Davis v NSW Land and Housing Corporation

Judgment

1. HER HONOUR: By amended summons filed with leave on the date of the hearing, the plaintiff seeks leave to appeal (out of time) from a decision of the New South Wales Civil and Administrative Tribunal's Appeal Panel ("the Appeal Panel") delivered on 17 December 2015, confirming the correctness of the decision of the Consumer and Commercial Division of the Civil and Administrative Tribunal ("the Tribunal") terminating a Residential Tenancy Agreement under which the plaintiff was the tenant and the defendant the landlord. The plaintiff seeks an order setting aside the termination order.

Background

1. The plaintiff is the sole tenant of residential premises at Redfern under a Residential Tenancy Agreement dated 19 September 2012 for a fixed term of five years. Her husband was in joint occupation of the leased premises. Although his occupancy was a breach of the terms of agreement in which the plaintiff occupied the premises, nothing turns on this for present purposes.
2. The leased premises are located on the third level of a multi-storey apartment building serviced by an internal lift. Laundry facilities for the use of the residents are located on each level.
3. On 28 May 2013, New South Wales police executed a search warrant at the leased premises in the course of a police investigation into the suspected drug activities of the plaintiff's husband. The plaintiff read the search warrant and then said, "I have nothing to do with my husband's business" and "if I show you where it all is you'll make my life easier and just go away after youse find it all". She went on to say, "I don't have anything to do with what my husband does, I have made sure of that".
4. Thereafter, under the plaintiff's direction, police located paraphernalia commonly associated with the supply of drugs including, in particular, a large number of water balloons and packets of freezer bags in a kitchen cupboard. Police also located mobile telephones, three sets of electronic scales and a quantity of cash in the amount of $16,000. No drugs were located in the premises.
5. Section 91 of the Residential Tenancies Act 2010 (NSW) ("the Act") provides that the Tribunal may, on the application of the landlord, issue a termination order if it is satisfied the leased premises are being used or have been used for the illegal purposes specified in s 91(1)(a), or for unspecified unlawful purposes in s 91(1)(b) of the Act. Section 91 provides as follows: 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.
6. It would appear that upon becoming aware of the results of the execution of the search warrant and, further, upon being aware that as a result of electronic and other physical surveillance of the activities of the plaintiff's husband as a drug supplier in the apartment block and surrounding streets, he was charged with supplying heroin contrary to s 25 of the Drug Misuse and Trafficking Act 1985 (NSW). The defendant applied for an order terminating the Residential Tenancy Agreement.
7. The evidence relied upon by the defendant in support of the application included a number of statements from the police brief of evidence which exposed the plaintiff's husband's modus operandi as a drug supplier. This included evidence that on being contacted on his mobile telephone by a prospective customer, he would arrange a meeting at the laundry on level 6 of the apartment block and, after travelling to that level from level 3 via an internal lift, he would exchange heroin he had packaged in one or more water balloons for money.
8. In its reasons for decision, the Tribunal held that it was reasonably satisfied (in the sense of being actually persuaded in accordance with the test in Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336) that a termination order should issue based upon the following findings: 1. The plaintiff occupied the premises jointly with her husband; 2. The plaintiff's husband supplied heroin packaged in small water balloons from a place described as "the pit stop", being an unlocked and shared laundry area on level 6 of the apartment building, three levels above the residential premises leased by the plaintiff; 3. The plaintiff's husband stored his drug supply paraphernalia in the leased premises. The plaintiff was aware that her husband used these items for the purposes of supplying heroin; 4. The unlocked laundry on level 6, the venue from which the plaintiff's husband supplied heroin within the apartment block, was "property available to be used by the plaintiff in common with other tenants" as provided for in s 91(1)(a) of the Act; 5. A reinforced steel door with bars was installed by the plaintiff's husband at the front door of the leased premises to secure the premises against the risk of a "drug-related home invasion"; and 6. By allowing the steel door to be installed, the plaintiff either consented to the leased premises being used for the purposes of her husband supplying heroin (consistent with the definition of "use" in the Macquarie Dictionary being "to employ for some purpose", thereby satisfying s 91(1)(a) of the Act), or the installation of the door itself constituted an unlawful use of the premises by facilitating the supply of drugs by the plaintiff's husband (including by allowing him to secure the proceeds of his drug supply business), thereby satisfying s 91(1)(b) of the Act.
9. On 13 October 2014, the Tribunal made the following orders: 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 advice 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.

The Appeal Panel

1. The plaintiff appealed to the Appeal Panel pursuant to s 80(1) of the Civil and Administrative Tribunal Act 2013 (NSW) ("the NCAT Act"). A number of legal errors in the Tribunal's reasons for decision were relied upon including, relevantly for the purposes of these proceedings, what was said to be error in the Tribunal's construction of ss 91(1)(a) and (b) of the Residential Tenancies Act in the following respects: 1. By conflating the use of the leased residential premises for illegal purposes as provided for in s 91(1)(a) of the Act with the use of a laundry external to the leased premises as the venue from which drugs were supplied; and 2. By finding that the leased premises were used for an unlawful purpose in accordance with s 91(1)(b) of the Act in the absence of any evidence of any unlawful conduct within the premises.
2. In construing the concept of "use" of residential premises for the purposes proscribed in ss 91(1)(a) and (b) of the Act, the Appeal Panel adopted the approach of the Appeal Panel in McGuiness v NSW Land and Housing [2014] NSWCATAP 98. The following extract from McGuiness was cited by the Appeal Panel with approval: [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 [in s 91(1)(b)] 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 [sic], 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.
3. Adopting the approach in McGuiness to the concept of "use" for an unlawful purpose in s 91(1)(b) (the section with which the Appeal Panel in McGuiness was concerned), and, by analogy, applying it to the concept of "use" for an illegal purpose in s 91(1)(a), the Appeal Panel concluded: [17] … [T]here was abundant evidence upon which the Tribunal could find that [the plaintiff's husband] 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.
4. The Appeal Panel came to a different conclusion to that reached by the Tribunal concerning the construction of s 91(1)(a). In their view, the laundry on level 6 of the apartment building was not "common property" within the meaning of the section: [15] …In our view, the words in parenthesis [in s 91(1)(a)] - 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.
5. The Appeal Panel also concluded that since the installation of the reinforced steel door in the leased premises was equally consistent with the plaintiff's wish to be protected from the notoriously "lawless and violent behaviour of residents in the vicinity", it was not open to the Tribunal to find that its installation was for the purpose of the plaintiff's husband's drug supply business or that the premises were used for unlawful purposes under s 91(1)(b) because of the installation of the door.

The proceedings in this Court

1. The defendant does not oppose leave being granted to permit the plaintiff to seek appellate review of the decision of the Appeal Panel on a question of law pursuant to s 83(1) of the NCAT Act or leave being granted to bring the proceedings out of time. The defendant accepts that there are sufficient reasons disclosed in the pleadings to justify a grant of leave in light of what is said by the plaintiff to be a wrong construction of s 91(1) of the Residential Tenancies Act pursuant to which the termination order was made. That concession was properly made (see generally Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572; 104 FCR 564).
2. The further grant of leave (not opposed by the defendant) permitting the plaintiff to file the amended summons on the day of the hearing had the practical effect of reducing the issues raised by the defendant's Notice of Contention, with the third of the three filed grounds in the Notice being recast by the plaintiff as a further ground of appeal upon which she seeks relief.

The plaintiff's amended grounds of appeal

1. The plaintiff's primary ground of appeal concerns the finding by the Appeal Panel that the use of the leased premises by the plaintiff's husband to store various items and pieces of equipment to facilitate the supply of heroin by him to people outside the premises, was a use of the premises for the purposes of the supply of prohibited drugs within the meaning of the Drug Misuse and Trafficking Act. In the plaintiff's submission, this finding is based upon an erroneous construction of s 91(1)(a) of the Residential Tenancies Act.
2. The plaintiff further contends that the Tribunal erred in finding that the alteration to the leased premises by the installation of the steel door facilitated the premises being used for the supply of prohibited drugs, thereby constituting the use of the premises for an unlawful purpose within the meaning of s 91(1)(b) of the Residential Tenancies Act as an alternate basis upon which the Tribunal's order should issue. For the purposes of these proceedings, it is not clear to me why this Court needs to be concerned with what is said to be an error in the findings of the Tribunal in circumstances where the Appeal Panel reversed that finding (see [14]).

The defendant's notice of contention

1. In the event that the Appeal Panel's construction of s 91(1)(a) of the Residential Tenancies Act is found to be wrong in law, the defendant submitted that the decision of the Appeal Panel is sustainable on grounds in that: 1. The Appeal Panel ought to have found that the common property within the apartment building to which the plaintiff had access under the residential agreement (including, relevantly, the laundry on level 6) was encompassed by the express terms of s 91(1)(a) of the Act ; and 2. The Appeal Panel ought not to have disturbed the Tribunal's finding that the unauthorised installation of a steel door at the leased premises was for the unlawful purpose of facilitating the drug supply business conducted by the plaintiff's husband from those premises.

The plaintiff's submissions

1. In the plaintiff's submission, s 91(1)(a) of the Act, which is directed to proscribing the intentional or reckless use of the leased premises by the tenant or a joint occupant for illegal purposes, must be strictly construed in a given case, referable to the specific drug-related offending within the meaning of Drug Misuse and Trafficking Act, in this case the supply of prohibited drugs.
2. The concept of "supply" in s 3(1) of the Drug Misuse and Trafficking Act has an extended meaning to include a wide range of conduct including the following: … sell and distribute, and also includes agreeing to supply, or offering to supply, or keeping or having in possession for supply, or sending, forwarding, delivering or receiving for supply, or authorising, directing, causing, suffering, permitting or attempting any of those acts or things.
3. Leaving to one side whether on the proper construction of s 91(1)(a) the use of the laundry on level 6 by the plaintiff's husband to supply heroin constituted an illegal use of the leased premises (the issue raised by (a) of the defendant's Notice of Contention), the plaintiff submitted that because there were no prohibited drugs found within the leased premises, and no evidence before the Tribunal or the Appeal Panel that there were traces of drugs on the scales or other items of drug paraphernalia seized under warrant from the premises, there is nothing to support the Appeal Panel being satisfied that it was open to the Tribunal to find the premises were a place where the heroin was offered or received or delivered or kept for the purposes of supply (within the extended definition of supply) or that the premises were a place where any of those acts or things were authorised, suffered, permitted or attempted (also within the extended definition).
4. Counsel submitted that the mere use of the leased premises to store equipment for the weighing and packaging of heroin to be supplied from a venue or venues elsewhere in the apartment building or beyond, does not amount to the use of the leased premises for the purposes of supply within the extended definition. Counsel accepted that it would be otherwise if s 91(1)(a) proscribed the use of the premises "for the purposes of or in connection with the supply of prohibited drugs". Counsel submitted that the Appeal Panel wrongly interpreted the concept of "the use of the leased premises for the purposes of supply" in s 91(1)(a), to include their use in connection with the supply of drugs from places outside the premises contrary to (or at least not comprehended by) the proscribed use of the premises in the statutory sense. Counsel submitted that it was not open to the Appeal Panel to extend the concept of "use" of premises for the illegal purpose of supplying drugs in s 91(1)(a) in that way, an approach which he submitted was necessarily implicit in the reasoning of the Appeal Panel.
5. Counsel also submitted that the plaintiff's knowledge of her husband's business as a drug supplier and, by necessary inference from what she said and did in the course of the execution of the search warrant, knowing that her husband used balloons to package the weighed drugs he supplied to drug users, does not allow for the further finding, also implicit in the reasoning of the Appeal Panel at [17], that it was open to the Tribunal to find that the drugs that had been or were to be supplied to end users on level 6 (or elsewhere) were in fact weighed and packaged in the leased premises, as distinct from that being the place where that equipment was stored.

The defendant's submissions

1. The defendant submitted that the legislature having not defined in the Act what is to be encompassed by the concept of the "use" of residential premises for the purposes proscribed in ss 91(1)(a) and (b), the ordinary dictionary meaning of "use", being to employ for some purpose or apply to one's own purpose, should be applied, consistent with the approach taken by the Appeal Panel in McGuiness. The defendant emphasised that the Appeal Panel noted (correctly) that questions of degree are necessarily involved in determining whether, in any given case, the particular facts and circumstances relied upon to support an application for a termination order justify a finding by the Tribunal that the premises were being used for a purpose (or more than one purpose) proscribed by s 91 of the Act.
2. The defendant further submitted that there is nothing in the reasons for decision, or in the extract from McGuiness to which the Appeal Panel referred with approval, to support the plaintiff's argument that in applying the meaning of "use" in its ordinary sense, the Appeal Panel erroneously imported into its consideration of what aspects of the conduct of the plaintiff's husband might be comprehended by "the use of the premises for the purposes of supply", the use of the premises by him "in connection with" the supply of prohibited drugs by his use of the premises as a storage place for his equipment.

Consideration

1. In my view, the analysis of the Appeal Panel's reasoning in the way urged by the plaintiff is misconceived. In resolving to the uncontroversial finding at [17] that there was an abundance of evidence before the Tribunal that the plaintiff's husband was supplying drugs (that is, selling or distributing them by pre-arrangement to customers from the laundry on level 6 and other venues external to the apartment block), for the Appeal Panel's finding that it was also open to the Tribunal to be satisfied that the leased premises were used for that purpose (and that the plaintiff permitted that to occur) was not based upon any express finding by either the Tribunal or any view of the Appeal Panel that the premises were simply or solely used as a storage unit for the equipment used to weigh and package the drugs. Given the abundance of evidence before the Tribunal as to the plaintiff's modus operandi as a drug supplier, I am satisfied that it is at least implicit in the reasoning of the Appeal Panel that the finding of the equipment in the leased premises on level 3, and the plaintiff's statements about it at the execution of the search warrant, was consistent with the premises themselves being the place where the drugs were weighed and packaged before being supplied to customers on level 6 (and elsewhere) despite no drugs being found on that occasion.
2. That being the case, I am not persuaded that the legal error in the construction of s 91(1)(a) of the Act for which the plaintiff contends is made out. Since that is the primary ground upon which the relief under the summons is sought, there is no occasion to address the further ground of appeal which alleges error in the construction of s 91(1)(b) or to resolve the issues raised by the defendant's Notice of Contention. I would, however, venture the view that there is much to commend the Appeal Panel's construction of the words in parentheses in s 91(1)(a) in [18] and the conclusion they reached, contrary to that of the Tribunal, that the laundry on level 6 does not fall within the description of premises for the purposes proscribed in s 91(1)(a).

Orders

1. Accordingly, I make the following orders: (1) The amended summons is dismissed. (2) The plaintiff is to pay the defendant's costs.

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