Sara McGuiness v NSW Land and Housing Corporation

(a) Use of the premises for an unlawful purpose 18In relation to the cash in the wardrobe, the Tribunal found that the employment of a locked cupboard for secreting stolen cash created a sufficient nexus between the use of the premises and an illegal purpose [39]. This misstated the nature of the cash, which was not stolen. It was suspected of being proceeds of crime. 19In relation to the identification material, the Tribunal made findings that: (1)documents spread across the bed indicated a system of sorting and review on the Tenant's bed [40]-[41], (2)these documents were being used to steal identities and defraud people [41]-[42], (3)in any event, the scale of the identification material found gave rise to the inference that the premises were being used for the illegal purpose of compiling and referencing the material whether by spreading those items on the bed or otherwise [44]. 20In relation to the skimmer, the Tribunal found that it was being used at the premises with "computer equipment", which, must have been a reference to the electrical leads [50] and [21], and [43]. 21The Tribunal adopted Macquarie Dictionary definitions of "use" meaning "to employ for some purpose" or to "act or behave towards, or treat in some manner" [38]. It rejected a submission by the Tenant that a "substantial connection" between use and the illegal activity was required [25]. 22The Tribunal found that the required use of the premises existed because: 50. In this particular circumstance, the respondent having pleaded guilty to the indictable offence and having been sentenced, has acknowledged her role as a principal in those activities, and which activities were conducted at least in part at the premises by virtue of the storing of the cash and the use of the skimmer device with computer equipment and the sorting and accessing of stolen identification documents. 23However, having said that, the Tribunal also said: 52. The Tribunal as presently constituted agrees with that approach and accepts that in the circumstances of this case, the storage of stolen goods including bundles of cash and the credit cards and identification information found at the premises, were a necessary part of the crimes admitted to by the respondent and which constitutes a breach of Section 91 of the Act. 24The approach the Tribunal was there agreeing with was that taken in New South Wales Land and Housing Corporation v Robertson [2008] NSWCTTT 1197. 25There is nothing in the reasons to indicate that in assessing the unlawful use of the premises for the remainder of the operation of s 91(1) of the RTA, including the exercise of the discretion to terminate, the Tribunal had regard only to this more passive use of storage of these items on the premises. On the contrary, the Tribunal's conclusions in paragraph 61, which referred to the "unlawful use of the stolen goods and equipment found" and distinguished the facts from those in Ozen and Marshall, indicate otherwise.

(b) Use is sufficient to justify termination 26The Tribunal at first instance did not make an explicit finding that the requisite use was sufficient to justify termination. However, in deciding against the Tenant on grounds that referred to the serious nature of the illegal use and purpose [58], and that the unlawful purpose was not "minor or petty" [60], it appears implicit that it did so.

(c) Discretion to order termination 27In exercising the discretion to order termination, the Tribunal took account of two factors in favour of the Tenant, namely that the premises had been leased to her for a continuous period of almost nine years in which there was no history of any previous unlawful use, and that the Tenant was residing in the premises with her children at the time of her arrest resulting in their relocation during her imprisonment [54]. 28The Tribunal referred to the Tenant's submission about becoming ineligible for social housing. It took the view that this involved "merely speculating" about the Tenant's possible options [56]. In so finding, the Tribunal pointed out that the details of the policy were not in evidence and there was no evidence of any relevant pre-determination by the Landlord as to what would occur in the event of termination [56]. 29Taking into account what it regarded as the serious nature of the illegal use and purpose and the lack of any additional factors favouring a refusal of termination, the Tribunal found that the factors favouring the Tenant were not of sufficient weight to warrant refusal of an order for termination [57].

Grounds of appeal 30The Tenant appealed on grounds that raised the following questions of law: a) The Tribunal wrongly interpreted, and misdirected itself as to the law in s.91 Residential Tenancies Act 2010. b) There was insufficient evidence to support the finding that the Premises were used for an unlawful purpose. c) The Tribunal failed to take account of a relevant consideration namely the application of the Respondent's policy which would declare the Appellant ineligible for future social housing, and her other personal history. There is no basis to disregard future events when considering the discretionary factors in s.91(2) Residential Tenancies Act 2010. d) The Tribunal wrongly considered whether there had been a breach of a statutory term of the tenancy agreement, such consideration being irrelevant to the Tribunal's decision whether to terminate the agreement under s.91. 31The matter in (b) was treated by both parties as raising a "no evidence" point and, hence, raising a question of law. 32In addition, the Tenant sought leave to appeal on other grounds including that the decision was against the weight of the evidence, was not fair and equitable and significant new evidence had arisen that was not reasonably available at the time of the hearing. 33The Tenant's principal arguments on appeal were: (1)merely having or, indeed, storing stolen goods or property reasonably suspected to be proceeds of crime on the premises is not sufficient to constitute use of the premises for an unlawful purpose or is not sufficiently serious to justify termination. In this respect, it is not sufficient that there be a passing connection with the premises, (2)there was no evidence to support the findings as to use of the premises for review and sorting of the identification documents, and to do so in order to steal identities and defraud persons, (3)there was no evidence to support the findings concerning the use of the skimmer, (4)the Tribunal should have taken account of the application of the Landlord's policy about ineligibility for social housing and its likely impact on the Tenant, but failed to do so.

(a) First ground - wrong interpretation of use of the premises for an unlawful purpose 34We were referred to a number of authorities bearing upon the meaning and application of the relevant words in s 91(1)(b) of the RTA, namely: R v Rintel (1990) 3 WAR 527; Southern Junction Youth Services Inc v Cottle [1996] SARTT 10 (22 April 1996); NSW Land and Housing Corporation v Marshall (Tenancy) [2007] NSWCTTT 575 (4 October 2007); Director of Housing v TP (Residential Tenancies) [2008] VCAT 1275 (24 June 2008); NSW Land and Housing Corporation v Robertson (Tenancy) [2008] NSWCTTT 1197 (5 August 2008); Director of Housing v TK (Residential Tenancies) [2010] VCAT 1839 (16 November 2010); NSW Land and Housing Corporation v Baldwin (Social Housing) [2013] NSWCTTT 281 (19 June 2013); NSW Land and Housing Corporation v Nihangun Ozen (19 March 2014); NSW Land and Housing Corporation v Davis (13 October 2014). 35We have also had regard to the English decisions in S Schneiders and Sons Ltd v Abrahams, [1925] 1 KB 301 and Abrahams v Wilson [1971] 2 WLR 923 both of which are referred to in Director of Housing v TK. 36There are no authorities binding upon the Appeal Panel. 37The meaning of "use" is, in our view, the ordinary meaning of "employ for some purpose", as was submitted by the Landlord (see also Rintel at 529.45) or "to avail oneself of; apply to one's own purposes": see Macquarie Dictionary. This meaning accords with the familiar concept of use of a property for residential purposes to which use for an unlawful purpose is to be contrasted. 38What will satisfy the requirement of use for an unlawful purpose will depend on the circumstances of each case. Matters of degree may be involved. 39However, there is nothing in the words, context or purpose of the statute that leads to a construction that precludes mere presence or storage at the premises of stolen items, or items reasonably suspected of being the proceeds of crime, or prohibited substances, from amounting to use of the premises for an unlawful purpose. 40To the extent that the contrary view was taken in Marshall and Ozen, we disagree with that view and agree with the view of the Tribunal in Robertson on this point. 41The language used is broad and unqualified. The section does not provide, for example, that the use is to be: (1)for the dominant purpose of the unlawful activity, (2)an essential or integral component of the unlawful purpose, (3)a substantial part, or substantially connected with, the unlawful purpose, (4)directly related to the unlawful purpose. 42The use for an unlawful purpose need not displace use of the premises for residential purposes. The uses can co-exist. 43As Malcolm CJ said in Rintel (at page 530.3), use for residential purposes involves use for a variety of purposes, including shelter, eating, sleeping, storage of goods, recreation and even taking a bath. 44In this company, keeping stolen goods, or goods suspected to be proceeds of crimes, even if openly on display (as some goods were in Marshall) is an additional, but unlawful use. As is also, very clearly, using the premises for the operation of an illegal brothel. 45On the other hand, the connection between the premises and the unlawful purpose may be so limited that it is not sensible to say that the premises were employed, or availed of, for an unlawful purpose. 46An example can be taken from the facts of this case. The Tenant's possession of cash in the sum of $1,100 in her handbag found at the premises, suspected of being proceeds of crime, had some connection with the premises. However, on these facts alone, the premises, as distinct from the handbag, were not employed or availed of for an unlawful purpose. 47On the other hand, had it been established that the cash in her handbag was at the premises because it was about to be placed in a safe installed at the premises then, in our view, the required use would exist. 48In some cases it may be said that the required use of the residential premises does not exist because the premises are merely the scene of the crime. In Schneiders case, Bankes LJ (at page 307.3) gave the example of an assault on someone who happened to be on the premises. He doubted that this would constitute use of the premises for an illegal purpose. 49We share such doubt. On the other hand, if the victim of the assault had been lured to the premises so that the assault could be carried out there, a different answer may well be given. 50There is no reason why a passing connection with the premises could never suffice. For example, if stolen goods were harboured at the premises for five minutes on their way to another destination this would, in our view, still be use of the premises for an unlawful purpose. 51In the operation of s 91(1)(b), there is then a separate question whether such use is sufficient to justify termination. Yet further, there is the question whether to make the termination order. In that regard, the Tribunal may consider the nature of the unlawful use: s 91(2)(a). 52This structure of the section supports an extensive operation for the first part of s 91(1)(b). The first part is broad, but whether it leads to termination is dependent upon additional controls. 53For the above reasons, in our view the Tribunal in Marshall erred in concluding: (1)It would seem likely that as the words, "in connection with" are absent from section 23(1)(a), a substantial connection between the illegal purpose and the use, in a common sense way, is required when interpreting section 23(1)(a) of the Residential Tenancies Act 1987 (page 7.9). (2)That a direct relationship between the offence and the premises was required (page 10.4). 54Furthermore, in arriving at these conclusions, the Tribunal in Marshall was influenced by some of the reasoning in Rintel concerning a differently expressed provision and one that was concerned with the forfeiture of property. With respect, it erred in taking this approach (in particular, at page 7.8 and page 10.4 of Rintel). The reference in Rintel to a direct relationship between the use of the premises and the offence concerned only that part of the provision in that case that spoke of use of the premises "in the commission ... of the offence" (at page 529.25). 55In the circumstances, we can discern no error in the Tribunal's interpretation of these words in s 91(1)(b). In particular, in our view, the Tribunal did not err in: (1)rejecting the submission that the Tribunal had to find that there was a "substantial connection" between the illegality and the use of the premises, (2)finding that the storage of material at the premises, including cash and identification information, did amount to use of the residential premises for an unlawful purpose.

(b) Second ground of appeal - no evidence to support findings of unlawful use 56It should be noted that there was no challenge to the Tribunal's factual findings of storage of cash and other items. 57Findings of the Tribunal in relation to the identification information and the skimmer are challenged on the "no evidence" basis. 58There will be an error of law where an inference of fact was not open to be drawn: Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 356 per Mason CJ; Bruce v Cole (1998) 45 NSWLR 163 at 187G per Spigelman CJ.

(i) The identification information 59Three aspects of the findings concerning the identification information are challenged on appeal. First, the finding that documents spread across the bed indicated a system of sorting and review of the documents. Secondly, the finding that these stolen papers were being used to steal identities and to defraud persons. Thirdly, the finding that the premises were being used for the purpose of compiling and referencing the identification information. 60In our view, these findings went too far and were not open to the Tribunal on the material before it. We have come to this conclusion based on the totality of the evidence about the identification information. 61The Tribunal should have confined the findings in respect of these items to the keeping of the information and review of some of it by the Tenant at the premises. 62Such activity was, in our view, a use of the premises for an unlawful purpose within the meaning of s 91(1)(b). 63To paraphrase, the Tenant had pleaded guilty to possession of this identification information with intent to defraud. As noted earlier, she had not been charged with any offence relating to the use of the information. 64The only additional evidentiary material before the Tribunal on this subject, beyond the Tenant's admission and conviction, was that: (1)the identification information related to more than 100 people, (2)documents and cards containing the information had been found in the Tenant's bedroom, (3)many of the documents containing this information were strewn across the double bed in the bedroom, (4)other documents containing this information were on the floor and in the backpack in the Tenant's bedroom, (5)the credit cards were assembled, in an ordered fashion, in a folder found on a bedside table in the Tenant's bedroom. 65In conjunction with her admission, these additional facts establish that the Tenant had the means and intent to use the information to defraud but do not permit an inference to the Briginshaw standard that the Tenant was actually using the information to do so or that she had a system of sorting or use of the information, or was compiling and referencing the information. 66The Tribunal did not utilise the evidence about the skimmer or the electrical leads in arriving at these findings about the identification information. For the reasons concerning these other items below, evidence concerning them was incapable of being of any assistance in relation to findings about use of the identification information. 67An additional submission is made by the Tenant that DSC Lavender's evidence about the location of documents on the Tenant's bed may not have been where the documents were when first found during the execution of the search warrant. It is unclear, it is said, that he was in the room at this time. The submissions surmise that it may have been the searching officers who placed the documents on the bed. 68However, nothing in the statement or oral evidence of DSC Lavender has been drawn to our attention in support of this submission and it was not put to DSC Lavender in cross-examination. We do not accept this submission.

(ii) The skimmer 69The Tenant challenges the finding of the Tribunal in relation to the use of the skimmer and the electrical leads (see in paragraph 20 above). 70No charges and no admissions were made in relation to the skimmer and the electrical leads. 71The evidentiary material before the Tribunal in relation to these items was sparse, vague and incomplete. In this respect, we repeat our analysis in paragraph 16(3), (4), (5) and (6) above. 72On this material, it was not open to the Tribunal to make these findings.

(c) Third ground of appeal - error in relation to the discretion to order termination/the Landlord's ineligibility policy 73The Tenant submits that the Tribunal failed to take account of a relevant consideration, namely the Landlord's policy about ineligibility for social housing where a tenancy is terminated on the basis of use of the premises for an unlawful purpose. 74Clearly, in many, cases the impact on the Tenant of a termination order will be considered by the Tribunal in the exercise of its discretion whether to make such an order. Nothing in the statute precludes such consideration: Cain v New South Wales Land and Housing Corporation [2014] NSWCA 28 at [39]. 75Section 91(2) does not expressly mandate that such impact be considered but it does not preclude its consideration. The matters there referred to as open for consideration do not refer to this matter, but it is expressly stated that the Tribunal is not confined to the consideration of the three listed matters. 76In our view, impact on the Tenant of termination and, hence, material about future ineligibility for social housing is not a mandatory, relevant consideration. It is not explicitly said to be. We do not detect that it be so by implication: see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 40.4. 77Whilst such a matter appears as an obvious potential consideration, it is of some significance that three matters are specifically identified and impact on the Tenant is not one of them. It also occurs to us that there may be cases, for example, in circumstances where the unlawful use is grave, that impact on the Tenant becomes irrelevant. In its submissions, the Tenant does not identify any factors from which an implication that the Tribunal is bound to take this matter into account is said to arise. 78However, that is not the end of the matter so far as the Tenant's grievance is concerned. In our view, in the circumstances of this case, the matter of impact on the Tenant of termination and, hence, material concerning future eligibility for social housing was a legitimate, available consideration, albeit not an obligatory one: Neat Domestic Trading Pty Ltd v AWB Ltd (2003) 216 CLR 277 at [20]. This was so, despite the absence of any evidence from the Tenant as to the consequences to her of termination, although the absence of such evidence reduced the force of her position. 79We do not agree with the Tribunal's conclusion that it would be "merely speculating" about the Tenant's possible options: at [56]. This was a conclusion that appeared to be based upon the absence of any details of the policy before the Tribunal and because there had been no relevant pre-determination by the Landlord. 80We accept, as was submitted by the Landlord on the appeal, that the policy will not and cannot determine whether the Tenant obtains other social housing in the event of termination of her current tenancy. However, as the Landlord put to the Tribunal below [35], the situation was one in which the occupant is likely to be categorised as ineligible for social housing. There must be, at least, a substantial risk that this would be the result. 81In view of what the Tribunal was told by the Landlord about the effect of the policy, the absence of the detail of the policy in evidence appears to be of little significance. It should not have been a reason for the "merely speculating" conclusion. In any event, it was open to the Tribunal to require that the policy be produced to it: see s 38(6)(a) of the Civil and Administrative Tribunal Act 2013 (the Act). 82The policy was sought to be adduced by the Tenant on appeal and relied upon as a ground for leave to appeal on the basis that it was new evidence. 83At the hearing of the appeal, we examined the policy. However, it was not established that the evidence was not reasonably available at the time of the hearing at first instance, as required by cl 12(1)(c) of Schedule 4 of the Act. In the circumstances, we refuse leave to appeal on this ground. 84However, in our view, in exercising its discretion whether to terminate, the Tribunal mistook the facts about the significance of this policy. The policy meant that it was likely that the Tenant would be ineligible for social housing or there was a significant risk she would be. The options for the Tenant were not a matter of mere speculation. 85This is an error affecting a discretion of the kind referred to in House v The King (1936) 55 CLR 499 at 505.2. It is not an error on a question of law as provided for in s 80(2) of the Act. Leave to appeal on this ground is, therefore, required. 86In our view, such leave should be granted. The Tenant may have suffered a substantial miscarriage of justice because the decision at first instance was not fair (cl 12(1)(a) of Schedule 4 of the Act), particularly where the error on this issue is assessed in the light of other errors we have identified concerning findings of unlawful use of the premises (see further in paragraphs 95 to 97 below).

(d) Remaining grounds of appeal 87We have now dealt with all grounds of appeal, save for the following two matters.

(i) It was irrelevant to consider that there had been a breach by the Tenant of s 51(1)(a) of the RTA and the tenancy agreement 88The Tenant argued that it was an irrelevant consideration for the Tribunal to take account of the fact that its findings about unlawful use of the premises meant that the Tenant had breached her statutory obligation under s 51(1)(a) of the RTA not to use the premises for any illegal purpose, and her contractual obligation in clause 7.1 of the tenancy agreement to the same effect. 89We see nothing in this argument. No reason was advanced why this was a matter precluded from consideration in the exercise of the discretion whether to terminate. We see no reason why it should be so precluded. In any event, such findings do not appear to have been material to the Tribunal's exercise of its discretion.

(ii) Other new evidence 90Leave to appeal is needed in respect of this ground. 91On the appeal, the Tenant sought to rely on a report by Anand Narayanan dated 31 March 2014, received by the Tenant's legal representatives on 30 June 2014, concerning the Tenant's drug dependency and her favourable behaviour at the Dillwynia Correctional Centre. It was a report requested on 19 February 2014 by Magistrate Huber of the Local Court, Waverley in connection with the two offences relevant to these proceedings. 92The Tenant seeks leave to appeal on the ground that this report is significant new evidence not reasonably available at the time the proceedings under appeal were being dealt with. 93Bearing in mind the hearing date of 1 July 2014, the short answer to this point is that the Tenant has failed to establish that this material was not reasonably available at the relevant time.

Outcome of Appeal 94The Tribunal was correct in making findings of use of the premises for unlawful purposes in so far as those findings were at the level of use of the premises for the storage or keeping of cash and identification information and, to an extent, the review of some of that identification information at the premises. 95However, the Tribunal was not entitled to make the more extensive findings that it proceeded to make about the unlawful use of the identification information and the skimmer at the premises. 96In addition, the Tribunal erred in concluding that it was mere speculation what the impact of termination would be to the Tenant having regard to the Landlord's policy concerning ineligibility for social housing. 97Taken together, we do not conclude that these errors were inconsequential and could not have materially affected the outcome: D'Amore v Independent Commission Against Corruption [2013] NSWCA 187 at [233]. 98In the circumstances, the appeal should be allowed and the whole of the case reconsidered by the Tribunal as constituted by the same Member.

Orders on Appeal 99The orders of the Appeal Panel are as follows: (1)Leave to appeal be granted in respect of the ground of appeal relating to the impact on the Tenant of the Landlord's policy about future ineligibility for social housing. (2)The appeal be allowed. (3)Set aside the orders of the Tribunal at first instance terminating the tenancy agreement and entitling the Landlord to possession of the premises effective immediately. (4)The whole of the case be reconsidered by the Tribunal constituted differently from the Tribunal at first instance. 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. 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: 04 December 2014