James v NSW Land and Housing Corporation

Grounds of appeal

1. An appeal may be made as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds (Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act"), s 80(2)(b)).
2. Counsel for the appellant, Mr Krayem, submitted that his client was only relying upon error of law grounds. Whilst several grounds of appeal were identified in the Notice of Appeal, at the hearing Mr Krayem said that the appellant relied upon only two grounds. These grounds are: 1. The Tribunal erred in refusing a stay of the proceedings until the criminal proceedings had concluded; and 2. There was a lack of evidence to satisfy the requirements of s 91(1) of the Residential Tenancies Act 2010 (NSW).
3. We agree that both grounds raise questions of law and that the appellant may appeal as of right on these grounds.

Stay

1. The appellant applied for a stay of the order terminating his tenancy and giving possession to the landlord on the date of termination. On 6 December 2019, the Appeal Panel, constituted by Deputy President Westgarth, granted the stay. The stay order was conditional upon the appellant continuing to pay the occupation fee on a fortnightly basis.

Refusal of an adjournment

1. The appellant submitted that the Tribunal erred in not granting the application for a stay or adjournment of the proceedings, until the appellant's criminal proceedings had concluded.
2. The appellant relied upon Commissioner of the Australian Federal Police v Zhao (2015) 255 CLR 46 ("Zhao"). In that case, proceedings were brought by the Commissioner of the Australian Federal Police for the forfeiture of property of a Mr Jin as proceeds of crime, at a time when charges were pending against Mr Jin. Mr Jin's defence of the criminal proceedings might have been affected if he was obliged to defend the forfeiture proceedings before his criminal trial was held. Mr Jin's application for a stay of the forfeiture proceedings was refused.
3. The High Court (French CJ, Hayne, Kiefel, Bell and Keane JJ) upheld the decision of the Victorian Court of Appeal, setting aside the judgment at first instance and staying the forfeiture proceedings. Their Honours found (at [42]) that the risk of prejudice to Mr Jin if a stay were not granted in the forfeiture proceedings was "plain." They concluded that the interests of justice were not served by requiring Mr Jin to defend the forfeiture proceedings before his criminal proceedings were finalised, especially since the Commissioner would suffer no relevant prejudice from a delay in the continuation of the forfeiture proceedings (at [50]).
4. The relevant principles derived from Zhao are extracted in Construction, Forestry, Mining and Energy Union v Australian Competition and Consumer Commission (2016) 242 FCR 153 at [22] as follows: "(i) where both civil and criminal proceedings are pending, a stay of the civil proceeding will be ordered where 'the interests of justice require such an order': Zhao (HC) at [36]; (ii) a court will not grant a stay of a civil proceeding merely because related charges have been brought against an accused and criminal proceedings are pending: Zhao (HC) at [35]; (iii) to warrant a stay of the civil proceeding, 'it must be apparent' that the accused 'is at risk of prejudice in the conduct of his or her defence in the criminal trial': Zhao (HC) at [35]; (iv) the risk of prejudice must be real and, in considering what the interests of justice require, that risk is to be weighed against the prejudice that a stay of the civil proceeding would occasion: Zhao (HC) at [47] and [50]."
5. Mr Krayem also took the Appeal Panel to In the Matter of Gap Constructions Pty Ltd [2013] NSWSC 1262 at [6], where Kunc J reproduced an extract from the judgment of Wootten J in McMahon v Gould (1982) 7 ACLR 202 at [206]-[207]. That extract sets out the principles to be applied in relation to an application for a stay of civil proceedings pending resolution of criminal proceedings and is as follows: "I approach the decision of this matter with the following guidelines: (a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court (Rochfort v John Fairfax & Sons Ltd at 19); (b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds (ibid); (c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with (Jefferson v Bhetcha at 905); (d) Neither an accused (ibid) nor the Crown (Rochfort v John Fairfax & Sons Ltd at 21) are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding; (e) The court's task is one of "the balancing of justice between the parties" (Jefferson Ltd v Bhetcha at 904), taking account of all relevant factors (ibid at 905); (f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors (ibid at 905); (g) One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused's "right of silence", and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding (ibid at 904). I return to this subject below; (h) However, the so-called "right of silence" does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding (ibid at 904-5); (i) The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings (ibid at 905); (j) In this regard factors which may be relevant include: (i) the possibility of publicity that might reach and influence jurors in the civil proceedings (ibid at 905); (ii) the proximity of the criminal hearing (ibid at 905); (iii) the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses (ibid at 905); (iv) the burden on the defendant of preparing for both sets of proceedings concurrently (Beecee Group v Barton); (v) whether the defendant has already disclosed his defence to the allegations (Caesar v Somner at 932; Re Saltergate Insurance Co Ltd at 736); (vi) the conduct of the defendant, including his own prior invocation of civil process when it suited him (cf Re Saltergate Insurance Co Ltd at 735-6); (k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant's obligation to the plaintiff; (l) In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed Beecee Group v Barton [sic])."
6. These principles are broadly consistent with the High Court's decision in Zhao. McCallum J, in McLachlan v Browne (No 9) [2019] NSWSC 10 at [6], indicated that the starting point in an application to stay proceedings where criminal proceedings were on foot were the guidelines stated by Wootten J in McMahon v Gould (1982) 7 ACLR 202. However, her Honour noted (at [15]) that in Lee v Director of Public Prosecutions (Cth) (2009) 75 NSWLR 581; [2009] NSWCA 347 at [89], the Court of Appeal (Basten JA, Macfarlan JA and Sackville AJA) indicated that "the guidelines in McMahon v Gould may give too limited a weight to the general law immunity from compulsion to incriminate oneself," although the Court did not express a concluded view.
7. The Tribunal has a broad power to adjourn proceedings under s 51 of the NCAT Act. The Tribunal is required to seek to give effect to the "guiding principle" when exercising this and other powers under the NCAT Act, being to facilitate the just, quick and cheap resolution of the real issues in the proceedings (NCAT Act, s 36(1) and (2)(a)). This does not mean, however, that a request for an adjournment must always be refused, in the interests of speed and efficiency. The "just … resolution" of the real issues in the proceedings may require the grant of an adjournment. The Tribunal must be guided by the obligation to act judicially and by reference to the interests of justice (see McLachlan v Browne (No 9) [2019] NSWSC 10 at [8]).
8. The Tribunal gave a number of reasons for refusing the appellant's adjournment application, including that the matter had been on foot for a lengthy period; that it could be some time before the criminal proceedings were finally disposed of; that the Tribunal could issue the appellant with a certificate under s 128 of the Evidence Act 1995 (NSW); that the test under s 91 of the Residential Tenancies Act was different from the test for a criminal charge; and that determination of the termination application did not depend upon whether or not all of the criminal charges were made out, because of the differing standards of proof involved.
9. The Tribunal considered that Zhao was distinguishable because it "involved proceedings very much connected with the criminal proceedings" whereas the present matter arose "in a housing context, somewhat removed from the criminal matter, under very different legislation."
10. The basis upon which the Tribunal distinguished Zhao was, in our respectful opinion, misconceived. The principles in Zhao do not depend upon establishing that the legislation under which a person is charged has any similarity to the legislation governing the civil proceedings in which a stay or an adjournment is sought. What is most significant is the similarity or identity of the factual issues in the two proceedings and whether the accused should be placed in a position where he or she must decide whether to prejudice his or her criminal trial or his or her defence of the civil proceedings (see Zhao at [19]).
11. There was a commonality of issues in the criminal proceedings and the residential tenancy proceedings which were before the Tribunal. According to the submissions made by the NSW Land and Housing Corporation to the Tribunal, the offences the appellant was charged with included possess and supply prohibited drug in breach of ss 10(1) and 25(1) of the Drug Misuse and Trafficking Act 1985 (NSW) and possess and use prohibited weapon (capsicum spray) contrary to s 7(1) and 34(1) of the Weapons Prohibition Act 1985 (NSW).
12. Section 91(1) of the Residential Tenancies Act, on which the NSW Land and Housing Corporation relied, 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.
13. In its written submissions to the Tribunal, the NSW Land and Housing Corporation identified the particulars of the breach of s 91 of the Residential Tenancies Act on which it relied as follows: "The particulars of the breach of s91 of the Act referred to in the Application which are relied on by the Applicant are that on 1 April 2019 the NSW Police attended the premises and recovered a serrated (zombie) knife 40cm in length, 537.5 grams of Cannabis, Capsicum Spray, 340 Valium tablets, Cocaine 0.95 grams and other drug supply paraphernalia."
14. The criminal proceedings arose out of the incident which was the focus of the landlord's application (see NSW Land & Housing Corporation v Martin [2017] NSWCATCD 100 at [18]). The issues of whether the appellant possessed or supplied drugs, and whether the appellant possessed a prohibited weapon, were agitated in both the criminal and the civil proceedings. As the appellant submitted, he could not realistically defend the termination proceedings without telegraphing his likely defence (see Zhao at [17]).
15. The reasons the Tribunal gave for rejecting the adjournment application were not consistent with established principles governing applications for adjournments in circumstances where criminal proceedings are pending.
16. As the appellant submitted, the prospect of a certificate being issued under s 128 of the Evidence Act did not overcome the prejudice to the appellant in not granting the adjournment. In Zhao, the High Court found that Mr Jin would be prejudiced in his criminal proceedings, even though the primary judge had found that he could avail himself of the procedure provided for in s 128 of the Evidence Act 2008 (Vic). The High Court observed that the Victorian Court of Appeal had referred to the potential for advantage to be taken by prosecuting authorities of the evidence disclosed (see Zhao at [16]).
17. A certificate issued under s 128 of the Evidence Act would provide the appellant with only limited protection. As the Tribunal said in NSW Land & Housing Corporation v Martin [2017] NSWCATCD 100 at [22], the power to grant such a certificate "would depend on how the evidence arose in the course of the hearing of the Tribunal proceedings, whether in cross examination or evidence in chief, and also on the actions of the parties and the Tribunal at the time." Further, "the grant of a certificate would not necessarily limit the uses to which a prosecutor may be able to put that evidence in preparing the prosecution itself, and in anticipating possible defences that might be raised" (NSW Land & Housing Corporation v Martin [2017] NSWCATCD 100 at [22]).
18. The Tribunal also reasoned that determination of the termination application did not depend upon whether or not all of the criminal charges were made out, because of the differing standards of proof involved. This is undoubtedly so. However, if the different standards of proof in civil and criminal proceedings provided a rationale for refusing an adjournment in circumstances like the present, civil proceedings would never be adjourned pending the outcome of a criminal case.
19. The significance of the onus of proof in a criminal case is rather that it is for the prosecution to prove the guilt of an accused, beyond reasonable doubt, in the context that the accused has a right to silence. As the High Court said in Zhao (at [18]), "a fundamental principle of the common law, is that the prosecution is to prove the guilt of an accused person and cannot compel a person charged with a crime to assist in the discharge of its onus of proof." The Tribunal gave insufficient weight to this principle.
20. Mr Fester, for the Land and Housing Corporation, submitted that the appellant could not succeed on this ground, because he had not put any evidence before the Tribunal to show a real and not a merely notional danger of injustice.
21. The appellant had the onus of establishing that it was "just and convenient" that the landlord's "ordinary rights should be interfered with" by the grant of an adjournment (McMahon v Gould (1982) 7 ACLR 202; see also Franken v NSW Land and Housing Corporation [2016] NSWCATAP 154 at [74]). However, that onus is to be understood in the context of the High Court's comments in Zhao concerning the importance of the right to silence and the privilege against self-incrimination. The landlord's submission is not unlike that made by the Commissioner in Zhao, that it was necessary for Mr Jin to state the specific matters of prejudice before a stay could be contemplated (at [43]). The High Court found (at [42]) that the risk of prejudice if a stay were not granted was "plain" and that it was not necessary for Mr Jin "to say any more than he did on the application for a stay in order to identify that risk, given that the offences and the circumstances relevant to both proceedings are substantially identical." It said that to require him to state the specific matters of prejudice "would be to make the risk of prejudice a reality by requiring him to reveal information about his defence, the very situation which an order for a stay seeks to avoid" (at [43]).
22. The Tribunal had before it evidence of the police charges and the police fact sheets. It accepted that the appellant was pleading not guilty to the charges. It knew what the landlord's case was under s 91 of the Residential Tenancies Act (as set out above). In our view, the appellant had put forward sufficient evidence for the Tribunal to conclude that there was a real danger of injustice to the appellant if the residential tenancy proceedings were not stayed.
23. The critical question, when a stay or adjournment of civil proceedings is sought, is whether the litigant is "at risk of prejudice in the conduct of his or her defence in the criminal trial" (Zhao at [35]; see also Franken v NSW Land and Housing Corporation [2016] NSWCATAP 154 at [74]). In this case, unlike in Franken (see at [75]), the appellant identified the prejudice he was likely to suffer, in detailed submissions to the Tribunal. The Tribunal misdirected itself by failing to ask itself whether he was at risk of prejudice in the conduct of his defence in the criminal trial.
24. Lastly, we note that the landlord has filed no evidence of prejudice it would suffer if a stay were granted. We agree that the effect on the landlord must be considered and weighed against the effect on Mr James (see Martin at [24]).. The landlord has not provided evidence of any kind that would indicate that a stay of the proceedings has a detrimental effect on the landlord's obligation to its other tenants that may outweigh the potential impact on Mr James' prejudice in the conduct of his defence in the criminal proceedings.
25. The first ground of appeal is upheld.

No evidence ground

1. The appellant's second ground was that there was a lack of evidence to satisfy the requirements of s 91(1) of the Residential Tenancies Act. While it is not strictly necessary for us to determine this ground, we have done so, given that it was fully argued.
2. The appellant submitted that the only document relied upon by NSW Land and Housing Corporation in support of its allegations that he had used the rental premises for the purposes of the supply of a prohibited drug, or for another unlawful purpose, was a police fact sheet. Mr Krayem submitted that, in criminal proceedings, a fact sheet is not used as evidence, and the fact sheet merely records allegations.
3. The Tribunal stated that it relied upon a police fact sheet and attendance notices setting out the charges and other details and certificates of analysis of substances. It also relied upon the oral evidence of Mr Paul White, a solicitor employed by the Department of Communities and Justice. Mr White gave evidence that the fact sheets and drug analysis certificates were produced by the police under summons. The summons sought documents relating to the execution of a search warrant at the appellant's address.
4. The Tribunal accepted Mr White's evidence that the documents before it had been produced by police in answer to the summons. It accepted that the documents were what they purported to be, namely documents arising from the search of the premises.
5. The Tribunal stated that the fact sheet indicated that two named police officers conducted searches of the appellant's premises and located illicit substances and a serrated knife, being a prohibited weapon. It accepted that the results set out in the analysis certificates related to material seized from the premises because they bore the same description as some of the substances that were seized in the search of the premises and were apparently tested soon after the searches.
6. Referring to s 91(1) of the Residential Tenancies Act, the Tribunal found that the appellant "recklessly caused or permitted" the drugs to be on the premises. It noted that the drugs were available for supply and that the amount of cannabis on the premises constituted deemed supply for the purposes of the criminal law. It found that the three mobile phones and three sets of scales which were seized from the premises were "suggestive of supply, though not conclusive."
7. The Tribunal continued: "In the alternative, the presence of such illicit substances, in such quantities, means that the premises were being used for an 'unlawful purpose' within the terms of Section 91(1)(b)."
8. If a decision-maker makes a finding of fact for which there is a complete absence of evidence, then that is an error of law: Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390, Hayne, Heydon, Crennan and Kiefel JJ at 418 [91]. It is also an error of law for a decision-maker to make a finding of fact, or to draw an inference, without any supporting probative evidence: Minister for Immigration and Multicultural and Indigenous Affairs v VOAO [2005] FCAFC 50 at [5]; Haider v JP Morgan Holdings Aust Ltd [2007] NSWCA 158 at [33]. As Spigelman CJ has said, acting without probative evidence is the equivalent of acting without evidence: Skiwing Pty Ltd v Trust Co of Australia t/as Stockland Property Management [2006] NSWCA 276 at [52]; Bruce v Cole (1998) 45 NSWLR 163 at 188-189.
9. What amounts to probative evidence varies with the circumstances: Emerald Grain Australia Pty Ltd v Agrocorp International Pte Ltd (2014) 314 ALR 299; [2014] FCA 414 at 309 [15]. It is to be borne in mind that an administrative decision-maker (such as the Tribunal) is usually entitled to take into account material which would not count as "evidence" in a judicial context: L & B Linings Pty Ltd v WorkCover Authority of New South Wales [2012] NSWCA 15 at [34]. The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice: NCAT Act, s 38(2). Where a decision-maker is not bound by the rules of evidence, there must be an absence of material, whether strictly admissible according to the rules of evidence or not, for there to be an error of law on the "no evidence" ground: South Western Sydney Area Health Service v Edmonds [2007] NSWCA 16 at [127]-[129].
10. We accept the appellant's submission that police fact sheets contain allegations and that a fact sheet is not admissible evidence in criminal proceedings. However, we do not consider that a police fact sheet cannot be probative evidence, in the context of Tribunal proceedings. The appellant did not put the police fact sheet which was in evidence before the Tribunal, in evidence before the Appeal Panel. Accordingly, we cannot assess its probative value. However, we note the Tribunal's observation that the police fact sheet in question named the police officers responsible for the search and the items seized. It may be inferred that the fact sheet reflected the police officers' account of the search and what was found.
11. Even if the police fact sheet was not probative evidence without more, it was supported by drug analysis certificates. This was probative evidence from which the Tribunal was entitled to infer that illicit drugs were found on premises. Mr Krayem submitted that the certificates proved what the substance was which was tested, but not where it was found. However, taken with the police fact sheet and the charge, and with Mr White's oral evidence as to the provenance of the certificates, we consider that it was open to the Tribunal to infer that the drugs which were tested were found on the premises.
12. We consider that there was evidence supporting the Tribunal's alternative finding that the premises were being used for an unlawful purpose within s 91(1)(b) of the Residential Tenancies Act.
13. This ground is dismissed.

Appropriate orders

1. We have found that the Tribunal misdirected itself when determining the appellant's adjournment application. The orders made on the substantive application should not have been made before the adjournment had been lawfully determined. It follows that the termination and possession orders should be set aside. The proceedings will be remitted to the Tribunal for redetermination of the landlord's application.
2. It is open to us to remit the adjournment application to the Tribunal for redetermination or to determine that application ourselves (NCAT Act, s 81(2)).
3. The course which best gives effect to the guiding principle is for the Appeal Panel to determine the adjournment application. The parties have put before us their written submissions to the Tribunal on the adjournment application and we consider that we are in as good a position as the Tribunal to determine it.
4. The prejudice to the appellant, if an adjournment is not granted, is "plain" because "the circumstances relevant to both proceedings are substantially identical" (Zhao at [42]).
5. It is relevant to consider the effect of an adjournment upon the NSW Land and Housing Corporation. The Tribunal recorded that, at the hearing, the representative for the landlord said that, if the premises were being used for drug supply or another drug-related purpose, neighbours and other vulnerable tenants might suffer. She also said that there was a long waiting list of vulnerable people requiring public housing accommodation. As far as we are aware, there was no evidence of the identity of the neighbours or of the long waiting list. Even accepting, however, that the matters put forward by the landlord had an evidentiary basis, we do not consider that they would justify the refusal of an adjournment in the circumstances of this case. Any potential "suffering" by neighbours and others as a result of drug-related activities in the appellant's premises is speculative. Further, the Appeal Panel considers that the potential prejudice to the appellant in his criminal proceedings is to be given significant weight and that it is not outweighed by the matters raised by the landlord.
6. The appellant should not be "placed in a position where he must decide whether to prejudice his criminal trial or his defence of the [residential tenancy] proceedings" (Zhao at [19]). Accordingly, we make an order, in substitution for the Tribunal's order dismissing the adjournment application, adjourning the proceedings until such time as the criminal proceedings are finally disposed of.

Order 1. The appeal is allowed. 2. Orders 1 to 4 made by the Tribunal on 14 November 2019, are set aside. 3. The proceedings are remitted to the Tribunal for redetermination in accordance with law. 4. In substitution for the Tribunal's order dismissing the appellant's adjournment application, the Appeal Panel orders as follows: 1. the proceedings are stayed until such time as the criminal proceedings against the appellant are disposed of; 2. the appellant is to advise the Tribunal and the respondent within seven days of the determination of the criminal proceedings to have application SH 19/21606 relisted.

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: 04 May 2020