Tribunal
failed to properly construe s48.
- The
Tribunal first considered the general market level of rents for comparable
premises. It found that this was the predominant consideration
under s48 of the
Act. In doing so it followed the decision of this Court in Kilpatrick v
Gresser (unreported, 13 May 1987, Foster J). The Tribunal held that the
expression "general market level" meant the general level of rents
to be found
in that or a similar locality for comparable premises. It rejected the argument
that the market rents were rents charged
by other Local Aboriginal Land Councils
for comparable premises (which it accepted were considerably less than the rent
paid by the
plaintiff). This finding is not challenged in the proceedings.
- Before
further analysing the reasons of the Tribunal, it is necessary to set out the
legislation which governed the proceedings before
the Tribunal.
- Section
48 of the Act provides:
"48 The Tribunal may, in determining
whether or not a rent increase or rent payable under a residential tenancy
agreement or a proposed
residential tenancy agreement for residential premises
is excessive, have regard to the general market level of rent for comparable
premises (other than premises let by a Government department, administrative
office or public authority) in the locality or a similar
locality and may also
have regard to:
(a) the value of the residential premises;
(b) the amount of any outgoings in respect of the residential premises
required to be borne by the landlord under the residential
tenancy agreement or
proposed agreement;
(c) the estimated cost of any services provided by the landlord or tenant
under the residential tenancy agreement or proposed agreement,
(d) the value and nature of any fittings, appliances or other goods, services
or facilities provided with the residential premises,
(e) the accommodation and amenities provided in the residential premises and
the state of repair and general condition of the premises,
(f) any work done to the premises by or on behalf of the tenant, to which the
landlord has consented, and
(g) any other relevant matter."
- Section
49 of the Act relevantly provides:
"49(1) The Tribunal may, on
application by a tenant under section 46, 47 or 47A, and after considering any
matters it considers appropriate
under section 48, determine that a rent
increase or rent is excessive.
...
(4) An order made by the Tribunal specifying a maximum amount of rent:
(a) has effect for such period, not exceeding 12 months, as is specified by
the Tribunal in the order, and
(b) binds only the parties to the residential tenancy agreement or the
proposed residential tenancy agreement under which the rent
is payable."
- It
should be noted that on 31 January 2011 the Residential Tenancies Act
2010 commenced which, by s5, repeals the Act. It was common ground that
since these proceedings relate to the validity of the Tribunal's
decision, the
applicable law is the Act which was in force at the time of the Tribunal's
decision. As a result of the commencement
of the 2010 Act, these proceedings
will not be of general application to future Tribunal proceedings under the 2010
Act since the
new provision which performs the function analogous to that
performed by s48, is drafted in significantly different terms.
- In
addition to the conclusion in [8] hereof, the Tribunal considered the matters in
s48(a)-(g) of the Act as arose from the evidence
before it. In the course of
doing so it rejected the argument that the affordability of the rent increase
fell within s48(g). It
found that there was an intention to identify the matters
which most commonly bear on the issue of rental increase, but that not
all
situations that might have a bearing on the issue could be anticipated. The
Tribunal said that para (g) was "included to allow
the Tribunal to take account
of those other matters that in the circumstances of the particular case are
relevant to the question
of whether the rent increase is excessive". Implicit in
the Tribunal's conclusion was the proposition that the tenant's financial
circumstances could never be relevant to the question of whether a rent increase
was excessive.
- Finally,
the Tribunal considered the size and frequency of recent rent increases and,
while of the view that they were relevant, found
that they did not make the
current increase excessive because the new rent was well below the general level
of rents for comparable
premises in the locality.
Consideration
Jurisdictional Error
- There
was an issue as to whether the plaintiff could bring herself within s69 SC Act
even if her complaint concerning the Tribunal's
determination was made out. A
preliminary question arose as to whether s65 of the CTTT Act in the
circumstances of this case would
prevent the plaintiff being able to rely upon
s69 SC Act.
- Section
65 CTTT relevantly provides:
"65(1) Except as provided by this
section, a court has no jurisdiction to grant relief or a remedy by way of:
(a) a judgment or order in the nature of prohibition, mandamus, certiorari or
other relief, or
(b) a declaratory judgment or order, or
(c) an injunction,
in respect of any matter that has been heard and determined (or is to be
heard or determined) by the Tribunal in accordance with this
Act or in respect
of any ruling, order or other proceeding relating to such a matter.
...
(3) A court is not prevented from granting relief or a remedy of a kind
referred to in subsection (1) in relation to a matter in respect
of which the
Tribunal has made an order if the ground on which the relief or remedy is sought
is that:
(a) the Tribunal had no jurisdiction to make the order, or
(b) in relation to the hearing or determination of the matter, a party had
been denied procedural fairness."
- The
force of s69 SC Act and the effect of privative clauses seeking to reduce its
ambit were recently examined by the High Court in
Kirk v Industrial Court of
NSW [2010] HCA 1, (2009) 239 CLR 531 at [98] - [99] where the Court said:
"[98] The supervisory jurisdiction of the Supreme Courts was at
federation, and remains, the mechanism for the determination and the
enforcement
of the limits on the exercise of State executive and judicial power by persons
and bodies other than the Supreme Court.
That supervisory role of the Supreme
Courts exercised through the grant of prohibition, certiorari and mandamus (and
habeas corpus)
was, and is, a defining characteristic of those courts. ...
[99] There is but one common law of Australia. The supervisory jurisdiction
exercised by the State Supreme Courts by the grant of
prerogative relief or
orders in the nature of that relief is governed in fundamental respects by
principles established as part of
the common law of Australia. That is, the
supervisory jurisdiction exercised by the State Supreme Courts is exercised
according to
principles that in the end are set by this Court. To deprive a
State Supreme Court of its supervisory jurisdiction enforcing the
limits on the
exercise of State executive and judicial power by persons and bodies other than
that Court would be to create islands
of power immune from supervision and
restraint. It would permit what Jaffe described as the development of "distorted
positions".
And as already demonstrated, it would remove from the relevant State
Supreme Court one of its defining characteristics."
- It
is now clear that while it is constitutionally impermissible for the NSW
Parliament to deprive this Court of its supervisory jurisdiction
with respect to
both inferior Courts and Tribunals, it may nevertheless deny the availability of
relief for non-jurisdictional error
of law appearing on the face of the record (
Kirk at [96], [98 - 100]. It appears as a result of Kirk, that the
Hickman principle ( The King v Hickman; Ex parte Fox and Clinton (1945)
HCA 53; (1945) 70 CLR 598) has little if any work to do at State level. State
privative clauses can no longer protect an inferior Court or Tribunal from
review
by the Supreme Court of NSW when jurisdictional error has occurred.
- The
plaintiff submits that the relief which she seeks is permitted by s65(3) CTTT
Act. That section allows judicial review where a
jurisdictional error was
established. She submits that the errors relied upon by her in this case were
errors of that kind.
- Reliance
was placed on the observations of McHugh, Gummow and Hayne JJ in Minister for
Immigration and Multicultural Affairs v Yusuf [2001] HCA 30; (2001) 206 CLR
232 at [82]:
"[82] It is necessary, however, to understand what is
meant by "jurisdictional error" under the general law and the consequences that
follow from a decision-maker making such an error. As was said in Craig v
South Australia , if an administrative tribunal (like the Tribunal)
"falls into an error of law which causes it to identify a wrong issue, to ask
itself a wrong question, to ignore relevant material,
to rely on irrelevant
material or, at least in some circumstances, to make an erroneous finding or to
reach a mistaken conclusion,
and the tribunal's exercise or purported exercise
of power is thereby affected, it exceeds its authority or powers. Such an error
of law is jurisdictional error which will invalidate any order or decision of
the tribunal which reflects it."
"Jurisdictional error" can thus be seen to embrace a number of different
kinds of error, the list of which, in the passage cited from
Craig , is
not exhaustive. Those different kinds of error may well overlap. The
circumstances of a particular case may permit more than
one characterisation of
the error identified, for example, as the decision-maker both asking the wrong
question and ignoring relevant
material. What is important, however, is that
identifying a wrong issue, asking a wrong question, ignoring relevant material
or relying
on irrelevant material in a way that affects the exercise of power is
to make an error of law. Further, doing so results in the decision-maker
exceeding the authority or powers given by the relevant statute. In other words,
if an error of those types is made, the decision-maker
did not have authority to
make the decision that was made; he or she did not have jurisdiction to make it.
..."
- The
plaintiff submits that the errors upon which she relied are of such a kind. She
relies upon Italiano v Carbone [2005] NSWCA 177 at [116], where Basten JA
said:
"[116] ... there was a constructive failure by the Tribunal
to exercise the jurisdiction vested in it by statute, in accordance with
the
mandatory requirements of the statute. Absent compliance with those
requirements, the Tribunal "had no jurisdiction to make the
order", a finding
which falls within s65(3)(a) of the CTTT Act. In those circumstances, the Court
is empowered to grant relief in
the nature of certiorari, pursuant to s65(1)(a)
of the CTTT Act."
- It
was accepted by the parties that the provisions of s65(3)(a) of the CTTT Act are
a description of jurisdictional error. If there
were any doubt on that issue,
the judgment of the Court of Appeal in Scicluna v NSW Land and Housing
Corporation [2008] NSW 277; [2008] NSWCA 277; (2008) 72 NSWLR 674 at [33] resolved it. There
Basten JA said:
"[33] ... That conclusion is also consistent with
the apparent purpose of s 65 of the CTTT Act, which is to limit the relief which
might have been available in the nature of prerogative relief, declaratory
judgments or orders and injunctions, to circumstances
of jurisdictional error or
denial of procedural fairness."
- It
follows that I am satisfied that s65 of the CTTT Act does not preclude
proceedings before the Supreme Court for judicial review
where the plaintiff can
establish jurisdictional error. Jurisdictional error leads to the inferior Court
or Tribunal having "...
no jurisdiction to make the order ...". I am also
satisfied that if the plaintiff is correct in her assertions of error on the
part
of the Tribunal, those matters if made out constitute jurisdictional error
of such a kind as to not be precluded by s65 CTTT Act.
- The
parties accepted that in exercising its inherent jurisdiction to supervise
inferior Courts and Tribunals, this Court does not
undertake a merits review.
They accepted that in the absence of any specific statutory provision, it is not
appropriate for this
Court to determine the weight to be given to matters which
are required to be taken into account in the exercise of its statutory
power by
the Tribunal. It is important in the circumstances of this case to be aware of
the limited exercise that the Court is engaged
in when its jurisdiction
addressing judicial review is invoked. The Court's decision in this matter does
not involve the expression
of any opinion whatsoever on the substance or merits
of the dispute between the plaintiff and the Land Council. The question is
essentially
one of statutory interpretation with particular reference to whether
the Tribunal identified a wrong issue, asked the wrong question
or ignored
relevant material.
Submissions
- The
plaintiff's position can be summarised as follows. She submits that
Kilpatrick v Gresser was wrongly decided and that when construing s48 of
the Act the Court should not take into account any of the matters there set out
as being a "predominant consideration". Secondly, the plaintiff submits that
affordability or economic impact on the tenant falls
within the scope of
sub-paragraph 48(g) of the Act being a relevant matter which the Tribunal should
have had regard to.
- The
start point for a consideration of the plaintiff's first submission is the
decision of Foster J in Kilpatrick v Gresser. That was a decision handed
down in May 1987. It concerned the interpretation of s52(3) of the
Residential Tenancies Tribunal Act 1986. Section 52(3) of that Act was in
identical terms to s48 of the Act, except for sub-paragraph (f), "Any work done
to the premises
by or on behalf of the tenant, to which the landlord has
consent", which was added when the 1986 Act was repealed and the Act was
proclaimed. Kilpatrick v Gresser has been generally followed in the
Tribunal and has been applied by this Court in Randy River Health and Beauty
Aid Co Pty Limited trading as Middle Rock Village Park v Consumer Trader and
Tenancy Tribunal [2007] NSWSC 1142 (Malpass AsJ). In those circumstances and
taking into account that s48 of the Act has now been repealed and is in a very
different
form in the 2010 legislation, there would need to be compelling
reasons for a single Judge of this Court not to apply that case.
- In
Kilpatrick v Gresser Foster J was considering an appeal from the Tribunal
in point of law where the Tribunal had found that the proposed rent increase
was
not excessive. In the course of giving his decision, his Honour made the
following observations and findings:
"I am satisfied, having
considered the submissions put to me, that the word "may" appearing in the first
line of section 52(3), and
also in the last line of the first paragraph, must
necessarily in the context of the section and the role that it plays in this
Act,
be given the meaning of "shall". In my view the Tribunal has the positive
obligation imposed by law in determining whether or not
a rent increase is
excessive to have regard to the matters which are set out in that section. ...
It is to be noted that the first obligation of the Tribunal under s52(3) is
to "have regard to the general market level of the rents
for comparable premises
in the locality or a similar location". I consider that the structure of this
section does indicate that
the question of general market level of rents for
comparable premises is the predominant criterion to which the Tribunal must have
regard in determining the question of excessiveness or otherwise of the rent
increase. It is to be noted that the matters to which
it "may also have regard"
set out in sub-paras (a) to (e) are undoubtedly matters which it would want to
take into consideration
on the basis of available evidence in determining
whether the premises the subject of the application were in fact premises
comparable
with these said to evince a comparable rental level. In other words I
am satisfied that s52(3) contemplates that in determining that
overriding and
predominant question of what is the general market level of rents for comparable
premises the Tribunal will take into
account in determining relevant
comparability the characteristics of premises and of lettings as set out in
sub-paras (a) to (e).
It has been submitted to me that the Tribunal has adopted an impermissibly
strict construction of s52(3) in that it has attributed
to subsidiary a role to
the matters referred to in sub-paras (a) to (e) and indeed sub-para (f). It is
submitted that the Tribunal
has in effect held as a matter of construction that
it can have regard to those sub-paragraphs only in aid of determining the
question
of comparability posed by the main paragraph. It is clear that the
construction would be the correct one beyond doubt if the words
"in doing so"
had been introduced into the section by the legislature between the words "and"
and "may" at the conclusion of the
first paragraph of s52(3).
I think it is probably correct that the legislature is not to be taken as
having intended that the matters for consideration posed
in sub-paras (a) to (f)
are to have only a minor subsidiary role in the ultimate determination of the
question of comparability posed
in the first part of the section. It certainly
does not appear from the ministerial speech, to which I have made reference,
that
the Minister was expressing such a limited view to Parliament.
However, I do not think that the matters referred to in those sub-paragraphs
can be divorced from the overall obvious intention expressed
in this section
that the overriding matter to be considered by the Tribunal in determining
whether a rental is excessive is the comparison
of that rental with general
market levels for rents for comparable premises.
I think that the obligations of the Tribunal are clearly satisfied if, in
approaching the determination of the question of excessiveness
or otherwise of a
rental increase, it has regard to the matters set out, so far as the evidence
permits, in paras (a) to (f), in
conjunction with its overall and predominant
considerations as to the general market rents of comparable premises. If it
appears
that the Tribunal has borne such matters in mind in the manner
contemplated by the passage to which I have referred in Rathbourne's
case, then the Tribunal clearly, in my view, has done all that it is
required to do under the section."
- The
plaintiff submits that this approach is fundamentally flawed. She says that the
word "may" in s48 of the Act should have its natural
meaning, i.e. it refers to
what is permissible as distinct from what "must" or "shall" be considered. In
other words, everything
in s48 is discretionary in nature. She submits such a
discretion was made clear by the reference in s49(1) of the Act to "after
considering
any matters it considers appropriate under s48". In summary, the
plaintiff submits that the very start point in Kilpatrick v Gresser is
wrong.
- She
justifies that approach by reference to the very broad nature of the Act. She
relies upon the fact that it applies to what is
described as "social housing
premises" as well as residential tenancies generally which are defined very
broadly. She submits that
because s48 has such a wide application, it should not
be construed in the narrow way prescribed by Kilpatrick v Gresser.
- She
says that such an approach is consistent with the reference to "any other
relevant matter" in sub-para (g) and to the subjective
element included for the
first time in the Act in sub-para (f), i.e. work done to the premises by or on
behalf of the tenant.
- She
submits that the error in the decision is that comparability of is the ultimate
determinant for whether or not a rent increase
is excessive. She submits that
such an approach is not consistent with a proper analysis of sub-paras (a) to
(g) of the section.
It is also not consistent with the application of s48 and
s49 of the Act to social housing premises.
- She
submits that the problem with Kilpatrick v Gresser is demonstrated by the
approach adopted by the Tribunal to the facts of this case. She submits that the
Tribunal, having concluded
that the proposed rental increase was less than the
general market level of rents for comparable premises in the locality, only took
account of sub-paras (a) to (g) of s48 for the purposes of considering whether
they derogated from that prima facie conclusion which
the Tribunal had already
reached. She submits that such an approach was inconsistent with the overall
intention and structure of
the Act.
- I
do not agree with those submissions.
- The
submissions do not answer his Honour's reasoning based on the structure of s48.
His Honour was entitled to give weight to the
juxtaposition of the comparability
requirement with the words "and may also have regard to" before the list of
other considerations.
The approach of his Honour gives appropriate weight to
what is a somewhat unusual structure to the section. This structure supports
the
conclusion of Foster J that the comparability factor which is first raised in
the chapeau to the section, is the one which should
predominate over the others.
- Next
the plaintiff's submissions do not give adequate weight to the considerations
identified in paras (a) to (f). Even having regard
to sub-para (f) which was not
in the section considered by his Honour, all of those paragraphs reflect matters
that go to the comparability
of the premises. Such an approach gives to s48 an
internal cohesiveness and consistency. Even so it is clear from his Honour's
reasoning
that his Honour did not confine the consideration of those
sub-paragraphs only to that purpose.
- It
is true, as the plaintiff submits, that the Act and s48 have a very broad
application. However, no intention is disclosed anywhere
in the Act to the
effect that rents assessed under s48 should be anything other than market based.
The fact that there are other
sections in the Act, to which the Court was
referred, which deal specifically with social housing suggests that if the
legislature
had intended that there was to be some special consideration given
to social housing when applying s48, that would have been expressly
referred to
in the section.
- The
question can be looked at in another way. If it were accepted that all of the
matters expressly referred to in s48 were discretionary
in nature, it is
difficult to see why any particular matters or considerations should have been
expressly referred to. It would have
been sufficient to provide the Court with a
general discretion to take into account "any relevant matter". Such an approach
not only
ignores the structure of s48 but its content.
- It
is difficult to see how a Court or Tribunal could properly construe s48 if its
content were not the starting point and if its content
did not provide guidance
as to what matters were relevant considerations. It is the specific reference to
comparability and the further
reference to other considerations which relate to
comparability, which provide the context in which applications for increase in
rent need to be considered.
- Support
for such an approach is found in the observations of Windeyer J in Finance
Facilities Pty Limited v Commissioner of Taxation [1971] HCA 12; (1970-71) 127 CLR 106 at
134 where his Honour said:
"This does not depend on the abstract
meaning of the word "may" but of whether the particular context of words and
circumstance make
it not only an empowering word but indicate circumstances in
which the power is to be exercised - so that in those events the "may"
becomes a
"must". "
- To
similar effect are the comments of Wilson, Deane and Gaudron JJ in Re:
Coldham & Ors Ex Parte Brideson [1989] HCA 2; (1988-1989) 166 CLR 338 at 347 where
their Honours said:
"A legislative direction to decide does not, as
a matter of ordinary statutory construction, import a discretion to give effect
to
that which, having regard to the scope and purposes of the legislation, is in
the opinion of the decision maker desirable. A discretion
of that nature will be
implied only if the context (including the subject matter to be decided) so
necessitates as, e.g. where the
context provides no positive indication of the
considerations by reference to which a decision is to be made."
- In
this case, of course, there are such positive indications and as already
demonstrated, those positive indications have their own
internal consistency.
- Finally,
I do not see that the wording of s49(1) provides a basis for reaching a
conclusion different to that in Kilpatrick v Gresser . The reference to
"considering any matters it considers appropriate under s48" does no more than
make it clear that a Court or Tribunal
is not obliged to specifically have
regard to all the matters in s48, but only those matters in relation to which
evidence has been
adduced and which apply to the premises the subject of the
application.
- For
the above reasons I have not been persuaded that the approach of his Honour in
Kilpatrick v Gresser is incorrect and that jurisdictional error occurred
when the Tribunal followed it.
- The
plaintiff's second point needs to be considered on the basis that Kilpatrick
v Gresser was correctly decided and provides guidance as to the construction
of s48 of the Act.
- The
plaintiff submits that there were two matters relevant to whether the proposed
rent increase was excessive for the purposes of
s48 which the Tribunal refused
to consider. These were the capacity of the plaintiff to pay the increased rent
and that rent paid
in respect of premises owned by other Aboriginal Land
Councils was lower than the proposed rent increase.
- In
relation to the first of those issues, the Tribunal said:
"I turn
now to consider the central issue raised in these applications: whether the
"affordability" of a rent increase falls within
"any other relevant matter"
under s48(g) of the Act.
The applicants argued that it was a relevant matter within this paragraph to
consider the capacity of the applicants to pay, or at
least, whether the new
rent was affordable by persons for whom this community housing provider made
accommodation available.
There is no doubt that the majority of the applicants who gave evidence are
struggling to pay the increased rent on the fixed incomes
they receive. Many
have been tenants for long periods and have expressed concerns as to their
ability to continue to reside in the
premises as a result of this and previous
rent rises. ...
The respondent disputed the claim that the Tribunal could take into account
the financial circumstances of the tenants."
- In
reaching its conclusion the Tribunal rejected any reliance on the ejusdem
generis rule. The Tribunal said:
"I do not see why a matter can
only be relevant under s48(g) if it relates to the premises solely because this
is the focus of the
matters in (a) to (f). The better view, in my opinion, is
that the legislative intention was to identify those matters most commonly
anticipated to bear on the issue of the increase but recognise that not all
situations that may have a bearing on this consideration
could be anticipated.
Accordingly, paragraph (g) was included to allow the Tribunal to take account of
those other matters that in
the circumstances of the particular case are
relevant to the question of whether the rent increase is excessive. I am of the
view
that the application of the ejusdem generis rule to s48(g) would be
contrary to the legislative intention as to the operation of
that paragraph."
- The
Tribunal then considered some earlier decisions in the Tribunal, in particular
Bentink v NSW Land & Housing Corporation (Tenancy) (2007) NSWCTTT 47
where contrary to previous decisions, the Tribunal held that affordability was a
matter relevant under s48(g) of the Act. The Tribunal
rejected the reasoning in
Bentink because it was based on "social policy grounds rather than a
judgment on legal principles". The Tribunal said:
"It is not for
the Tribunal to substitute its own decision on how [the policy of the Department
of Housing] be effected in preference
to that made by the Department in
application of its housing policy. To do so departs from the matters arising
under s48 and raises
the potential for a decision to be arbitrary or capricious.
... If it is relevant under s48(g) to consider the tenants' financial
circumstances, it must be relevant to consider the policy and equally, the
financial circumstances of the social housing provider.
In the present applications that would involve consideration of Gandangara's
financial statements and whether its cost-rent method
of setting rents
corresponded to the cost of providing services to its tenants. It is clear that
in engaging in such an exercise,
the Tribunal would depart from its statutory
jurisdiction and embark on a review of administrative decision-making. This
function
is vested exclusively in superior courts and based on legal constraints
in the process of administrative decision-making. It is not
the task of the
Tribunal to impose its own "personal judgment" on an administrative decision or
administrative policy.
Bentink made findings as to the poor state of repair of the premises
and the tenants' work in maintaining and improving the premises. To the
extent
that these matters diminished the weight to be given to comparable rents and led
to a finding that the rent increase was excessive,
the decision is unremarkable.
To the extent that the ultimate finding was based on a tenant's capacity to pay,
it is a decision that
I cannot follow.
I find that the affordability of the increased rent is not a relevant
consideration under s48(g)."
- The
plaintiff submits that the purpose of the Act as a whole is to regulate the
provision and use of residential premises in NSW.
She submits that it does this,
in the first instance, by controlling the agreement that may be entered into
between a landlord and
tenant. She notes that a determination by the Tribunal is
binding only as between the parties to the particular agreement. In those
circumstances, she submits that since the Act moderates the relationship between
landlord and tenant, matters specific to each of
them are relevant to the
Tribunal's task. In support of that proposition the plaintiff relies on the
reference in s 48(f) to work
done by the tenant.
- In
essence the plaintiff submits that sub-para s48(g) should be given a wide and
unrestricted interpretation so that if a matter is
relevant to whether a
proposed rental increase is excessive it should be taken into account by the
Tribunal.
- I
do not agree.
- In
accordance with Kilpatrick v Gresser the predominant consideration in s48
is the comparability of premises. The other considerations in sub-paras (a) to
(f) not only relate
to questions of comparability, but also relate entirely to
the state of the premises. Despite the submissions of the plaintiff, there
is
nothing in those sub-paragraphs which relates to the personal circumstances
either of the landlord or of the tenant.
- It
is clear that the Act has and is intended to have a broad and general
application to residential tenancies. There is, however,
no intention disclosed
anywhere in the Act, and certainly not in s48, that the power to review
excessive rent increases was intended
to avoid what is essentially a market
based process. In this sense the scope and purpose of the Act is consistent with
the construction
of s48 in Kilpatrick v Gresser and as applied by the
Tribunal.
- While
not endorsing the application of the ejusdem generis rule, it is clear that a
consideration of the financial circumstances of
either the tenant or the
landlord would raise matters quite different to those specifically referred to
in the section. The matters
in s48 relate to various aspects of the premises
whereas the financial circumstances of either the landlord or tenant raise
matters
entirely personal to the parties and unrelated to the premises.
- The
Tribunal referred to the subjective nature of such an inquiry, whether it be
directed to the financial circumstances of the tenant
or the financial
circumstances and quality of decision making of the landlord. That is to be
contrasted with the more objective and
certainly more easily measured matters
expressly referred to in s48. It is nave to think that if the financial
circumstances of the
parties are relevant for the purposes of s48, such
examinations would not form a significant, if not the predominant consideration,
in s48-49 determinations. Such a result would distort the structure of s48 and
would be inconsistent with the result in Kilpatrick v Gresser .
- The
personal financial circumstances of the parties is such a potentially
significant and controversial issue in rent increase proceedings
that it is
surprising, if it were a relevant matter under s48, that the legislature had not
specifically referred to in the section.
The absence of any specific reference
to it in the section is indicative of an intention that it not be a relevant
matter. Its absence
from s48 is to be contrasted with the specific reference to
it in other sections of the Act, e.g. s65(1) and s69(1), s69A.
- The
first defendant listed a number of anomalous results which could arise if the
plaintiff's submissions were accepted. A landlord
of premises in a wealthy
suburb could be constrained in the rent which it charged its tenants because the
tenant had fallen upon
hard times, even though the market rent for neighbouring
comparable properties might be much higher. If the personal or financial
circumstances of the landlord could be taken into account, should a wealthy
landlord be constrained in its capacity to raise rent
because of the absence of
need on its part. Alternatively, should a tenant have to pay more than the
market rent for premises just
because the landlord cannot afford to keep the
rent at market levels. The first defendant also referred to practical
difficulties
arising from the subjective assessment of the reasonableness of
expenditure by tenants so as to determine whether hardship genuinely
exists in
meeting any increase in rent.
- For
the above reasons I am not persuaded that the Tribunal erred in failing to have
regard to a relevant consideration when it refused
to consider the financial
position of the plaintiff in its application of s48 of the Act.
- Little
was submitted by the plaintiff either orally or in writing, as to how the
Tribunal should have treated the evidence as to rents
charged by other Local
Aboriginal Land Councils. This is not surprising. Once the Tribunal had
(correctly in my opinion) rejected
evidence on that issue as relevant to the
construction of the phrase "general market level of rent" in s48, it is
difficult to see
what other use could be made of that material in the
application of s48. This was not explained anywhere in the plaintiff's
submissions.
Once again this is not surprising given the nature of the evidence
which comprised addresses of premises with an accompanying statement
as to the
number of bedrooms and rent paid but no other detail of the premises.
- Once
that material was excluded from a consideration of "the general market level of
rents for comparable premises" it is difficult
to see how that material would
otherwise have been relevant or would have assisted the Tribunal in the
application of s48.
Order
- For
these reasons I am satisfied that no jurisdictional error has been shown to have
occurred in the determination of the Tribunal.
Accordingly, I decline to make
any of the orders sought and I dismiss the summons. The orders which I make are
as follows:
(1) The Amended Summons is dismissed.
(2) The
plaintiff is to pay the first defendant's costs of these proceedings.
**********
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