McAuliffe v CTTT & Anor

Supreme Court of NSW|2004-09-01|Before: Mr P

CITATION : McAuliffe v CTTT & Anor [2004] NSWSC 824 HEARING DATE(S) : 1 September 2004 JUDGMENT DATE : 9 September 2004 JURISDICTION: Common Law - Administrative Law List JUDGMENT OF : Master Harrison DECISION : (1) The decision of Tribunal Member H E Moore dated 19 November 2003 is set aside; (2) The second defendant's application in the CTTT is dismissed; (3) The second defendant is to pay the plaintiff's costs as agreed or assessed.

CATCHWORDS : Appeal decision of CTTT - breach of tenancy agreement - pot plants Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) - s 67 LEGISLATION CITED : Crimes (Confiscation of Profits) Act 1988 (WA) - s 10 Residential Tenancies Act 1987 (NSW) - ss 3, 23, 57, 64 Supreme Court Rules 1970 (NSW) - Pt 51A r 2(b) Chapmans Ltd v Yandell (t/as Yandells) [1999] NSWCA 361 CDJ v VAJ (No 1) (1998) 197 CLR 172 CASES CITED : Coulter v Regina (1988) 164 CLR 350 House v The King (1936) 55 CLR 499 R v Rintel (1991) 52 A Crim R 209 Barbara Kay McAuliffe (Plaintiff)

Department of Housing (Second Defendant) FILE NUMBER(S) : SC 30006/2004 Mr D Murr SC with Ms M Fraser (Plaintiff) COUNSEL : Mr A Jungwirth (Second Defendant) Mr P Murphy (Plaintiff)

Submitting Appearance SOLICITORS : (First Defendant)

Mr Callen, Department of Housing (Second Defendant)

LOWER COURT Consumer Trader and Tenancy Tribunal of NSW JURISDICTION : LOWER COURT RT 03/85041 FILE NUMBER(S) : LOWER COURT Tribunal Member H E Moore JUDICIAL OFFICER :

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

30006/2004 - BARBARA KAY McAULIFFE v CONSUMER TRADER & TENANCY TRIBUNAL & ANOR

JUDGMENT (Appeal decision of CTTT - breach of tenancy agreement - pot plants) 1 MASTER: By amended summons filed 21 June 2004 the plaintiff seeks firstly an order that the orders of Tribunal Member H E Moore made on 19 November 2003 be set aside; secondly, an order dismissing the second defendant's application filed in the Consumer Trader & Tenancy Tribunal (CTTT); thirdly, an order granting the plaintiff leave to withdraw her concession that she breached the tenancy agreement; fourthly, a declaration that the plaintiff did not breach s 23 of the Residential Tenancies Act 1987 (NSW) (RT Act) and, in particular, in cultivating a prohibited plant at the demised premises, did not use the demised premises for an illegal purpose; fifthly, alternatively, a declaration that the breach was not of such seriousness that, in all the circumstances of the case, an order for termination of the tenancy and possession to the second defendant ought to be made; and sixthly, alternatively, an order that the matter be remitted to the CTTT to be reheard and redetermined. 2 The plaintiff is Barbara Kay McAuliffe. The first defendant is the CTTT who has filed a submitting appearance. The second defendant is the Department of Housing (DOH). The plaintiff relied on her affidavits sworn 14 January 2004 and 21 June 2004. 3 Section 67 Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) (the Act) allows for an appeal to be made to this court on a question of law. An appeal may only be made with leave of the court. A reference to a matter of law includes a reference to a matter relating to the jurisdiction of the Tribunal. The onus lies on the plaintiff to demonstrate that there has been an error of law. Section 67(3) of the Act provides that after deciding the question of the subject of an appeal the court may, unless it affirms the decision of the Tribunal on the question that should have been made by the Tribunal, remit its decision on the question to the Tribunal and order a rehearing of the proceedings before the Tribunal.

Whether an extension of time to appeal should be granted 4 Proceedings were required to be commenced within 28 days of the material date. The material date is 19 November 2003 - see Pt 51A r 2(b) of the Supreme Court Rules 1970 (NSW). The plaintiff was served with the order on 19 November 2003. The time to commence these proceedings expired on 17 December 2003. The proceedings were commenced on 14 January 2004, which is approximately 28 days out of time. 5 In Chapmans Ltd v Yandell (t/as Yandells) [1999] NSWCA 361, Fitzgerald JA (with whom Mason P and Davies AJA agreed) stated that it is important to keep in mind that the purpose of a requirement of leave to appeal is that it is intended to act as a filter to ensure that unsuitable appellant proceedings are not able to be brought with the attendant demands which that places upon the resources of the court, the burden which it places upon other parties and the delays which it causes to other litigants - see Coulter v Regina (1988) 164 CLR 350 at 359. 6 Fitzgerald JA also stated that if leave to appeal should be granted where there is some other matter which in justice required that leave to appeal be granted to allow that matter to be re-litigated, the party seeking leave to appeal obviously bears the burden of establishing that justice does require that leave to appeal be granted. Further, the Master when considering whether to grant leave to appeal obviously has a very wide discretion - see CDJ v VAJ (No.1) (1998) 197 CLR 172 (per McHugh, Gummow and Callinan JJ). 7 The plaintiff submitted that time to appeal should be extended as she has had little direct experience of the legal system and relied upon advice she was given and that she received inconsistent advice as to whether her representatives intended to file an appeal. The plaintiff submitted that she was not advised until 15 December 2003 that the time for filing an appeal would expire on 17 December 2003 and that her representatives advised against and declined to assist her in filing an appeal. On 13 January 2004 the plaintiff's application for rehearing was refused. On 17 February 2004 the CTTT provided written reasons for its decision. The second defendant has not suffered prejudice caused by the delay. It is my view that an extension of time to lodge the appeal should be granted.

Grounds of appeal 8 The plaintiff appeals the whole of the decision of the Tribunal. The grounds of appeal are (i) the learned Tribunal Member failed to give adequate reasons; (ii) the learned Tribunal Member misconstrued s 23(1) of the RT Act in that he found that the conduct of an illegal activity upon the premises, namely cultivations of a prohibited plant, constituted a use of the premises for an illegal purpose; (iii) the learned Tribunal Member erred in the exercise of his discretion pursuant to s 64 of the RT Act in that he overstated and gave undue weight to the ability of the plaintiff to maintain a system of cultivation of cannabis plants; (iv) the learned Tribunal Member erred in rejecting the evidence of Dr Clark, psychiatrist, and substituting his own opinion of the plaintiff's mental state for the opinion of the expert; and (v) the learned Tribunal member erred in the exercise of his discretion pursuant to s 64 of the RT Act in that he failed to take into account, or to give sufficient weight to the alleged breach and the plaintiffs' personal circumstances, the public interest, and the interests of other affected persons. 9 The Tribunal Member was satisfied that the notice of termination dated 30 May 2003 complied with the requirements of ss 57 and 63 of the RT Act. The notice of termination was held to be valid and the Tribunal was required to give consideration to whether the circumstances of the case justified an order terminating the tenancy under s 64 of the RT Act. 10 The Tribunal Member summarised the statement of Senior Constable Bailey as to what he found during the inspection of the premises. The growing of cannabis took place in two areas, namely the cupboard and bedroom. The plaintiff had a hydroponic set-up in a small white cupboard. Another hydroponic set-up was mounted on an aluminium framework with light sources, thermostats, a fan system and an irrigation system. This later system was discovered in a room, which had, its windows blocked by plastic. The entire cultivation process required the use of pots, fertilisers, electricity, water, thermostats, artificial lightning and adequate space appropriately sheltered in two distinct areas of the premises. The Tribunal Member accepted Ms McAuliffe's categorical denial of selling drugs so he disregarded any evidence that suggested that she was involved in the supply of a prohibited substance.

Whether cultivation of a prohibited plant constitutes a "use of premises for an illegal purpose" 11 The second defendant's submission that concerned the definition of "use" was not one that was argued before the Tribunal Member. Rather the plaintiff admitted breaching the tenancy agreement and now seeks to withdraw that admission. The plaintiff had representation at the Tribunal. It is my view that this submission concerning "use" should not be entertained on appeal. 12 However if I am wrong the plaintiff has now submitted that the purpose of the premises was the plaintiff's residence and that the growing of cannabis in part of the premises was incidental to the use of the premises. Thus, according to the plaintiff, the activity of growing cannabis plants does not fall into the definition of "use" in s 23(1). 13 Section 23(1) of the RT Act provides: "(1) It is a term of every residential tenancy agreement that: (a) the tenant shall not use the residential premises, or cause or permit the premises to be used, for any illegal purpose, (b) the tenant shall not cause or permit a nuisance, and (c) the tenant shall not interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of any neighbour of the tenant." 14 Residential premises is relevantly defined in s 3 of the RT Act as: "Residential Premises" (a) means any premises or part of premises (including any land occupied with the premises) used or intended to be used as a place of residence; …" 15 The plaintiff referred to R v Rintel (1991) 52 A Crim R 209 a decision of the Western Australian Court of Criminal Appeal where Pidgeon J in discussing s 10 of the Crimes (Confiscation of Profits) Act 1988 (WA) stated: "…I would, however, see some limitation in the meaning of the verb "to use" when it is used in the context of land. The most concise definitions are, I feel, contained in the Macquarie Dictionary inasmuch as they do not contain the word to be defined. The definitions are "to employ for some purpose"; "to put into service"; "to avail oneself of" and "to apply to one's own purpose". I would consider that in some contexts in ordinary speech the lesser is capable of excluding the greater. If one is having a bath, then the bath itself is being used for that purpose. Ordinary speech would indicate that the bathroom is also being used for the same purpose. That is the use for which it is set aside and it is also used for the purpose of drying. However I do not consider that it would normally be said, in ordinary speech, that the land on which the bathroom is situate is being used for the purpose of having a bath. If, therefore, the scales are used in a room for weighing, the scales are being used but I do not consider it could be said, if that was the only operation, that the land was being used. One of the factors to consider is that the act of weighing can be performed anywhere and does not need any particular place. If it could be said that the land is also being used, then it would follow that land must be used in respect of every act performed by mankind, unless the act was performed at sea or in the air." 16 The plaintiff further submitted that "use" should be interpreted as being protective of the landlord's interest. The plaintiff seeks a technical, restricted interpretation of s 23(1)(a) of the RT Act. The word "use" is not defined in the RT Act. The word "use" should be given its natural and ordinary meaning. The ordinary meaning of the verb "use" is utilization or employment for or with some aim or purpose - Shorter Oxford English Dictionary. The Macquarie Dictionary definitions of "use" include "to put into service", to "avail oneself of", "to exploit to one's own end" and "to apply to one's own purposes". 17 The use does not have to involve the "use" of the whole residential premises. It is my view that the plaintiff's hydroponic cultivation of cannabis within two areas of the residential premises falls within the definition of "use" in s 23(1) of the RT Act.

The exercise of discretion 18 The principles according to which this court is to decide whether the Member's discretionary decision to terminate the lease is correct are stated definitively in a short passage in the joint judgment of Dixon, Evatt and McTiernan JJ in House v The King (1936) 55 CLR 499 at 504-505. It is, I think, useful to re-state them as follows: "The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred." 19 Section 64 of the RT Act provides: "Application to Tribunal by landlord for termination and order for possession

(1) If: (a) a landlord or a tenant gives notice of termination of a residential tenancy agreement under this Part, and

(b) the tenant fails to deliver up vacant possession of the residential premises on the day specified, the landlord may, not later than 30 days after that day, apply to the Tribunal for an order terminating the agreement and an order for possession of the premises.

(2) The Tribunal shall, on application by a landlord under this section, make an order terminating the agreement if it is satisfied: (a) in the case of a notice given by the landlord on a ground referred to in section 56, 57 or 61: (i) that the landlord has established the ground, and

(ii) if the ground is a breach of the residential tenancy agreement, that the breach, in the circumstances of the case, is such as to justify termination of the agreement, (b) that the tenant has seriously or persistently breached the residential tenancy agreement, or

(3) Except as provided by section 66, the Tribunal shall not make an order terminating a residential tenancy agreement under this section unless it is satisfied that notice of termination was given and that it was given in accordance with this Part.

(4) Without limiting the obligations of the Tribunal under subsection (2), in considering the circumstances of a case concerning social housing premises, the Tribunal, in addition to having regard to the circumstances of the tenant and other circumstances of the case, 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 the breach of the residential tenancy agreement was a serious one (and, in particular, whether it was one to which subsection (6) applies), 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,

(d) whether the tenant, wilfully or otherwise, is or has been in breach of an order of the Tribunal,

(5) If the Tribunal makes an order terminating a residential tenancy agreement under this section, it must make a further order for possession of the residential premises, specifying the day on which the order takes effect.

(6) If the residential premises concerned are social housing premises, an order for possession made under this section is to be expressed to take effect immediately if the breach of the agreement: (a) involves the use of the premises, or any property adjoining or adjacent to the premises (including any property available for use by the tenant in common with others), for the purposes of the manufacture or sale of any prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985, or

(b) subjects persons or property to unreasonable risk, unless the Tribunal considers that it would be unjust to do so.

(7) Nothing in this section affects the operation of section 68." 20 The Tribunal Member set out the facts as follows: "On 24 December 2002 the Police executed a search warrant of the premises at '...' Waterloo following which the tenant was arrested and charged with offences under the Drug Misuse & Trafficking Act 1985 of cultivating a prohibited plant and possessing a prohibited plant.

Ms. McAuliffe pleaded guilty to the charge of cultivating a prohibited plant at an early stage of the criminal proceedings. Ms. McAuliffe appeared before the District Court on 30 April 2003, for sentence. She was convicted and given a 12 month bond on terms that she undergo drug rehabilitation.

Ms. McAuliffe is aged 65, of Aboriginal descent and lives alone at the premises. She is hoping that her 2 sons will reside with her from early 2004 upon their release from prison.

Ms. McAuliffe has been a Department of Housing tenant for some 26 years. For 14 of these years, she has resided at the '...' address.

Ms. McAuliffe gave evidence of the strong links she has with the local community and network of friends and other community providers. Ms. McAuliffe said she would be deeply affected if she were forced to move from the locality in which she has forged such ties. Away from Waterloo, Ms. McAuliffe says, she would know 'not a soul'.

Ms. McAuliffe says her medical conditions from which she suffers are attended to by the local doctors, R and Y. Problems with high blood pressure have led her to be consulting her doctors once every 10 days.

Ms. McAuliffe is in receipt of the aged pension. She said that if she had to go into private rental accommodation she would have to move 'right out of Sydney' to find something she could afford. To do so would also make it difficult for her to continue to see the psychiatrist, Dr Clarke. Ms. McAuliffe said that she would hope to be able to keep seeing Dr Clarke and as a result of his treatment she has been feeling a lot better. Presently she is taking anti-depressant medication.

Ms. McAuliffe said she undertook the cultivation of marijuana plants because she could not afford to buy the drug commercially. Further, she said, she was too scared to go out and buy cannabis at a hotel. Ms. McAuliffe said a friend of hers went to New Zealand and left her the equipment. This she had used because she had too many plants die in the past. Ms. McAuliffe said she grew 'a few' marijuana plants. Indeed, Ms. McAuliffe said that she had not grown 20 plants previously but had usually had only 2 plants at any one time." 21 The Tribunal Member concluded: "The Tribunal has given careful consideration to all of the circumstances presented by the parties in their evidence. Ms. McAuliffe is a long term resident in the locality. She has a strong connection to the local community. I do not accept that any medical condition from which Ms. McAuliffe suffered can provide some explanation for Ms. McAuliffe's illegal use of the premises. The system of cultivation used by Ms. McAuliffe was a sophisticated one. There was no suggestion that Ms. McAuliffe received any assistance in the management of this hydroponic system. It is difficult to reconcile the considerable effort and application necessary to maintain this system with the history of disorganised behaviour of persons suffering from chronic depression. I find Ms. McAuliffe to have engaged in an activity of a scale and sophistication that amounts to a serious breach of the residential tenancy agreement. The seriousness of that breach must in all the circumstances, outweigh the consequences of Ms. McAuliffe being uprooted from a community of which she is part.

Orders are made terminating the tenancy and requiring Ms. McAuliffe to vacate the premises in accordance with the orders at the commencement of this determination." 22 The plaintiff received a bond. It was her first criminal offence and she feels ashamed, absolutely stupid and foolish. Several neighbours gave evidence and spoke highly of the plaintiff. They spoke of her voluntary work to the community. She helps out one of her neighbours Ms Hawkins with her kids (t 38) and Ms Hawkins thinks that if the plaintiff had to leave the area "it would kill her, it would kill her". And that the people in the area "love her" because "she'll help anybody when she can, if she had the last dollar she'd give it to you if she had it". The plaintiff has been consulting Dr Clarke forensic psychiatrist. Dr Clarke prescribed medication and according to the doctor the plaintiff seems to have settled down a lot and is now more focused in her life. Dr Clarke stated that when the plaintiff was smoking marijuana she was "self-medicating" and it is his view that it was in the plaintiff's interest to remain in her present accommodation. In fact, he spoke very strongly in favour of the plaintiff remaining in her current accommodation and continuing with her medical treatment. The Tribunal Member accepted that the plaintiff did not sell cannabis. Had she been involved in selling cannabis, her being evicted would have been justified. The propagation of cannabis in her premises did not have any adverse effects on neighbouring residents or other persons. The Probation and Parole service was satisfied that the plaintiff unlikely to re-offend. Hence it is most unlikely that she will continue with her propagation of cannabis and thus will not be subjecting neighbouring residents or property to unreasonable risk (see s 64(4)(a) & (b)). 23 While this Court does not lightly interfere with the exercise of a Tribunal Member's discretion, the result upon the facts is harsh and plainly unjust. It is my view that a substantial injustice has in fact occurred such that there exists an error of law. The appeal is upheld. The decision of Tribunal Member H E Moore dated 19 November 2003 is set aside. The second defendant's application in the CTTT is dismissed. 24 Costs are discretionary. Costs usually follow the event. The second defendant is to pay the plaintiff's costs as agreed or assessed.

(1) The decision of Tribunal Member H E Moore dated 19 November 2003 is set aside.

(2) The second defendant's application in the CTTT is dismissed.

(3) The second defendant is to pay the plaintiff's costs as agreed or assessed. **********

Last Modified: 09/09/2004 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.

Consumer, Trader and Tenancy Tribunal Act 2001(NSW)

Crimes (Confiscation of Profits) Act 1988(WA)

Residential Tenancies Act 1987(NSW)

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