Wallace v New South Wales Land and Housing Corporation [2019] NSWCATAP 234 | Case summary

NCAT Appeal Panel|2019-09-02

Background

This appeal arises out of a decision made in the Consumer and Commercial Division terminating a residential tenancy agreement. The appellant was the tenant and the respondent to the appeal was the landlord. In June 2019 the Tribunal made orders terminating the tenancy agreement between the appellant and the respondent in accordance with s 91(1)(a) of the Residential Tenancies Act, 2010 (RT Act) and ordered the appellant to pay an occupation fee to the respondent from the date of termination to the date vacant possession was given. A Notice of Appeal was filed and served within time and subsequently an amended Notice of Appeal was filed and served. The appellant relies upon the amended Notice of Appeal.

The decision under appeal

We will refer to the decision under appeal as the "Decision" and in the following subparagraphs summarise the reasons contained in the Decision: 1. The respondent filed an application in the Tribunal seeking termination of the tenancy due to the unlawful use of the premises by the appellant or an occupant pursuant to s 91 of the RT Act. The respondent relied on a number of documents recorded in the Decision including a document called a Neighbourhood Impact Statement. The Decision also records the documents filed by the appellant; 2. The Decision records that the appellant conceded the breach of the residential tenancy agreement by supplying prohibited drugs from the tenanted premises. The appellant entered into the residential tenancy agreement with the respondent in April 2000 and has resided in the premises without any "significant breaches of the tenancy agreement until 2017 when she commenced selling cannabis from the premises". In late 2017 the appellant operated a significant drug supply operation from the premises supplying cannabis to as many as 100 customers per day between 7am and 8am and 8:30pm; 3. In July 2018 the police executed a warrant at the premises and the appellant was observed by a police officer seated at the dining table weighing cannabis and placing it into individual bags. The appellant was charged and later pleaded guilty to the offence of supplying not less than 1kg of cannabis and dealing with the proceeds of crime. In February 2019 she was sentenced to a term of full-time custody for a period of 22 months with a non-parole period of 11 months. We were informed at the hearing of the appeal that since the publication of the Decision, the appellant's sentence has been altered to one by which home detention has been imposed; 4. The Decision records that the appellant has made a significant financial gain from her illegal activity; 5. It was conceded by the appellant that she breached her tenancy agreement by supplying prohibited drugs from the premises. The Tribunal found that the criteria for termination under s 91(1)(a) of the RT Act had been established. The Tribunal found that the appellant had intentionally caused or permitted the use of the residential premises for the purpose of the sale or supply of a prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985; 6. The Tribunal found that the appellant was a person who suffers from a disability within the meaning of the Anti-Discrimination Act 1977 and that she would suffer undue hardship if a termination order were made. Consequently, having regard to s 154D(3)(2) of the RT Act, the Tribunal had a discretion as to whether to make a termination order under s 91(1)(a) of the RT Act taking into account the matters in s 154E of the RT Act; 7. The Decision records that counsel for the appellant submitted that the only evidence relevant to s 154E(1)(a) (which concerns the effect the tenancy has had on neighbouring residents or other persons) was evidence in the form of witness statements from the appellant's neighbours and that the Tribunal should give considerable weight to that evidence. The Decision then records briefly the effect of approximately five statements from witnesses whose statements speak favourably of the appellant; 8. The respondent tendered a Neighbourhood Impact Statement which the Decision records as detailing complaints from neighbours about noise issues with people entering and exiting the building, drug supply activity, tenants being abused, harassed and intimidated by drug affected visitors and neighbours, threats of violence and general disruption to the peace and harmony in the complex; 9. The Decision records that the appellant's evidence confirmed that up to 100 people a day could attend her premises to purchase cannabis and that she was aware that selling drugs contributed to antisocial behaviour; 10. At paragraph 67 of the Decision the Tribunal stated that it preferred the evidence of the respondent to that of the appellant concerning the effect of the behaviour on the neighbourhood described in the preceding paragraph [66]. Specifically, the Decision states that the witness statements tendered by the appellant are "more character references rather than dealing with the issue of the effect of the illegal activity on them". The Tribunal noted that there is little or no reference in the statements to the drug dealing or its impact on the appellant's neighbours"; 11. The Decision also noted that it was significant that each of the persons who provided a witness statement was not a client of the appellant and may not have been aware of the full extent of her illegal activity. Further, the summary of complaints in the Neighbourhood Impact Statement are "more credible and I am satisfied on the basis of that evidence that the illegal activity has had a significant and adverse impact on neighbouring residents for at least a six month period. I find the summary of complaints compelling and accept that evidence of antisocial behaviour as a true indication of the impact on the neighbours" [69]; 12. The Decision went on to deal with evidence relevant to ss 154E(b), (c), (d) and (e); and 13. The Tribunal stated that having considered the facts set out in s 154E there was sufficient evidence to satisfy the Tribunal that the appellant would suffer hardship if the tenancy were terminated and, notwithstanding that the tenant would suffer undue hardship, the Tribunal declined to exercise its discretion under s 154E.

The Grounds of Appeal recorded in the amended Notice of Appeal

The appeal was based upon two errors of law. Leave to appeal was not sought in respect of the factual findings.

Ground 1

The Tribunal failed to apply s 154E(1)(a), (b) and (e) correctly and so failed to take into account mandatory relevant considerations: 1. the legislative requirement was to take into account the effect of the tenancy on neighbouring residents or other persons. The Tribunal unduly narrowed the paragraph (and associated considerations) to take into account only the effect of the illegal activity on neighbours; and 2. the Tribunal explicitly rejected evidence of the effect of the tenancy generally, which demonstrates the failure to take into account mandatory relevant considerations.

Ground 2

The Tribunal erred in the application of s 154F(1) by taking into account a purported neighbourhood impact statement that did not comply with s 154(2)(a).
The appellant sought orders for the appeal to be upheld and for the proceedings to be remitted to a differently constituted Tribunal for determination according to law.

Reply to Appeal

The respondent has filed a Reply to Appeal seeking orders that the appeal be dismissed.

Appellant's submissions

The appellant's submissions (made in writing prior to the hearing of the appeal and orally at the hearing) may be summarised as follows: 1. Section 154E of the RT Act provides that in considering whether to make a termination order for a social housing tenancy agreement, the Tribunal must have regard to the matters set out in subsections (a), (b), (c), (d) and (e). These are mandatory considerations; 2. The concept of the effect the tenancy has had or will have in the future on neighbouring residents or other persons in these subsections is not capable of being construed as limited to negative implications. Rather, the contrary intention is claimed by the breadth of the language used; 3. The matters to be considered under s 154E(1) involve a balance of factors intended to be weighed against each other in consideration of whether there is sufficient justification to terminate a social housing tenancy agreement. To limit consideration of any of these factors to purely negative impacts of the tenancy on neighbours would tilt that balance to the point of frustrating the purpose of providing a discretionary power over termination; 4. The effect of paragraphs [67] to [68] of the Decision shows that the Member failed to apply s 154E(1)(a) having regard to this proper statutory context. The criticism of the Tribunal was that the evidence led for the appellant was more "character references than dealing with the issue of the effect of the illegal activity". It is clear from this that the Tribunal considered that the "issue" under s 154E(1)(a)) concerned only the effect of the illegal activity upon neighbouring residents. It was for this reason that the Tribunal rejected evidence that demonstrated a favourable effect of the tenancy on neighbouring residents and other people. This was both to fail to ask the correct question regarding the content of s 154E(1)(a) but also to then fail to take into account that evidence as directed by the content of that paragraph; 5. With respect to Ground 2, the appellant submitted that the effect of s 154F(1) was to prescribe the content of the document known as a neighbourhood impact statement for the purpose and effective operation of the provision. It is a "summary of statements made by neighbouring residents". The appellant submitted that a document not properly answering the description of a neighbourhood impact statement under s 154F(2)(a) cannot be taken into account under s 154F(1). This is due to the express words of the provision and because taking into account something other than a neighbourhood impact statement as properly defined does not assist the Tribunal to achieve the purpose of the provision; and 6. The particular document upon which the Tribunal placed great weight (see paragraph [69]) did not answer to the description of a neighbourhood impact statement for the purpose of s 154F(2)(a). That document was not a summary of statements made by neighbouring residents, nor did it include the information necessary for the Tribunal to be properly informed of the relevant matters under s 154E(1)(a). It was an unfocused compilation of general information about the building and surrounds prepared by an employee of the respondent based upon general records.

Respondent's submissions

The written and oral submissions of the respondent may be summarised as follows: 1. Section 154E(1) does not require the Tribunal to enquire into and consider each of the matters prescribed in that subsection but "rather to deal with matters that have weight, significance or relevance" (see: Yonan v NSW Land and Housing Corporation [2017] NSWCATAP 37 at [48]); 2. The appellant asserts that the concept of "tenancy" under s 154E(1)(a), (b) and (d) is not capable of being construed as limited to "negative implications" and the appellant refers to the decisions of Coffs Harbour and District Local Aboriginal Land Council v Lynwood [2017] NSWCA 317 and Orr v New South Wales Land and Housing Corporation (No 2) [2018] NSWSC 1909 in support of that contention. However, neither of these decisions speak to the issue raised by the appellant; 3. On the evidence deployed by the appellant, it was open to the Tribunal to regard the material led by the appellant as no more than character references of the appellant on the issue of what effect the tenancy has had on the neighbouring residents or other persons; 4. Although the appellant submitted that the term "effect" within s 154E(1)(a) should be given a neutral reading, such an interpretation is not consistent with the surrounding criteria of s 154E(1)(a) namely consideration of:

"Serious adverse effects in the future if the tenancy is not terminated (see: s 154E(1)(b));
"The landlord's responsibility to its other tenants" (being a reference to the landlord's liabilities in relation to anti-social behaviour of the tenant) (see s 154E(1)(c));
"Whether the tenant wilfully or otherwise is, or has been in breach of an order of the Tribunal" (being further reference to the conduct of the tenant in a negative context). 1. To the extent that the above submissions are not accepted, the respondent submitted that the Tribunal's pathway of reasoning supports the conclusion the Tribunal merely engaged in the weighing up exercise consistent with Appeal Panel authority when considering the effect the tenancy had on other neighbouring residents. It was open to the Tribunal to accept the summary of complaints in the neighbourhood impact statement when addressing the issues contained within s 154E(1)(a) of the RT Act and reject and/or categorise the appellant's evidence in the way that it did; 2. In respect of Ground 2, the respondent submitted that the appellant's description of the neighbourhood impact statement overlooks Parliament's intention which was described in the relevant Minister's Second Reading Speech to Parliament. The Minister's speech was to the effect that neighbours will be able to have a confidential discussion about what is happening with a family and community services officer and will be able to table a statement outlining the impact of the anti-social or illegal behaviour on the local community. The source will not be identified and the weighting of this evidence is still a matter for the Tribunal. The criticisms raised by the appellant are without substance as the substantive content of the neighbourhood impact statement addresses the social impact of the tenancy, the environmental impact of the tenancy, the financial impact and the economic impact of the tenancy and the impact on local facilities/services/schools; 3. The respondent submitted that the Tribunal did not err in taking the neighbourhood impact statement into account; and 4. The respondent seeks the dismissal of the appeal with costs.

Appellant's Submissions in Reply

Counsel for the appellant submitted in reply that the respondent's submissions that the Tribunal merely categorised evidence is a submission without adequate meaning and does not address the statutory direction of the section which is to require the Tribunal to have regard to the effect the tenancy has had on neighbouring residents.
In addition, the appellant submitted in reply that some facts contained in the neighbourhood impact statement were not consistent with the proven facts and if that statement had been excluded, it is not possible to say what decision the Tribunal would have come to. The appropriate course is to order that the application be remitted back to the Consumer and Commercial Division for a rehearing.

Decision

We are of the opinion that the appeal should be dismissed and in the following paragraphs set out our reasons.

Ground 1

We accept the force of the appellant's submissions that the matters to which the Tribunal must have regard under s 154E(1) are not limited to matters of a negative nature such as the effect of the illegal activity of a tenant. Rather, under s 154E(1)(a) the Tribunal must have regard to the "effect the tenancy has had on neighbouring residents or other persons", which may include, in our opinion, any beneficial effects that the tenancy has had.
However, notwithstanding the view expressed in the above paragraph, we are of the opinion that the Tribunal did not limit itself to negative implications (to use the language of the appellant's submissions). It is clear from paragraphs [67] and [68] of the Decision that the Tribunal preferred the evidence of the respondent (in particular, the neighbourhood impact statement to which we will refer later in these reasons) to the evidence put forward by the appellant, namely the witness statements. The witness statements were not preferred because they did not address or did not address adequately the appellant's drug dealing or its impact on the appellant's neighbours. The Tribunal found at [80] that each of the persons who provided a witness statement was not a client of the appellant and may not have been aware of the full extent of her illegal activity. We interpret the Tribunal to have taken into account the witness statements but then explained why they ought not be preferred in evaluating the overall effect the tenancy has had on neighbouring residents and other persons and whether the tenancy should continue or be terminated. In essence, that was because there was no evidence that the favourable view of the appellant as expressed in the witness statements was a view held notwithstanding knowledge of the illegal activity. The criticism of the references as not dealing with the "issue of the effect of the illegal activity" as expressed in [67] was a conclusion by the Tribunal as to the worth of those witness statements in the context of all of the evidence as opposed to a statement to the effect that those statements were not to be considered in the context of addressing the requirements of s 154E(1)(a).
In short, despite some witnesses speaking favourably of the appellant as a tenant and neighbour, the "significant adverse impact" arising from the appellant's drug dealing activities justified termination of the tenancy.

Ground 2

The issue of the admissibility of the neighbourhood impact statement not complying with s 154F(2)(a) does not appear to have been raised in the proceedings at first instance. However no point was taken by the respondent in this appeal.
In any event, we are of the opinion that the neighbourhood impact statement relied upon in these proceedings was a statement meeting the requirements of s 154F. It contained a summary of statements made by neighbouring residents or other persons relevant to the requirement for the Tribunal to have regard to the effect the tenancy has had on them as required by s 154F(2)(a).
The neighbourhood impact statement was completed by a person employed by the respondent who is described as a client service officer. She states that she believed the evidence to be true and correct based upon direct knowledge and experience or based upon reasonable investigations.
The statement makes clear on page 1 that it is in respect of the appellant, her name being recorded beside the words "Tenant details". The statement contains statements recording complaints from neighbours. We do not agree with the suggestion by the appellant that the statement is in general terms rather than referencing the appellant and particular activities specifically attributed to her in and around her premises and or that the statement is no more than indicative of illegal activities on and around the subject premises.
It is clear from the statement that it was intended to provide a summary of the effect the appellant's admitted illegal activities had on the neighbours and other persons. In doing so, the statement put this activity in context, namely there is a significant impact on the environment because of drug dealing and other illegal activities in and around the premises. It is also clear the statement was a summary of statements made by neighbouring residents and other persons on these matters, without identifying those particular people.
The rules of evidence do not apply to render the statement inadmissible because of its form. The author is identified and it is not suggested the facts recorded in the statement are untrue.
It was not suggested by the appellant that the Tribunal's conclusions at [69] were not reasonable having regard to the statements summarised in the neighbourhood impact statement. Paragraph [69] includes the finding that on the basis of the evidence contained in the neighbourhood impact statement the appellant's illegal activity has had a significant adverse impact on neighbouring tenants for at least a six month period.
The neighbourhood impact statement contained some information not relevant to the allegations against the appellant. For example, it contained reference to "drug paraphernalia (syringes, plastic bags etc.) in gardens, drains and gutters". Although that factual material might not be attributable to the illegal, activities of the appellant, it places the activities of the appellant in the relevant neighbourhood.
Further, there is no suggestion that the Tribunal was influenced by or based any finding about the appellant and her tenancy upon the conduct of other people carrying out illegal activities in the same location and the inclusion of that material does not render the statement as inadmissible.
In short, it is our view that the appellant's submissions that the neighbourhood impact statement did not answer to the description required for such a statement in accordance with s 154F(2)(a) should be rejected. In particular, the assertion that the statement was based upon "general records" is not supported by the specific description of the neighbour complaints as recorded in the statement when the statement is read as a whole.

Conclusion

For the above reasons, it is our view that the appropriate order is to dismiss the appeal. We note that the respondent seeks costs of the appeal has not provided submissions to support this application
Our preliminary view is that no order should be made. However we propose to make directions for written submissions to be provided in relation to any application by the respondent.

Orders

The Appeal Panel makes the following orders: 1. Appeal dismissed; 2. If the respondent seeks costs of the appeal it must file and serve a submission in support within 7 days of the date of publication of these orders; 3. The appellant may file and serve submissions in opposition to the respondent's costs submissions within 14 days of the date of publication of these orders; 4. The respondent is to file and serve any submissions in reply within 21 days of the date of publication of these orders 5. The submissions should address the question of whether the Appeal Panel may consider the question of costs on the papers and dispense with a hearing.

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: 20 September 2019

Wallace v New South Wales Land and Housing Corporation

At a glance

Court

Decision date

Source

Judgment (15 paragraphs)

Parties

Cases Cited (3)