Wallace v NSW Land and Housing Corporation

1. [1]

   HER HONOUR: The plaintiff seeks both a judicial review and an appeal of the whole of a decision of the NSW Civil and Administrative Tribunal dated 14 June 2019.

2. [2]

   By amended summons filed 1 November 2019, the plaintiff seeks, firstly, an order that leave be granted appeal from the whole of the decision below under s 83(1) Civil and Administrative Tribunal Act 2013 (NSW) (“the CAT Act”); secondly, the appeal be allowed; thirdly, that the decision orders of the Appeal Panel be set aside; thirdly, that the decision and orders of the Tribunal in proceedings SH18/34659 be set aside; fourthly, that the proceedings SH18/34659 be remitted to a member other than the original deciding member; and finally, in the alternative to orders (1) to (5), an order under s 69 of the Supreme Court Act 1970 (NSW) in the nature of certiorari to quash the appeal decision and original decision and remit the proceedings to the Tribunal.

3. [3]

   The plaintiff is Vicki Wallace. The first defendant is the NSW Land and Housing Corporation (“Housing NSW”). The second defendant is NSW Civil and Administrative Tribunal (“NCAT”). NCAT filed a submitting appearance. The parties relied upon their joint court book filed 20 November 2019.

Background

1. [4]

   In April 2000, Housing NSW and the plaintiff entered into a residential tenancy agreement (“the tenancy agreement”) for premises at XX/XX Walker Street, Redfern (“the premises”).

2. [5]

   Clause 7.1 of the tenancy agreement provided that the tenant was not to use, cause or permit the premises to be used for any illegal purpose.

3. [6]

   From April 2000, the plaintiff resided in the premises continuously without any significant breaches of the tenancy agreement until late 2017, when she began to sell cannabis from the premises.

4. [7]

   Around that time, the plaintiff began to run a drug supply operation from the premises, supplying cannabis to as many as 100 customers per day between the hours of 7.00 am or 8.00 am to 8.30 pm. She was assisted in this operation by her partner, Mikaele Saili, who resided with her at the premises.

5. [8]

   In September 2017, the police executed two surveillance warrants targeting the suppliers of prohibited drugs to the Redfern area. As a result of the investigation, the plaintiff and her partner came to the attention of the police.

6. [9]

   On 4 July 2018, the police executed a crime scene warrant at the premises. A police officer observed the plaintiff seated at the dining room table weighing cannabis and placing it into individual bags. The plaintiff was arrested and conveyed to Redfern Police Station, where she was charged with six counts of supply of a prohibited drug under the Drug Misuse and Trafficking Act 1985 (NSW).

7. [10]

   In February 2019, the plaintiff pleaded guilty to the offences of supply not less than one kilogram of cannabis and dealing with the proceeds of crime.

8. [11]

   On 4 February 2019, Local Court Magistrate Huntsman sentenced the plaintiff to a term of full-time custody for a period of 22 months, with a non-parole period of 11 months. The plaintiff appealed the sentence on the grounds of severity.

9. [12]

   On 18 March 2019, the appeal was heard by her Honour Judge Syme at the Sydney District Court. Her Honour accepted that the sentence was excessive and indicated that it was her intention to make an Intensive Correction Order. It is a requirement for the making of such an order that plaintiff have a permanent residence which is able to be assessed by Community Corrections. The final determination of the District Court appeal has been adjourned pending the outcome of this application.

10. [13]

    On 30 April 2019, the plaintiff’s application for termination was heard by Tribunal Member Kinsey (“the Primary Member”) in proceedings SH18/34659. On 14 June 2019, the Primary Member handed down his written reasons for decision (“the Primary Member’s decision”). He ordered that the tenancy agreement was terminated and that the order for possession was suspended until 12 July 2019.

11. [14]

    On 28 June 2019, the plaintiff lodged her appeal.

12. [15]

    On 2 September 2019, the plaintiff’s appeal was heard by an Appeal Panel consisting of Deputy Presidents S Westgarth and M Harrowell (“the Appeal Panel”).

13. [16]

    On 20 September 2019, the Appeal Panel handed down written reasons for its decision (“the Appeal Panel’s decision”). It dismissed the appeal.

Relevant legislation

1. [17]

   Before I turn to set out the reasons for the decisions of the Primary Member and the Appeal Panel, it is convenient that I set out the relevant legislation in the Residential Tenancies Act 2010 (NSW).

2. [18]

   Section 81 of the Residential Tenancies Act sets out the circumstances under which a residential tenancy terminates under the Act. It reads:

3. [19]

   Section 91 of the Residential Tenancies Act reads:

4. [20]

   Section 154D of the Residential Tenancies Act relevantly reads:

5. [21]

   Sections 154E and 154F of the Residential Tenancies Act read:

The decision of the Primary Member

1. [22]

   On 14 June 2019, the Primary Member handed down written reasons for his decision in relation to the termination of the plaintiff’s tenancy agreement. He began by setting out the evidence of the parties and the factual background of the case, as I have summarised earlier in this judgment. He then set out the parties’ submissions.

2. [23]

   At [36] of the decision, the Primary Member stated that Housing NSW sought a termination order pursuant to s 91 of the Residential Tenancies Act. He stated at [38] that there was no dispute and that it was conceded by the plaintiff that she had breached her tenancy agreement by supplying prohibited drugs from the premises. He then made a determination at [39] that the elements under s 91(1)(a) had been made out. That finding is not in dispute.

3. [24]

   The Primary Member at [44] set out s 154D of the Residential Tenancies Act, extracted earlier in this judgment. At [49], the Primary Member found that the plaintiff was a person suffering from a disability within the meaning of the Anti-Discrimination Act 1977 and that she would suffer undue hardship if a termination order was made. These submissions had been conceded by Housing NSW at the hearing before the Primary Member and are not in dispute in these proceedings.

4. [25]

   At [50] of his decision, the Primary Member stated:

5. [26]

   In applying s 154E of the Residential Tenancies Act, the Primary Member stated at [52]-[53]:

6. [27]

   The Primary Member’s reasons which, are of particular relevance to this application to appeal appear at [55]-[64] of the decision, where he turned to consider the prescribed matters in s 154E of the Residential Tenancies Act. They are as follows:

7. [28]

   The Primary Member then set out s 154F of the Residential Tenancies Act, which has also been reproduced earlier in this judgment. The Primary Member continued at [66]-[69]:

8. [29]

   The Primary Member concluded at [103]-[106]:

9. [30]

   The Primary Member then made an order that the plaintiff’s residential tenancy agreement be terminated under s 91(1)(a) of the Residential Tenancies Act.

The decision of the Appeal Panel

1. [31]

   On 20 September 2019, the Appeal Panel dismissed the plaintiff’s appeal and gave written reasons for decision.

2. [32]

   The Appeal Panel set out the plaintiff’s grounds of appeal as follows at [4] and [5]:

3. [33]

   In considering Ground 1, the Appeal Panel stated at [13] and [14]:

4. [34]

   The Appeal Panel then addressed Ground 2 at [16]-[25] of its decision as follows:

5. [35]

   At [26] of its decision, the Appeal Panel dismissed the plaintiff’s appeal.

The appeal to this Court

1. [36]

   The plaintiff seeks leave to appeal from the decision of the Appeal Panel pursuant to s 83(1) of the CAT Act. It provides that leave from the Supreme Court may only appeal on a question of law. It reads:

2. [37]

   Two cases which deal with the principles governing leave to appeal are Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 (“Das”) and Lee v New South Wales Crime Commission (2012) 224 A Crim R 94; [2012] NSWCA 262 (“Lee”).

3. [38]

   In Das, the Court of Appeal set out the principles to be considered in deciding whether leave to appeal should be granted. At [32], [33] and [35], Basten JA stated:

4. [39]

   Similarly, in Lee, Bathurst CJ at [12] outlined the principles relevant to the granting of leave as follows:

5. [40]

   In Coulter v R [1988] HCA 3; 164 CLR 350 at 359, Deane and Gaudron JJ noted the requirement for leave:

6. [41]

   The authorities referred to above are equally applicable in these proceedings.

7. [42]

   In determining whether to grant leave to appeal, I am to consider certain relevant factors as set out by Campbell JA (Young and Meagher JJA agreeing) in Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]. Specifically, these are whether the present proceedings concern an issue of principle, a question of general public importance or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable, that the primary decision was in error: see also Lee per Bathurst CJ (Macfarlan and Barrett JJA agreeing).

8. [43]

   While counsel for the defendant objects to the granting of leave to appeal, he concedes that ground two of the appeal does raise a matter of principle.

9. [44]

   It is my view that ground one also raises an issue of principle. As explained by counsel for the plaintiff (T 23.35-43), Parliament has treated ss 154E and 154F of the Residential Tenancies Act as mandatory, and therefore intends them to be followed through. The idea that it would not matter that a decision maker could be in breach of a statutory provision is out of keeping with s 81, which says that a residential tenancy agreement terminates only in circumstances set out in the Residential Tenancies Act. This appeal deals with the proper interpretation of ss 154E and 154F of the Residential Tenancies Act. These sections set out the factors which the Tribunal must consider when determining whether to make a termination order for a social housing tenancy agreement. As these grounds of appeal raise matters of principle and are of general public importance, I grant leave to appeal.

Grounds of appeal

1. [45]

   The grounds of appeal are that the Appeal Panel erred as follows:

   1. (1)

      in the application of s 154E(1)(a) of the Residential Tenancies Act in finding that the original decision was not itself made in error on a question of law unduly narrowing the scope of that provision; and

   2. (2)

      in the application of s 154F(1) of the Residential Tenancies Act in finding that the original decision was not itself made in error on a question of law, because the Appeal Panel accepted and used a purported Neighbourhood Impact Statement which did not meet the statutory requirements for such a document.

2. [46]

   It is the plaintiff’s case that the Appeal Panel made an error of law on the face of the record, being the errors described in grounds one and two, and in the misconstruction of the reasons in the original decision.

3. [47]

   I will now turn to consider whether the two grounds are more than reasonably arguable.

4. [48]

   The plaintiff submitted that in his decision, the Primary Member determined not to exercise his discretion not to terminate the plaintiff’s social housing tenancy by reference to s 154D(3)(b), purporting to have regard to the mandatory matters for consideration in the exercise of that function under s 154E of the Residential Tenancies Act. The plaintiff appealed from that decision to the Appeal Panel on the grounds that the Primary Member had made the following two errors on questions of law:

   1. (1)

      by impermissibly narrowing the scope of the matters to be taken into account under s 154E(1)(a) of the Residential Tenancies Act by only taking into account matters “dealing with the issue of the effect of the illegal activity on [third parties]” at [67] of its decision; and

   2. (2)

      by impermissibly taking into account, and put weight upon, a document purporting to be a Neighbourhood Impact Statement that did not meet the statutory definition of such a document under s 154F(2)(a).

5. [49]

   The plaintiff submitted that it is important to note that the defendant’s primary response before the Appeal Panel was not that the Primary Member had correctly construed the provision as allowing an accounting or balancing for positive and negative “effects” of the tenancy on third persons, but rather that the Primary Member had been correct to narrow the scope of the provision to negative effects. That is, the respondent’s primary position accepted the complaint of the plaintiff that this is what the Primary Member had done. Nevertheless, the Appeal Panel found otherwise at [13]-[14] of its decision, extracted earlier in this judgment.

6. [50]

   With respect to the Appeal Panel, the plaintiff submitted that its “interpretation” of the reasons for the Primary Member’s decision was manifestly incorrect, and further, that it propagated the Primary Member’s error in treating favourable evidence about the effect of the tenancy on third parties as subject to a precondition that such evidence can only be given by persons with an expressed knowledge of the illegal activity. This is the error originally framed by the Primary Member at [67] of his decision that the “issue” under s 154E(1)(a) is the “effect of the illegal activity” on third parties.

7. [51]

   The plaintiff submitted that the reasons given for not accounting for the positive evidence was a misguided belief that such evidence had to be given by persons having knowledge of the illegal activity. The reasons state at [68] that this absence is “significant”. There is no support in the statute for such a pre-condition. It demonstrates the error of the Primary Member (and the Appeal Panel) in misunderstanding the purpose and scope of s 154E(1)(a) which would allow an accounting of positive effects of the tenancy whether or not the person giving that evidence was aware of or affected by the illegal activity.

8. [52]

   Further, the interpretation of the Primary Member’s reasons was incorrect, because they did not express themselves as being an assessment of the evidence in the context of “all the evidence”. Nor did the Primary Member’s reasons express themselves as conducting any distinct assessment of positive and negative “effects”, and then explaining why the “overall effect” of the tenancy had been negative. Rather, the reasons clearly show that the Primary Member was of the view that the negative evidence ought to be “preferred”.

9. [53]

   The plaintiff submitted that it is easily conceivable that a lawful application of s 154E(1)(a) might have a decision maker note a tension between positive and negative evidence and result in a finding regarding the “overall effect” of the tenancy (in the way described by the Appeal Panel). However, neither that process nor that result would be properly expressed as a preference regarding evidence. Rather, if that process had occurred, it would be expressed as a substantive outcome, an evaluative judgment, arrived at as a result of the “intuitive synthesis” of the relevant factors: see HIA Insurance Services Pty Ltd v Kostas [2009] NSWCA 292 at [14] per Spigelman CJ.

10. [54]

    The Appeal Panel’s interpretation of the Primary Member’s reasons fails to grapple with the manner by which the Primary Member expressed his conclusions as a preference on evidence and, in addition, the absence of any evident “balancing exercise” actually done by reference to the reasons. Finally, the Appeal Panel’s interpretation affirmed the Primary Member’s finding that positive evidence would be subject to a pre-condition for it to be credible, which is a criterion not sourced in the statute.

11. [55]

    According to the plaintiff, a better interpretation is that the Primary Member misunderstood the statutory requirement under s 154E(1)(a). This explains the reasons of the Primary Member in a more satisfactory way. The finding that positive evidence would only be able to be considered, or would only be credible, if it was addressed to the issue of the “effect of the illegal activity” on third parties is more readily understood as an error in understanding the scope of s 154E(1)(a). That misunderstanding of the actual evaluative judgment required to be addressed resulted in a failure to properly apply the provision: see Murlan Consulting Pty Ltd v Ku-ring-gai Municipal Council (2009) 170 LGERA 162 at [71] per Basten JA. Given that the provision is addressed in mandatory terms, the plaintiff submitted that the failure to properly apply it ought to have resulted in the Appeal Panel confirming that the Primary Member’s decision should have been set aside: see Project Blue Sky Inc v ABA (1998) 194 CLR 355 at [93].

12. [56]

    It is not for the Appeal Panel to reconstruct what might have been a lawful exercise of the discretion properly exercised in interpretation of the reasons originally given. This is to conduct a re-hearing on the merits within the Appeal Panel, which the plaintiff submitted could have been brought under s 80(3) of the CAT Act, but would have required notice to the parties and a finding properly made as to that process being “warranted”. Neither of those circumstances was met.

13. [57]

    There was an error on a question of law in the Primary Member’s decision, which ought to have been found by the Appeal Panel. As such, the Court should grant leave and uphold the appeal to make those orders that ought to have been made. The Primary Member’s decision should be set aside and the application for termination of the plaintiff’s tenancy remitted to the Tribunal for lawful determination.

14. [58]

    The first defendant submitted that in addressing the import of s 154E(1)(a) of the Residential Tenancies Act, the Appeal Panel at [13] of its decision accepted the plaintiff’s submission that the factors under that subsection are not limited to matters of a negative nature. The first defendant submitted that there is no reason to doubt or disturb that conclusion.

15. [59]

    The plaintiff submitted that notwithstanding the Appeal Panel’s conclusions at [14] that:

    1. (1)

       the Primary Member did not limit himself to “negative implications”;

    2. (2)

       the Primary Member preferred the evidence of the first defendant over that of the plaintiff; and

    3. (3)

       evidence from the plaintiff’s witnesses had been given in the absence of those witnesses having any knowledge of the illegal activity of the plaintiff;

16. [60]

    These interpretations further propagate the Primary Memebr’s error that it set a statutory precondition for itself or reconstructed the lawful interpretation of s 154E(1)(a) reduced to the effect of the illegal activity on third parties, rather than neutral words of the section.

17. [61]

    The plaintiff’s understanding of the Primary Member’s reasons read them with an eye attuned to identifying error, and not fairly and as a whole.

18. [62]

    The Primary Member began his analysis of s 154E at [55]-[61] of its reasons by attesting to the plaintiff’s character. The Primary Member then considered the first defendant’s characterisation of the plaintiff’s character evidence in the context of the breach at [62]-[63], before outlining the Neighbourhood Impact Statement at [64]-[65]. At [67] of his reasons, the Primary Member stated that he “prefers the evidence of housing on this point.” The first defendant submitted that the point, in this context, should be read to mean “the effect the tenancy has had on neighbouring residents or other persons”, from the heading of the section, as opposed to “the effect of the illegal activity”, from the following sentence.

19. [63]

    The Primary Member then characterised the plaintiff’s evidence as being “more character references rather than dealing with the effect of the illegal activity on them”. This is not the misapplication of the statutory test as asserted by the plaintiff. It is the characterisation of the plaintiff’s evidence. The following two sentences make this clear, when the Primary Member commented that the authors of the witness statements were limited (in assessing the true impact of the tenancy) by the fact that they appeared to be unaware of the illegal activity.

20. [64]

    Put another way, the plaintiff’s evidence was a friendly witness not fully appraised of the issues. The limitations referred to by the Primary Member and the Appeal Panel are obvious when one considers that a neighbour may despise drug dealing in their neighbourhood but not know who is responsible for it. If that neighbour or third party is informed that the responsible party is the tenant, their views of that person’s impact on the neighbourhood may change significantly. The neighbour’s evidence is necessarily limited to what they know and do not know. The Primary Member, as confirmed by the Appeal Panel discussing the “criticism of references” at [14] of its decision, was simply pointing to the limited assistance such one-sided evidence provided to the exercise of its discretion under s 154E(1)(a) of the Residential Tenancies Act.

21. [65]

    Having considered the limited nature of the tenant’s evidence and the matters raised in the Neighbourhood Impact Statement, the Primary Member preferred the latter as “a true indication of the impact on neighbours”, as it was entitled to do.

22. [66]

    The first defendant also submitted that it is worth noting the neutral language deployed in the final sentence at [69] of the Primary Member’s reasons. The Primary Member referred to the impact on neighbours, confirming that he had not departed from the neutrality of the test in s 154E(a) of the Residential Tenancies Act. The first defendant submitted that the Appeal Panel clearly appreciated the same conclusion.

23. [67]

    There has been no error by the Primary Member or the Appeal Panel in their respective applications/interpretations of s 154E(1)(a) of the Residential Tenancies Act. Both the Primary Member and Appeal Panel sufficiently engaged in the evaluative judgment that underpins the exercise of their discretion under s 154E(1)(a). Such an analysis was not sullied or infected by the Primary Member’s preference for certain evidence, which was a course available to him. As such, this ground of appeal must fail.

24. [68]

    Section 81(1) of the Residential Tenancies Act, extracted earlier in this judgment, states that a residential tenancy agreement terminates only in the circumstances set out in the Act.

25. [69]

    Under s 91(1)(a) of the Residential Tenancies Act, the Tribunal “may” exercise its discretion to make a termination order on application by a landlord if, relevantly, the Tribunal is satisfied that the tenant has used the residential premises for the purposes of the manufacture, sale, cultivation or supply of any prohibited drug within the meaning of the Drug Misuse and Trafficking Act. Although the power to make an order under s 91(1)(a) is discretionary, s 154D(1)(b) of the Residential Tenancies Act states that the Tribunal must make a termination order where an application has been made under s 91 and the Tribunal is satisfied of the matters set out in s 91(1)(a). It is not in dispute in these proceedings that the plaintiff used the premises for the purposes outlined in s 91(1)(a).

26. [70]

    However, s 154D(3)(b) of the Residential Tenancies Act relevantly states that the requirement in s 154D(1)(b) does not apply where the Tribunal is satisfied that a termination order would be likely to result in “undue hardship” being suffered by a person with a disability within the meaning of the Anti-Discrimination Act who is occupying the premises. It is also not in dispute that the plaintiff suffers from a disability as referred to under s 154D(1)(b) of the Residential Tenancies Act. As such, the prevailing dispute between the parties in relation to this ground of appeal is the operation of s 154E.

27. [71]

    Section 154E(1) of the Residential Tenancies Act states that in considering whether to make termination order, the Tribunal must have regard to the five factors under subs (a)-(e). Relevantly, sub (a) is “the effect that the tenancy has had on neighbouring residents or other persons”.

28. [72]

    The Primary Member’s consideration of s 154E(1)(a) appears at [55]-[69] of his decision and is reproduced earlier in this judgment. In his consideration at [55]-[61], the Primary Member outlined the evidence from the plaintiff’s witness statements, to the effect that she had been a decent and helpful neighbour. The Primary Member then at [62]-[64] summarised the effect of the first defendant’s submissions that the plaintiff’s drug dealing had an apparent adverse impact on the neighbouring residents. At [64], the Senior Member referred to the complaints from neighbours as canvassed in the Neighbourhood Impact Statement.

29. [73]

    After referring to the plaintiff’s sworn evidence at [66], the Primary Member stated at [67] that he preferred the first defendant’s evidence, as the plaintiff’s witness statements were “more character references than dealing with the issue of the effect of the illegal activity on them”. He noted that “as a general observation, there is little or no reference in the statements to the drug dealing or its impact on the tenant’s neighbours.” The Primary Member then stated that he considered it “significant” that the witnesses were not clients of the tenant, and may not have been aware of the full extent of her illegal activity.

30. [74]

    At [69], the Primary Member concluded that the summary of complaints in the Neighbourhood Impact Statement was more credible, and he accepted that evidence as a true indication of the plaintiff’s impact on the neighbours.

31. [75]

    In considering this issue on appeal, the Appeal Panel at [13] of its reasons accepted the “force” of the plaintiff’s submission that s 154E(1) does not limit the Tribunal to considering matters of a negative nature, such as “the illegal activity”. However, it was the Appeal Panel’s conclusion that the Primary Member had not limited himself to considering the negative impacts of the plaintiff’s tenancy. The Appeal Panel stated that it was clear that the Primary Member “preferred” the first defendant’s evidence over the plaintiff’s witness statements. The Appeal Panel stated at [14] the Primary Member had 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.

32. [76]

    It was the Appeal Panel’s conclusion that despite some witnesses speaking favourably of the plaintiff as a tenant and neighbouur, the significant adverse impact arising from her drug dealing justified termination of her tenancy.

33. [77]

    In considering the reasons of the Primary Member and the Appeal Panel, I adopt the approach that this Court should not read “with an eye finely tuned for error”: McGinn v Ashfield Council [2012] NSWCA 238 per McColl JA at [17] (Sackville AJA and Gzell J agreeing); Walsh v Parramatta City Council [2007] NSWLEC 255; (2007) 161 LGERA 118 at [67] per Preston CJ citing Minister for Immigration and Ethnic Affairs v Wu Shan Liang [1996] HCA 6; (1996) 185 CLR 259 at 291.

34. [78]

    I also bear in mind that what constitutes sufficient reasons for a Primary Member and Appeal Panel of NCAT differs from that of a court. At the hearing of these proceedings, counsel for the first defendant referred to New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 (“Orr”), where Bell P (Ward JA agreeing) addressed the sufficiency of such reasons at [69]-[72] as follows:

35. [79]

    Even when read at this standard, it is my view that the Primary Member’s reasons lead to the conclusion that he attached a precondition to the plaintiff’s evidence for the purposes of s 154E(1)(a) of the Residential Tenancies Act. The Primary Member, when addressing s 154E(1)(a), discounted the value of the witness statements because they were “more character references than dealing with the issue of the effect of the illegal activity on them.” Section 154E(1)(a) does not in terms refer to illegal activity. The neighbouring residents spoke positively of the effect the plaintiff’s tenancy has had on them. At [68], the Primary Member considered it “significant” that the people who provided witness statements may not have been aware of the plaintiff’s illegal activity.

36. [80]

    Section 154E(1)(a) requires the Tribunal to have regard to the effect that the tenancy, not the illegal activity, has had on neighbouring residents or other persons. The Primary Member’s interpretation narrows the operation of the section by devaluing the witness statements for an insufficiency which is not founded in the statute. By doing so, the Primary Member exercised his discretion based on a wrong understanding of the statutory test. Further, this misinterpretation meant that the Primary Member’s reasons did not properly engage in a balancing exercise of relevant factors. These constitute judicial errors and errors of law on the face of the record. The Primary Member’s decision should be quashed.

37. [81]

    As for the Appeal Panel, it stated at [13] of its decision that it accepted the force of the plaintiff’s submissions that the Tribunal is not limited under s 154E(1) to only have regard to matters of a negative nature, such as the effect of the illegal activity of a tenant. It went on to say that 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 any beneficial effects that the tenancy has had. At [14], the Appeal Panel then stated that notwithstanding the view expressed in [13], it was of the opinion that the Primary Member did not limit himself to negative implications.

38. [82]

    I disagree with this reasoning. In its reasons, the Appeal Panel attempted to explain what the Primary Member should have said in order to comply with the statute. The Appeal Panel interpreted the Primary Member as stating that he preferred certain evidence when “evaluating the overall effect” the tenancy had on neighbouring residents or other persons ([14]). It is not open to the Appeal Panel to attempt to explain and justify the Primary Member’s incorrect interpretation of s 154E(1)(a). In these circumstances, the Appeal Panel’s decision should be quashed.

39. [83]

    The plaintiff submitted that the Neighbourhood Impact Statement on which the first defendant relied did not meet the requirements of s 154F(2)(a) of the Residential Tenancies Act. If that was correct, it would be an error for the Primary Member to have given effect to the document as if it had the statutory status which it did not.

40. [84]

    The Primary Member clearly provided the document with that status. He found at [63] and [69] that the document included a “summary of complaints”. The plaintiff submitted that it is unclear from the reasons whether the Primary Member properly considered whether those complaints were made specifically by persons regarding the effect the tenancy had “on them”.

41. [85]

    The finding of the Appeal Panel at [23] and [91] of its decision was that the Neighbourhood Impact Statement met the requirements for such a document under s 154F(1) of the Residential Tenancies Act. With respect to the Appeal Panel, the finding was incorrect on a proper reading of that document. Whether the document properly meets the statutory requirements for such a document, and then whether the document is entitled to be treated as having the statutory force intended by the Residential Tenancies Act, would each be a question of law: see Kostas v HIA Insurance Services Pty Ltd (2010) 241 CLR 390 at [23] and [91]; Director-General Department of Ageing, Disability and Home Care v Lambert (2009) 74 NSWLR 523 at [28]. The plaintiff submitted that even if it is not a particular question of law, the issue would involve an error on the face of the record and therefore be subject to the Court’s ability to grant relief under s 69 of the Supreme Court Act: see Warkworth Mining Ltd v Bulga Mulbrodale Progress Association Inc (2014) 86 NSWLR 527 at [6].

42. [86]

    The plaintiff submitted that the purpose(s) of the Neighbourhood Impact Statement are clear from s 154F of the Residential Tenancies Act.

43. [87]

    Firstly, the provision enables preparation of a document in a summary form. Second, that document is to include complaints by persons regarding the effect of the tenancy “on them”. The plaintiff submitted that the purpose of that is to allow the Tribunal access to material “relevant” to the consideration required under s 154E(1)(a), such that the two provisions are expressly linked. Third, that document must anonymise the identity of the complainant. Fourth, notwithstanding common law rules of fairness regarding anonymous evidence, if such a document is prepared in accordance with those statutory terms, the provision directs the Tribunal to take complaints into account in the s 154E(1)(a) assessment.

44. [88]

    The plaintiff submitted that this fourth point is highly significant. The modification to natural justice is presumed to be intended to be confined to the particular circumstances prescribed under the statutory process, but not if the statutory requirements are not met: see Lee v NSW Crime Commission (2013) 251 CLR 196 at [308]-[314]; North Australian Aboriginal Justice Agency Ltd v Northern Territory (2015) 326 ALR 16 at [11].

45. [89]

    The particular matter addressed by the Appeal Panel at [19] of its decision on the question of the application of the statutory requirements to the document itself is that the document was “about” the plaintiff, because her name was on the front of it. With respect, the plaintiff submitted that the fact the plaintiff’s name was on the document is not sufficient to repel the overwhelming conclusion drawn from reading the whole of the document that it was not a summary of complaints made by persons regarding the plaintiff’s specific actions and the effect of her tenancy on them. The plaintiff submitted that that is for the following reasons:

    1. (1)

       The “description of the residential premises” is the whole of the “residential block”.

    2. (2)

       The “description of the neighbours” is expressed as demographics, not by way of anything particular (even something expressed to be as anonymous). This does not confirm any inference that the document is a summary of particular complaints from persons about the effect of the tenancy “on them” but rather suggests the opposite.

    3. (3)

       The “impact” evidence repeatedly refers to the issues associated with the “building” or local area, rather than being directed to the plaintiff’s particular unit, or her activity and its effect on particular persons.

    4. (4)

       The Appeal Panel accepted at [23] of its decisions that the “drug paraphernalia” referred to under the section on environmental impact has nothing to do with the plaintiff’s activity. The “drug dealers/users loitering in common areas, parks”, as well as all other information, is similarly general statements about the environment, rather than any particular complaint from a person about any of the plaintiff’s activities regarding the effect of the plaintiff’s tenancy on them.

46. [90]

    The plaintiff submitted that as such, the document did not comply with the statutory requirement of being complaints about the impact of the tenancy on particular people. Accordingly, it could not relevantly assist the Tribunal to fulfil the “requirements” under s 154E(1)(a). It follows that the purpose of the provision, manifest in the text of s 154F(2)(a) could not be fulfilled by the document. It would therefore be contrary to the purpose of that provision to nevertheless have a document not meeting those requirements treated as if it were compliant.

47. [91]

    The first defendant submitted that there can be no doubt that the Neighbourhood Impact Statement prepared by the first defendant’s client services officer complied with s 154F(2)(a) of the Residential Tenancies Act, having been admitted without objection.

48. [92]

    As the Appeal Panel explained, the Neighbourhood Impact Statement:

    1. (1)

       was prepared by a client services officer and derived from direct knowledge and experience, or through her reasonable investigations (18]);

    2. (2)

       specifically concerned the plaintiff ([19]);

    3. (3)

       contained statements from neighbours in relation to the plaintiff ([19]);

    4. (4)

       contained a summary of the effects of the plaintiff’s illegal activities on the neighbours without identifying them ([20]); and

    5. (5)

       contained findings that the plaintiff’s illegal activities had had a significant adverse impact on the neighbouring tenants for at least a six month period ([22]).

49. [93]

    The first defendant argued that the plaintiff’s submission that the Neighbourhood Impact Statement did not concern the plaintiff or her actions must be rejected for the following reasons.

50. [94]

    Firstly, at p 2 of the Neighbourhood Impact Statement, the neighbourhood profile calls for a description of both the residential premises (in this case, a block of units) and then the premises specifically in reference to its proximity to other residents and the neighbourhood.

51. [95]

    Secondly, a description of the neighbours by reference to the demographics is entirely sensible in the context of the document, as it supports the intended anonymisation of the individual complaints.

52. [96]

    Thirdly, the impact referred to can only be inferred to relate to the plaintiff’s illegal activities, noting that she conceded that she was in breach of the Residential Tenancies Act. It therefore follows that the targeted nature of the Neighbourhood Impact Statement meant that the reference to “drug supply activity”, “unauthorised access and activity”, and other complaints of impact were clearly directed towards the plaintiff.

53. [97]

    Finally, although the reference to particular drug paraphernalia did not relate to the plaintiff, the context of those activities was clearly relevant to her in light of her own conceded illegal activity.

54. [98]

    The first defendant submitted that s 154F(2)(a) of the Residential Tenancies Act called for a summary of statements by neighbouring residents having regard to “the effect the tenancy has had on them.” As such, the specificity of the Neighbourhood Impact Statement, in addition to the plaintiff’s concession that she had breached the Residential Tenancies Act and the nature of the comments the impact statement contained, make it clear that the Neighbourhood Impact Statement addressed the effect of the tenancy on the surrounding residents or other persons, and therefore complied with the legislation. To that end, the first defendant submitted that there has been no error of law on the record.

55. [99]

    Section 154F of the Residential Tenancies Act is reproduced in full earlier in this judgment. Relevantly, s 154F(1) states that in considering whether to make a termination order, the Tribunal is to have regard to any Neighbourhood Impact Statement submitted by the tenant’s landlord. Section 154F(2)(a) states that a Neighbourhood Impact Statement is “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”. Section 154F(2)(b) of the Residential Tenancies Act states that the Neighbourhood Impact Statement should not identify the neighbouring residents or other persons.

56. [100]

    The Neighbourhood Impact Statement tendered by the first defendant in the proceedings before the Primary Member comprised of a four-page document with an attached map and photographs of the residential area of and surrounding the plaintiff’s premises (CB 87-92). The heading of the document stated:

57. [101]

    Under “Description of the residential premises”, the client services officer who executed the form gave a brief description of the residential block of 20 units and its neighbouring buildings (CB 87). Under “Description of the tenant’s property (size and location) and proximity to other residents/neighbourhood”, the client services officer described the tenant as occupying a “2 bedroom unit on first floor”, then relevantly wrote, “Building is accessed from Walker Street, security door in place. (This door is often vandalised/propped open by tenants and others gaining legitimate and unauthorised access.)” (CB 88).

58. [102]

    Under “Description of the neighbours”, the client services officer described the gender, age and documented mental health of the plaintiff’s neighbours. She then relevantly wrote (CB 88):

59. [103]

    The remainder of the statement relevant to these proceedings concerns “Evidence of Impact on Neighbourhood/Community”. Under “Social Impact”, the client services officer wrote (CB 89):

60. [104]

    Under “Environmental Impact”, the client service officer wrote (CB 89):

61. [105]

    Under “Financial Impact”, the client services wrote (CB 89):

62. [106]

    Under “Economic Impact”, the client services officer wrote (CB 89):

63. [107]

    Finally, under “Impact on local facilities/services/schools”, the client services officer wrote (CB 90):

64. [108]

    Counsel for the plaintiff submitted that the statements in the Neighbourhood Impact Statement revealed “demographic information”, but did not convey a sense that the author had interviewed specific people about the effect of the plaintiff’s tenancy on them (T 11.12-15), as prescribed under s 154F(2)(a) of the Residential Tenancies Act. The Neighbourhood Impact Statement consistently referred to “the building” and not the plaintiff’s unit; to “tenants” plural; to “unknown others” and “drug dealing in plain view throughout the neighbourhood”; and to “drug paraphernalia” not associated with the plaintiff’s prohibited drug. It also referred to “dealers” (plural) “loitering in common areas in parks” not relevant to the plaintiff’s sales from her premises. As such, counsel for the plaintiff submitted that at best, the statement could have given rise to an inference that the plaintiff’s conduct may have contributed to the antisocial behaviour that the document described. However, it inadequately tied the plaintiff’s tenancy to those impacts.

65. [109]

    The plaintiff argued that properly construed, the document provides a general statement regarding drug dealing and antisocial behaviour in the building. It may have been admissible as such, and considered relevant by the Primary Member, but should have been weighed properly for that purpose.

66. [110]

    I agree that certain references to drug paraphernalia, as well as drug dealing “in plain view”, were unrelated to the plaintiff’s criminal behaviour. However, there is no indication that the Primary Member interpreted the impact described in those statements as being attributable to the plaintiff. At [64] of his reasons, the Primary Member stated:

67. [111]

    Later in his reasons, the Primary Member tied the plaintiff to the relevant impacts described in the Neighbourhood Impact Statement. Under the heading “The likelihood that neighbouring residents or other persons will suffer serious adverse effects in the future if the tenancy is not terminated” at [77], the Primary Member added that the plaintiff “was aware that her activity contributed to anti-social behaviour in the complex”. Under the heading “The landlord’s responsibility to its other tenants” at [80], the Primary Member also stated, “The tenant has acknowledged that her clients cause damage to the building and contribute to anti-social behaviour”. At [66], the Primary Member stated that the plaintiff confirmed that up to 100 customers attended her premises to purchase cannabis per day. The Neighbourhood Impact Statement’s references to, amongst other relevant effects, “unauthorised persons in the building”, “noise from visitors trying to access [the] building”, “drug supply activity by tenants”, and “fear of accessing [their] own dwellings due to unauthorised access and activity by unknown others” capture the impacts to which the plaintiff’s activities contributed.

68. [112]

    I note that although the Primary Member’s consideration of the relevance of the Neighbourhood Impact Statement appears under various headings in his decision, this Court should not read passages in isolation from others to which they may be related: Re Maria Politis v Commissioner of Taxation [1988] FCA 739 at [14].

69. [113]

    In considering the Primary Member’s use of the Neighbourhood Impact Statement, the Appeal Panel stated at [20] of its reasons that the statement “was intended to provide a summary of the effect [the plaintiff’s] admitted illegal activities had on the neighbours and other persons.” The Appeal Panel stated that the statement “put this activity in context” by demonstrating the significant impact that drug dealing and other illegal activities had on the environment of the premises.

70. [114]

    As to the references in the Neighbourhood Impact Statement to behaviour unrelated to the plaintiff, the Appeal Panel stated at [23] of its reasons that these references are relevant because they “[place] the activities of the appellant in the relevant neighbourhood.” Moreover, the Appeal Panel stated at [24] that there is no suggestion that the Primary Member was influenced by or based any finding about the plaintiff and her tenancy upon the conduct of other people carrying out illegal activities in the same location.

71. [115]

    This ground of appeal is that the Appeal Panel erred, as did the Primary Member, in accepting and using the Neighbourhood Impact Statement when it did not meet the statutory requirements for such a document. As outlined earlier, s 154F(2)(a) of the Residential Tenancies Act states that a Neighbourhood Impact Statement “is a summary of statements 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” (my emphasis). In my view, the Neighbourhood Impact Statement met this description. As the Appeal Panel stated at [20] and [23] of its reasons, the document provided a summary which placed the plaintiff’s activities in a neighbourhood affected by other drug dealing and antisocial behaviours. It is my view that this is relevant to the Tribunal’s consideration of the effect of the plaintiff’s tenancy on residents in the context of their neighbourhood generally.

72. [116]

    I also agree with the Appeal Panel that there is no indication that the Primary Member attributed to the plaintiff any of the references to antisocial behaviour not relevant to her. Rather, I share the Appeal Panel’s view that the Primary Member used the document for the purpose outlined in s 154F(2)(a), concluding (as the plaintiff herself conceded) that her illegal activities contributed to certain of the anti-social behaviours described. Accordingly, the Primary Member’s finding that the Neighbourhood Impact Statement met the requirements for such a document under s 154F(1) of the Residential Tenancies Act was not in error. The Appeal Panel in dealing with this issue on appeal did not err. Ground two of the appeal fails.

Discretion to set aside the decision

1. [117]

   Neither party made any submissions in relation to whether a different result could not be produced if the matter is remitted to NCAT: see Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141. That is, in order to exercise my discretion to not set aside the decision of the Primary Member and/or Appeal Panel, I would need to be satisfied that if the proceedings were remitted, a different result could not be produced.

2. [118]

   For these reasons, it is my view that I should exercise my discretion to set aside the decisions of the Primary Member and of the Appeal Panel.

The result

1. [119]

   Leave to appeal is granted. The decision of the Primary Member dated 14 June 2019 is quashed. The decision of the Appeal Panel dated 20 September 2019 is quashed. The proceedings are remitted to NCAT to be determined according to law.

2. [120]

   Costs are discretionary. Costs usually follow the event. The first defendant is to pay the plaintiff’s costs on an ordinary basis.