Department of Housing v Consumer, Trader and Tenancy Tribunal and Anor

CITATION : Department of Housing v Consumer, Trader and Tenancy Tribunal and Anor [2003] NSWSC 150 revised - 7/04/2003 HEARING DATE(S) : 6/3/03 JUDGMENT DATE : 31 March 2003

JUDGMENT OF : Shaw J DECISION : Appeal dismissed; subject to argument, applicant to pay costs of respondents.

CATCHWORDS : Statutory Interpretation - Appeals - Leases - construction of the word 'permit' - quiet enjoyment - whether an error of law or fact LEGISLATION CITED : Consumer, Trader and Tenancy Tribunal Act 2001 Residential Tenancies Act 1987 Adelaide City Coporation v Australasian Performing Rights Association (1928) 40 CLR 481; Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321; Azzopardi v Tasman UEB Industried Ltd (1985) 4 NSWLR 139; Bowen-James v Delegate of the Director-General of the Department of Health (1992) 27 NSWLR 457; Brimbella Pty Ltd v Mosman Municipal Council (1993) 79 LGERA 367; Broad v Parish (1941) 64 CLR 588; Bruce v Cole (1998) 45 NSWLR 163; CASES CITED : C A Ford Pty Limited (t/as Caford Castors) v Comptroller-General of Customs (1993) 123 ALR 623; Commissioner of Taxation v Miller (1946) 73 CLR 93; Elliott v Nanda [2001] FCA 418; (2001) 111 FCR 240; Hope v Bathurst City Council (1980) 144 CLR 1; Lyver v Victoria [1983] 2 VR 475; Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247; Vetter v Lake Macquarie City Council (2001) 202 CLR 439; Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547; Young v Australian Workers Union (1974) 5 ALR 347; Department of Housing -Applicant PARTIES : Consumer, Trader and Tenancy Tribunal of New South Wales -First respondent Hector Ingram -Second respondent FILE NUMBER(S) : SC 30055 of 2002 COUNSEL : P McEwen, SC with J Atkin - Applicant C Ronalds - Second respondent SOLICITORS : Department of Housing -Plaintiff D.I. Catt -Second Respondent

LOWER COURT Consumer, Trader and Tenancy Tribunal JURISDICTION : LOWER COURT 00/11419 FILE NUMBER(S) : LOWER COURT Member D Sheehan JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30055 of 2002 Department of Housing (applicant)

Consumer, Trader and Tenancy Tribunal of New South Wales (first respondent);

JUDGMENT 1 Shaw J: In this matter, the applicant, the Department of Housing ("the Department"), seeks an order setting aside the decision of the Consumer, Trader and Tenancy Tribunal ("the tribunal") of 6 June 2002. 2 Whilst attempting to avoid doing an injustice to the well developed argument of the applicant before this Court, I think the attack on the tribunal's decision can be crystallised as follows:

(a) the tribunal did not make findings with respect to the tenant's right to quiet enjoyment provided by s 22 of the Residential Tenancies Act 1987 (NSW) ("the Act") in the sense that it did not determine whether or not the landlord or the landlord's agent had ' permitted ' any interference with the reasonable peace, comfort or privacy of the tenant in using the residential premises pursuant to s 22(1)(b) of the Act;

(b) to the extent that the tribunal might have implicitly determined such question, it was wrong in law and that it applied the wrong test as to the meaning of the word ' permit ' in s 22(1)(b) of the Act. 3 The tribunal produced an admirably detailed and reasoned decision which acknowledged that the Department was in an invidious position but nonetheless held that its failure to issue proceedings to compel the tenant to comply with the terms of the agreement was erroneous and ordered compensation. 4 The facts, which cannot be in dispute in this Court, are to the effect that there was a breach of the tenants right to the quiet enjoyment and the right to reasonable peace, comfort and privacy. It was consequentially suggested that the failure of the Department, as landlord, to remedy this situation meant there was a breach of the tenancy and that compensation was therefore payable. 5 The tribunal held that there was good reason to think that if there were 'concurrent proceedings' in the tribunal, the behaviour of the adjoining tenant would have been modified. 6 The proceedings in this Court arise under s 67(1) of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW), which allows an appeal to the Supreme Court against a decision with respect to a 'matter of law'. 7 This is obviously a restrictive provision for any review of the tribunal's decision and I am bound by the decision of the New South Wales Court of Appeal in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 as to what is a question of law, as opposed to a question of fact. 8 In Azzopardi, it was stated by Glass JA, with whom Samuels JA agreed (Kirby P dissenting), that an illogical, perverse or completely unreasonable finding of fact was nevertheless within the power of a decision maker to make and could not amount to an error of law. There was no suggestion from either counsel that this did not remain the law of this State and it has been subsequently applied by the Court of Appeal: Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247; Bowen-James v Delegate of the Director-General of the Department of Health (1992) 27 NSWLR 457; Bruce v Cole (1998) 45 NSWLR 163 (though Azzopardi seems to have been questioned in the Federal Court: C A Ford Pty Limited (t/as Caford Castors) v Comptroller-General of Customs (1993) 123 ALR 623 at 626-627 per Davies J). 9 However, as was noted by Mason JA, as he then was, in Williams v Bill Williams Pty Ltd [1971] 1 NSWLR 547 at 557: …where a tribunal at first instance fully and comprehensively states all the facts requisite for the decision, and poses for decision the question whether those facts fall within the meaning of a statutory provision, the question may, in general, be regarded as a question of law. But it sometimes happens that a tribunal at first instance states a number of facts, without making findings on all the issues of fact relevant to the final decision in the case. The decision may then depend on an unexpressed finding of fact, with the consequence that where an appeal lies from the decision on a question of law only, it is not possible to conclude that the error asserted by the appellant is one of law. 10 This reasoning was affirmed by Mahoney JA in Soulemezis v Dudley Holdings Pty Ltd (1987) 10 NSWLR 247 at 265. 11 In Hope v Bathurst City Council (1980) 144 CLR 1 at 7 Mason J, as he then was (and with whom Gibbs and Stephen JJ, Murphy J and Aiken J agreed), said: Many authorities can be found to sustain the proposition that the question whether facts fully found fall within the provisions of a statutory enactment properly construed is a question of law. 12 In that case Mason J was prepared to find an error of law in the approach of the trial judge, and the Court of Appeal, in the construction of the word 'business', for dismissing the claim and appeal upon the basis that the meaning of an ordinary English word was a question of fact. 13 In Vetter v Lake Macquarie City Council (2001) 202 CLR 439 at 450 Gleeson CJ said: Whether facts as found answer a statutory description or satisfy statutory criteria will very frequently be exclusively a question of law…However, not all questions involving mixed questions of law and fact are, or need to be susceptible to one correct answer only. Not infrequently, informed or experienced lawyers will apply different descriptions to a factual situation. That is why the test whether legal criteria have been met has been expressed in language of the kind used by Jordan CJ in Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126 at 138: [I]f the facts inferred…from the evidence…are necessarily within the description of a word or phrase in a statute or necessarily outside that description, a contrary decision is wrong in law. 14 It seems that, where all material facts have been found, the question as to whether the case comes within a statutory enactment, properly construed, is a question of law rather than fact: see also Commissioner of Taxation v Miller (1946) 73 CLR 93 at 97. 15 However, it is unclear on the current state of authority, if the tribunal failed to expressly define for itself the meaning of the word 'permit', whether this amounts to an error of law or fact and whether such an error, if committed, can be corrected by a court of review. 16 The tribunal was required to determine whether the incidents involving the harassment and intimidation of the second respondent and his wife by their neighbours was a breach of the quiet enjoyment they were statutorily entitled to have preserved. In reaching that decision it was necessary for the tribunal to take into consideration whether the Department was responsible for these acts, either directly (in the sense that it might 'interfere' or 'cause' interference) or indirectly (in the sense that it did 'permit' interference). 17 This secondary consideration would involve the tribunal in an analysis of whether, on the facts presented to it, it was open to find that a breach occurred and whether this breach occurred with the permission of the Department. Since both considerations involve the application of facts found to a legal standard (that is, 'permission' pursuant to the Act) any mistakes made by the tribunal in this respect may arguably amount to an error of law. Nevertheless, the Court is limited in how it can approach this appeal since the findings of fact made by the tribunal, including the meaning of an ordinary English word like 'permit', are immune from review: Azzopardi; see also Jordan CJ in Australian Gas Light Co v Valuer-General (1940) 40 SR (NSW) 126. 18 The applicant's case before the tribunal was that the Department failed to take adequate steps, particularly under 'good neighbour' policy guidelines published by the Department, to restrain the actions of the neighbouring tenants.

19 The tribunal found in favour of the second respondent on the basis that the Department failed to initiate proceedings against such neighbouring tenants to ameliorate the harassment suffered by the second respondent and his wife. These findings of the tribunal involved applying the construction of the statute to the facts found by the member. These inferences were clearly open to the tribunal. I can perceive no error of law in them: So long as there is some basis for an inference - in other words, the particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, then there is no place for judicial review because no error of law has taken place. ( Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356 per Mason CJ.)

20 In relation to the primary proposition propounded by the applicant in this Court, namely that the tribunal did not deal with the question of whether there was an act of 'permission' by the Department, I accept the submissions of Ms Ronalds, counsel for the second respondent, to the effect that it was necessarily implied in the decision of the tribunal that, in the light of the factual findings, and upon the ordinary meaning of the word 'permit', the tribunal could make the orders which it thought were appropriate. 21 As a matter of common sense and practicality, the tribunal must be taken to have formed the view that the landlord had failed to take reasonable steps to reduce or eliminate breaches of a tenancy of which the landlord was aware or ought to have been aware were occurring. 22 As Ms Ronalds points out, the tribunal expressly referred to the provisions of s 22 of the Act. Furthermore the tribunal found, and in my opinion was entitled to find, that conduct involving the harassment of tenants by another tenant, noise and interference impacting upon them in their own premises, is a breach of quiet enjoyment and that all those activities would come well within the provisions of s 22(1)(a) of the Act. 23 The findings of the tribunal as to matters of fact and the application of those facts to the statutory regime seem to me to be impeccable. The failure to explicitly consider the meaning of the word 'permit' constitutes a modest blemish that does not amount to an error of law. 24 The next question raised by the applicant, assuming there was some decision on the word 'permit' and its application to the facts of this case, is that there was an error of law discernable in relation to the application of the facts found to the statutory description, that is, a misunderstanding of the content of the word 'permit' in the legislative scheme. 25 The applicant sought to apply a maxim of statutory interpretation, noscitur a sociis, to the phrase 'shall not interfere, or cause or permit any interference'. The applicant submits that the word 'permits' takes on a content, in this statutory provision, similar to that of the word 'cause'. In this sense, the applicant submits, the word 'permits' means some kind of volitional activity and, further, mere indifference or an omission, such as failing to take action against the neighbouring tenants, cannot amount to permission on the part of the Department. 26 The appellant made reference to observations in the High Court in Adelaide City Corporation v Australasian Performing Rights Association (1928) 40 CLR 481 where it was said by Isaacs J that the word 'permits' is one of extensive connotation and that it should not be restricted to narrow limits. Higgins J focused his mind on the application of the words in the context of concrete facts. His Honour thought that:

To show such permission, it must be shown, inter alia, that the corporation willed the song to be sung, and communicated that will in some way to the singer or his employer. (At 500.)

27 It was held in Broad v Parish (1941) 64 CLR 588 at 594 that 'apart from any arbitrary definition [the word permit] connotes an authorisation of a person who has at least de facto control'. Reference was also made by the appellant to English authority on this question of the legal status of the term 'permission': Barton v Reed [1932] Ch 362 at 377; Bromsgrove District Council v Carthy (1975) 30 TNCR 34; Lomas v Peek [1947] 2 All ER 574 at 575; and Commercial General Administration v Thomsett (1979) 250 EG 547. 28 However, it seems to me that none of these authorities take the word 'permit' beyond its ordinary Australian connotation, that is, in accordance with the Macquarie Dictionary definition (3rd ed) as meaning, 'to allow…to do something; let (something) to be done or occur; to tolerate; to agree to'. 29 On the ordinary meaning of the word 'permit', to allow or tolerate a breach of statutory rights seems to properly ground an action to enforce those rights. It has been held that the concept of permission may, in some contexts, include the absence of appropriate steps to influence or control conduct, for example, in anti-discrimination law: Elliott v Nanda (2001) 111 FCR 240 per Moore J. In that case Moore J explained the legislative context of the term and noted the correctness of a 'wide operation' (at 292; par [261]). 30 As Moore J pointed out in Elliott v Nanda, no doubt depending on its own context, the concept of permission can include indifference or omission: referring to Adelaide City Corporation v Australasian Performing Rights Association Ltd (1928) 40 CLR 481 at 487 per Knox CJ; see also Young v Australian Workers Union (1974) 5 ALR 347. Similarly, in Lyver v Victoria [1983] 2 VR 475 at 478 Young CJ held that wilful blindness or failure to take reasonable steps to prevent a contravention of a statutory regime may amount to permission. 31 The reasons for the tribunal's decision detail precisely how the Department was aware of the incidents occurring between its tenants. Departmental file notes, records of complaints, and police records complete the picture the Department had of the threats received by Mr and Mrs Ingram as well as the actual disturbances to their peace and safety. In these circumstances, in my opinion, the tribunal was entitled to find that the failure to take any active steps to prevent the commission of further breaches amounts to an implied license to the disturbing tenants. 32 The Department must be taken to have known that if it failed to take action the breaches of Mr Ingram's rights as a tenant would continue. Accordingly, even if the tribunal's findings that the failure to take an action in the tribunal amounted to a breach were wrong, nevertheless the knowledge that the breaches would continue meant that the Department did permit further breaches of s22 of the Act. 33 Taking no active step to remedy the situation after taking cognisance of the likelihood of further breaches is, in my opinion, sufficient for it to have been open to the tribunal to find that liability for the breaches could attach to the Department. 34 In all of these circumstances there is no clear or discernable error of law arising from the determination of the tribunal. There was a reasonable factual foundation for the conclusions of the tribunal that there was evidence of harassment, and that the Department was on notice for a significant period before any action was taken. It was therefore reasonably open for the tribunal to find that the Department did permit tenants to breach the quiet enjoyment of another tenant. 35 The reasons of such tribunals should not be read in some pedantic or overzealous way: see Brimbella Pty Ltd v Mosman Municipal Council (1993) 79 LGERA 367 at 369 per Kirby P. On the contrary, the task of the tribunal such as this is to dispense justice expeditiously and fairly. Of course, where there is evident injustice or legal error that should be corrected. But in the absence of such error the broad discretion of the tribunal should be upheld, as I propose to do in this case. 36 Accordingly, I would dismiss the appeal and, subject to any further argument, I would propose that the applicant pay the costs of the respondents in relation to the appeal proceedings.

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