McGeown v NSW Land and Housing Corporation

NCAT Appeal Panel|2014-08-11

reasons for decision 1This appeal raises issues relating to whether a social housing tenant who has been imprisoned has a right to keep the home and return to it on release. 2The appeal relates to orders made under the Residential Tenancies Act 2010 (RT Act) granting the landlord possession of the premises and requiring the tenant to surrender possession: NSW Land and Housing Corporation v Catherine McGeown [2014] NSWCATCD 49. The orders are stayed pending the resolution of this appeal. 3The tenant appeals against those orders pursuant to s 80 of the Civil and Administrative Tribunal Act 2013. Section 80 confers a right to appeal on a 'question of law' and the appeal may extend to 'other grounds' with the leave of the Appeal Panel (with the discretion to grant leave qualified in the case of appeals from the Consumer and Commercial Division (as this is) by cl 12 of Schedule 4). 4The appeal is confined to questions of law. There is no application to appeal on 'other grounds'. We will turn to the grounds of appeal later in the reasons. 5In October 2001 the appellant entered into a 'social housing tenancy agreement' (as defined in s 136) with the Housing and Land Corporation, a 'social housing provider (s 136), for the lease and occupation of residential premises. She occupied the premises continuously until 11 December 2012. On that date she commenced a term of imprisonment of three years, due to expire on 13 March 2015. (She has filed an appeal against the severity of the sentence, and as at the date of the appeal hearing (11 August 2014) it was yet to be heard.) 6Section 15 of the RT Act allows for a standard form of residential tenancy agreement to be prescribed, and that has been done. The standard form of agreement appears at Schedule 1 of the Residential Tenancies Regulation 2010 (RT Reg). If the standard form is used, the parties may include additional terms but only if they do not contravene the Act or other laws, and only if the terms are 'not inconsistent with the terms set out in the standard form': s 15(4). 7The Corporation learnt of her imprisonment in March 2013. The Corporation notified her that due to her incarceration for over 3 months she was obliged to surrender the premises, and stated that she was in breach of cl 35(1) of her social housing tenancy agreement, which was an additional term to the standard form: 35.1 The tenant agrees that he or she will personally occupy the premises at all time. 35.2 The tenant acknowledges that ceasing personally to occupy the premises whether by operation of law or as a result of a court order or for any other reason whatsoever, is a breach of this agreement enabling the landlord to give a Notice of Termination on ground of breach of this agreement. 35.3 Without limiting the operation or generality of clause 35.1, the tenant acknowledges that the premises are intended to be available as public housing and that the mere payment of rent or maintenance of the premises does not constitute occupancy. 8She did not comply with the notice. 9Section 87 of the RT Act provides: 87 Breach of agreement (1) A landlord may give a termination notice on the ground that the tenant has breached the residential tenancy agreement. (2) The termination notice must specify a termination date that is not earlier than 14 days after the day on which the notice is given. (3) The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement. (4) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that: (a) the tenant has breached the residential tenancy agreement, and (b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement, and (c) the termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice. (5) In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the breach, (b) any previous breaches, (c) any steps taken by the tenant to remedy the breach, (d) any steps taken by the landlord about the breach, (e) the previous history of the tenancy. (6) The Tribunal may refuse to make a termination order if it is satisfied that the tenant has remedied the breach. Note. Section 152 sets out additional matters to be considered if the residential tenancy agreement is a social housing tenancy agreement. 10Section 152 is applicable to this case, and provides 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. 11The Corporation then proceeded to apply under s 87, successfully, for the orders that are now the subject of this appeal.

The Appeal 12We will deal with the grounds of appeal in the following order: Ground 4 (which if successful decides the appeal), then Grounds 1 and 2, and finally Ground 3.

Ground 4 13The ground is that: The Tribunal erred in holding that cl 35.1 of the Applicant's Residential Tenancy Agreement is not inconsistent with the Applicant's right to quiet enjoyment of the property pursuant to s 50 of the RTA. In the alternative, the Tribunal erred in holding that cl 35.1 is not inconsistent with the Applicant's right to reasonable peace, comfort and privacy under subsection 50(2) of the RTA. 14The appellant submitted to the Tribunal below, on three bases, that cl 35 was invalid and of no effect. The first of them referred to s 21 which provides: 21 Inconsistent and prohibited terms void (1) A term of a residential tenancy agreement is void to the extent to which it: (a) is inconsistent with any term included in the agreement by this Act or the regulations, or (b) is prohibited by this Act or the regulations. (2) The Tribunal may, on application by a landlord or a tenant, make an order declaring that a term of a residential tenancy agreement is void or partly void if satisfied that the term is inconsistent with any term included in the agreement by this Act or the regulations or is prohibited by this Act or the regulations. 15The Tribunal rejected the appellant's argument, and that decision is not put in issue by the appeal; and nor is the Tribunal's rejection of the second argument that cl 35 is so affected by uncertainty as to be unenforceable. 16Ground 4 is confined to the third argument made to the Tribunal - whether the clause is inconsistent with the statutory rights conferred on tenants by s 50(1) and (2). 17Section 50 provides: 50 Tenant's right to quiet enjoyment (1) A tenant is entitled to quiet enjoyment of the residential premises without interruption by the landlord or any person claiming by, through or under the landlord or having superior title (such as a head landlord) to that of the landlord. (2) A landlord or landlord's agent must not interfere with, or cause or permit any interference with, the reasonable peace, comfort or privacy of the tenant in using the residential premises. Maximum penalty: 10 penalty units. (3) A landlord or landlord's agent must take all reasonable steps to ensure that the landlord's other neighbouring tenants do not interfere with the reasonable peace, comfort or privacy of the tenant in using the residential premises. (4) This section is a term of every residential tenancy agreement. 18At [49]-[52] of its reasons, the Tribunal dealt with this issue. The Tribunal said: 49 The Tribunal rejects the submission that clause 35 of the Agreement is inconsistent with section 50 of the RTA. The prescribed form of residential tenancy agreement is to be found in Schedule 1 of the Residential Tenancies Regulation 2010. Section 15(4) allows additional terms to be included subject to the limitations set out in that section. 50 The Tribunal finds that clause 35 of the Agreement does not contravene the RTA or the Residential Tenancies Regulation or any other Act, and its terms are not inconsistent with the terms set out in the prescribed standard form in Schedule 1. 51 The Tribunal notes the rationale behind clause 35 of the Agreement is detailed in the applicant's written submission dated 16 January 2014: "25.Furthermore at the time the parties entered into the Agreement they intended 'occupy' in clause 35.1 to mean 'reside in' the premises. The applicant is a Statutory Corporation established pursuant to section 6 of the Housing Act 2001 (the Housing Act). Section 5 sets out the objects of the Housing Act including: (a) to maximise the opportunities for all people in New South Wales to have access to secure, appropriate and affordable housing. 26.To achieve that objective, section 18 of the Housing Act provides: For the purposes of this Act and subject to this Act, the Corporation may in relation to land vested in the Corporation; (a) ... (b) Subject to such terms and conditions as it thinks fit, sell, lease, exchange or otherwise dispose of or deal with the land and grant easements or rights-of-way over the land or any part of that land. 27.Therefore to assist the applicant to achieve the objective of maximising the opportunities for all people in New South Wales to have access to secure, appropriate and affordable housing, section 18 of the Housing Act specifically allows the applicant to include such terms and conditions as it thinks fit in residential tenancy agreements it enters into in respect of public housing. Clause 35.1 of the Agreement is such a term." 52 The Tribunal finds that there is no inconsistency between a term of the Agreement which requires the respondent to personally occupy the premises and the tenant's right to quiet enjoyment as provided for in section 50 of the RTA. 19It will be seen that the Tribunal adopted submissions of the Corporation that relied in turn on the provisions of the Housing Act 2001. In particular it adopted a submission by the Corporation that s 18(b) of the Housing Act allows the Corporation to include such terms and conditions as it thinks fit (our emphasis) in residential tenancy agreements, and that cl 35.1 is such a term. 20Section 18 of the Housing Act bears the section heading 'General Powers of Corporation in relation to land vested in the Corporation' and contains a series of broad statements, one of which, s 18(b), provides: For the purposes of this Act and subject to this Act, the Corporation may, in relation to land vested in the Corporation: (b) subject to such terms and conditions as it thinks fit, sell, lease, exchange or otherwise dispose of or deal with the land and grant easements or rights-of-way over the land or any part of that land 21In our view, the specific provisions of residential tenancy law can not be ousted by omnibus provisions of this kind. The Corporation must, to take a different example, deal in and sell land in a manner which conforms with the laws relating to sale of land, unless those laws are specifically qualified in relation to its activities. The same applies to leasing, especially the leasing of public housing. The RT Act is the principal law in this field, and the RT Act itself gives attention to the special place of social housing providers and social housing tenancy agreements. 22The result is that in its reasons relevant to this point ([49]-[52]) the Tribunal gave no acceptable substantive reason for its conclusion that cl 35 was not inconsistent with the term incorporated by s 50 into social housing agreements. 23However, we consider that (different) submissions made at the appeal hearing by the Corporation do meet the argument. We agree with the Corporation that clause 35 is directed to circumstances where the tenant is no longer in occupation or resident at the premises. The implied covenant of quiet enjoyment at common law is explained by Professor Butt in Land Law (5th ed) at [1560] as: "... a covenant that neither the landlord nor those lawfully claiming through the landlord will substantially interfere with the tenants 'quiet enjoyment' of the premises. The word 'quiet' is used in the sense of 'free from interruption' or 'peaceful'." 24In our view, s 50 is directed to a landlord-tenant relationship where the tenant is in practical occupation of the premises. Section 50 does not foreclose a landlord from taking actions that are reasonable if the landlord believes reasonably that the premises are no longer occupied in a practical sense by the tenant. The landlord would, we consider, be entitled in those circumstances to come on to the property to investigate the situation, and take necessary action protective of the landlord's interests. For the same reasons, we are not satisfied that the clause infringes s 50(2), which, in our view, is no more than a provision designed to address any doubts in the scope of the common law obligation as to interests of the tenant that are to be protected from unreasonable interference. 25This ground of appeal is rejected.

Grounds 1 and 2 26Grounds 1 and 2 are: (1)The Tribunal failed to consider matters in subsections 87(5)(a) to (e) inclusive in the RTA. (2) The Tribunal failed to provide reasons for the decision regarding the matters raised by the applicant in relation to subsection 87(5) of the RTA. 27The Tribunal dealt with this part of the appellant's case at [68 ] to [73] of its reasons, as follows. SHOULD THE TENANCY BE TERMINATED? 68 The Tribunal finds that there was a valid NOT and that there has been a breach of clauses 35.1 and 35.2 of the Agreement. The respondent conceded she has not been in personal occupation of the premises since 11 December 2012. 69 The Tribunal now turns to a consideration of whether the breaches are in the circumstances sufficient to justify the termination of the Agreement. In Howard v B Miles Womens Foundation Inc (2012) NSWC 1173, Schmidt J said; "It is obvious that the legislation seeks to achieve a balance between the rights and obligations of landlords and tenants". In that case, Her Honour was referring to the Residential Tenancies Act 2010. 70 Section 87 gives the Tribunal a clear discretion as to whether or not to make an order for termination. In considering the circumstances of the case, the Tribunal has had regard to each of the matters in section 87(5) of the RTA. 71 The Tribunal has considered each of the matters in section 87(5) and is satisfied that the respondent has breached clause s 35.1 and 35.2 of the Agreement. The respondent did not seriously address the matters in section 87(5) in her submissions. 72 The Tribunal has in determining whether to terminate the Agreement also had regard to the matters in section 152 of the RTA in so far as they are relevant. The Tribunal has taken into account as a relevant consideration that the applicant is a social housing provider and the objects of the provision of public housing in the Housing Act 2001 which are detailed in the applicant's submission. In the Tribunal's opinion, these are a relevant consideration in deciding whether it is appropriate to make a termination order. 73 The applicant is the provider of low cost housing to those most in need. After considering all the circumstances of the case, the Tribunal finds that the respondent has breached the Agreement and the breach is sufficient to justify the termination of the Agreement. 28It will be seen that the Tribunal states that it has considered each of the matters to which s 87(5) makes reference, but it does not give any detail as to what those matters were specifically, or how they were specifically evaluated. To reiterate sub-section (5) provides: (5) In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the breach, (b) any previous breaches, (c) any steps taken by the tenant to remedy the breach, (d) any steps taken by the landlord about the breach, (e) the previous history of the tenancy.

Ground 1 29The appellant's principal submission is that the Tribunal had a duty to consider the factors set out in s 87(5), and that it failed to carry out that duty. Section 87(5) is to be read in conjunction with s 87(4), in particular s 87(4)(b). 30Section 87(4)(b) provides that the Tribunal 'may make' a termination order if it is satisfied of certain matters, among which is the 'circumstances' of the case. Section 87(5) deals with circumstances that 'may' be considered. 31As the appellant submits, it is open to a court to conclude, contrary to its usual and ordinary meaning, that the proper construction of the word 'may' is that it means 'must' or 'shall'. That conclusion may emerge from a consideration of the statutory context in which the word appears, the purpose of the legislation and any other indicia considered persuasive. But this conclusion, which displaces the ordinary meaning of the word 'may', is not lightly to be reached. Section 9 of the Interpretation Act 1987 reinforces this point. It provides: 9 Meaning of may and shall (1) In any Act or instrument, the word "may", if used to confer a power, indicates that the power may be exercised or not, at discretion. (2) In any Act or instrument, the word "shall", if used to impose a duty, indicates that the duty must be performed. 32Section 5(2) of the Interpretation Act provides: (2) This Act applies to an Act or instrument except in so far as the contrary intention appears in this Act or in the Act or instrument concerned. 33To quote Leeming JA in Cain v New South Wales Land and Housing Corporation [2014] NSWCA 28: [The] ordinary meaning [of 'may'] is confirmed by s 9 of the Interpretation Act 1987 (NSW). Accordingly, it is necessary to discern a contrary intention: s 5(2). In accordance with ordinary principles of statutory construction, a contrary intention may be discerned from the text or the context (which may include the legislative purpose: see for example Aussie Vic Plant Hire Pty Ltd v Esanda Finance Corporation Ltd [2008] HCA 9; 232 CLR 314 at [19]). There is no simple formula for discerning a contrary intention: Deputy Commissioner of Taxation (NSW) v Mutton (1988) 79 ALR 509 at 512 (Mahoney JA). 34In that case, the Corporation had submitted that the words 'may make a termination order' used in the power conferred on the Tribunal by s 91 of the Act (allowing premises to be used for illegal purposes) were to be construed as imposing a duty to make a termination order if the circumstances to which the provision is addressed were proven. It was a case of a 'power coupled with a duty'. The argument had prevailed in the District Court, leading to the terminated tenant appealing to the Court of Appeal. In the present case the submission is along similar lines, though its focus is the question of whether each of the considerations set out in s 87(5) must be considered before any order can be made. 35In our view, there is nothing in the context or purpose of the RT Act as it bears on the Tribunal's powers under s 87 which ought lead to us to a conclusion in relation to the use of 'may' in s 87(5), read in conjunction with, s 87(4)(b), that differs from that reached by the Court of Appeal in Cain in the respect of the Tribunal's s 91 powers. In our view the analyses undertaken by Basten JA and Leeming JA in Cain apply equally to the present case. As Basten JA said at [24]-[25]: 24 ... [W]here the statute uses the same terminology in various provisions, it will usually (though not necessarily) be appropriate to give it the same meaning in each case. Both ss 87 and 91 confer a power on the Tribunal by use of the word "may": a clear reason must be established to conclude that in one situation the Tribunal has a discretion, but in another it does not. 5 The difference in effect between "may" and "must" (or "shall", being the term identified as imposing a duty in s 9(2) of the Interpretation Act) does not depend upon the existence of s 9 of the Interpretation Act; it is an element of ordinary English usage. Nor did the distinction escape the drafter of the Residential Tenancies Act, which uses the language of power and the language of obligation with, to all appearances, deliberate precision: cf the use of "must" in ss 84(3) and 85(3). There is nothing in the surrounding provisions which require a strained construction of s 91. 36We note in particular that within s 87 itself the provisions uses the word 'must' and 'may' differentially. This is a strong pointer, as both Basten JA and Leeming JA noted, that the word 'may' is to retain its ordinary meaning. 37We conclude that s 87(4)(b) does not itself impose on the Tribunal a mechanistic duty to go through each of the considerations listed in 87(5), and nor does s 87(5), read in light of s 87(4)(b), or in isolation contain such a duty. This flexible approach is, as we see it, also consistent with the one of the Parliament's statutory objectives for the law governing the Tribunal (the Civil and Administrative Tribunal Act 2013 (NCAT Act)) - 'to enable the Tribunal to resolve the real issues in proceedings' (s 3 (d)). 38We reject Ground 1.

Ground 2 39The submission is that the Tribunal failed to give adequate reasons in relation to the matters to which s 87(5) refers. 40The Tribunal's exercise of the discretion given by s 87(4) is subject to the usual restraints of the law requiring a discretion to be exercised in a judicial way, in particular - not to take account of irrelevant considerations to be rational and not to be exercised in a manifestly unreasonable way. See further, Cain per Basten JA at [27]-[40]. The Tribunal has a duty to give reasons. The NCAT Act provides relevantly, s 62: (3) A written statement of reasons for the purposes of this section must set out the following: (a) the findings on material questions of fact, referring to the evidence or other material on which those findings were based, (b) the Tribunal's understanding of the applicable law, (c) the reasoning processes that lead the Tribunal to the conclusions it made. 41Therefore the reasons must, at the least, identify the discretionary considerations that led the Tribunal to make its final orders. 42But, as noted by French CJ and Kiefel J in relation to the duty of courts to give reasons (Wainohu v New South Wales [2011] HCA 24 at [56]): [The duty's] content - that is, the content and detail of the reasons to be provided - will vary according to the nature of the jurisdiction which the court is exercising and the particular matter the subject of the decision. 43This is a most unusual case. There is no suggestion that the appellant was other than a good tenant during the 11 years she occupied the property before being imprisoned. 44We have reviewed the transcript of the hearing before the Tribunal. We accept the appellant's submissions that a range of matters were put to the Tribunal as to why, despite her absence from the property, an order of termination should not be made. 45The submissions referred at a number of points to the situation she would face on release of having no home to return to, and not having any claim to priority in the social housing allocation policies of the Corporation. 46It may have, perhaps, been appropriate for the Tribunal to refer to these submissions, and explain why it had decided that they could be given no weight. It might perhaps have at least qualified its statement at [71], that the appellant did not 'seriously address' in her submissions circumstances which, on her submission, would justify a decision to exercise the Tribunal's discretion favourably to her. 47On the other hand, we note that in support of the Tribunal's statement at [71], the Corporation drew our attention to p 22 of the Transcript and the apparent concession made by Ms Murray for the appellant at first instance that a circumstances argument may not be appropriate to be pressed, given the fact that she was incarcerated. 48In our view, a fair reading of the Tribunal's reasons read as a whole is that the Tribunal considered that there was only matter personal to the appellant that was negative to her, but it was a very significant matter - her absence long-term from the premises due to imprisonment. It was not a case of a multiplicity of considerations, as might arise in relation to a tenant in occupation - allegations of misconduct or failure to observe the terms of the tenancy. 49In addition, the Tribunal regarded as relevant to the exercise of its discretion, a matter that may be considered under s 152 - the role of the Corporation as a social housing provider. While it did not spell out in detail in its reasons at [72] and [73] what the Corporation said in its submissions to it (reiterated on appeal), we are satisfied that it was alluding here to the importance of social housing stock being administered in a way that ensures that it is used to the benefit of the community and not left vacant for long periods. 50In our a view a fair reading of the reasons adequately discloses the reasons for the Tribunal's decision. 51We reject Ground 2. 52Ground 3 is that: The Tribunal failed to exercise the discretion reposed in it by s 114 of the RTA. 53Section 114 provides: 114 Suspension of possession orders (1) The Tribunal may suspend the operation of an order for possession of residential premises for a specified period if it is satisfied that it is desirable to do so, having regard to the relative hardship likely to be caused to the landlord and tenant by the suspension. (2) The Tribunal may impose an obligation on a tenant to pay a specified occupation fee for the period for which the order for possession is suspended. 54This is a discretionary matter. The Corporation submitted at hearing that the appellant did not raise the possibility of suspending the operation of any termination order at the hearing. We have reviewed the transcript and agree. In our view, it is not surprising that in this case the Tribunal did not turn its mind to the possibility of suspending the possession orders. 55Such an exercise of discretion would normally be directed to circumstances where the tenant was in practical occupation, and there were reasons why it would not be fair to give the notice of termination immediate effect. As the Corporation submitted, this was a case, given its circumstances, when there was no utility in considering whether to defer the making of the order for possession. 56In our view, there was no error of law on the part of the Tribunal in failing to refer to this power. 57We reject Ground 3.

Order 1.The appeal is dismissed. 2.The stay of orders of 15 April 2014 is lifted. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Principal Registrar

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: 23 October 2014

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