Claydon v NSW Land and Housing Corporation

Scope and nature of the appeal

1. The decision under appeal is an "internally reviewable decision" (ss 4, 32(4) of the Act). A party may appeal an internally reviewable decision on any question of law or with the leave of the Appeal Panel on any other ground (s 80(2)(b) of the Act).
2. Where, as in this case, the decision the subject of the appeal is a decision of the Consumer and Commercial Division of NCAT, cl 12 of Schedule 4 of the Act limits the circumstances in which an Appeal Panel may grant leave to appeal: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80(2)(b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (a) the decision of the Tribunal under appeal was not fair and equitable, or (b) the decision of the Tribunal under appeal was against the weight of evidence, or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). Note: Under section 80 of this Act, a party to proceedings in which a Division decision that is an internally appealable decision is made may appeal against the decision on a question of law as of right.

Ms Claydon charged with drug-related offences

1. On 28 August 2014, following the execution of a search warrant on her home, Ms Claydon, her adult stepson and a visitor were charged with multiple drug-related offences. According to Ms Claydon, at the time of her arrest her stepson was on a good behaviour bond and "paroled" to her address following a conviction for fraud.
2. When the matter first came before the Local Court on 24 February 2015, Ms Claydon was charged with: two counts of "supply prohibited drug", namely 20.7 gm methylamphetamine and 45 gm cannabis (s 51(1), of the Drug Misuse and Trafficking Act 1985 (NSW)) knowingly allowing the premises to be used as "drug premises" (s 36Y(1)(a) of the Drug Misuse and Trafficking Act knowingly participating in group participating in criminal activity, namely supply prohibited drug (s 93T(1)(a) of the Crimes Act 1900 (NSW).
3. In March 2015, following discussions between solicitors representing Ms Claydon and the Office of the Director of Public Prosecutions, the above charges were withdrawn and Ms Claydon entered a guilty plea for the lesser offences of "possess prohibited drugs" (x 2), (1.24 gm methyl amphetamine and 1.4 gm of cannabis). On 24 March 2015, the Local Court convicted Ms Claydon of two counts of "possess prohibited drugs". She was fined $100 in respect of each offence.
4. In a statement tendered in these proceedings dated 13 April 2015, Ms Claydon stated that at the time of her arrest she did not understand why Police alleged she was supplying illicit drugs and running a "drug house". She stated she was "extremely shocked" when told that large amounts of methyl amphetamine and cannabis had been found in the garage and in a "book safe" in the lounge room of her home. She stated that when arrested she was suffering from osteoarthritis and spinal disc disease, which restricted her mobility. She claimed as a result she was largely confined to her bedroom which was on the second floor of the town house she leased from Housing NSW.
5. Ms Claydon also stated that while at all times she has admitted using cannabis for pain relief she has denied supplying drugs or running a "drug house".

NSW Housing applies for orders to terminate tenancy

1. In September 2014, NSW Housing issued Ms Claydon with a termination notice and applied to NCAT for orders that the Agreement be terminated under s 91 of the RT Act, which provides: 91 Use of premises for illegal purposes (1) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that the tenant, or any person who although not a tenant is occupying or jointly occupying the residential premises, has intentionally or recklessly caused or permitted: (a) the use of the residential premises or any property adjoining or adjacent to the premises (including any property that is available for use by the tenant in common with others) for the purposes of the manufacture, sale, cultivation or supply of any prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985 , or (b) the use of the residential premises for any other unlawful purpose and that the use is sufficient to justify the termination. (2) In considering whether to make a termination order on the ground specified in subsection (1) (b), the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the unlawful use, (b) any previous unlawful uses, (c) the previous history of the tenancy. (3) The termination order may specify that the order for possession takes effect immediately. (4) A landlord may make an application under this section without giving the tenant a termination notice. (5) The Tribunal may make a termination order under this section that takes effect before the end of the fixed term if the residential tenancy agreement is a fixed term agreement.
2. The matter was first listed before NCAT on 5 November 2014 but adjourned to 26 November 2014, apparently because NSW Police had failed to produce documents, in answer to a summons issued at the request of NSW Housing. Those documents related to Ms Claydon's arrest were subsequently produced and Ms Claydon was granted access to them.
3. According to Ms Claydon, late in the afternoon of Friday 30 January 2015 she found a letter notifying her that a NCAT hearing had been listed the following Monday, 2 February 2015, to determine the application made by NSW Housing to terminate the Agreement. At the hearing, an advocate from the Southern Sydney Tenants Advice Service applied for an adjournment on the ground that Ms Claydon was yet to enter a plea in the criminal proceedings. That application was refused and the Member advised that unless the parties were able to reach agreement he would proceed to hear the application.
4. According to Ms Claydon, she felt she "had little or no choice" but to reach agreement with Housing NSW. She claimed she was concerned that if she gave evidence in the NCAT proceedings the Police might use that evidence to "build a case against her" in the criminal matter. She stated that she had formed the opinion that any challenge to NSW Housing's application was unlikely to be successful and she had nothing to gain and much to lose, if the application was adjudicated. She stated that a factor which weighed heavily in that decision was the fact that the offences for which she was originally charged carried a significant custodial sentence. She claimed she consented to orders that the Agreement be terminated with "great reluctance".
5. Ms Claydon was given a grant of aid by Legal Aid NSW in respect of the criminal charges (not the NCAT proceedings). Prior to the 2 February 2015 NCAT hearing she had met with the solicitor appointed to represent her in the criminal proceedings on one occasion.

Can we be satisfied that Ms Claydon may have suffered a substantial miscarriage of justice because the decision was not fair and equitable?

1. Ms Claydon seeks leave to appeal on the ground that she may have suffered a substantial miscarriage of justice because the decision under appeal was not "fair and equitable".
2. Originally Ms Claydon contended the decision under appeal was not fair and equitable because it was based on an agreement entered into under duress. At hearing she abandoned that claim contending instead that the agreement was entered into at a time when she was under "great pressure".
3. The Appeal Panel has power to set aside an order made by consent under s 59 of the Act in certain circumstances. The grounds for setting aside a consent order are the same as those for setting aside the agreement on which the order is based (Loch v New South Wales Land and Housing Corporation [2014] NSWCATAP 110 at [27], [28]; Shelton v Phoo [2015] NSWCATAP 120 at [45]). In Harvey v Phillips [1956] HCA 27; (1956) 95 CLR 235, the High Court identified (at 243-4) grounds which might warrant the setting aside of an agreement: The question whether the compromise is to be set aside depends upon the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it, grounds for example such as illegality, misrepresentation, non-disclosure of a material fact where disclosure is required, duress, mistake, undue influence, abuse of confidence or the like.
4. While the grounds listed by the High Court in Harvey v Phillips are not exhaustive, we are not persuaded that "feeling under enormous pressure" provides an adequate basis to set aside an agreement. Ms Claydon made an informed decision, albeit reluctantly, that it was not in her best interests to run the risk that evidence given by her in the NCAT proceedings might be used in the criminal trial. It is not clear whether it was explained to Ms Claydon that it was open to the Tribunal to issue a certificate under s 128 of the Evidence Act 1995 (NSW) if she gave evidence that might tend to prove that she had committed an offence, providing the requirements of that provision were met (see s 38(3)(b) of the Act).
5. We are not satisfied the decision can be characterised as "not fair and equitable". Given this finding it is not necessary to consider whether Ms Claydon may have suffered a substantial miscarriage of justice because of this ground.

Can we be satisfied that Ms Claydon may have suffered a substantial miscarriage of justice because significant new evidence has arisen?

Has significant new evidence arisen which was not reasonably available at the time of the hearing

1. Ms Claydon argues that the decision by the DPP to withdraw the more serious charges of "supply drugs" and her ultimate conviction for the lesser offence of "possess prohibited drugs", constitutes "significant new evidence" within the meaning of cl 12(1)(c) of Schedule 4 of the Act.
2. NSW Housing argues that Ms Claydon's version of events was evidence available at the time of the hearing. It contends that the purported "new evidence" relates to factual matters that occurred after the making of the decision under appeal and, as such, does not constitute "new evidence" within the meaning of cl 12(1)(c).
3. "New evidence" within the meaning of cl 12(1)(c) is not, as we understand NSW Housing to suggest, the same as "fresh evidence". In Wright v Ryan & Anor [2005] NSWCA 368, the Court of Appeal considered the meaning of the term "fresh evidence" as used in the context of a motion for a new trial: The evidence must be admissible and credible, and such that it could not have been discovered by the exercise of reasonable diligence before the trial. It must be of such probative value and significance that, taken with the evidence given at the trial, it will in all probability be decisive of the issues between the parties and result in a different verdict: McDonald v McDonald [[1965] HCA 45; (1965) 113 CLR 529] at 532 per Barwick CJ.
4. To amount to "new evidence" for the purpose of cl 12(1)(c) of Schedule 4 of the Act, an appellant must be able to point to evidence which: (1) is significant; and (2) has arisen and is new in the sense that it was not reasonably available at the time the proceedings below were being heard. [emphasis added] (See Owners - SP 76269 v Draybi Bros Pty Ltd [2014] NSWCATAP 29 at [109].)
5. In oral submissions, counsel for NSW Housing advanced the proposition that a fact not in existence at the time of hearing can never be said to constitute "new evidence" for the purpose of cl 12(1)(c). This submission implies that unless a fact was in existence (but not reasonably discoverable) at the time of the original hearing it cannot later be adduced as "new evidence".
6. There is nothing in the language of the provision to support the restrictive interpretation Counsel for NSW Housing urges us to adopt. Nor, as argued by Counsel, does QP v RP [2014] NSWCATAP 59 at [35] - [37] support such interpretation. That decision concerns an appeal against a decision made by the Guardianship division of NCAT. Clause 12(1)(c) of Schedule 4 does not apply to appeals from that Division. The cited passage relates to s 80(3)(b) of the Act which concerns the power to permit "fresh evidence" in an appeal.
7. There can be no argument that Ms Claydon's version of events surrounding her arrest is not "evidence" that is "new in the sense that it was not reasonably available at the time the proceedings below". However, the subsequent decision by the DPP to withdraw the more serious charges of supply prohibited drugs and Ms Claydon's conviction for the lesser offences of possession, in our view is evidence that is both new and significant.
8. It is new because it was not available at the time of the original hearing. And it is significant because if Ms Claydon had been charged in the first place with mere possession of a prohibited drug, the application to terminate her lease may never have been made. In our view, the threshold test has been met.

Can we satisfied that Ms Claydon may have suffered a substantial miscarriage of justice because significant new evidence has arisen?

1. To rely on Schedule 4, cl 12(1)(c) it is not enough that significant new evidence has arisen, we must also be satisfied that Ms Claydon may have suffered a substantial miscarriage of justice because that evidence has arisen. In Collins v Urban [2014] NSWCATAP 17 an Appeal Panel of NCAT considered what constitutes a "substantial miscarriage of justice" in the context of Schedule 4, cl 12. After considering the authorities the Appeal Panel concluded (at [76]): Accordingly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in cl 12(1)(a), (b) or (c) where there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
2. When exercising its powers under s 91 of the RT Act to make, or to decline to make, a termination order the Tribunal must undertake a two-step process First, the Tribunal must satisfy itself that the tenant, or any person who is occupying or jointly occupying the residential premises, has intentionally or recklessly caused or permitted the use of the premises for the purposes of the manufacture, sale, cultivation or supply of any prohibited drug within the meaning of the Drug Misuse and Trafficking Act. If so satisfied, the Tribunal must decide whether to exercise the discretionary power to terminate the tenancy agreement and in so doing may have regard to the matters listed in s 91(2) of the RT Act.
3. As NSW Housing points out, the DPP's decision to withdraw the more serious charges of supply laid against Ms Claydon does not make it a foregone conclusion that if the application to terminate was determined on its merits, Ms Claydon would be successful. The DPP's decision does not prove that Ms Claydon was not engaged in the supply of prohibited drugs, simply that a forensic decision was made that the available evidence did not support a finding that the elements of the offence could be proven to the criminal standard.
4. If the application to terminate the tenancy is adjudicated, the Tribunal may not accept Ms Claydon's unsupported claim that she has had no involvement in the supply of illicit drugs. Alternatively, the Tribunal may find that Ms Claydon's stepson was jointly occupying the premises and intentionally or recklessly caused or permitted the use of the premises for the purposes of the supply of prohibited drugs.
5. Nonetheless, while not determinative, the availability of the new and significant evidence of Ms Claydon's conviction of the lesser charge of possessing prohibited drugs in our opinion means that there is a "chance which was fairly open" that if the matter were to be adjudicated the application to terminate the tenancy agreement might be dismissed. In reaching this conclusion we note that to exercise the power to terminate the tenancy the Tribunal must not only be satisfied that the pre-condition to the exercise of that power to terminate the Agreement can be exercised but must also decide whether that power should be exercised.
6. We are satisfied that Ms Claydon may have suffered a substantial miscarriage of justice because significant new evidence has arisen.

Should the power to grant leave be exercised?

1. Having found that Ms Claydon may have suffered a substantial miscarriage of justice because significant new evidence has arisen we must consider whether to exercise the discretion to grant leave to appeal. The principles governing the grant of leave under s 80(2)(b) of the Act were considered by in Collins v Urban and summarised as follows: (1) In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; (2) Ordinarily it is appropriate to grant leave to appeal only in matters that involve (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed, (3) In relation to an application for leave to appeal relating to a question of practice and procedure, the application is to be approached with the restraint applied by an appellate court when reviewing such decisions, especially if the application is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21] and the authorities cited there.
2. Ms Claydon argues that the circumstances of her case warrant the granting of leave. She points out that she has been a social housing tenancy for nearly two decades and has no alternative housing options. Further, she argues that it is highly relevant that if the application to terminate the Agreement were to be adjudicated there is a real possibility that the Tribunal will find that the precondition to the exercise of the power under s 91 of the RT Act is not satisfied.
3. NSW Housing argues that none of the factors listed in Collins v Urban apply in this case and leave to appeal should be refused.
4. We accept the submission made by NSW Housing that this case does not raise an issue of principle or a question of public importance. Nonetheless, given the significance of the new evidence, we have decided that the interests of justice demand that in the circumstances of this case Ms Claydon be afforded the opportunity of having the application made by NSW Housing determined on its merits. For that reason we have decided to grant leave to appeal.

Should the time to lodge the Notice of Appeal be extended?

1. Ms Claydon was required to lodge the Notice of Appeal within 14 days from the day on which was she notified of the decision (Rule 25(4)(b) of the Civil and Administrative Tribunal Rules 2014 (NSW)). Lodged on 23 April 2015, the Notice of Appeal was out-of-time by about two months.
2. Section 41 of the Act confers on the Appeal Panel a discretionary power to extend the time for lodging the Notice of Appeal. While unfettered, that power must be exercised judicially and having regard to s 36 of the Act and the need "to facilitate the just, quick and cheap resolution of the real issue in the proceedings": Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 at [18].
3. In Jackson the Appeal Panel identified at [22] a number of considerations generally relevant to the consideration of whether to extend time to lodge a Notice of Appeal: (1) The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant; (2) The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success; (3) Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: (a) The length of the delay; (b) The reason for the delay; (c) The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and (d) The extent of any prejudice suffered by the respondent (to the appeal), (4) It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable (citations omitted)].

Explanation for the delay

1. Ms Claydon explained that the appeal was lodged out of time because first, she was required to await the outcome of the Local Court proceedings, which was not finalised until 23 March 2015, and second, it took some time to obtain advice from the Tenants Advice Service and in turn for the Service to obtain necessary reports from the lawyers who represented her in criminal proceedings and her treating medical practitioners.
2. While the explanation for the delay proffered by Ms Claydon is not the most compelling especially in relation to the further four-week delay after the Local Court entered the conviction for the lesser offence of supply drugs, we find it nonetheless to be reasonable.

Prejudice to NSW Housing

1. NSW Housing submits its interests would be prejudiced if an extension of time is granted because it could create a precedent resulting in tenants in similar situations seeking to delay the making of orders under s 91 of the RT Act until the outcome of the associated criminal proceedings is finalised.
2. NSW Housing is charged with the difficult task of fairly and equitably allocating and managing social housing in an environment where demand outstrips supply. It has a legitimate concern that an application to terminate a tenancy might be delayed even where there is powerful evidence that a tenant has done one of the things listed in s 91(1) of the RT Act. Our decision has no precedent value. Each case must be considered on its merits. We are not persuaded that in the circumstances of this case NSW Housing would be prejudiced if an extension of time is granted.

Conclusion

1. Time limits are imposed to bring finality to the decision-making process. They are an important, but not an absolute, value. Once the threshold questions of whether a reasonable explanation for lodging an appeal out of time and whether the respondent will suffer substantial prejudice are resolved, the question must be whether or not justice can be done to both parties if the matter proceeds to an appeal having regard to the need "to facilitate the just, quick and cheap resolution of the real issue in the proceedings". It is to that question that the considerations outlined in Jackson are ultimately directed.
2. While the delay in lodging the Notice of Appeal was significant, a satisfactory explanation has been given and the NSW Housing is unlikely to suffer any significant prejudice if the application to extend time is granted. In our opinion the balance of considerations favour the granting of an extension of time for the lodging of the Notice of Appeal.

Orders

1. Time to file the Notice of Appeal is extended to 23 April 2015.
2. Leave to appeal is granted.
3. Appeal is allowed.
4. Decision under appeal is set aside.
5. Application made by NSW Housing to terminate the Agreement is remitted to the Consumer and Commercial Division of NCAT for determination. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 09 September 2015