AARON LYE V NORMA SWEENEY [2009] NSWSC 193

New South Wales Supreme Court

CITATION : AARON LYE V NORMA SWEENEY [2009] NSWSC 193

HEARING DATE(S) : 19 March 2009

JUDGMENT DATE : 26 March 2009

JUDGMENT OF : Smart AJ

DECISION : Motion and appeal dismissed with costs.

CATCHWORDS : Landlord and tenant - no subsisting tenancy - lawfully terminated - consideration of ss 85(1)(d) and 127 of Conveyancing Act 1919 - futile to order re-hearing of strike out application on natural justice grounds as decision of Associate Judge correct.

LEGISLATION CITED : Conveyancing Act 1919 Real Property Act 1900

CASES CITED : Batiste & Ors v Lenin [2002] NSWCA 316

FILE NUMBER(S) : SC 5259/2007

C. Dibb (P and Appellant) COUNSEL : V. R. Gray (D and Respondent)

SOLICITORS : Johnson & Sendall (P and Appellant) P. J. Webb (D and Respondent)

- 9 - IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION

SMART AJ

26 March 2009

5259/2007 AARON LYE V NORMA SWEENEY JUDGMENT

1 Aaron Lye, the plaintiff, by his Notice of Motion of 3 October 2008 filed 17 October 2008 appeals against the whole judgment of Associate Justice Macready delivered 5 September 2008 by which he determined that the lease of the plaintiff had been validly terminated and there was no basis for the claim made in the statement of claim. He dismissed the proceedings by the plaintiff against the second defendant, Norma Sweeney. 2 The background and the facts are set out in the judgment of the As. J. I add that on 29 October 2007 Mr Lye issued a summons against R A Burrows Pty Ltd seeking relief against it similar to that specified in paragraph 5 of the As. J's judgment. On 4 February 2009 a Deputy Registrar granted the plaintiff leave to file an Amended Summons, the effect of which was to add Ms Norma Sweeney as the second defendant and seek the relief set out in para [5] of the As. J's judgment. On 8 February 2008 this Court, by consent, granted leave to the plaintiff to discontinue proceedings against R. A. Burrows Pty Ltd. The appeal grounds are that the As. J erred: "1. … in holding that the Second Defendant had terminated the lease of the plaintiff pursuant to s 85(1)(d) of the Conveyancing Act 1919. 2. … in dealing with the matter before him on the basis that the powers of the lessor had been enlivened by s 85(1)(d) of the Conveyancing Act 1919 without the plaintiff having been given an opportunity to be heard on that issue." 3 As to the second ground counsel for the parties who appeared before the As. J and me were not agreed as to what occurred before the As. J. The transcript of 6 August 2008 of the hearing throws no light on the point of disagreement. 4 Mr C Dibb for the plaintiff contended that at the hearing before the As. J the defendant had submitted that the tenancy of the plaintiff was a tenancy at will pursuant to s 127 of the Conveyancing Act and the plaintiff agreed. Mr Dibb said that the plaintiff pointed out that there had not been one month's notice in writing. 5 Mr Dibb said that at the hearing before the As. J neither party referred to s 85 of the Conveyancing Act. Mr Gray agreed. 6 Mr Gray told me that he had contended before the As. J that Mr Lye must establish that he had a reasonably arguable case that he had a valid and enforceable equitable leasehold interest in SP 70637, lots 7, 9, 15 and 23 and that the evidence established positively that Mr Lye had and has no such equitable estate or interest. Submissions to this effect, but in greater detail, appeared on p.3 in the Second Defendant's Outline Submissions. Mr Gray told me that the As. J put to him that the plaintiff probably had a leasehold interest and that he (Gray) submitted that at its highest on the evidence if there was a leasehold interest it was a tenancy at will under s 127 of the Conveyancing Act. It was contrary to the tenor of the Second Defendant's Outline Submissions that the plaintiff had a leasehold interest of any kind. 7 Paragraph 24 of the judgment states "The defendant suggested that it was a tenancy at will under s 127 of the Conveyancing Act 1919." The word "suggested" may be significant. The suggestion has to be read in the light of the Outline Submissions. In view of those there could be no doubt in the plaintiff's mind as to the primary position of the defendant. 8 At paragraph 29 the As. J said: "The evidence indicates that the plaintiff initially paid rent to the defendant each month. The evidence shows that the parties paid and accepted the rent on a monthly basis. In the documentation that is available there is no suggestion of a term of years or that the monthly rent was determined by reference to an aliquot (proportionate) part of a year. In the absence of any written agreement or other evidence that the rent was determined as an aliquot part of a year, s 127 is not applicable and the tenancy in question is a common law periodic monthly tenancy. Such a tenancy continues from period to period indefinitely until determined by notice or forfeiture." 9 He thus rejected that there was a tenancy at will under s 127 of the Conveyancing Act. He had previously rejected the defendant's contention that the plaintiff had no leasehold interest in the lots in question. 10 After rejecting that there was a tenancy at will under s 127 the As. J sought to determine whether there was another basis for the alleged tenancy. He considered that the tenancy which existed was a common law periodic monthly tenancy. He then considered whether s 85 of the Conveyancing Act applied. 11 The As. J held that s 85(1)(d) of the Conveyancing Act applied to the periodic monthly tenancy and that there was a right of re-entry for breach without prior notice. The As. J held that the defendant did this by peaceably changing the locks when the rent was two months in arrears and accordingly the tenancy was determined. He held that s 129(8) made the giving of prior notice unnecessary where there is non-payment of rent. That provides that s 129 does not affect the law relating to re-entry or forfeiture or relief in case of non-payment of rent. The As. J concluded that the lease of the plaintiff had been validly terminated. 12 The As. J found that as at 21 December 2007 the rent was in arrears by $14,551.50. The affidavit bearing date 27 June 2008 of Norma Sweeney (and filed 28 July 2008), para [7] makes it clear that Ms Sweeney has never received from the plaintiff any rent or other money in respect of any period on or after 21 December 2007 and that the plaintiff has never tendered to her any rent or other money in respect of his occupation of Lots 7, 9, 15 and 23. 13 There is no evidence of any written direction being given on settlement on 21 December 2007 for Mr Lye in future to pay all rent to Ms Norma Sweeney. The amendment of the Summons on 4 February 2008 shows that at least by that date the plaintiff was aware of the transfer to Ms Sweeney of the 4 lots. In paragraph [8] of the Statement of Claim (Pleadings and Particulars) the plaintiff alleges that Ms Sweeney became the registered proprietor of the lots by transfer from R A Burrows Pty Ltd to Ms Norma Sweeney on 21 December 2007. 14 As the As. J found (para [14]) Ms Sweeney had taken possession of the units by changing the locks on the relevant units in January 2008 (about 13 or 14 January), 7 February 2008, 26 February 2008, 26 March 2008, 16 April 2008 and 20 May 2008. He further found that on each occasion after taking possession the locks were changed again and she has been denied possession of the units. 15 While Mr Gray conceded that the As. J devoted part of his judgment to a consideration of s 85 of the Conveyancing Act on which he received no submissions from counsel Mr Gray submitted that the appellant must go further and demonstrate that the judgment under review was relevantly wrong. Mr Gray's submissions read in part: "In CSR Ltd v Eddy (2008) 70 NSWLR 725 at 735 para 40 Basten JA quoted Stead v State Government Insurance Commission (1986) 141 CLR 141: For this reason not every departure from the rules of natural justice at a trial will entitle the aggrieved party to a new trial. By way of illustration, if all that happened at a trial was that a party was denied the opportunity of making submissions on a question of law, when, in the opinion of the appellate court, the question of law must clearly be answered unfavourably to the aggrieved party, it would clearly be futile to order a new trial. and continued (p. 735 [42]) Where the appeal turns on a question of law, with no need for additional fact-finding, it will rarely be necessary for an appellate court conducting a re-hearing, to remit a matter rather than determine the question for itself." 16 Mr Gray pointed to the facts found by the As. J namely: