Davis v NSW Land and Housing Corporation

1. [1]

   HER HONOUR: By amended summons filed with leave on the date of the hearing, the plaintiff seeks leave to appeal (out of time) from a decision of the New South Wales Civil and Administrative Tribunal’s Appeal Panel (“the Appeal Panel”) delivered on 17 December 2015, confirming the correctness of the decision of the Consumer and Commercial Division of the Civil and Administrative Tribunal (“the Tribunal”) terminating a Residential Tenancy Agreement under which the plaintiff was the tenant and the defendant the landlord. The plaintiff seeks an order setting aside the termination order.

Background

1. [2]

   The plaintiff is the sole tenant of residential premises at Redfern under a Residential Tenancy Agreement dated 19 September 2012 for a fixed term of five years. Her husband was in joint occupation of the leased premises. Although his occupancy was a breach of the terms of agreement in which the plaintiff occupied the premises, nothing turns on this for present purposes.

2. [3]

   The leased premises are located on the third level of a multi-storey apartment building serviced by an internal lift. Laundry facilities for the use of the residents are located on each level.

3. [4]

   On 28 May 2013, New South Wales police executed a search warrant at the leased premises in the course of a police investigation into the suspected drug activities of the plaintiff’s husband. The plaintiff read the search warrant and then said, “I have nothing to do with my husband’s business” and “if I show you where it all is you’ll make my life easier and just go away after youse find it all”. She went on to say, “I don’t have anything to do with what my husband does, I have made sure of that”.

4. [5]

   Thereafter, under the plaintiff’s direction, police located paraphernalia commonly associated with the supply of drugs including, in particular, a large number of water balloons and packets of freezer bags in a kitchen cupboard. Police also located mobile telephones, three sets of electronic scales and a quantity of cash in the amount of $16,000. No drugs were located in the premises.

5. [6]

   Section 91 of the Residential Tenancies Act 2010 (NSW) (“the Act”) provides that the Tribunal may, on the application of the landlord, issue a termination order if it is satisfied the leased premises are being used or have been used for the illegal purposes specified in s 91(1)(a), or for unspecified unlawful purposes in s 91(1)(b) of the Act. Section 91 provides as follows:

6. [7]

   It would appear that upon becoming aware of the results of the execution of the search warrant and, further, upon being aware that as a result of electronic and other physical surveillance of the activities of the plaintiff’s husband as a drug supplier in the apartment block and surrounding streets, he was charged with supplying heroin contrary to s 25 of the Drug Misuse and Trafficking Act 1985 (NSW). The defendant applied for an order terminating the Residential Tenancy Agreement.

7. [8]

   The evidence relied upon by the defendant in support of the application included a number of statements from the police brief of evidence which exposed the plaintiff’s husband’s modus operandi as a drug supplier. This included evidence that on being contacted on his mobile telephone by a prospective customer, he would arrange a meeting at the laundry on level 6 of the apartment block and, after travelling to that level from level 3 via an internal lift, he would exchange heroin he had packaged in one or more water balloons for money.

8. [9]

   In its reasons for decision, the Tribunal held that it was reasonably satisfied (in the sense of being actually persuaded in accordance with the test in Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336) that a termination order should issue based upon the following findings:

9. [10]

   On 13 October 2014, the Tribunal made the following orders:

The Appeal Panel

1. [11]

   The plaintiff appealed to the Appeal Panel pursuant to s 80(1) of the Civil and Administrative Tribunal Act 2013 (NSW) (“the NCAT Act”). A number of legal errors in the Tribunal’s reasons for decision were relied upon including, relevantly for the purposes of these proceedings, what was said to be error in the Tribunal’s construction of ss 91(1)(a) and (b) of the Residential Tenancies Act in the following respects:

2. [12]

   In construing the concept of “use” of residential premises for the purposes proscribed in ss 91(1)(a) and (b) of the Act, the Appeal Panel adopted the approach of the Appeal Panel in McGuiness v NSW Land and Housing [2014] NSWCATAP 98. The following extract from McGuiness was cited by the Appeal Panel with approval:

3. [13]

   Adopting the approach in McGuiness to the concept of “use” for an unlawful purpose in s 91(1)(b) (the section with which the Appeal Panel in McGuiness was concerned), and, by analogy, applying it to the concept of “use” for an illegal purpose in s 91(1)(a), the Appeal Panel concluded:

4. [14]

   The Appeal Panel came to a different conclusion to that reached by the Tribunal concerning the construction of s 91(1)(a). In their view, the laundry on level 6 of the apartment building was not “common property” within the meaning of the section:

5. [15]

   The Appeal Panel also concluded that since the installation of the reinforced steel door in the leased premises was equally consistent with the plaintiff’s wish to be protected from the notoriously “lawless and violent behaviour of residents in the vicinity”, it was not open to the Tribunal to find that its installation was for the purpose of the plaintiff’s husband’s drug supply business or that the premises were used for unlawful purposes under s 91(1)(b) because of the installation of the door.

The proceedings in this Court

1. [16]

   The defendant does not oppose leave being granted to permit the plaintiff to seek appellate review of the decision of the Appeal Panel on a question of law pursuant to s 83(1) of the NCAT Act or leave being granted to bring the proceedings out of time. The defendant accepts that there are sufficient reasons disclosed in the pleadings to justify a grant of leave in light of what is said by the plaintiff to be a wrong construction of s 91(1) of the Residential Tenancies Act pursuant to which the termination order was made. That concession was properly made (see generally Johnson Tiles Pty Ltd v Esso Australia Ltd [2000] FCA 1572; 104 FCR 564).

2. [17]

   The further grant of leave (not opposed by the defendant) permitting the plaintiff to file the amended summons on the day of the hearing had the practical effect of reducing the issues raised by the defendant’s Notice of Contention, with the third of the three filed grounds in the Notice being recast by the plaintiff as a further ground of appeal upon which she seeks relief.

The plaintiff’s amended grounds of appeal

1. [18]

   The plaintiff’s primary ground of appeal concerns the finding by the Appeal Panel that the use of the leased premises by the plaintiff’s husband to store various items and pieces of equipment to facilitate the supply of heroin by him to people outside the premises, was a use of the premises for the purposes of the supply of prohibited drugs within the meaning of the Drug Misuse and Trafficking Act. In the plaintiff’s submission, this finding is based upon an erroneous construction of s 91(1)(a) of the Residential Tenancies Act.

2. [19]

   The plaintiff further contends that the Tribunal erred in finding that the alteration to the leased premises by the installation of the steel door facilitated the premises being used for the supply of prohibited drugs, thereby constituting the use of the premises for an unlawful purpose within the meaning of s 91(1)(b) of the Residential Tenancies Act as an alternate basis upon which the Tribunal’s order should issue. For the purposes of these proceedings, it is not clear to me why this Court needs to be concerned with what is said to be an error in the findings of the Tribunal in circumstances where the Appeal Panel reversed that finding (see [14]).

The defendant’s notice of contention

1. [20]

   In the event that the Appeal Panel’s construction of s 91(1)(a) of the Residential Tenancies Act is found to be wrong in law, the defendant submitted that the decision of the Appeal Panel is sustainable on grounds in that:

   1. (1)

      The Appeal Panel ought to have found that the common property within the apartment building to which the plaintiff had access under the residential agreement (including, relevantly, the laundry on level 6) was encompassed by the express terms of s 91(1)(a) of the Act ; and

   2. (2)

      The Appeal Panel ought not to have disturbed the Tribunal’s finding that the unauthorised installation of a steel door at the leased premises was for the unlawful purpose of facilitating the drug supply business conducted by the plaintiff’s husband from those premises.

The plaintiff’s submissions

1. [21]

   In the plaintiff’s submission, s 91(1)(a) of the Act, which is directed to proscribing the intentional or reckless use of the leased premises by the tenant or a joint occupant for illegal purposes, must be strictly construed in a given case, referable to the specific drug-related offending within the meaning of Drug Misuse and Trafficking Act, in this case the supply of prohibited drugs.

2. [22]

   The concept of “supply” in s 3(1) of the Drug Misuse and Trafficking Act has an extended meaning to include a wide range of conduct including the following:

3. [23]

   Leaving to one side whether on the proper construction of s 91(1)(a) the use of the laundry on level 6 by the plaintiff’s husband to supply heroin constituted an illegal use of the leased premises (the issue raised by (a) of the defendant’s Notice of Contention), the plaintiff submitted that because there were no prohibited drugs found within the leased premises, and no evidence before the Tribunal or the Appeal Panel that there were traces of drugs on the scales or other items of drug paraphernalia seized under warrant from the premises, there is nothing to support the Appeal Panel being satisfied that it was open to the Tribunal to find the premises were a place where the heroin was offered or received or delivered or kept for the purposes of supply (within the extended definition of supply) or that the premises were a place where any of those acts or things were authorised, suffered, permitted or attempted (also within the extended definition).

4. [24]

   Counsel submitted that the mere use of the leased premises to store equipment for the weighing and packaging of heroin to be supplied from a venue or venues elsewhere in the apartment building or beyond, does not amount to the use of the leased premises for the purposes of supply within the extended definition. Counsel accepted that it would be otherwise if s 91(1)(a) proscribed the use of the premises “for the purposes of or in connection with the supply of prohibited drugs”. Counsel submitted that the Appeal Panel wrongly interpreted the concept of “the use of the leased premises for the purposes of supply” in s 91(1)(a), to include their use in connection with the supply of drugs from places outside the premises contrary to (or at least not comprehended by) the proscribed use of the premises in the statutory sense. Counsel submitted that it was not open to the Appeal Panel to extend the concept of “use” of premises for the illegal purpose of supplying drugs in s 91(1)(a) in that way, an approach which he submitted was necessarily implicit in the reasoning of the Appeal Panel.

5. [25]

   Counsel also submitted that the plaintiff’s knowledge of her husband’s business as a drug supplier and, by necessary inference from what she said and did in the course of the execution of the search warrant, knowing that her husband used balloons to package the weighed drugs he supplied to drug users, does not allow for the further finding, also implicit in the reasoning of the Appeal Panel at [17], that it was open to the Tribunal to find that the drugs that had been or were to be supplied to end users on level 6 (or elsewhere) were in fact weighed and packaged in the leased premises, as distinct from that being the place where that equipment was stored.

The defendant’s submissions

1. [26]

   The defendant submitted that the legislature having not defined in the Act what is to be encompassed by the concept of the “use” of residential premises for the purposes proscribed in ss 91(1)(a) and (b), the ordinary dictionary meaning of “use”, being to employ for some purpose or apply to one’s own purpose, should be applied, consistent with the approach taken by the Appeal Panel in McGuiness. The defendant emphasised that the Appeal Panel noted (correctly) that questions of degree are necessarily involved in determining whether, in any given case, the particular facts and circumstances relied upon to support an application for a termination order justify a finding by the Tribunal that the premises were being used for a purpose (or more than one purpose) proscribed by s 91 of the Act.

2. [27]

   The defendant further submitted that there is nothing in the reasons for decision, or in the extract from McGuiness to which the Appeal Panel referred with approval, to support the plaintiff’s argument that in applying the meaning of “use” in its ordinary sense, the Appeal Panel erroneously imported into its consideration of what aspects of the conduct of the plaintiff’s husband might be comprehended by “the use of the premises for the purposes of supply”, the use of the premises by him “in connection with” the supply of prohibited drugs by his use of the premises as a storage place for his equipment.

Consideration

1. [28]

   In my view, the analysis of the Appeal Panel’s reasoning in the way urged by the plaintiff is misconceived. In resolving to the uncontroversial finding at [17] that there was an abundance of evidence before the Tribunal that the plaintiff’s husband was supplying drugs (that is, selling or distributing them by pre-arrangement to customers from the laundry on level 6 and other venues external to the apartment block), for the Appeal Panel’s finding that it was also open to the Tribunal to be satisfied that the leased premises were used for that purpose (and that the plaintiff permitted that to occur) was not based upon any express finding by either the Tribunal or any view of the Appeal Panel that the premises were simply or solely used as a storage unit for the equipment used to weigh and package the drugs. Given the abundance of evidence before the Tribunal as to the plaintiff’s modus operandi as a drug supplier, I am satisfied that it is at least implicit in the reasoning of the Appeal Panel that the finding of the equipment in the leased premises on level 3, and the plaintiff’s statements about it at the execution of the search warrant, was consistent with the premises themselves being the place where the drugs were weighed and packaged before being supplied to customers on level 6 (and elsewhere) despite no drugs being found on that occasion.

2. [29]

   That being the case, I am not persuaded that the legal error in the construction of s 91(1)(a) of the Act for which the plaintiff contends is made out. Since that is the primary ground upon which the relief under the summons is sought, there is no occasion to address the further ground of appeal which alleges error in the construction of s 91(1)(b) or to resolve the issues raised by the defendant’s Notice of Contention. I would, however, venture the view that there is much to commend the Appeal Panel’s construction of the words in parentheses in s 91(1)(a) in [18] and the conclusion they reached, contrary to that of the Tribunal, that the laundry on level 6 does not fall within the description of premises for the purposes proscribed in s 91(1)(a).

Orders

1. [30]

   Accordingly, I make the following orders: