Lynwood v Coffs Harbour and District Local Aboriginal Land Council

Background and relevant provisions

1. Coffs Harbour and District Local Aboriginal Land Council (the landlord) is a social housing provider. Each of the three premises the subject of this appeal are social housing premises and the residential tenancy agreements are social housing tenancy agreements within the meaning of that term in s 136 of the Act. The social housing tenancy agreements were periodic agreements, that is agreements that are not fixed term agreements.
2. A landlord may give a 90 day termination notice if the tenancy agreement is a periodic agreement: s 85(1) and (2). 85 Termination of periodic agreement (1) A landlord may, at any time, give a termination notice for a periodic agreement. (2) The termination notice must specify a termination date that is not earlier than 90 days after the day on which the notice is given.
3. When giving a notice under s 85, a landlord is not required to give a ground for the notice: s 82(1)(c).
4. Section 85(3) provides that "[T] he Tribunal must on application by a landlord, make a termination order if it is satisfied that a termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice".
5. The landlord served notices of termination on each of the three tenants who are the appellants in these proceedings giving them 90 days' notice of the termination of the social housing tenancy agreement. The tenants contend that following the inclusion of s 154E with the enactment of the Residential Tenancies and Housing Legislation Amendment (Public Housing - Antisocial Behaviour) Act 2015 (NSW) (the Amending Act), the Tribunal is obliged to take into account the matters in that provision before making a termination order under s 85(3) where the landlord is a social housing provider. Section 154E provides that: 154E Exercise of discretion to make termination order (1) In considering whether to make a termination order for a social housing tenancy agreement, the Tribunal must have regard to the following: (a) the effect the tenancy has had on neighbouring residents or other persons, (b) the likelihood that neighbouring residents or other persons will suffer serious adverse effects in the future if the tenancy is not terminated, (c) the landlord's responsibility to its other tenants, (d) the history of the current tenancy and any prior tenancy arising under a social housing tenancy agreement with the same or a different landlord, (e) whether the tenant, wilfully or otherwise, is or has been in breach of an order of the Tribunal. (2) This section does not limit any other matter that may be considered by the Tribunal under this Act.
6. Section 137, which is in Part 7 (Social Housing Tenancy Agreements) provides that: In the event of any inconsistency between a provision of this Part and any other provision of this Act or the regulations, this Part prevails to the extent of the inconsistency.

Tribunal's order

1. The Tribunal made the following orders: The residential tenancy agreement is terminated in accordance with: s 85 of the Residential Tenancies Act 2010 as the landlord has served a 90 day notice for termination of a periodic agreement. 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 14 Jan 2017.
2. The Tribunal's reasons for rejecting the tenants' submission that the factors in s 154E should be taken into account were that: 1. s 154E is prefaced on the existence of a discretion being available to the Tribunal; 2. as there is no discretion under s 85(3), s 154E does not apply; 3. s 154E is in Part 7, Division 5, Subdivision 4 of the Act and that Subdivision only applies to terminations for breaches of the residential tenancy agreement. As there has been no breach in this case, s 154E does not apply; and 4. s 137 does not apply because there is no inconsistency between s 85 and s 154E.

Tenants' submissions

1. The tenants submitted that the Tribunal is obliged to take the factors in s 154E into account because: 1. there is nothing on the face of s 154E which confines its operation to termination for breach of a social housing tenancy agreement; 2. the legislative history of the relevant provisions suggests that the factors listed in s 154E are relevant. Section 154E replaced s 152 of the Act on 18 December 2015 removing the words "on the ground of a breach by the tenant" from the provision; 3. the fact that s 154E appears in a Subdivision of the Act headed "Breach of Agreement" is not determinative of the meaning of the provision; 4. there is an 'apparent inconsistency' between s 85 and s 154E and that inconsistency should be resolved by the application of s 137; and 5. section 154E does not depend, for its operation, on the existence of a discretion but rather it is an 'evaluative process'.
2. The tenants' appeal is about the proper statutory construction of s 154E of the Act. That is a question of law about which they have a right to appeal. They did not ask for permission to appeal on a ground other than a question of law: Civil and Administrative Tribunal Act 2013 (NSW), s 80(2)(b).

Consideration

1. We begin with the relevant legislative history of s 154E of the Act because of the tenants' submissions that the Amending Act means that since 18 December 2015 the Tribunal must take into account the factors in s 154E before terminating social housing tenancy agreements on the service of a 90 day notice. The history of the legislative scheme may help us decide what parliament intended when it enacted s 154E: Palgo Holdings Pty Ltd v Gowans [2005] HCA 28; (2005) 221 CLR 249 at [12] - [21], [29]-[30].
2. Part 5 of the Act provides for the termination of residential tenancy agreements. That Part contains s 85(3) which requires the Tribunal to terminate a periodic tenancy agreement if it is satisfied of the matters in that provision. Section 85(3) applies to all periodic tenancy agreements including social housing tenancy agreements. Part 7, Division 5 contains additional provisions applicable to the termination of social housing tenancy agreements. It was that Division that was amended by the Amending Act. The long title of the Amending Act is to "amend the Residential Tenancies Act 2010 and the Housing Act 2001 to facilitate the termination of public housing tenancies for antisocial behaviour and for other purposes".
3. The Amending Act amended the heading to Division 5 of Part 7 of the Act. The heading was "Termination of social housing tenancy agreements - additional grounds". The words "additional grounds" were removed because "the Division as amended will relate to grounds for termination under Part 5 of the principal Act as well as additional grounds": Explanatory Note to the Residential Tenancies and Housing Legislation Amendment (Public Housing Antisocial Behaviour) Bill 2015 (the Bill). Not only does Division 5 of Part 7 provide additional grounds for terminating social housing tenancy agreements, it qualifies and modifies existing grounds for termination under Part 5.
4. Before the Amending Act took effect, Division 5 of Part 7 comprised ss 143 - 155. The Amending Act restructured the Division into Subdivisions dealing with various subjects. Subdivisions 1, 2 and 3 now deal with the existing grounds for termination on eligibility grounds, alternative premises grounds and behaviour grounds. Two new Subdivisions were added - Subdivision 4 headed "breach of agreement" and Subdivision 5 headed "Miscellaneous". Subdivision 4 contains s 154A - s 154F. Some of those provisions expressly apply to the termination of residential tenancy agreements under particular provisions in Part 5. For example, s 154B lists extra factors to which the Tribunal must have regard when determining whether to terminate an agreement under s 87 for any breach of the agreement. Section 154D lists extra matters about which the Tribunal must be satisfied when determining whether to terminate an agreement under s 90 (serious damage or injury by tenant or other occupant) and s 91 (use of premises for illegal purposes).
5. Section 154E contains no reference to any provision in Part 5. It is a modified version of the old s 152 which provided that: 152 Termination by Tribunal of social housing tenancy agreements for breach (1) In determining whether to terminate a social housing tenancy agreement on the ground of a breach by the tenant, the Tribunal is to have regard to such of the following matters as may be relevant: (a) any serious adverse effects the tenancy has had on neighbouring residents or other persons, (b) whether any breach of the agreement was a serious one, and whether, given the behaviour or likely behaviour of the tenant, a failure to terminate the agreement would subject, or continue to subject, neighbouring residents or any persons or property to unreasonable risk, (c) the landlord's responsibility to its other tenants, (d) whether the tenant, wilfully or otherwise, is or has been in breach of an order of the Tribunal, (e) the history of the tenancy concerned, including any prior tenancy of the tenant arising under a social housing tenancy agreement. (2) This section does not limit any other matters that may be considered by the Tribunal under any other provision of this Act.
6. Schedule 1 to the Explanatory Note to Bill describes the effect of s 154E: Proposed section 154E lists the factors that must be taken into account by the Tribunal in determining whether to make a termination order for a social housing tenancy agreement. These include the factors currently set out in section 152 of the Principal Act and, in addition, the history of the current tenancy and any prior tenancy arising under a social housing tenancy agreement with the same or a different landlord.
7. The tenants highlighted the differences between the old s 152 and the new s 154E. The words "on the ground of a breach by the tenant" in s 152 were not included in s 154E. In their submission, those words were deleted because s 154E not only applies to termination for breaches by the tenant but also, for example, to termination under s 85(3) for failure to vacate the premises following a 90 day notice being issued.
8. In construing s 154E, we may have regard to the fact that the words "on the ground of a breach by the tenant" were not included: Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 366-368. But the omission of those words cannot result in an interpretation of s 154E which is not apparent on its face, especially if there is a rational explanation for the change: DC Pearce and RS Geddes, Statutory Interpretation in Australia, (8th ed 2014, Lexis Nexis Butterworths); Walsh v Permanent Trustee Australia Ltd (1996) 21 ACSR 213 at 215.
9. On its face, s 154E applies to any termination order for a social housing tenancy agreement, not just to termination for a breach of the agreement by the tenant. Nothing in any of the extrinsic material to which we were referred explains the omission of the words "on the ground of a breach by the tenant" in s 152 from s 154E. However, for the reasons we give below, the Tribunal must not have regard to the matters listed in s 154E when determining whether to terminate a social housing tenancy agreement under s 85(3).
10. Section 154E must be read in the context of the whole Act. As the High Court said in K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 157 CLR 309 at 315: … to read the section in isolation from the enactment of which it forms a part is to offend against the cardinal rule of statutory interpretation that requires the words of a statute to be read in their context.
11. Subdivision 4 of Division 5 of Part 7 of the Act, which includes s 154E, is headed "breach of agreement". Because that is a heading to a Subdivision, it is taken to be part of the Act: Interpretation Act, s 35(1). The heading supports the conclusion that s 154E applies only to termination orders for breaching the tenancy agreement. A 90 day termination notice does not seek to terminate the tenancy agreement on the ground of breach.
12. While the heading to s 154E ("exercise of discretion to make termination order") is not to be read as part of the Act, it is extrinsic material which can be taken into account in the circumstances set out in s 34(1) of the Interpretation Act 1987 (NSW): (1) In the interpretation of a provision of an Act or statutory rule, if any material not forming part of the Act or statutory rule is capable of assisting in the ascertainment of the meaning of the provision, consideration may be given to that material: (a) to confirm that the meaning of the provision is the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made), or (b) to determine the meaning of the provision: (i) if the provision is ambiguous or obscure, or (ii) if the ordinary meaning conveyed by the text of the provision (taking into account its context in the Act or statutory rule and the purpose or object underlying the Act or statutory rule and, in the case of a statutory rule, the purpose or object underlying the Act under which the rule was made) leads to a result that is manifestly absurd or is unreasonable.
13. The heading to s 154E is capable of assisting to ascertain the meaning of s 154E because, in accordance with s 34 (1)(b)(i) of the Interpretation Act, it is ambiguous. While it lists factors to which the Tribunal must have regard when making a termination order, it does not expressly limit the provision to circumstances where the Tribunal is exercising discretionary power. However, we are satisfied that it can be implied that the provision is limited to circumstances where the Tribunal is exercising discretionary power. We rely on the heading to s 154E to support that conclusion as well as the inclusion of the words "when considering whether to make a termination order". When the Tribunal is determining whether to make an order under s 85(3) it must be satisfied of certain factual matters. It is not considering or taking into account any other matters.
14. When construing a legislative provision, the Tribunal is to have regard to the purposes or objects of the legislation. Section 33 of the Interpretation Act 1987 provides that: 33 Regard to be had to purposes or objects of Acts and statutory rules In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.
15. The long title of the Act is "An Act with respect to the rights and obligations of landlords and tenants, rents, rental bonds and other matters relating to residential tenancy agreements; and for other purposes". As we have said, the purpose of the Amending Act, as disclosed by the long title, was to "facilitate the termination of public housing tenancies for antisocial behaviour and for other purposes".
16. According to the tenants, a secondary purpose of the legislation is to regulate the relationship between landlord and tenant. The tenants highlighted security of tenure as an issue for social housing tenants as well as protecting the community including other social housing tenants, from the effects of anti-social behaviour perpetrated by social housing tenants. These may be competing objectives.
17. The Court of Appeal addressed a similar issue in Victims Compensation Fund Corporation v Brown (2002) 54 NSWLR 668. At [9] Spigelman CJ referred to the following passage from a decision of the Supreme Court of the United States - Rodriguez v United States [1987] USSC 36; 480 US 522 (1987) at 525-526: "... No legislation pursues its purposes at all costs. Deciding what competing values will or will not be sacrificed to the achievement of a particular objective is the very essence of legislative choice - and it frustrates rather than effectuates legislative intent simplistically to assume that whatever furthers the statute's primary objective must be the law."
18. The purpose of the Amending Act, so far as it is articulated in the long title, is to make it easier for landlords to terminate social housing tenants for anti-social behaviour. The Amending Act strikes a balance between the rights of landlords who are social housing providers and their tenants. The purpose of the legislation is to give effect to the balance parliament has struck. It follows that submissions as to the purpose of the legislation do not support the appellant's construction of s 154E of the Act.
19. As s 154E is limited to circumstances where the Tribunal is exercising a discretionary power. As the Tribunal is not exercising a discretionary power or engaging in any evaluative process under s 85(3), no occasion arises for the exercise of a discretion and s 154E does not apply. If follows that there is no inconsistency between s 85(3) and s 154E: s 137of the Act.
20. The order for possession made by the Tribunal below was initially suspended by the Appeal Panel on 8 December 2016. That order was varied by consent of the parties on 21 December 2016, with the effect that the order for possession is suspended until determination of the appeal or further order of the Appeal Panel, whichever is earlier. However, we consider it appropriate to make a further order suspending the order for possession for a period of 14 days, in order to give the tenants sufficient time to find alternative accommodation and vacate the premises.

Orders In each of the proceedings:

1. The appeal dismissed.
2. The order for possession is suspended for 14 days from the date of these orders.

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: 24 March 2017