Silk Bros Pty Ltd v State Electricity Commission of Victoria
67 CLR 1(Judgment by: Latham CJ)
Silk Bros Pty Ltd
v State Electricity Commission of Victoria
Judges:
Latham CJRich J
Starke J
McTiernan J
Williams J
Judgment date: 8 April 1943
Sydney
Judgment by:
Latham CJ
ON REMOVAL FROM THE SUPREME COURT OF VICTORIA.
LATHAM C.J. The plaintiff company, Silk Bros. Pty Ltd , sued the defendant, the State Electricity Commission of Victoria, in the Supreme Court of Victoria, seeking an injunction against the defendant taking or continuing any proceedings to terminate the tenancy of the plaintiff in certain premises, or to recover possession of the premises, or to eject the plaintiff therefrom "except proceedings authorized by or under reg. 15 of National Security (Landlord and Tenant) Regulations."
The plaintiff applied in the Supreme Court for an interlocutory injunction. The defendant contended that reg. 15 was invalid. Martin J. was of opinion that this contention raised a question as to the limits inter se of the constitutional powers of the Commonwealth and of a State, and under s. 40A of the Judiciary Act 1903-1940 declined to proceed further in the matter, and the case accordingly was removed under that section to the High Court. In order to obviate the necessity of hearing argument as to whether the action did raise a question of the limits inter se of constitutional powers, when the matter came before me I made an order under s. 40 of the Judiciary Act removing the action into the High Court. The cause arose under the Constitution and involved its interpretation, and accordingly I followed the procedure adopted by Starke J. in James v Cowan [[1]] , at p. 388. The application for the injunction has been referred to the Full Court, and the parties have agreed to treat the application as the trial of the action.
In the statement of claim the plaintiff alleges that the defendant is the owner of the premises in question. It is therefore unnecessary to examine the steps by which it became owner under the State Electricity Commission Act 1928 (Vict.) and the Lands Compensation Act 1928 (Vict.). The evidence shows that the agreement for tenancy upon which the plaintiff relies contained a condition that, if the premises should be sold and the plaintiff were then given notice to vacate, it would do so. The premises were sold, and notice was given that vacant possession was required on 23rd October 1942, and the plaintiff was required to vacate the premises. The defendant made no agreement for tenancy with the plaintiff and has accepted no rent from the plaintiff. Thus, under the ordinary law of landlord and tenant, the defendant would be entitled to obtain an order for recovery of possession in proceedings in the Supreme Court.
The only question which arises upon the case as it now stands is whether reg. 15 of the National Security (Landlord and Tenant) Regulations prevents the defendant from taking steps to eject the plaintiff, whether such steps be taken under the ordinary law of landlord and tenant, or under special powers under the Lands Compensation Act which enable the Commission to take possession of land acquired by it under the Act. Although the only regulation mentioned in the documents in the case is reg. 15 of the Landlord and Tenant Regulations, the plaintiff has relied in argument also upon the National Security (Fair Rents) Regulations as affording protection to the plaintiff, if for some reason the Landlord and Tenant Regulations are not applicable in its favour.
The National Security (Landlord and Tenant) Regulations were made as Statutory Rules 1941 No. 275 and have been amended from time to time. They contain provisions for the Constitution of Fair Rents Boards and provide that the Boards may fix a fair rent for the premises to which the Regulations apply. The provisions relating to the determination of a fair rent are substantially the same as those which were contained in the National Security (Fair Rents) Regulations-Statutory Rules 1941 No. 62, as since amended. In addition, however, to the provisions for fixing fair rents, the Landlord and Tenant Regulations add in regs. 15 and 16 provisions placing restrictions upon the right of a landlord to evict a tenant.
Reg. 15 (1) of the Landlord and Tenant Regulations is as follows:"Subject to this regulation, the lessor of any prescribed premises shall not give any notice or take or continue any proceeding to terminate the tenancy or to recover possession of the premises or for the ejectment of the tenant therefrom." The premises in question are prescribed premises within the meaning of the Landlord and Tenant Regulations: See definition in reg. 4 thereof.
Reg. 15 (2) provides that, subject to succeeding sub-regulations, an application may be made by a lessor to a Fair Rents Board for an order for the recovery by him of any prescribed premises, or for the ejectment of the tenant therefrom, if the lessor, before taking such proceedings, has given to the lessee notice to quite for a specified period and that period of notice has expired. The notice to quit can be given only upon one or more of the grounds which are set out in sub-pars. a to h. The lessor has not given the notice required by this provision, and there is no evidence that any of the specified grounds exist in the present case. Accordingly, as reg. 15 is in terms applicable to the present case, the defendant has no right, if the regulation is valid, to take any proceedings to terminate the tenancy.
The effect of reg. 15 is to prevent any action for recovery of possession of land in the courts which normally deal with such matters and to confine the power to make an order for recovery of possession to Fair Rents Boards. Power to make an order in favour of a landlord against a tenant for the recovery of the possession of leased land is plainly a judicial power according to any definition of judicial power which can be suggested. In Shell Co of Australia Ltd v Federal Commissioner of Taxation [[2]] , the Privy Council adopted as one of the best definitions of judicial power that given by Griffith C.J. in Huddart, Parker & Co Pty Ltd v Moorehead [[3]] , at p. 357:"I am of opinion that the words `judicial power' as used in s. 71 of the Constitution mean the power which every sovereign authority must of necessity have to decide controversies between its subjects, or between itself and its subjects, whether the rights relate to life, liberty or property. The exercise of this power does not begin until some tribunal which has power to give a binding and authoritative decision (whether subject to appeal or not) is called upon to take action." The power which reg. 15 purports to confer on a Fair Rents Board is a power to decide a controversy between landlord and tenant relating to property. The Fair Rents Board is expressly given power to make a binding and authoritative decision: see reg. 15 (9), which provides that a Fair Rents Board shall have all the powers possessed by courts of summary jurisdiction and that its decision shall not be subject to appeal. Reg. 16 expressly provides that any order made by a Board under these Regulations for the recovery of premises, or for the ejectment of a tenant, may be enforced in the same manner as if the order had been made by a court which, but for the Regulations, would have had jurisdiction to make the order. Thus the Regulations purport to invest Fair Rents Boards with judicial power.
Section 71 of the Constitution provides that the judicial power of the Commonwealth shall be vested in the High Court, and in such other Federal courts as the Parliament creates, and in such other courts as it invests with Federal jurisdiction. Griffith C.J. said in New South Wales v The Commonwealth [[4]] , at p. 62: "There cannot be a third class of courts which are neither Federal courts nor State courts invested with Federal jurisdiction." Accordingly, in order that a Fair Rents Board should be able to discharge the functions committed to it, it must be either a Federal court created by the Commonwealth Parliament by or in pursuance of the Regulations, or a State court invested by or in pursuance of the Regulations with Federal jurisdiction.
A Federal court, in order to be validly constituted under the Constitution, must satisfy the provisions of the Constitution with respect to the tenure of the members of the court. In Waterside Workers' Federation of Australia v J. W. Alexander Ltd [[5]] it was held that s. 72 of the Constitution required that every member of any court created by the Parliament of the Commonwealth should, subject to the power of removal contained in the section, be appointed for life: See also per Knox C.J. in British Imperial Oil Co Ltd v Federal Commissioner of Taxation [[6]] , at pp. 432, 433. Accordingly, a Fair Rents Board cannot be a Federal court, so as to be capable of exercising judicial power in that capacity, unless the members of the Board are appointed for life. I refer hereafter in some detail to the provisions relating to the Constitution of Fair Rents Boards. It is sufficient here to say that it cannot be suggested that the members of Fair Rents Boards have been appointed for life, or that the regulations relating to them either contemplate or permit appointments for life in accordance with the terms of s. 72 of the Constitution.
A Fair Rents Board can therefore exercise the powers conferred upon it by regs. 15 and 16 of the Landlord and Tenant Regulations only if it is a State court which has been invested with the Federal jurisdiction referred to in those Regulations.
It is contended for the company that Fair Rents Boards are State courts to which Federal jurisdiction has been given by the Regulations. Reg. 3 (4) of the Landlord and Tenant Regulations provides that, where the Minister is satisfied in respect of any State that the law in force in that State does not sufficiently carry out the objects of the Regulations, the Minister may, by order in the Gazette, declare that the provisions of the Regulations which are not otherwise in force in the State shall apply in that State. Reg. 3 (5) provides that where the Minister makes any such order in respect of a State in which, at the publication of the order, a Fair Rents Board is constituted under the National Security (Fair Rents) Regulations, every Fair Rents Board constituted under those Regulations shall continue in existence as if constituted under the Landlord and Tenant Regulations, but that it may be abolished in accordance with the Landlord and Tenant Regulations. (Reg. 7 of the Landlord and Tenant Regulations provides that the Minister may abolish any Fair Rents Board. This provision in itself is sufficient to show that the members of a Fair Rents Board do not hold office under the terms of s. 72 of the Constitution, which require life tenure, subject only to removal on an address from both Houses of the Parliament. But, if the Fair Rents Boards are State courts, then they may be invested with judicial power, though it is hard to see how in such a case a Federal Minister could "abolish" them.)
In order to determine whether the Fair Rents Boards are State courts, it is necessary to consider the effect of the provisions relating to the continuance under the Landlord and Tenant Regulations of the existence of Fair Rents Boards constituted under the Fair Rents Regulations.
The Minister, on 25th March 1942, made an order under reg. 3 (4) declaring that the provisions of the Landlord and Tenant Regulations which are not otherwise in force in the State of Victoria should apply in that State. The consequence of this order was that Fair Rents Boards constituted under the Fair Rents Regulations continued to exist in Victoria for the purpose of the Landlord and Tenant Regulations: See reg. 3 (5) already quoted. It is necessary, therefore, to refer to the Fair Rents Regulations in order to ascertain what is the Constitution of Fair Rents Boards under the Landlord and Tenant Regulations. Reg. 7 (1) of the Fair Rents Regulations provides that the Governor in Council of a State may, for the purposes of the Regulations, constitute Fair Rents Boards in the State at such places as he thinks fit. Par. 3 of this regulation provides that each Fair Rents Board in a State shall consist of a police, stipendiary or special magistrate, and, if the Governor in Council thinks fit, two other persons. Par. 4 provides that the member or members of a Fair Rents Board in a State shall be appointed by the Governor in Council of that State, and shall hold office during his pleasure.
It is argued that these provisions bring about the result that, as a police magistrate may in Victoria constitute a Court of Petty Sessions (Justices Act 1928, s. 63), Courts of Petty Sessions in Victoria are appointed as Fair Rents Boards and that, as they are State courts, they may properly be invested with the judicial power with which the Landlord and Tenant Regulations seek to invest them. I find myself unable to accept this contention. The Regulations provide for the creation of the Boards, to consist of a police, stipendiary or special magistrate, with or without other persons. They do not provide for the addition of new (Federal) powers to those already possessed by State courts. The Fair Rents Boards consist of persons qualified in the manner set forth in the Regulations, and not of courts in which those persons (or some of them) might exercise judicial functions under State law. A Court of Petty Sessions in Victoria may be constituted by a police magistrate or by two or more justices of the peace: See Justices Act 1928, s. 63. But par. 3 of reg. 7 provides that the Governor may constitute a Fair Rents Board consisting of a police magistrate and, if he thinks fit, two other persons. It is not provided that these other persons must be justices of the peace, and accordingly it is obvious that a Fair Rents Board could be constituted under the Regulations which could not possibly be a Court of Petty Sessions. It may, however, be observed that even if two justices (not being police magistrates) were appointed in a particular case, their jurisdiction is limited in respect of bailiwicks (Justices Act, s. 12), and they could not be members of a Court of Petty Sessions acting elsewhere than in their bailiwicks.
Appointments of Fair Rents Boards were made by the Governor in Council in pursuance of the Fair Rents Regulations. On 9th October 1939 the Governor in Council constituted Fair Rents Boards by a proclamation containing the following declaration:"I do hereby constitute a Fair Rents Board at each place in the State of Victoria at which a Court of Petty Sessions has been or may hereafter be appointed to be holden under the provisions of the Justices Acts of the State of Victoria and do hereby appoint any Police Magistrate for the time being assigned to adjudicate at any such Court of Petty Sessions to constitute the Fair Rents Board at the place at which the said Court of Petty Sessions is appointed to be holden as aforesaid." In respect of the metropolitan district specified police magistrates were appointed to be Fair Rents Boards.
These appointments were, in my opinion, clearly appointments of persons possessing the qualifications of police magistrates to be Fair Rents Boards at particular places at which Courts of Petty Sessions were holden. They were not, and did not purport to be, the assignment to any Courts of Petty Sessions of the functions of Fair Rents Boards.
I am therefore of opinion that the Regulations did not invest in State courts, or authorize the investment in State courts of, any Federal jurisdiction. This conclusion makes it unnecessary for me to consider arguments for the defendant based upon Le Mesurier v Connor [[7]] , at pp. 499, 500, where three Justices expressed the opinion that only a Federal statute could invest State courts with Federal jurisdiction under s. 77 (iii.) of the Constitution, and that such investing with jurisdiction could not be effected by a proclamation made under or in pursuance of a statute.
If Fair Rents Boards are neither duly constituted Federal courts, nor State courts invested with Federal jurisdiction, it follows that they cannot exercise judicial power by virtue of Federal legislation. Reg. 15 (2) of the Landlord and Tenant Regulations purports to give judicial power to Fair Rents Boards. Reg. 15 (2) is therefore invalid.
The plaintiff, however, relies upon reg. 15 (1), which is simply prohibitory in character. It provides that, subject to the regulation, the lessor of premises shall not give any notice, or take or continue any proceeding to terminate the tenancy, etc It is urged that, even if reg. 15 (2) is invalid, reg. 15 (1) may be valid. This argument, however, cannot be maintained. Reg. 15 (1) is introduced by the words "Subject to this regulation." It is, therefore, plainly dependent for its operation upon the operation of the following provisions. As those provisions are invalid, it is clear that sub-reg. I cannot operate, as it is shown by its own terms that it was never intended to operate independently of the rest of the regulation. It is, therefore, unnecessary to examine various tests of severability that have been suggested, or to consider the provisions of s. 46 (b) of the Acts Interpretation Act 1901-1941. Sub-reg. 1 is plainly not severable from the rest of the regulation, and it must fail with the rest of the regulation. Therefore the whole of reg. 15 is invalid and, accordingly, the plaintiff fails so far as it relies upon that regulation.
It does not follow, however, that the whole of the Landlord and Tenant Regulations are invalid. The regulations other than regs. 15 and 16 refer to the fixing of fair rents, and to other matters which are quite distinct from those dealt with in regs. 15 and 16. It is argued that the provisions for fixing a fair rent (rent-pegging regulations) are inseverable from regs. 15 and 16, which give stability of tenure to occupants of houses and other premises. (The object of this argument, advanced for the plaintiff, is to show that, if reg. 15 is invalid, the whole statutory rule of which it forms part is invalid, so that the whole of a later statutory rule-No. 12 of 1943 - which amends the Landlord and Tenant Regulations-is invalid for all purposes.) The bearing of this argument will become clear only when it becomes necessary to examine the effect of Statutory Rules 1943 No. 12 in relation to the Fair Rents Regulations, which that statutory rule purports to repeal. In my opinion there is no foundation for the argument that the invalidity of regs. 15 and 16 infects the whole of the Landlord and Tenant Regulations. The provisions for fixing fair rents are complete in themselves. They constitute a complete scheme for dealing with that subject. They are independent, in terms and in operation, of the provisions relating to recovery of possession and ejectment, and there is no reason why they should be held to be dependent upon the latter provisions. I am therefore of opinion that the invalidity of regs. 15 and 16 does not affect the validity of the rest of the Landlord and Tenant Regulations.
The plaintiff, however, contends that, even if the Landlord and Tenant Regulations, or regs. 15 and 16 thereof, are invalid, the Fair Rents Regulations are still in existence and that he is protected from ejectment by reg. 17 of those Regulations.
The Fair Rents Regulations contain provisions for the fixing of fair rents by Fair Rents Boards. These provisions are to a large extent identical with the provisions relating to the same subject matter contained in the later Landlord and Tenant Regulations. The fair rent, which alone is recoverable from a tenant by a landlord (see reg. 16), is either the rent as determined by a Board or, where no rent has been so determined, a rent not exceeding the rent payable in respect of the premises at 31st December 1940 (reg. 6). Reg. 17 (1) provides that, where the rent of any prescribed premises is fixed by virtue of reg. 6, or by determination, then, so long as the lessee duly pays the rent and otherwise performs the terms and conditions of his lease, the lessor shall not, without the consent of a Fair Rents Board, demand any increased rent, or give any notice or take any proceeding to terminate the tenancy. The rent in the case of the premises in question is fixed by virtue of reg. 6. The defendant Commission is seeking to obtain possession of the premises occupied by the plaintiff company, and it has not obtained the consent of a Fair Rents Board to take any proceeding to terminate the tenancy. The plaintiff contends that, in the absence of such consent, the defendant cannot take any proceeding to recover possession of the premises and that upon this ground the injunction sought should be granted.
It is contended for the defendant that for several reasons the plaintiff cannot rely upon reg. 17 as constituting an obstacle in the way of the defendant recovering possession of the premises. In the first place it is said that there is no relation of lessor and lessee between the parties. It is contended that the Regulations apply only to the case of a lessor who has granted a lease to a lessee and a lessee who has accepted a lease from a lessor, and not to a case where premises subject to a lease are sold, so that there is a new owner of the reversion. "Lessor" and "lessee" include a mesne lessor and a mesne lessee (reg. 4). But, upon the view which I take of other matters in the case, it is not necessary to reach any decision upon the effect of this definition in the present case.
In the next place it is pointed out that the Fair Rents Regulations apply only in the case of "prescribed premises," and that the definition in those Regulations is more narrow than that contained in the Landlord and Tenant Regulations. Reg. 4 defines "prescribed premises" as meaning a dwelling-house, shop or factory. The premises in question are not any dwelling-house or a factory. The defendant contends that they are not a shop. "Shop" is defined by reg. 4 as meaning any premises leased wholly or in part for the purposes of a shop and including (a) any part of any such premises separately leased; (b) any land or appurtenances leased with any such premises or part thereof. The only evidence which the Court has with respect to the purposes for which the premises are used is contained in an affidavit filed on behalf of the plaintiff, in which it is stated that the plaintiff uses the premises as a storehouse for fruit and vegetables in connection with its business as wholesale produce merchants. The plaintiff applied for leave to adduce further evidence for the purpose of showing that the premises are a shop, and not merely a storehouse, but the majority of the Court were of opinion that, in view of the stage at which this application was made, further evidence should not be admitted. I am inclined towards the view that the evidence before the Court does not establish that the premises are a shop; but I am not prepared to decide the case against the plaintiff upon this point when possible evidence has not been received and when the case can be decided upon other grounds. I therefore proceed to deal with other matters upon which the defendant relies.
I have referred to the Fair Rents Regulations as if they were still in force. Statutory Rules 1943 No. 12, however, which was headed "Amendments of the National Security (Landlord and Tenant) Regulations," contained in reg. 1 the following provision:"The National Security (Fair Rents) Regulations (being Statutory Rules 1941, No. 62, as amended by Statutory Rules 1941, No. 71) are repealed." If this regulation is effective according to its terms, it is plain that the Fair Rents Regulations no longer exist, and therefore that the plaintiff cannot rely upon them for any purpose in relation to any date after 13th January 1943, when Statutory Rules 1943 No. 12 came into operation. The writ in the action was issued on 17th February 1943.
The plaintiff endeavours to meet the difficulty created by the apparent repeal of the Fair Rents Regulations in two ways. In the first place, it is said that the regulation appears only as part of the Landlord and Tenant Regulations, and reference is made to the heading of the Regulations, which shows that they are intended to constitute an amendment of the Landlord and Tenant Regulations. It is then argued that, if the Landlord and Tenant Regulations are completely invalid, Statutory Rules 1943 No. 12, which amends those Regulations in certain particulars, is also invalid. In my opinion there are two answers to this contention. In the first place, I have already expressed my opinion that the Landlord and Tenant Regulations are not completely invalid, and there is no reason why the amendments made by Statutory Rules 1943 No. 12 in relation to regs. 3, 4, 5, 9 and 13, should not be completely effective, even if the amendment made by the only other regulation in the statutory rule (namely, reg. 7, amending reg. 15 of the Landlord and Tenant Regulations) should fail, together with reg. 15. In the next place, there is no reason why the operation of reg. 1 repealing the Fair Rents Regulations should be limited by the heading which describes the statutory rule as consisting of amendments of the Landlord and Tenant Regulations. The headings in a statute or in Regulations can be taken into consideration in determining the meaning of a provision where that provision is ambiguous, and may sometimes be of service in determining the scope of a provision (see In re Commercial Bank of Australia Ltd [[8]] , at p. 375). "But where the enacting words are clear and unambiguous, the title, or headings, must give way, and full effect must be given to the enactment" (Bennett v Minister for Public Works (N.S.W.) [[9]] , at p. 383, per Isaacs J.). In this case the words of reg. 1, repealing the Fair Rents Regulations, are clear and unambiguous.
The second argument on this point on behalf of the plaintiff is that the repeal of the Fair Rents Regulations should be regarded as having been made only for the purpose of allowing the Landlord and Tenant Regulations to operate uncomplicated by the provisions of the Fair Rents Regulations dealing with substantially the same subject matter, that is to say, with the fixing of fair rents. It is urged that the repeal of the Fair Rents Regulations was only a conditional repeal, the condition being that the Landlord and Tenant Regulations should be in full operation. If this condition is not satisfied by reason of the invalidity of the Landlord and Tenant Regulations, or of a substantial part thereof, the repeal should be held to be not effective.
Upon the view which I take of the validity of the Landlord and Tenant Regulations, there is no room for the application of an argument of this character because, in my opinion, the provisions of the Landlord and Tenant Regulations dealing with the fixing of fair rents are valid and are in full operation.
Apart, however, from this consideration, I find myself unable to accept the argument submitted for the plaintiff upon this point. Probably it was believed by the draftsman that the whole of the Landlord and Tenant Regulations were valid, but the repeal of the Fair Rents Regulations is not made dependent upon the continuance in operation of the Landlord and Tenant Regulations. The words of repeal are quite unequivocal, and a court must give effect to them even though an expectation as to the condition of the law after such repeal may be disappointed in whole or in part. Grave difficulties would arise if a court were to attach an unexpressed condition to the operation of words of repeal so unambiguous as those in the present case. The door would be open to speculations of all kinds as to some probable, but unexpressed, intent of the legislating authority, and great uncertainty would arise as to the effect of repealing provisions. In my opinion the Fair Rents Regulations were effectively repealed as from 13th January 1943.
Accordingly, neither the Landlord and Tenant Regulations (which in my opinion are invalid in the material provision) nor the Fair Rents Regulations (which in my opinion have been repealed) constitute any obstacle in the way of the defendant exercising either the ordinary rights of a landlord against a tenant, or any special rights which it may have under the State Electricity Commission Act 1928 and the Lands Compensation Act 1928. (If the Commission acts under the latter Act, it must pay compensation assessed in the manner provided in s. 60 of the Act.)
On these grounds, in my opinion, the action should be dismissed.
What I have said is sufficient to dispose of the case, but it should be mentioned that the defendant attacked all the regulations as invalid on the ground that they could not be supported under any Federal legislative power. The regulations depend upon the defence power (Constitution, s. 51 (vi.)). It was argued that the regulations cannot be justified thereunder because they cannot assist the defence of the Commonwealth-because they have no real relation to, or no real connection with, defence. It is not necessary in the view which I have taken to decide this question, but I wish to say that, as at present advised, I see no reason for questioning the validity of any of these regulations under the defence power. In the case of Farey v Burvett [[10]] , it was held that the price of food could be fixed under the defence power. Similar considerations apply to the price of shelter-whether the shelter be used for living accommodation or for working accommodation. I see no reason why the price of shelter cannot similarly be fixed, and why provisions directed to securing persons in continued possession of premises of which they are in occupation should not be equally valid.
The parties have agreed to treat the application for an interlocutory injunction as the trial of the action. The action should be dismissed with costs, including costs in the Supreme Court. An undertaking was given by the defendant not to disturb the plaintiff's possession until the hearing, and at the hearing this undertaking was extended to the date of judgment in the case. The plaintiff gave an undertaking when the matter was before me to abide by any order which the Court may make as to damages in case the Court should be of opinion that the defendant should have sustained any by reason of the defendant's undertaking which the plaintiff ought to pay. If the parties do not agree upon this matter, it should be referred to the Registrar to fix the damages, and judgment should be given for the defendant for the amount of damages fixed. I suggest that the action might be referred back to myself for the purpose of dealing with any question of costs in relation to the fixing of damages which may arise.