Orr v NSW Land and Housing Corporation

NCAT Appeal Panel|2018-04-09|Before: Mr P, Mr J

Solicitors: Legal Aid NSW (Appellant) Department of Family and Community Services (Respondent) File Number(s): AP 18/05922 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 16 January 2018 Before: R Harris, General Member File Number(s): SH 17/18011

Introduction

This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) against a decision made in the Consumer and Commercial Division of the Tribunal on 16 January 2018.
The application to the Tribunal was brought by the respondent to the appeal (the landlord) against the appellant (the tenant).
For the reasons set out below, we have decided to refuse leave to appeal and dismiss the appeal.

Tribunal proceedings and decision

The landlord lodged the application to terminate the tenancy agreement which is the subject of this appeal under s 91 (and in particular under s 91(1)(a)) of the RT Act on 20 April 2017. The matter was listed for final hearing on 30 October 2017.
It was not in dispute in the proceedings that cannabis is a prohibited drug within the meaning of s 91(1)(a) of the RT Act. Nor was it in dispute that the tenant has post-traumatic stress disorder, which is a disability for the purposes of the Anti-Discrimination Act 1997.
According to the Tribunal's Reasons for Decision, the tenant defended the application on the basis that she would suffer undue hardship if her tenancy were terminated. She claimed that she did not realise the seriousness of reoffending after the previous Tribunal proceedings, and that the stress of her tenancy agreement being terminated and the difficulty of finding private rental accommodation could cause a re-occurrence of the cerebral aneurism she had suffered in 2013. The tenant claimed that she would have difficulty finding alternative accommodation because of her three dogs and two cats.
At [4] of the Reasons for Decision the Tribunal found the tenant's evidence to be "evasive and unconvincing particularly in relation to the period of time she had been cultivating the plants the subject of these proceedings".
The Tribunal described the documentary evidence provided in support of the tenant as follows: 7 The tenant's case was supported by a number of reports. A medical certificate from Dr Kearney dated 27 Mar 2017 describes how tenant self-managing her stress with the use of pot and refers to a life threatening ruptured cerebral haemorrhage in 06/2013 and asserts that the prospect of losing her house is creating significant stress which is putting her at further risk from her cerebral haemorrhage. A second report of the same day asserts that the prospect of losing her home would place her under financial stress further aggravating her risks of a major medical catastrophe and that she needs to reside in the area because all her support network is here. A further report of the 10th August asserts that her cerebral aneurysm has caused some cognitive effects + contributed to the trouble that may occur if she grew pot at property again. A further report of 25 September is to the same effect. A report from M/s Reichert a social worker dated 11 April 2017 asserted that the tenant reported in September ceasing all cannabis use following her then most recent arrest and that she had asked for counseling which had been provided focusing on relapse prevention and stress management. A detailed psychosocial assessment by Kate Seers of Client Assessment and Referral NSW Legal Aid Commission outlines in detail the tenants history and concludes by emphasizing the importance of a safe and predictable environment , the importance of a supportive network and the importance of the tenant's pets to her wellbeing.
The Tribunal then went on to consider whether the termination of the tenancy agreement could cause the tenant to suffer undue hardship: 8 The evidence suggests that the termination of her tenancy may cause the tenant hardship because her treatment is being provided locally to where she currently resides. The tenant was unable to say when she last saw her counsellor and it would appear to be some months ago. There is no evidence that she will have to leave the area if the tenancy is terminated or that the counselling and other medical treatment she needs could not be provided elsewhere. There is no evidence of any attempts by the tenant to find alternative accommodation. The medical evidence suggests that stable accommodation will assist the management of her stress and that termination may have serious adverse effects on her health. Given the height of the plants found on 9th March the Tribunal finds that it is more probable than not that the tenant was cultivating the plants at the time of the Tribunal hearing on the 23rd January 2017. And certainly was at the time the Tribunal gave judgment on the 15th February 2017 stating that any further cultivation would likely lead to termination. The tenant told the police that the plants were her daughter's which suggest she had a consciousness of the seriousness of her situation on the 9th March when the plants were found. At that time the Tribunal had handed down its decision in the earlier proceedings stating "given the likelihood that such reoffending would result in termination of the tenancy." The Tribunal does not accept the tenant's assertions that she did not understand the seriousness of her position if she continued to cultivate cannabis. In determining undue hardship the Tribunal must have regard to whether the consequences are out of proportion to the tenants fault. The tenants fault is substantial she was cultivating cannabis on the premises for a second time whilst proceedings were on foot to terminate her tenancy for that very thing. The case is finally balanced however having considered the whole of the evidence the Tribunal does not accept that there is undue hardship in the circumstances of the case.
At [9] of the Reasons for Decision, the Tribunal made findings in the alternative on the basis that the tenant would suffer undue hardship and that the Tribunal could exercise a discretion in deciding the termination application. In doing so, the Tribunal was required to consider s 154E of the RT Act.
In relation to the exercise of the discretion, the Tribunal found that: 9 Accepting that others may be of a different opinion the Tribunal will go on to consider assuming undue hardship whether in all the circumstances including taking into account the matters set out in Section 154E a termination order should be made. There is no direct evidence of the effect on neighbouring residents or adverse effects on the landlord other tenants. However as was pointed out by the Appeal Panel in NSW land & Housing v Raglione 2015 NSWCATAP 75(5 May 2015) at 51 the serious penalties the Parliament has proscribed under the Drugs Misuse and Trafficking Act 1985 (in that case supply of Methamphetamine but the same reasoning must apply to the cultivation of cannabis) means Parliament has treated breach of that Act as a serious threat to our society. Society of course includes neighbouring residents and the landlords other tenants. There is evidence of the history of the tenancy. On one side of the ledger the previous cultivation at the premises and on the other side the fact that there is no evidence of any other alleged breach over a significant period of time. The tenant has not been in breach of an order of the Tribunal but has been in breach of the law in a significant respect in cultivating cannabis at the premises whilst proceedings were on foot to have her evicted for that very thing. In this case despite the reports in support of the tenant the Tribunal cannot find as it did on the last occasion that there is only a small likelihood the respondent will reoffend by way of again consuming cannabis and an even lower likelihood she will reoffend by way of again cultivating cannabis at the premises. Having regarded to the whole of the circumstance the Tribunal is of the view that the tenancy should be terminated. However given the length of time the tenant has resided at the premises and the material in the reports submitted on behalf of the tenant the Tribunal will allow a period of 3 months for the tenant to find alternate accommodation and orders will be made accordingly.

Scope and nature of internal appeals

Internal appeals may be made as of right on a question of law, and otherwise with leave of the Appeal Panel: s 80(2) of the NCAT Act.
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question; 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it.
The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on that basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance.
Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b).
In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed.

Submissions and evidence

In deciding the appeal, we have had regard to the following:

The Notice of Appeal received on 1 February 2018;
The Reply to Appeal received on 9 April 2018;
The written submissions made on behalf of the tenant, received on 16 March 2018;
The written submissions made on behalf of the landlord, received on 9 April 2018;
The oral submissions made on behalf of the parties at the hearing;
A bundle of documents tendered by tenant in the Tribunal proceedings;
Call over directions made on 20 February 2018;
The Tribunal's reasons for decision dated 16 January 2018;
The application to the Tribunal dated 20 April 2017

Notice of Appeal

The Notice of Appeal was lodged on 16 January 2018 which is within the 14 day time period specified in cl 25(3) of the Civil and Administrative Tribunal Rules 2014 (the Rules).

Grounds of Appeal

The grounds of appeal are: 1. The Tribunal erred in its interpretation and application of s 154D(3)(b) of the RT Act. 2. The Tribunal erred in law in its interpretation and application of: 1. The discretion under s 91 of the RT Act; and/or 2. The mandatory considerations in s 154E of the RT Act; 3. Misinterpreting s 154E of the RT Act; 1. The Tribunal erred in law by making a finding of fact for which there was no probative evidence. 2. The Tribunal failed to give adequate reasons.
The tenant seeks leave to appeal on the basis that the Tribunal's decision that termination would not cause undue hardship to the appellant is against the weight of evidence.

Relevant legislation

It is useful to set out the legislative provisions on which the application before the Tribunal and the appeal turn: ss 91, 154D and 154E of the RT Act.
Section 91 is found in Division 2 of Part 5 of the RT Act. Part 5 is concerned with termination of residential tenancy agreements. Division 2 is concerned with termination by landlords. Section 91 provides: 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. (2) In considering whether to make a termination order on the ground specified in subsection (1) (b), the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the unlawful use, (b) any previous unlawful uses, (c) the previous history of the tenancy. (3) The termination order may specify that the order for possession takes effect immediately. (4) A landlord may make an application under this section without giving the tenant a termination notice. (5) The Tribunal may make a termination order under this section that takes effect before the end of the fixed term if the residential tenancy agreement is a fixed term agreement.
The application for termination in this case was made under s 91(1)(a). It is not in dispute that the criteria for termination under that sub-section were established.
In private tenancies, the Tribunal has a discretion as to whether to terminate a tenancy agreement under s 91(1)(a): Cain v New South Wales Land and Housing Corporation [2014] NSWCA 28. However, s 154D modifies that position in respect of social housing tenancy agreements.
S 154D is located in Subdivision 4 of Division 5 of Part 7 of the RT Act. Part 7 applies to social housing tenancy agreements. In accordance with s 137 of the RT Act, Part 7 prevails to the extent of any inconsistency between its provisions and any other provision of the Act or the regulations. Division 5 of Part 7 concerns termination of social housing tenancy agreements and Subdivision 4 concerns termination on the basis of breach.
Relevantly to the facts in this matter, s 154D provides: 154D Tribunal required to make termination order in certain circumstances (1) Subject to subsection (3), the Tribunal must make a termination order on the application of a landlord under a social housing tenancy agreement if: … (b) an application for the order is made under section 91 and the Tribunal is satisfied of the matters set out in section 91 (1) (a), or ….. (3) However: …. (b) subsections (1) and (2) do not apply if the Tribunal is satisfied that the termination order would be likely to result in undue hardship being suffered by a child, a person in whose favour an apprehended violence order could be made or a person suffering from a disability within the meaning of the Anti-Discrimination Act 1977 who is occupying or jointly occupying the social housing premises, and … (5) If the Tribunal does not make a termination order as a consequence of subsection (3), the Tribunal must provide written reasons for the decision.
Therefore, where an application under s 91(1)(a) is made in respect of a social housing tenancy agreement and s 91(1)(a) is established, s 154D(1) means that termination of the agreement is mandatory, unless s 154D(3) applies. So if, as in this case, the tenant whose tenancy agreement a social housing landlord seeks to have terminated under s 91(1)(a) is a person who suffers from a disability within the meaning of the Anti-Discrimination Act 1977 and the Tribunal is satisfied that a termination order "would be likely to result" in the tenant suffering "undue hardship", a termination order is not mandatory. Rather, the Tribunal has a discretion as to whether to make a termination order under s 91(1)(a).
Once s 154D(3) is engaged and the Tribunal has a discretion in relation to whether to terminate a social housing tenancy agreement, the Tribunal must have regard to the factors set out in s 154E of the RTA, which provides: 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.
As stated in s 154E(2), the factors set out in s 154E(1) are not exclusive. The Tribunal may take other relevant factors into account in exercising its discretion.
Terminating a social housing tenancy agreement under s 91(1)(a) therefore involves a three stage process: 1. Determining whether the elements of s 91(1)(a) are made out. 2. If the elements of s 91(1)(a) are made out, determining whether s 154D(3) applies so as to give the Tribunal a discretion as to whether to terminate the tenancy agreement. 3. If s 154D(3) applies, exercising the discretion in relation to termination having regard to the factors listed in s 154E(1) and to any other factors relevant to the exercise of the discretion.

Interpretation and application of s 154D(3)(b) of the RT Act.

This ground of appeal turns on the meaning of "undue hardship" in 154D(3)(b) of the RT Act.
As noted above, the application to the Tribunal was brought under s 91(1)(a) of the RT Act. Section 91 applies to all residential agreements, including social housing agreements. It is not in dispute that the tenant used the residential premises for the purpose of cultivating cannabis. It is also not in dispute that cannabis is a prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985. This means that the prerequisites for termination of the tenancy agreement under s 91(1)(a) were established.
The operation of s 154D(1)(b) of the RT Act means that termination of the tenant's social housing tenancy agreement was mandatory unless s 154D(3) applies. As noted above, it was not in dispute in the proceedings that the tenant is "a person suffering from a disability within the meaning of the Anti-Discrimination Act 1977". Therefore, the Tribunal could exercise a discretion not to terminate the agreement if it were satisfied that the termination order would be likely to result in the tenant suffering undue hardship. Ground 1 turns on the meaning of "undue hardship" for the purposes of s 154D(3).
Section 154D(3)(b) does not define "undue hardship". Nor is that expression defined elsewhere in the RT Act.
In [6] of the Reasons for Decision, the Tribunal noted the lack of definition of undue hardship in the RT Act and stated: … In Liberian Shipping v King 1967 QB 86 Lord Denning MR held "Undue' . . simply means excessive. It means greater hardship than the circumstances warrant. Even though a claimant has been at fault himself, it is an undue hardship on him if the consequences are out of proportion to his fault.'
The Tribunal found at [8] of the Reasons for Decision: In determining undue hardship the Tribunal must have regard to whether the consequences are out of proportion to the tenant's fault. The tenant's fault is substantial she was cultivating cannabis on the premises for a second time whilst proceedings were on foot to terminate her tenancy for that very thing.
The tenant submits that the Tribunal erred in the construction of "undue hardship" by importing the notion of "proportion to fault" in its consideration of the statutory language.
We have considered Liberian Shipping v King 1967 QB 86 (Liberian Shipping), the case on which the Tribunal relied in determining the meaning of undue hardship.
The issue in Liberian Shipping was whether an extension of time should be granted to ship owners seeking arbitration of a dispute with charterers in circumstances where a contractual three-month time limit had been exceeded by nine days. During the three-month period the owners had been in negotiations with the charterers. The ship owners sought an extension of time under s 27 of the Arbitration Act 1950 on the ground that "it would be undue hardship to them to be time-barred" (at 95). The majority (Harman LJ dissenting) held that the term "undue hardship" in s 27 should not be construed narrowly but may extend to cases in which, even though the claimants were themselves at fault, the consequences to them of barring their claim would be out of all proportion to the fault. This was because s 27 had been enacted to remedy the injustice of clauses barring well-founded claims because of a few days' delay.
The landlord submits that the Tribunal did not err in referring to Liberian Shipping v King 1967 QB 86, noting that the meaning given by Lord Denning in this case has been considered and applied in other decisions which have considered the meaning of undue hardship. The landlord submits that there is nothing in s 154D(1)(3) of in the RT Act that would preclude the Tribunal from defining undue hardship in s 154D(1)(3) as "hardship that is excessive in the circumstances". The landlord further submits that the Tribunal's finding that it must be satisfied that the consequences of making a termination order would not be out of proportion to the tenant's fault is consistent with "undue hardship" being "hardship that is excessive in the circumstances". The landlord submits that where the person seeking to rely on the s 154D(3)(b) exclusion to s 154D(1) breached s 91 of the RT Act, the person's level of culpability must be a relevant consideration in determining whether that person may suffer undue hardship if the tenancy is terminated.
The landlord's submissions note that the meaning Lord Denning gave to "undue hardship" Liberian Shipping has been applied in other cases, including in State of New South Wales v Austeel Pty Limited [2004] NSWSC 81 (23 February 2004) (Austeel).
Austeel case also concerned an application for an extension of time to commence arbitration proceedings, such application having been made under s 48 of the Commercial Arbitration Act 1984 (NSW). Under s 48(3)(a), the Court cannot extend time unless satisfied "that in the circumstances of the case undue hardship would otherwise be caused". Bergin J stated, at [22]: 22 "Hardship" is defined in The Macquarie Dictionary, Federation Edition, The Macquarie Library, at page 865, as "a condition that bears hard upon one; severe toil; trial; oppression, or need". The New Oxford Dictionary of English, Clarendon Press, Oxford 1998, defines "hardship" at page 837, as "severe suffering or privation". "Undue" has been defined relevantly as, "not proper, fitting, or right; unjustified" and "unwarranted or inappropriate because excessive or disproportionate": The Macquarie Dictionary at 2043; The New Oxford Dictionary of English at 2017. Lord Denning MR said that undue hardship: "simply means excessive. That is greater hardship than the circumstances warrant. Even though a claimant has been at fault himself, it is an undue hardship on him if the consequences are out of proportion to his fault": Liberian Shipping Corporation v A King & Sons Ltd [1967] 1 Lloyd's Rep 302 at 307.
In this appeal there was no dispute that "undue hardship" for the purposes of s 154D(3)(b) means "hardship that is excessive in the circumstances". We agree that such an interpretation is consistent with the ordinary meaning of the phrase. However, the fact that the phrase "undue hardship" in other legislation has been interpreted to mean "hardship out of proportion to fault" does not mean that this is the correct interpretation of the phrase for the purposes of s 154D(3) of the RT Act.
In construing "undue hardship" for the purposes of s 154D(3)(b) we have considered the context and purpose of the provision. This is in accordance with the proper approach to statutory construction articulated by the High Court in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, in which the plurality stated at [69]: The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.
As noted above, s 154D(3) applies only in circumstances where an application for termination of a social housing tenancy agreement has been made under s 90 or 91 of the RT Act. Relevantly to these proceedings, it applies where s 91(1)(a) is established. As noted above, it was not in dispute in this case that s 91(1)(a) was established, in that the tenant used the residential premises for the purpose of cultivation of cannabis, which is a prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985.
There is no requirement that the use of the premises by a social housing tenant for the manufacture, sale, cultivation or supply of any prohibited drug be of any particular level of seriousness before termination of the agreement is mandatory in accordance with s 154D(1). Nor is a charge or a conviction required for s 91(1)(a) to be established. Therefore, whether a social housing tenant cultivates one cannabis plant for personal use and faces no charges or manufactures a large quantity of methamphetamines for the purpose of supply and is convicted and sentenced to a term of imprisonment, termination of the tenancy agreement is mandatory unless s 154D(3) is engaged.
The purpose of 154D(3) is to mitigate the harsh consequences of s 154D(1) for defined categories of people who occupy social housing premises in circumstances where an order for termination would otherwise be mandatory regardless of the degree of fault of the social housing tenant. For s 154D(3) to be engaged, the Tribunal must be satisfied that termination of the agreement is likely to cause undue hardship to a person who falls into one of the specified categories and who is occupying the premises. That person may or may not be the tenant. Each of these categories involves a person who may be regarded as less capable than others of dealing with the hardships that may ordinarily arise from the termination of a social housing tenancy. Section 154D(3) therefore requires specific consideration of the impact of termination of the social housing tenancy agreement on a child, a victim of domestic violence or a person with a disability.
Given that termination of a social housing tenancy agreement under s 91(1)(a) would otherwise be mandatory regardless of the tenant's degree of fault, an interpretation of "undue hardship" that involves "consequences out of proportion to the tenant's fault" is, in our view, inconsistent with the purpose of s 154D(3)(b). The Liberian Shipping line of authority concerning the meaning of undue hardship can be distinguished from the use of the phrase in s 154D(3), as the conduct of the party seeking the extension of time is clearly relevant to the reasons for a delay in commencing proceedings and accordingly to the issue of whether an extension of time should be granted.
We conclude that the Tribunal did not correctly apply s 154D(3). However, in view of our findings in relation to the other grounds of appeal, this does not affect the disposition of the appeal.

Interpretation and application of s 154E of the RT Act and exercise of the discretion under s 91 of the RT Act

In relation to these grounds of appeal, the tenant submits that the Tribunal's reasons do not refer to the fact that the discretion to terminate under s 91 is at large and that while the s 154E factors are mandatory "other factors that may be lawfully considered are not excluded". The tenant submits that "the impact of her disability and the risks attendant on termination of the tenancy" were clearly relevant considerations.
The tenant further submits that the Tribunal did not address all of the mandatory criteria set out in s 154E(1) and that to the extent that the reference to NSW Land & Housing v Raglione [2015] NSWCATAP 75 (Raglione) was an implicit reference to s 154E(1)(b), the Tribunal did not apply the correct test and drew inferences without evidence.
As noted above, the Tribunal set out its alternative findings in [9]. The Tribunal accepted, for the purpose of making alternative findings, that the tenant would suffer undue hardship if the tenancy agreement were terminated. The relevant paragraph of the Tribunal's reasons for decision is set out above.
We do not accept that the fact that the Tribunal did not specifically refer to the discretion under s 91 when it made its findings in relation to the exercise of the discretion means that the Tribunal was unaware that the s 91 discretion, once engaged, is at large. In relation to this, when the Tribunal made its findings in the alternative by assuming that the tenant would suffer undue hardship, it stated that it would consider "whether in all the circumstances including taking into account the matters set out in s 154E a termination order should be made" (emphasis added). In our view, this clearly indicates that the Tribunal was aware that it had a general discretion under s 91 and was not limited to considering the factors listed in s 154E(1).
Furthermore, we are not satisfied that the Tribunal failed to consider factors other than those listed in s 154E. In relation to the exercise of the discretion, including the s 154E factors, the Tribunal's findings can be summarised as follows: 1. There was no direct evidence of the effect of the tenancy on neighbouring residents or of adverse effects on the landlord's other tenants. However, following the reasoning in Raglione, the serious penalties Parliament has proscribed under the Drugs Misuse and Trafficking Act 1985 means that Parliament treats breaches of that Act as a serious threat to society. 2. The tenant had been in breach of the law in a significant respect by cultivating cannabis at the premises while proceedings were on foot to have her evicted for the same thing. 3. In spite of the reports in support of the tenant, the Tribunal could not find as it did previously that there was only a small likelihood that the tenant would reoffend by consuming cannabis and an even smaller likelihood that she would reoffend by cultivating cannabis at the premises. 4. There was no evidence of any other breach of the tenancy over a significant period of time. 5. Given the length of time the tenant has resided in the premises and the material in the reports submitted on behalf of the tenant, three months should be allowed for the tenant to find alternative accommodation.
We are satisfied that the Tribunal's reasons indicate that, in considering the exercise of the discretion, it considered a range of factors, including the reports provided that supported a continuation of the tenancy. We note that the content of these reports is set out in [7] of the reasons for decision. Part of [8] of the reasons for decision concerns the evidence given by the tenant at the hearing in relation to the issues raised by the reports and the Tribunal's findings in relation to that evidence.
In relation to the submission that the Tribunal did not address all of the criteria of s 154E(1), the Tribunal is not required to enquire into and specifically consider each of those matters. Rather, s154E requires the Tribunal to deal with matters that have "weight, significance or relevance": Yonan v NSW Land and Housing Corporation [2017] NSWCATAP 37 at [48]. We are not satisfied that the Tribunal has failed to have regard to relevant factors set out in s 154E(1).
In relation to the Tribunal's reference to Raglione, we accept the tenant's submission that that matter concerned the supply of methamphetamines in the form of ice and not the cultivation of cannabis. We note the cases cited by the Appeal Panel in Raglione, Gedeon v Commissioner of the NSW Crime Commission [2008] HCA 43 (4 September 2008) (Gedeon) and R v Knight, Brian and Knight, Kevin [2008] NSWDC 135 (Knight), which are referred to by the landlord in its submissions on the appeal. Neither of these cases concerned the cultivation of cannabis. Gedeon concerned the legality of the NSW Crimes Commission's authorisation of the sale of cocaine by an informant. In Knight, both of the defendants had been convicted of supplying an indictable quantity of cannabis and one of the defendants had been convicted of supplying 25.2 grams of methamphetamine.
While Raglione, Gedeon and Knight all support the proposition that the supply of drugs causes societal harm, we do not consider that these cases support the proposition that an inference can be drawn about the effect on neighbouring residents of a tenant's cultivation - as opposed to supply - of cannabis. Nor do these cases support the proposition that an inference can be drawn that neighbouring residents or other persons would suffer serious adverse effects as a result of a tenant's cultivation of cannabis.
However, a fair reading of [9] of the Reasons for Decision indicates that the Tribunal did not draw such inferences. Rather, the Tribunal found that the serious penalties Parliament has proscribed under the Drugs Misuse and Trafficking Act 1985 mean that Parliament treats breach of that Act as a serious threat to society. We are not satisfied that such a conclusion was not available to the Tribunal.
In any event, even if Parliament were to consider that cultivation of cannabis is less of a threat to society than supply of methamphetamines, the Tribunal's central finding in relation to the factors listed in s 154E(1)(a) and s 154E(1)(b) was that there was no direct evidence in relation to these issues. We are not satisfied that the fact that the Tribunal cited Raglione in its reasons for decision is demonstrative of error.
It is clear from [9] the Reasons for Decision that, central to the Tribunal's exercise of the discretion to terminate the tenancy agreement, was the tenant's continued cultivation of cannabis notwithstanding the earlier proceedings to terminate her tenancy agreement, which is expressed in [9] as follows: … The tenant has not been in breach of an order of the Tribunal but has been in breach of the law in a significant respect in cultivating cannabis at the premises whilst proceedings were on foot to have her evicted for that very thing. In this case despite the reports in support of the tenant the Tribunal cannot find as it did on the last occasion that there is only a small likelihood the respondent will reoffend by way of again consuming cannabis and an even lower likelihood she will reoffend by way of again cultivating cannabis at the premises. Having regarded to the whole of the circumstance the Tribunal is of the view that the tenancy should be terminated.
We consider that an exercise of the discretion to terminate the tenancy agreement based on this factor was entirely open to the Tribunal. The exercise of the s 91 discretion as an alternative basis to terminate the tenancy agreement did not miscarry in the House v King sense.

Adequacy of reasons

In relation to adequacy of reasons, the requirement that reasons for decision be adequate has been extensively considered both judicially and by the Appeal Panel.
In Pollard v RRR Corporation Pty Limited [2009] NSWCA 110 McColl JA, with whom Ipp JA and Bryson AJA agreed, identified the principles relevant to the adequacy of reasons. Those observations were summarised as follows in Moussa Enterprises Pty Ltd v Stanford [2015] NSWCATAP 99 at [30]: (1) The giving of adequate reasons lies at the heart of the judicial process. Failure to provide sufficient reasons promotes "a sense of grievance" and denies "both the fact and the appearance of justice having been done", thus working a miscarriage of justice. (2) The extent and content of reasons will depend upon the particular case under consideration and the matters in issue. (3) While a judge is not obliged to spell out every detail of the process of reasoning to a finding, it is essential to expose the reasons for resolving a point critical to the contest between the parties. (4) The reasons must do justice to the issues posed by the parties' cases. Discharge of this obligation is necessary to enable the parties to identify the basis of the judge's decision and the extent to which their arguments had been understood and accepted. (5) Because a primary judge is bound to state his or her reasons for arriving at the decision reached, the reasons actually stated are to be understood as recording the steps that were in fact taken in arriving at that result. Where it is apparent from a judgment that no analysis was made of evidence competing with evidence apparently accepted and no explanation is given in the judgment for rejecting it, it is apparent that the process of fact finding miscarried.
In this case, we are not satisfied that the Tribunal's reasons are inadequate. The Tribunal's findings as to the basis on which it found that the tenant would not suffer undue hardship are clear. This is also the case in respect of the Tribunal's alternative findings which relate to the exercise of the discretion.
This ground of appeal fails.

Finding of fact for which there was no probative evidence

The tenant submits that there was no probative evidence for the Tribunal's finding that termination of the tenancy would not cause the tenant to suffer undue hardship and that this finding was against the weight of evidence. In relation to this ground, the tenant refers to the reports the tenant relied on at the hearing, which pointed to the potential for serious consequences for the tenant's health if her tenancy were terminated and notes that the writers of the reports were not required for cross-examination.
However, the Tribunal's alternative basis for terminating the tenancy agreement was predicated on an assumption that the tenant would suffer undue hardship. Further, as noted above, the Tribunal summarised that evidence at [7] of the Reasons for Decision and made observations about that evidence at [8] of the Reasons for Decision. The Tribunal then gave weight to that evidence in determining the date that possession should be given.
In these circumstances, we are not satisfied that there is any substance in this ground either as a question of law, or as a basis for leave to appeal.

Conclusion

Although we have concluded that the Tribunal erred in its interpretation of "undue hardship" in s 154D(3)(b) of the RT Act, we are not satisfied that the Tribunal erred in its alternative basis for terminating the tenancy agreement. We have therefore refused leave to appeal on the ground in respect of which leave was sought and have dismissed the appeal.
The Tribunal notes that the landlord agreed not to seek enforcement of the order for possession until after the determination of the appeal proceedings. The landlord may now seek to enforce the order. It is clear that the tenant will require some additional time in which to arrange alternative accommodation. We are satisfied that six weeks is a sufficient amount of time for her to do so.

Orders 1. Leave to appeal is refused and the appeal is dismissed. 2. Order 2 made by the Tribunal on 16 January 2018 is varied as follows: 2. The Residential Tenancy Agreement is terminated and possession is to be given to the landlord on 20 November 2018.

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: 09 October 2018

Commercial Arbitration Act 1984(NSW)

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Cases Cited (12)