Davis v NSW Land and Housing Corporation

NCAT Appeal Panel|2015-08-03|Before: Mr J

Introduction

This is an internal appeal pursuant to s 80(1) of the Civil and Administrative Tribunal Act 2013 from a decision of the Consumer and Commercial Division of the Tribunal published on 13 October 2014. The orders then made and appealed against were: 1. The Residential Tenancy Agreement is terminated in accordance with: s 91 (a) of the Residential Tenancies Act 2010 as the tenant/occupant has intentionally or recklessly caused or permitted the use of the premises for manufacture, sale, cultivation or supply of prohibited drugs. s 91 (b) of the Residential Tenancies Act 2010 as the tenant/occupant has intentionally or recklessly caused or permitted the use of the premises for any other unlawful purpose. 2. The Residential Tenancy Agreement is terminated immediately and possession is to be given to the landlord on the date of termination. 3. The order for possession is suspended until 20-Oct-2014 4. The landlord's agent is to advise the tenant in writing by the delivery of a letter to the premises by 6:00pm on 14-Oct-2014 of the orders made today.

Background

The appellant was the tenant of premises at XXXX Redfern under a residential tenancy agreement dated 19 September 2012 for a fixed term of 5 years commencing 24 September 2012. The respondent / landlord applied to the Tribunal for an order under s 91 of the Residential Tenancies Act (the 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.
The application inter alia sought "a termination order due to unlawful use of the premises by the tenant or occupier". It specified as reasons for the orders sought. On 28/5/13, NSW Police executed a search warrant at the premises. During execution of the warrant, police located the following - 4 x electronic scales, hundreds of water balloons, plastic freezer bags, drug paraphenalia, mobile phones, unlabelled Methadone Bottles and various substances which police believe are prohibited drugs requiring further analysis. An additional occupant was charged with Supply Prohibited Drug.
At the hearing below the evidence seemed to go well beyond the brief particulars in the application. In particular there was evidence that the appellant had been charged with a number of drug related charges and acquitted after a three day trial before a Magistrate. There was also evidence before the Tribunal that in executing the search warrant police officers located a reinforced steel entry door with bars which so it was contended and accepted by the Tribunal evidenced the use of the premises for the purposes of the supply and distribution of drugs.
As it seems, the appellant was charged with four offences "deal with suspected proceeds of crime", "possess prohibited drug", "supply a prohibited drug" and "owner or occupier knowingly allow premises to be used as drug premises". Although the appellant in other criminal proceedings is entitled to the full benefit of her acquittals the same cannot be said for these proceedings where a civil onus of proof applies. (Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd [2015] HCA 7; 89 ALJR 382 especially at paragraphs 32 to 34).
Before turning to the reasons given by the Tribunal below and the submissions of the parties before us, it is relevant to note that a term of the residential tenancy agreement restricted to one the number of persons who "may ordinarily live in the premises at any one time". Contrary to that restriction, it appears that the appellant allowed a Mr Trimarchi (hereafter Mr Trimarchi or Mr T) to live in the premises as her husband.

Tribunal's decision

In its reasons the Tribunal below expressed its conclusions upon the evidence as follows: "It is not in dispute that Mr T was occupying or jointly occupying the residential premises with the tenant as required by section 91(1). The applicant led evidence that the husband resided with the tenant and that at least one motor cycle was registered to the husband at the residential premises and that the husband's driver's licence disclosed the residential premises as his address. The fact that the occupant was unauthorised under the agreement is of no consequence for the consideration by the Tribunal. I am satisfied that the joint occupation of the husband has been established. It is further not in contention that the onus of proof rests with the applicant and that the applicable evidentiary standard is the Briginshaw standard of proof. The Tribunal must have a "reasonable satisfaction" or feel "an actual persuasion" that the elements of section 91(1)(a) or (b) have been satisfied. I now turn to each of the factual allegations as led by the applicant. Criminal proceedings against Mr T are pending. Taking into account the whole of the Police brief and in particular the lengthy surveillance conducted, I am persuaded on the civil standard of proof and not "oppressed by reasonable doubt" that the tenant's husband has supplied and sold drugs at the pit stop on level 6 of the residential premises. I am further persuaded that the tenant's occupant stored the paraphernalia commonly associated with the supply and sale of drugs such as balloons, mobiles phones and scales on the residential premises, and that the tenant was aware of the intended use of these items. The tenant offered no explanation for presence existence of these items or to support her solicitor's contention that because these items are in general domestic use, no explanation is necessary. In the absence of any contest I am comfortably persuaded that the tenant was aware these items were used for the purpose of her husband's supply of heroin. Similarly I cannot accept tenant's evidence that she knew nothing of her husband's illegal activities, some of which were conducted on level 6 of the residential premises. I am satisfied that her exclamation "I have nothing to do with my husband's business" is an admission that she knew her husband was dealing in the supply of an illicit drug. A preponderance of evidence supports the applicant's contention that the tenant accompanied her husband on various drug runs, even if she was not involved in the actual exchange. I am comfortable (sic) satisfied that the tenant must have been aware that a sale of heroin was proceeding. In particular I have taken into account the surveillance of the tenant accompanying her husband in Redfern Park, Coles, Woolworths, the Rankin Methadone Clinic and other venues. I am satisfied that her husband provided heroin to persons in small balloons like the ones found at the premises and that these contained heroin and that the tenant knew of these transactions. Finally I am persuaded that the door was installed as the drug business by the husband brought with it a risk of drug related home invasion. The installation of the door is therefore an unauthorised alteration of the premises, in breach of the residential tenancy agreement. The tenant by allowing the alteration of the door, was using the premises in a manner that facilitated the sale or supply of heroin even if no heroin was actually found at the premises. The Macquarie Dictionary defines "use" to mean "to employ for some purpose". I am persuaded that the, alteration of the door, the storage of drug paraphernalia, the storage of proceeds of crime on the premises formed an integral part of the supply of heroin as carried out by the tenant's husband and amounted to intentional or reckless permission by the tenant to use the premises for the sale of heroin. I am satisfied that there is sufficient nexus between the use of the premises and the supply as carried out by the husband. Furthermore I am satisfied that the use of the laundry at level 6 for the supply of heroin constitutes a sale from premises available to be used by the tenant in common with others (see s91).) I reject the tenant's evidence that this laundry was locked and could not be used by her. Constable Phillips' evidence that the laundry was not locked and was used by the tenant's husband as a venue for the exchange of drugs is more persuasive and I accept and prefer the applicant's evidence in this regard. If I have erred and the elements of section 91(a) are not made out, and the premises are not used for the sale or supply of drugs, the applicant submits the elements in section 91(b) are also met. The premises are used and even altered for another unlawful purpose, to hide the proceeds of crime, and to permit a joint occupier to conduct the sale of drugs from the laundry at level six. I am satisfied and agree with the applicant's submission that the alteration of the premises facilitated its unlawful use, being the supply of drugs."

Appellant's submissions

Mr Weller who appeared for the appellant in the Tribunal below and before us submitted:

There is no evidence that the appellant herself in contrast to Mr Trimarchi used the premises for the sale of illegal drugs or other unlawful purpose.
That evidence of sales of illegal drugs by Mr Trimarchi was that such sales occurred well away from the premises.
Any activity by Mr Trimarchi at the laundry on level 6 could not fall within s 91 of the Act so far as the appellant is concerned.
That the finding by the Tribunal below that the steel door was "designed to prevent police from gaining access to the premises" was not available on the evidence.
That as the items located in the exercise of the search warrant were common in everyday life the Tribunal was required to provide reasons for its conclusion that they were indicia of an illegal drug business.
Similarly there was no reasoned basis for the Tribunal to conclude that the money located on the premises constituted the proceeds of the supply of heroin.
That the Tribunal wrongly conflated the use of the premises for unlawful purposes and the use of the laundry on level 6.
That there is no evidence as to any conduct within the premises to justify a finding that they were used for an unlawful purpose.
That there was no evidence of heroin being found on the premises and therefore the balloons could not have been required for packaging a non-existent product.

Respondent's submissions

In its submissions in reply the respondent, correctly we think, characterised the grounds of appeal as raising the question of law that there was no evidence to warrant particular findings or that particular findings having regard to the evidence available to support them were perverse. These alternatives both raise questions of law for which the appellant does not require leave.
The respondent submitted that there was clear evidence of use of the premises for an unlawful purpose. The respondent pointed to evidence regarding the security door and the location of balloons, mobile phones, scales and cash and evidence that the appellant showed police where these articles were kept, as well as saying to police officers "and if I show you where it all is you'll make my life easier and just go away after youse find it all".

Consideration

The meaning of the word "use" for the purposes of s 91 of the Act was considered in McGuiness v NSW Land and Housing [2014] NSWCATAP 98 (McGuiness). At [34] and following the Appeal Panel said: 34 We were referred to a number of authorities bearing upon the meaning and application of the relevant words in s 91(1)(b) of the RTA, namely: R v Rintel (1990) 3 WAR 527; Southern Junction Youth Services Inc v Cottle [1996] SARTT 10 (22 April 1996); NSW Land and Housing Corporation v Marshall (Tenancy) [2007] NSWCTTT 575 (4 October 2007); Director of Housing v TP (Residential Tenancies) [2008] VCAT 1275 (24 June 2008); NSW Land and Housing Corporation v Robertson (Tenancy) [2008] NSWCTTT 1197 (5 August 2008); Director of Housing v TK (Residential Tenancies) [2010] VCAT 1839 (16 November 2010); NSW Land and Housing Corporation v Baldwin (Social Housing) [2013] NSWCTTT 281 (19 June 2013); NSW Land and Housing Corporation v Nihangun Ozen (19 March 2014; NSW Land and Housing Corporation v Davis (13 October 2014). 35 We have also had regard to the English decisions in S Schneiders and Sons Ltd v Abrahams, [1925] 1 KB 301 and Abrahams v Wilson [1971] 2 WLR 923 both of which are referred to in Director of Housing v TK. 36 There are no authorities binding upon the Appeal Panel. 37 The meaning of "use" is, in our view, the ordinary meaning of "employ for some purpose", as was submitted by the Landlord (see also Rintel at 529.45) or "to avail oneself of; apply to one's own purposes": see Macquarie Dictionary. This meaning accords with the familiar concept of use of a property for residential purposes to which use for an unlawful purpose is to be contrasted. 38 What will satisfy the requirement of use for an unlawful purpose will depend on the circumstances of each case. Matters of degree may be involved. 39 However, there is nothing in the words, context or purpose of the statute that leads to a construction that precludes mere presence or storage at the premises of stolen items, or items reasonably suspected of being the proceeds of crime, or prohibited substances, from amounting to use of the premises for an unlawful purpose. 40 To the extent that the contrary view was taken in Marshall and Ozen, we disagree with that view and agree with the view of the Tribunal in Robertson on this point. 41 The language used is broad and unqualified. The section does not provide, for example that the use is to be: (1) for the dominant purpose of the unlawful activity, (2) an essential or integral component of the unlawful purpose, (3) a substantial part, or substantially connected with, the unlawful purpose, (4) directly related to the unlawful purpose. 42 The use for an unlawful purpose need not displace use of the premises for residential purposes. The uses can co-exist. 43 As Malcolm CJ said in Rintel (at page 530.3), use for residential purposes involves use for a variety of purposes, including shelter, eating, sleeping, storage of goods, recreation and even taking a bath. 44 In this company, keeping stolen goods, or goods suspected to be proceeds of crimes, even if openly on display (as some goods were in Marshall) is an additional, but unlawful use. As is also, very clearly, using the premises for the operation of an illegal brothel. 45 On the other hand, the connection between the premises and the unlawful purpose may be so limited that it is not sensible to say that the premises were employed, or availed of, for an unlawful purpose. 46 An example can be taken from the facts of this case. The Tenant's possession of cash in the sum of $1,100 in her handbag found at the premises, suspected of being proceeds of crime, had some connection with the premises. However, on these facts alone, the premises, as distinct from the handbag, were not employed or availed of for an unlawful purpose. 47 On the other hand, had it been established that the cash in her handbag was at the premises because it was about to be placed in a safe installed at the premises then, in our view, the required use would exist. 48 In some cases it may be said that the required use of the residential premises does not exist because the premises are merely the scene of the crime. In Schneiders case, Bankes LJ (at page 307.3) gave the example of an assault on someone who happened to be on the premises. He doubted that this would constitute use of the premises for an illegal purpose. 49 We share such doubt. On the other hand, if the victim of the assault had been lured to the premises so that the assault could be carried out there, a different answer may well be given. 50 There is no reason why a passing connection with the premises could never suffice. For example, if stolen goods were harboured at the premises for five minutes on their way to another destination this would, in our view, still be use of the premises for an unlawful purpose.
We respectfully adopt what the Appeal Panel said in McGuiness in respect of the meaning of the word "use" for the purpose of s 91.
Nonetheless in our view there is something to be said for some of Mr Weller's submissions. We agree that there was no evidence that the appellant herself was engaged in the supply of heroin and we also agree that the laundry on level 6 does not fall within the description contained in s 91(1)(a). In our view, the words in parenthesis - that is, "including any property that is available for use by the tenant in common with others" - are qualified by the words "or any property adjoining or adjacent to the premises". In a large building containing a number of storeys, it would do undue violence to the language to interpret "property adjoining or adjacent to the premises" as apt to include a room three storeys above the premises. Neither "adjoining" "nor" "adjacent" is defined in the statute and should be given their ordinary meanings. According to the Macquarie Dictionary Third Edition, "adjoining" means "bordering contiguous" and "adjacent" "lying near, close or contiguous, adjoining, neighbouring". We are of the opinion that it was irrelevant for the Tribunal to consider whether the landing on the 6th floor was available for use by the tenant in common with others. However, for the reasons set out in [17] below, we are of the opinion that nothing turns on this finding.
Moreover, in light of evidence as to the lawless and violent behaviour of residents in the vicinity of the premises we do not think it was open to the Tribunal below to find that the steel door meant that the premises were used for the supply of drugs. It was equally indicative of the appellant's desire for self-protection. Further, we note that there was no challenge to the appellant's evidence to the effect that the money found on the premises was obtained lawfully.
However, apart from these three matters there was abundant evidence upon which the Tribunal could find that Mr Trimarchi was supplying prohibited drugs and to support its finding that, within the meaning of McGuiness, the premises were used for the purposes of supply. It was open to the Tribunal to conclude that balloons and scales were intended for that purpose even though no heroin was located at the time of the search. It was also open to the Tribunal as a consequence of the appellant's own admissions to conclude that the appellant, although having no part in the supply herself, permitted the premises to be used for that purpose.
That is not to say that the Tribunal was then left with no discretion as to whether a termination order should be made. The decision of the Court of Appeal in Cain v NSW Land and Housing Corporation [2014] NSWCA 28; 86 NSWLR 1 is directly on this point. In that case the Court (Basten JA Gleeson JA and Leeming JA) unanimously held that the word "may" in the opening words of s 91(1) confers a discretion as to whether or not to make a termination order even if satisfied as to the matters set forth in paragraph (a). As to the matters which could be taken into account in exercising the discretion Basten JA (with whom Gleeson JA and Leeming JA (in a separate judgment) agreed) said: However, there is no basis for concluding that the Tribunal must disregard future events unless satisfied on the balance of probabilities that they will occur. (No sentencing judge could ever take prospects of rehabilitation into account if that approach were mandatory: it would require a clear statutory provision to have that effect.) Assuming that the Tribunal had power to decline to make a termination order, there is no basis for reading the statute as excluding either the personal history of the respondent, the nature of the offending, the sentencing in the District Court for the offence the possibility of repetition in the future or the likely effect of the termination order on the tenant's health and medical treatment.
The Tribunal below having found that the terms of s 91(a) had been proved proceeded to consider a number of discretionary factors, some of which operated in the appellant's favour. In our view the Tribunal was entitled to consider the matters it did consider and no error of law was exposed thereby.
In the result as we have found no error of law, the appeal as of right must fail. As to whether leave should be granted under s 80(2)(b) of the Civil and Administrative Tribunal Act we are not persuaded that either of the grounds specified in Schedule 4, Part 6, cl 12 of the Act which were argued before us have been established, in that we do not think the result was not fair and equitable nor that it was against the weight of evidence. We say this in light of the terms of the statute which may be said to operate harshly where the drug related illegal use of the premises on the tenant's part is relatively minor. Indeed if the appellant can establish to the satisfaction of the respondent that hereafter she will occupy the premises as a single woman in accordance with the terms of the tenancy the respondent might be minded to reconsider its position in respect of enforcing the order for possession.
While we have dismissed the appeal, we have amended the date for the order for possession to take effect to allow sufficient time for the appellant to vacate the premises.

Orders 1. Appeal dismissed. 2. Termination order confirmed. 3. Order for possession varied to take effect on 31 January 2016.

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: 17 December 2015

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