FEDERAL COURT OF AUSTRALIA Lin v State Rail Authority of NSW [2004] FCAFC 219 FEDERAL JURISDICTION – claim under Federal Act struck out – federal jurisdiction in respect of a claim under a State Act. PROPERTY LAW – nature of a monthly periodic tenancy – Retail Leases Act 1994 (NSW). Judiciary Act 1903 (Cth) s 79 Retail Leases Act 1994 (NSW) s 3, s 6, s 34, s 44(5), s 63, s 72, s 75, s 76 Trade Practices Act 1974 (Cth) s 2B, s 51AC Transport Administration Act 1988 (NSW) s 4(2)(b) Amad v Grant (1947) 74 CLR 327 cited Australian Securities and Investment Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 cited Burgundy Royale v Westpac (1987) 18 FCR 212 cited Cattley v Arnold (1859) 1 J&H 651; 70 ER 905 cited Decor Corp v Dart Industries Inc (1991) 33 FCR 397 cited Dockrill v Cavanagh (1944) 45 SR (NSW) 78 cited Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478 cited Murphy v Overton Investments Pty Ltd (2001) 182 ALR 138 cited Niemann Electronic Industries Ltd [1978] VR 431 cited Oxley v James (1844) 13 M&W 209; 153 ER 87 cited Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 cited Bradbrook, MacCallum & Moore, Australian Real Property Law (3rd ed, 2002) Butt, Land Law (4th ed, 2001) Gray & Gray, Elements of Land Law (3rd ed, 2001) Hogg & Monahan, Liability of the Crown (3rd ed, 2000) SARAH LIN v STATE RAIL AUTHORITY OF NSW No N 1996 of 2003 FINN, MANSFIELD & GYLES JJ SYDNEY 6 AUGUST 2004 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N1996 OF 2003 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: SARAH LIN APPELLANT AND: STATE RAIL AUTHORITY OF NSW RESPONDENT JUDGES: FINN, MANSFIELD AND GYLES JJ DATE OF ORDER: 6 AUGUST 2004 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: (1) leave to appeal be granted; (2) the appeal be allowed; (3) the order of the primary judge be set aside; (4) the matter be remitted to the primary judge; (5) the respondent pay the appellant's costs of the application and the appeal. As the matter is being remitted it will be for the judge at first instance to determine whether it is appropriate to have the proceeding transferred to a State Court. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N1996 OF 2003 ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA BETWEEN: SARAH LIN APPELLANT AND: STATE RAIL AUTHORITY OF NSW RESPONDENT JUDGES: FINN, MANSFIELD AND GYLES JJ DATE: 6 AUGUST 2004 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 The considerations ordinarily applied in determining whether to grant leave to appeal against an order striking out an application disclosing no cause of action are well understood and have been reiterated on many occasions. They are: (i) whether in all the circumstances the decision is attended by sufficient doubt to warrant the decision being reconsidered by the Full Court; and (ii) whether substantial injustice would result if leave were refused supposing the decision to be wrong. See generally Niemann Electronic Industries Ltd [1978] VR 431; Decor Corp v Dart Industries Inc (1991) 33 FCR 397 at 398. The present matter calls for the application of both of these considerations. 2 The appellant, Sarah Lin, commenced proceedings in this Court claiming that the respondent, the State Rail Authority of New South Wales ("the SRA"), has as her landlord (i) engaged in conduct in contravention of s 51AC of the Trade Practices Act 1974 (Cth); and (ii) breached the provisions of s 34 of the Retail Leases Act 1994 (NSW). Pecuniary relief was sought in respect of each claim. 3 The primary judge upheld the SRA's motion to strike out the claim on the basis that it disclosed no cause of action. His Honour held, unexceptionably as we will indicate, that the Trade Practices Act claim must fail for the reason that s 51AC does not bind the SRA. His Honour also noted in relation to the Retail Leases Act claim that (at [14]): "a claim under that Act has already been made to the Administrative Decisions Tribunal of New South Wales and dismissed for lack of jurisdiction: see Lin v State Rail Authority of New South Wales [2003] NSWADT 131. This Court has no jurisdiction to deal with that claim, at least in the absence of an arguably proper claim in federal jurisdiction." 4 For the reasons we give below, it is this last conclusion which is the cause of difficulty on this application. 1. THE TRADE PRACTICES ACT CLAIM 5 The SRA is a statutory corporation created under the Transport Administration Act 1988 (NSW). It is expressly declared by that Act to be, "for the purposes of any Act, a statutory body representing the Crown": see s 4(2)(b). As such it has had conferred upon it the privileges and immunities of the Crown in right of New South Wales: see generally Hogg & Monahan, Liability of the Crown, par 12.3 (3rd ed, 2000). One such immunity, qualified in form, is from the operation of the provisions of the Trade Practices Act (the "TP Act"). 6 Section 2B(1) of the TP Act provides: "(1) The following provisions of this Act bind the Crown in right of each of the States, of the Northern Territory and of the Australian Capital Territory, so far as the Crown carries on a business, either directly or by an authority of the State or Territory: (a) Part IV; (aa) Part VB; (b) Part XIB; (c) the other provisions of this Act so far as the relate to the above provisions." Section 51AC is in Part IVA of the TP Act. Irrespective then of whether the SRA is carrying on a business, it is not bound by the provisions of the TP Act. His Honour was correct in concluding that Ms Lin had no cause of action against the SRA under that Act. 7 Ms Lin, who is an unrepresented litigant, has sought to repel this conclusion by relying (as she did before the primary judge) upon a number of cases which the primary judge properly characterised as irrelevant. They deal with subject matter quite unrelated to the federal issue dealt with in s 2B of the TP Act. 2. THE RETAIL LEASES ACT CLAIM 8 The SRA does not seek to uphold his Honour's decision on the basis relied upon by his Honour. It is conceded in light of case law which we ought follow, that the matter before the primary judge was "'wholly' federal" in character even though one of the two claims made arose under a State statute: Australian Securities and Investment Commission v Edensor Nominees Pty Ltd (2001) 204 CLR 559 at [7]. Being endowed with that character from the outset, it was retained thereafter notwithstanding that the claim which gave the matter its federal character initially was later struck out: Unilan Holdings Pty Ltd v Kerin (1993) 44 FCR 481 at 481-482; Burgundy Royale v Westpac (1987) 18 FCR 212 at 219. The concession is properly made: see generally Allsop, "Federal Jurisdiction and the Jurisdiction of the Federal Court of Australia" (2002) 23(1) Aust Bar Rev 29; though it does not imply that Ms Lin, in consequence, in fact has a cause of action under the Retail Leases Act. 9 It is the SRA's contention that she has no such cause of action and that, for this reason, leave should be refused as no injustice would result notwithstanding the primary judge's error. A Notice of Contention to this effect has been filed. 10 To appreciate the burden of this contention it is necessary to refer both to the provisions of the Retail Leases Act and to the factual setting in which Ms Lin's claim is made. 11 First, the Act. A "retail shop lease" is defined to mean any agreement under which a person grants or agrees to grant to another person for value a right of occupation of premises for the purpose of the use of the premises as a retail shop: s 3. It may be assumed for present purposes that Ms Lin has such a lease from the SRA. 12 Section 6 of the Act limits the retail shop leases to which the Act applies. This provision is central to the SRA's contention. It provides insofar as presently relevant: "6. (1) This Act does not apply to any of the following leases of retail shops: (a) leases for a term of less than 6 months without any right for the lessee to extend the lease (whether by means of an option to extend or renew the lease or otherwise), and for this purpose a provision for holding over by the lessee at the end of the term of the lease is not considered to confer a right on the lessee to extend the lease if it operates effectively at the discretion of the lessor." 13 This primary judge had before him a copy of Ms Lin's tenancy agreement. It was executed on 10 October 1998 for a term of one month as a periodic monthly tenancy. Rent was payable monthly in advance. A guarantee equivalent to three month's rent was to be provided before the commencement of the lease. The lease was terminated on 9 April 2003 because of non-payment of rent. The events the subject of Ms Lin's application occurred prior to that date. 14 It is well settled that a monthly periodic tenancy continues from month to month indefinitely, until determined by notice to quit given by either party to the other: Butt, Land Law, 264-265 (4th ed, 2001). As was said by Latham CJ in Amad v Grant (1947) 74 CLR 327 at 336: "There is not a new tenancy with the beginning of each month … but a letting for a period determinable by a notice to quit." The notice to quit must itself be for a month terminating at the end of a complete month: Dockrill v Cavanagh (1944) 45 SR (NSW) 78 at 82. Because a tenancy continues indefinitely until determined by notice, it can hardly be said to have a certain prefixed maximum duration: see Gray & Gray, Elements of Land Law, 345 (3rd ed, 2001). There is authority, though, for the view that the term of a periodic tenancy can be treated in retrospect as the period for which the tenancy actually continued: see e.g. Cattley v Arnold (1859) 1 J&H 651; 70 ER 905; Oxley v James (1844) 13 M&W 209; 153 ER 87; Bradbrook, MacCallum & Moore, Australian Real Property Law, 418 (3rd ed, 2002). 15 While the SRA's contention is that the Retail Leases Act does not apply to Ms Lin's lease because of the provisions of s 6(1)(a), the question for this Court is whether it would be futile to grant leave as her claim under that Act disclosed no reasonable cause of action and ought to have been dismissed for that reason under O 20 r 2 of the Federal Court Rules. 16 That question raises two distinct issues. These are: (i) is there a real question to be tried as to whether or not Ms Lin's lease falls within the exclusion in s 6(1)(a) of the Act; and (ii) if the exclusion does not apply, is the claim one that the Court can entertain under the Retail Leases Act. 17 As to the first of these, and consistent with what has been said above about periodic tenancies, it cannot be said that there is not a real question to be tried as to whether s 6(1)(a) applies to a lease for an indefinite period which, in retrospect, had a term of about four and a half years and which was "founded on the continuing will of both landlord and tenant that the tenancy shall persist": Hammersmith and Fulham London Borough Council v Monk [1992] 1 AC 478 at 492. The lease, arguably, was not one for a fixed term whether for less than six months or otherwise, though it was capable, in fact, of being determined within that period. Its duration did not depend on the exercise of rights to extend. Rather, it depended on the exercise of a power to determine what otherwise was of indefinite duration. It is arguable, furthermore, that the Act's provision dealing with termination of a retail shop lease does not apply to a periodic tenancy: see s 44(5) of the Act. 18 The second issue depends on whether the Retail Leases Act was in terms which made it capable of being picked up and applied by this Court under s 79 of the Judiciary Act 1903 (Cth): Murphy v Overton Investments Pty Ltd (2001) 182 ALR 138. The Act is a source both of rights and remedies. While it clearly envisages that "retail tenancy disputes": see s 63(ii); should ordinarily be resolved by the Administrative Decisions Tribunal: see Division 3, esp ss 72, 75 and 76; it acknowledges (inter alia) that if a claim has previously been lodged with the Tribunal and has been "dismissed for want of jurisdiction", it may later be raised in civil proceedings before a court: s 76(1)(a). In the present matter a claim by Ms Lin was dismissed by the Tribunal for want of jurisdiction. This Court, in consequence, has jurisdiction to entertain the claim: Murphy, above. 19 The Court will order that: (1) leave to appeal be granted; (2) the appeal be allowed; (3) the order of the primary judge be set aside; (4) the matter be remitted to the primary judge; (5) the respondent pay the appellant's costs of the application and the appeal. 20 As the matter is being remitted it will be for the judge at first instance to determine whether it is appropriate to have the proceeding transferred to a State Court. I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Finn, Mansfield and Gyles. Associate: Dated: 17 August 2004 Appellant appeared in person. Counsel for the Respondent: Mr G Sirtes with Ms F Sinclair Solicitor for the Respondent: Henry Davis York Date of Hearing: 6 August 2004 Date of Judgment: 6 August 2004