Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Bidgood v NSW Land and Housing Corporation [2020] NSWCATAP 101 Hearing dates: 25 March 2020 Date of orders: 02 June 2020 Decision date: 02 June 2020 Jurisdiction: Appeal Panel Before: A Suthers Principal Member S Thode Senior Member Decision: (1) The Appeal is allowed. (2) Orders one to five made on 3 December 2019 in SH 19/34828 are set aside. (3) The application is remitted to the Consumer Commercial Division for determination according to law and in accordance with any Direction the Tribunal may make. Catchwords: APPEAL – Residential Tenancy – Error of law – Proper application of s 91(1)(b) Residential Tenancies Act Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Residential Tenancies Act 2010 (NSW) Cases Cited: Collins v Urban [2014] NSWCATAP 17; Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22; Orr v NSW Land and Housing Corporation [2018] NSWCATAP 23; New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231; Texts Cited: None cited Category: Principal judgment Parties: Karen Bidgood (Appellant) NSW Land and Housing Corporation (Respondent) Representation: Counsel: B Fogarty (Applicant) Solicitors: Legal Aid NSW (Applicant) NSW Land and Housing Corporation (Respondent) File Number(s): AP 20/00783 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 5 December 2019 Before: K Ruschen, General Member File Number(s): SH 19/34828 reasons for decision Introduction 1. This is an internal appeal under s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) against a decision made in the Consumer and Commercial Division of the Tribunal on 3 December 2019 (the Decision). 2. An application to the Tribunal was brought by New South Wales Land & Housing Corporation (the respondent) against Ms Bidgood (the appellant) for termination and possession pursuant to s 91(1)(b) of the Residential Tenancies Act 2010 (NSW) (the RT Act). More specifically, the respondent alleged that the appellant allowed residential premises to be used for an unlawful purpose, as discovered by the execution of a search warrant by police, dated 2 May 2019. The respondent's application was successful. The Tribunal terminated the social housing tenancy agreement, publishing its reasons for decision on 5 December 2019. The appellant lodged an appeal against the decision on 7 January 2020. The appellant proceeds by way of Amended Notice of Appeal filed on 12 February 2020. 3. For the reasons set out below, we have decided to allow the appeal. Background 1. The parties to the appeal entered into a social housing tenancy agreement on 13 July 1998 for a three bedroom house at Macquarie Fields (the residential premises). 2. On May 2019 NSW Police conducted a search of the residential premises under a warrant and the appellant was charged with: 1. three counts of possession of prohibited drugs (cannabis and methamphetamine); 2. possession of a prohibited weapon without permit (knuckle dusters); and 3. possession of a prescribed substance (Ritalin). 1. The appellant pleaded guilty to possession of a prohibited weapon without a permit; possession of a prohibited drug (0.69 g of methamphetamine) and possession of a prohibited drug (a silver tray containing cannabis leaf). NSW Police withdrew the other drug charge and the tenant pleaded 'not guilty' to the possession of a prescribed substance (Ritalin) and that charge was dismissed by the court. It was not in dispute between the parties that another person who resided at the premises at the time, but who was not a tenant, was charged with offences concerning the possession of fireworks; two counts of unlawfully obtained goods; possession of ammunition without a licence; and possession of a prohibited weapon. Tribunal proceedings and reasons for decision 1. On 1 August 2019, the respondent filed an application seeking orders for termination and possession under sections 91, 123, 187(1)(a) and 187(1)(i) of the RT Act, citing as particulars in the "reasons for the orders" the results of the New South Wales Police search warrant being executed at the premises on 2 May 2019 including the five charges laid against the appellant by New South Wales Police. 2. In deciding the application, the Tribunal found that the appellant suffered from schizophrenia, which is a disability within the meaning of the Anti-Discrimination Act 1977 (NSW) and for the purpose of s 154D(3)(b) of the RT Act. 3. In considering whether the appellant would suffer undue hardship, the Tribunal took into account the following facts, none of which were challenged by the respondent, see written reasons for decision, page 6, at [3]: 1. The tenant suffers from schizophrenia; 2. The tenant attends a local GP in the vicinity of the premises for monthly injections; 3. The tenant is familiar with the area, her home, the neighbours and does not want to move; 4. The tenant is on a disability support pension, and has resided in the area for 20 years; 5. The tenant's sister, her full-time carer, attends a couple of times per week; 6. The tenant may be assisted from time to time by neighbours who live in the immediate vicinity; 7. There was no medical evidence before the Tribunal suggesting that termination of the tenancy may have serious adverse effects on the tenant's health or that the condition cannot be adequately managed or that the tenant will not be able to access necessary treatment if she moves from the area. 1. The Tribunal also considered s 154E of the RT Act, and in particular found that there was no evidence of unlawful conduct that has negatively affected neighbours (noting that two neighbours provided statements that the appellant was "quiet and helpful"); the length of the tenancy; that there was no evidence of any breaches of previous Tribunal orders; and that the landlord has a responsibility to other social housing tenants. 2. Significantly, at page 6 of the reasons for decision, proximate to and under the introduction "for there to be undue hardship" the Tribunal also considered the following: Regard has also been had to the prior conviction in 2015, which has also involved unlawful use of the premises, the ongoing use of cannabis from the premises for many years together with the storage of ICE and Ritalin at the premises for 6 and 2 years respectively prior to the police search in 2019 and the nature of the unlawful conduct the subject of this Application as well as the history of the tenancy. 1. The Tribunal ultimately was not satisfied that the appellant would suffer undue hardship if her tenancy agreement were terminated, on the basis that the appellant was unable to state what hardship she would suffer by reason of her disability, citing only the usual concerns of someone facing termination such as that she liked where she lived, she was familiar with the neighbourhood, and that she did not want to move and had limited financial means. The stay orders 1. At a call over on 23 January 2020 the Appeal Panel stayed the order for possession on the condition that there is no unlawful activity on the premises and the appellant fully complies with the terms of the tenancy; Mr Jarvis not occupy the premises (without precluding him from visiting the premises); and that the respondent may relist the appeal to request the stay to be lifted if the conditions are not met. Scope and nature of internal appeals 1. Internal appeals may be made as of right on a question of law, and otherwise with permission (that is, the "leave") of the Appeal Panel: s 80(2) Civil and Administrative Tribunal Act 2013 (NSW)(NCAT Act). 2. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: 1. the decision of the Tribunal under appeal was not fair and equitable; or 2. the decision of the Tribunal under appeal was against the weight of evidence; or 3. significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17 (Collins v Urban), the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b). 2. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. Submissions and evidence 1. In deciding the appeal, we have had regard to the following: * The Amended Notice of Appeal filed and served on 12 February 2020, attaching a binder including evidence, transcript and written submissions. * The Reply to Appeal filed and served on 16 January 2020 and a binder with the respondent's written outline of submissions. * The appellant's outline of submissions in reply, filed on 23 March 2020, which also attached proposed fresh evidence not previously filed in the appeal, or the proceedings below: a report of Dr Adam Martin, Forensic Psychiatrist dated 20 March 2020 and the letter of instruction under the hand of Jennifer Lee, Solicitor, Legal Aid, dated 9 March 2020. Notice of Appeal and Extension of time 1. The Notice of Appeal should have been lodged by 20 December 2019, in accordance with the 14 day time period specified in cl 25 of the Civil and Administrative Tribunal Rules 2014 (the Rules). The Notice of Appeal was lodged on 7 January 2020, 18 days out of time. We will therefore have to decide whether time should be extended pursuant to s 41 of the NCAT Act. Principles relevant to the exercise of that discretion are set out in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22. Some of the factors to consider in an application for extension of time include the length of the delay, the reason for the delay, the appellant's prospects of success and the extent of any prejudice to the respondent. For the reasons set out below, the appellant had strong prospects of success in the appeal and the respondent did not object to the late filing of the appeal, nor was there any evidence of prejudice before the Tribunal. We extend time for the filing of the Notice of Appeal to 7 January 2020. The Grounds of Appeal and the Appellant's submissions Ground One 1. The first ground of appeal alleges that: The Tribunal erred in law by taking into consideration irrelevant considerations, namely the nature of the 2019 unlawful use and the previous 2015 unlawful use, in its assessment under s 154D(3)(b) of the RT Act, rather than considering exclusively (our emphasis) the likely hardship to be suffered by the appellant if a termination order was made, thereby applying the wrong test. Ground Two 1. The second ground alleges that: The Tribunal erred in law by applying the wrong test under s 154D(2)(c) of the RT Act. Despite not being satisfied that there is hardship or hardship that is excessive in the circumstances within the meaning of s 154D(3)(b) and (c) of the RT Act, rather than simply proceeding to make a non-discretionary termination order under s 154D(2)(c) as is mandatory following on from that conclusion, the Tribunal instead proceeded to consider the appellant's "fault" in relation to both the 2015 and 2019 unlawful uses before concluding that the tenancy should be terminated under s 91(1)(b), thereby lapsing into legal error. Ground Three 1. This ground alleges that the Tribunal's finding that there was no undue hardship or hardship that was excessive in the appellant's circumstances pursuant to s 154D(3)(b) of the RT Act was against the weight of evidence and there was manifestly insufficient evidence to justify this finding. Ground Four 1. This ground alleges that the Tribunal failed to give any or sufficient weight to the risk of homelessness faced by the appellant if her social housing tenancy was terminated in the context of its exercise of the section 91 discretion and or section 150D(3)(b) of the RT Act. Relevant legislation 1. It is useful to set out the relevant legislative provisions: ss 91 and 154D of the RT Act. 2. Section 91 is found in Division 2 of Part 5 of the RT Act. Part 5 is concerned with termination of residential tenancy agreements. Division 2 is concerned with termination by landlords. Section 91 provides, relevantly: Use of premises for illegal purposes (1) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that the tenant, or any person who although not a tenant is occupying or jointly occupying the residential premises, has intentionally or recklessly caused or permitted: (a) the use of the residential premises or any property adjoining or adjacent to the premises (including any property that is available for use by the tenant in common with others) for the purposes of the manufacture, sale, cultivation or supply of any prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985, or (b) the use of the residential premises for any other unlawful purpose and that the use is sufficient to justify the termination. (2) In considering whether to make a termination order on the ground specified in subsection (1) (b), the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the unlawful use, (b) any previous unlawful uses, (c) the previous history of the tenancy. 1. The application for termination in this case was made under s 91(1)(b). The tenant accepted that she intentionally or recklessly caused or permitted the use of the premises for an unlawful purpose and the criteria for termination under that sub-section were established. 2. The Tribunal then has a discretion whether to terminate a tenancy agreement under s 91(1)(b), but s 154D modifies that position in respect of social housing tenancy agreements. Relevantly, s 154D provides: 154D Tribunal required to make termination order in certain circumstances … (2) Subject to subsection (3), the Tribunal must make a termination order on the application of a landlord if-- … (c) an application for the order is made under section 91 and the Tribunal is satisfied that the tenant, or any person who although not a tenant is occupying or jointly occupying the social housing premises, has intentionally or recklessly caused or permitted the social housing premises … to be used for any other unlawful purpose and that the use is sufficient to justify the termination. (3) However-- … (b) subsections (1) and (2) do not apply if the Tribunal is satisfied that the termination order would be likely to result in undue hardship being suffered by a child, a person in whose favour an apprehended violence order could be made or a person suffering from a disability within the meaning of the Anti-Discrimination Act 1977 who is occupying or jointly occupying the social housing premises, and (c) subsection (2) does not apply if the tenant satisfies the Tribunal that there are other exceptional circumstances that justify the order not being made. … (5) If the Tribunal does not make a termination order as a consequence of subsection (3), the Tribunal must provide written reasons for the decision. 1. Where an application under s 91(1)(b) is made in respect of a social housing tenancy agreement and the elements required in s 91(1)(b) are established, s 154D(2)(c) (essentially the same test as that contained in s 91(1)(b) in a social housing context) means that termination of the agreement is, prima facie, mandatory in a case such as this. This is the case unless s 154D(3)(b) applies and such termination would result in undue hardship, or unless s 154D(3)(c) applies and there are other exceptional circumstances that justify the order not being made. 2. The Appeal Panel's decision in Orr v NSW Land and Housing Corporation [2018] NSWCATAP 23 at [33] explains the interrelationship of sections 154D(1) and (3)(b) in the context of an application made under s 91(a), as does the Court of Appeal's decision in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231, at [80] to [81] (per Bell P, with Ward JA agreeing) and at [118] to [119] (per McCallum JA). The test to be applied before termination involves a number of steps. In the circumstances of this matter, which is an application under s 91(1)(b) in respect of a social housing tenancy, the Tribunal must determine: 1. whether the elements of s 91(1)(b), and thereby s 154D(2)(c), are made out; 2. if so, whether s 154D(3)(b) is engaged, because a termination order would result in undue hardship to a person with a disability or whether s 154D(3)(c) is engaged, because the Tribunal is satisfied that other exceptional circumstances exist which justify the order not being made; 3. If either s 154D(3)(b) or s 154D(3(c) apply, the Tribunal has a discretion as to whether or not to terminate the tenancy agreement, and must exercise that discretion having regard to the factors listed in s 154E(1) and to any other factors relevant to the exercise of the discretion. 1. There is no argument that the Tribunal properly reached step 2 of this process and decided that the necessity to consider s 154D(3)(b) was engaged. The Tribunal also decided that the tenant had not demonstrated that other exceptional circumstances exist which justify the order not being made, which demonstrates that the Tribunal considered the application of s 154D(3)(c). That finding was unchallenged. 2. This appeal turns on, first, whether the Tribunal fell into error when, in determining whether undue hardship to the tenant would be occasioned by termination of the tenancy agreement, it had regard to irrelevant considerations as to the seriousness of the prior offences and the fault of the appellant. 3. As clearly enunciated in NSW Housing v Orr [2018] NSWCATAP 237, considerations of fault must be excluded from an assessment of "undue hardship" in the context of s 154D(3)(b) of the RT Act, although that does not mean that fault may not be a relevant consideration in the discretionary decision to terminate a tenancy pursuant to s 91 of the Act where that discretion is enlivened. Cain v New South Wales Land and Housing Corporation (2014) 86 NSWLR 1; [2014] NSWCA 28 at [39] (Cain) is authority for that proposition, as well as for the more general proposition that an application for termination under s 91 of the Act involves the exercise of a discretion. This analysis of the Appeal Panel was cited by the Court of Appeal (New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 at [32]) as correct and is authority that the purpose of s 154D(3) is to mitigate the harsh consequences of s 154D(1) for defined categories of people who occupy social housing premises in circumstances where an order for termination would otherwise be mandatory regardless of the degree of fault of the social housing tenant. 4. Secondly, we must consider whether the Tribunal erred by failing to consider that by operation of s 154D(2) of the RT Act, the termination of the tenant's social housing tenancy agreement was mandatory after the Tribunal found that there was no undue hardship and the provisions of 154D(3) were not otherwise enlivened. 5. For the reasons that follow we are of the view that Grounds One and Two of the appeal should succeed and that the appeal should be allowed. It is therefore not necessary for us to consider the remaining grounds of appeal. The structure of the reasons 1. The reasons for the Decision are not numbered or significantly structured within headings. 2. This is an understandable incident of the nature of reasons provided in a high volume jurisdiction such as the Residential Tenancies List, and the constraints of the electronic environment in which the reasons are produced. 3. Two things arise from this. Firstly, where we have referred to paragraph numbers of the reasons we have done so simply by assigning a number to the paragraphs as they appear in the reasons on each page. Secondly, the reasons, with respect, lack the clarity of expression that headings and dealing with issues in a structured and sequential way provides. 4. Nonetheless, we have considered the reasons as a whole, and where necessary, made due allowance for the possibility that the Tribunal was detailing and expressing its views on the evidence interspersed with detailing its understanding of the law and making its findings, even where the broad headings used by the Tribunal of "Legislation", "Facts" and "Consideration" might indicate otherwise. 5. Prior to turning to the respondent's submissions in the Appeal in respect of Grounds One and Two, it is appropriate that we set out the most relevant sections of the Tribunal's reasons, in full and in order, with the numbering we have used applied. They are as follows, commencing under the heading "Consideration": At page five: [8] The Tribunal notes the following relevant principles from the recent Court of Appeal decision in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231: - The starting point is that "undue hardship" within the meaning of s 154D(3)(b) of the Act is what needs to be established to open a gateway to a discretionary consideration of a termination application under s 91 of the Act; if "undue hardship" is not established, the termination of the tenancy is mandatory under s 154D(1) of the Act. At page six, continuing paragraph [8] from page five: - Hardship is one factor to consider in the exercise of the relevant discretion under s 91 of the Act. "The degree of its significance in any given case will be a function not of any legal characterisation for the purposes of s 154D(3)(b) of the Act as to whether the hardship was "undue", but by reference to the quality or extent of the hardship in fact demonstrated in the evidence before the Tribunal on the termination application as one of a number of mandatory and other permitted relevant considerations that fall for consideration in the exercise of the Tribunal's discretion". - Fault is a relevant, if not mandatory, consideration in the exercise of the s 91 discretion: see Cain at [39] where it was said, in the context of s 91 of the Act, that "there [was] no basis for reading the statute as excluding either the personal history of the respondent, the nature of the offending, the sentencing in the District Court for the offence, the possibility of repetition in the future or the likely effect of the termination order on the Tenant's health and medical treatment". - It follows that both fault and hardship were relevant considerations in the exercise of the s 91 discretion. [1] For there to be "undue hardship" there must be hardship that is excessive in the circumstances. In relation the Tenant's hardship the Tribunal has considered: 1. The fact the Tenant suffers schizophrenia. 2. That the Tenant attends a local GP approximately 4km away for monthly injections. 3. That the Tenant is familiar with the area, the home and her neighbours and does not want to move. 4. That the Tenant is on a disability pension, with a limited income and has been a social housing tenant in the subject premises for at least 20 years. 5. That whilst the Tenant's sister is the Tenant's full time carer she only attends 2 or 3 times per week for a couple of hours at a time to help calm the Tenant, if she calls upon her sister by telephone to do so. 6. That Mr Jarvis attends from time to time when called upon to do so by telephone to calm the Tenant if her sister cannot be there. 7. That the Tenant may be assisted occasionally by neighbours but that the evidence indicates they are not aware of the Tenant's medical condition (the Tenant indicated she keeps it to herself) and that the neighbour assistance is limited to the usual neighbourly help when one gets on with their neighbours such as a lift to the doctor if the Tenant's car is unavailable. 8. That there is no medical evidence to suggest termination may have serious adverse effects on the Tenant's health or that the condition is not being adequately managed or that the Tenant will not be able to access necessary treatment if she moves from the area. [2] The Tribunal has also considered the matters in section 154E in exercising the discretion that: - There is no evidence the unlawful conduct has affected neighbours. - That the tenancy has been on foot for 20 years. - There is no evidence of any breaches of previous Tribunal orders. - That the landlord has a responsibility to other social housing tenants. [3] Regard has also been had to the prior conviction in 2015, which also involved unlawful use of the premises, the ongoing use of cannabis from the premises for many years together with storage of ICE and Ritalin at the premises for 6 and 2 years respectively prior to the police search in 2019 and the nature of the unlawful conduct the subject of this Application as well as the history of the tenancy. At page seven [1] Whilst the Tribunal accepts some hardship may be suffered by the Tenant if the agreement were terminated the Tribunal concludes on balance that there would not be "undue hardship" within the meaning of s 154D(3)(b). The Tenant was unable to state what hardship she would suffer by reason of her disability, if the tenancy was terminated, citing only the usual concerns of someone in facing termination such as that she liked where she lived, she was familiar with the neighbourhood, did not want to move and had limited financial means. She also had a pet to consider. There was simply no evidence, however, that there would be any hardship specific to or in connection with her disability. The medical evidence was deficient on this, comprising only one hospital discharge summary from a 2013 admission and a note from her GP confirming her diagnosis and injection treatment plan. There was no other medical evidence and in particular, no up to date medical evidence about any specific living or accommodation requirements of the Tenant by reason of her disability or otherwise. [2] There is no reason why the Tenant could not continue to receive her monthly GP treatment through her current or another local GP. There is no evidence that the Tenant's sister or Mr Jarvis could not attend when telephoned to do so, in order to calm the Tenant down if she were to reside elsewhere. In particular, the Tenant's sister is meant to be the Tenant's full time carer and is paid a carer's pension accordingly. [3] There is no evidence that the issues raised by the Tenant in terms of limited finances or her medical condition cannot be overcome or accommodated in alternative accommodation. On balance the Tribunal is not satisfied there is undue hardship or hardship that is excessive in the circumstances by reason of the Tenant's disability or by reason of any other fact. The Tribunal is also not satisfied there are other exceptional circumstances that justify the order to terminate not being made. [4] The Tribunal also finds that the Tenant is at fault in relation to the unlawful conduct, admitting that she was guilty of same and further admitting that she permitted Mr Jarvis to also use the premises for unlawful conduct. The Tribunal also finds there has been previous unlawful use of the premises in relation to the earlier charge of the Tenant in 2015 regarding possession of a prohibited drug on the premises and the Tenant's admissions to police during the 2019 search that she uses cannabis and has done so for years from the premises. As noted, the Tribunal has considered the other matters raised by the Tenant in relation to the degree of unlawful conduct, that it did not impact the neighbours in an adverse way, that the tenancy has been on foot for around 20 years and that the Tenant is otherwise a good Tenant. However, the Tribunal is satisfied section 91(1)(b) is made out and that the use of the premises is sufficient to terminate the tenancy. [5] The Tribunal finds on balance that neither s154D(3)(b) or (c) is made out and so s154D(3) does not apply for the reasons outlined above. The Tribunal finds the Tenancy should be terminated under sections 91(1)(b) and 154D(2)(c) and makes the orders set out above. The Respondent's submissions 1. The Respondent submits that Ground One should be rejected as this ground is predicated on the assumption that the Tribunal's reasons for decision on page 6 at [3] indicate that it had regard to the seriousness and criminality of the offences in 2015 and 2019 when considering whether the undue hardship provisions apply. The respondent submits that the hardship provisions were previously correctly applied on page 3 of the reasons, where the Tribunal stated "the [tenant's] medical condition amounted to a disability under the Anti-Discrimination Act". The Tribunal went on to consider, in the respondent's submission correctly, whether the disability results in undue hardship, under s 154D(3) of the Act. The respondent places particular reliance on page five paragraph [8] (continuing onto page six) and paragraphs [1] and [2] on page six of the reasons where the Tribunal considers the hardship factors. The respondent points out that these paragraphs do not take into account "fault". It is the respondent's submission that on a correct reading of the decision in its totality, the Tribunal does not consider "fault" when considering undue hardship. 2. It is submitted by the respondent that the reference to prior convictions in 2015 on page six at [3] should be properly read in the context of the reasons as a whole as the Tribunal considering the elements of s 91(1)(b), and not as factors taken into account when considering s154D(3)(b). 3. It further submitted that the decision of Orr is distinguishable by reason of the fact that that it concerned a termination on the grounds of use of residential premises for the sale or supply of a prohibited drug, s 91(1)(a) and not, as here, s 91(1)(b) for another illegal use of the premises. We accept that this adds an extra consideration to those relevant in Orr, as the Tribunal considering an application under s 91(1)(b) must be satisfied that the use of the premises warrants a finding that it "is sufficient to justify the termination" before the terms of s 91(1)(b) are fully met, a requirement the legislature did not require to be separately satisfied when the illegal use meets the description in s 91(1)(a). 4. In particular, the respondent relies on page 7, at [3] of the decision where, after rejecting the notion of undue hardship, the Tribunal recorded that it was "… not satisfied there are other exceptional circumstances that justify the order to terminate not being made." The respondent submits this is a clear indication that the Member understood that unless a finding of hardship was made, a termination order was mandatory. 5. The respondent submits that the reasons, when read in context and as a whole, disclose the application of correct principles and that the "reasons recorded ought not be inspected with a fine tooth-comb attuned to identifying error: Collector of Customs v Pozzolanic Enterprises Pty Ltd (1993) 43 FCR 280 at 287; [1993] FCA 456 at 287. Consideration Ground One 1. It is our view that the Tribunal fell into error when it considered the undue hardship provisions, as evidenced by it making specific reference to the appellant's prior offences in 2015 in the way that it did. Whilst the Tribunal correctly sets out the test as considered by the Court of Appeal in Orr, there appears to follow a consideration of the undue hardship provisions which included direct reference to the severity of the offences committed, and the "fault" of the appellant. 2. Whilst read in isolation each paragraph on page six may not give this impression, the order in which they are recorded, in the absence of any explanation to the contrary, does so. 3. This is because there was no other reason for the Tribunal to consider and therefore, in recording its logical and sequential reasoning process, refer to issues of "fault' between recording its considerations as to hardship or undue hardship from [8] on page 5 to [3] on page six and then going on to make a finding that there was no undue hardship at [1] on page seven. 4. Similarly, unless the Tribunal was first satisfied that the elements of s 91(1)(b) were made out, there was no need for it to move to a consideration of whether undue hardship had been established, as the discretion to terminate the tenancy indicated by the use of the word "may" in the chapeau to s 91(1) would not have been enlivened. This is contrary to the sequence in which the Tribunal has recorded its considerations in moving from the content of [2] to [3] on page six. 5. We acknowledge that the only explicit finding made by the Tribunal that the terms of s 91(1)(b) were made out occurred on page seven, at [4]. Therefore, it is arguable that paragraph [3] on page six was simply a consideration on the way to that conclusion, and that the matters referred to by the Tribunal from [8] on page five to [3] on page seven were intended to be read disjunctively, not sequentially or as indicating an uninterrupted process of reasoning. 6. The respondent makes particular reference to page 7 at [3]: "On balance the Tribunal is not satisfied there is undue hardship or hardship that is excessive in the circumstances by reason of the Tenant's disability or by reason of any other fact. The Tribunal is also not satisfied there are other exceptional circumstances that justify the order to terminate not being made". It is the respondent's submission that this passage clearly demonstrates that the Member applied the correct test and that there was no conflation between the consideration of hardship and the exercise of the s 91 discretion. However, we do not consider that this paragraph, although generally stating the principles correctly, explains the extensive reference to the tenant's criminal offending on page 6, amidst the consideration of undue hardship. 7. In reading the reasons as a whole, the conclusion we draw is that Tribunal has conflated the issues it needed to consider, as evidenced by referencing previous convictions and "fault" in the context of undue hardship, rather than solely in respect of the questions of whether the illegal use of the premises justified the termination of the tenancy or whether it should exercise any residual discretion it believed that it had to terminate the tenancy. 8. There is, in our view, no comfort for the appellant to be derived from the reasons that the provisions of s 154D(3)(b) were correctly considered, untainted by considerations of her previous convictions or "fault". 9. We are not satisfied that the analysis by the Appeal Panel in Orr above, and as affirmed by the Court of Appeal (with due regard to the fact that this was an application under s 91(1)(b) and not s 91(1)(a)) was correctly applied by the Tribunal. Nor do the reasons demonstrate an understanding of the clear differentiation between the application of s 154D(3) and the exercise of the discretion under s 91 or consideration of the elements of s 91(1)(b). 10. We are therefore satisfied, on balance, that the member took into account an irrelevant consideration when deciding whether prospective undue hardship had been demonstrated, constituting an error on a question of law. We find that Ground One is made out. Ground Two 1. In respect of this ground, the respondent submits that the Tribunal "clearly states" its reasoning for the termination. The submissions go on to state: "In coming to the conclusion that there has been a breach of s 91(1)(b) the Tribunal is not restricted in what matters it can take into account. In [the respondent's] submission this could include fault, the factors identified under s154E and so forth. So once it has determined that there is a breach of section 91(b) (sic) it has to look at subsection 154D(2) to determine whether it is mandatory to terminate the tenancy." 1. It is not clear to us that the considerations in s 154E could have any bearing on a finding as to whether the illegal use of the premises is sufficient to justify the termination of the tenancy, however nothing turns on this. We understand the general thrust of the submission to be that a consideration of this issue may encompass any relevant factors, including the extent of the tenant's fault in the use occurring. 2. Whilst we agree with the general proposition for which this submission stands, there is no clear indication of the application of the correct reasoning process in the reasons, in that once a finding that the elements of s 91(1)(b) were made out, and the notion of undue hardship was rejected, the Tribunal had no other option than to terminate the tenancy. In our view the reasons reflect more than a mere "looseness" in the language of the Tribunal but rather the lack of a clear understanding of the relevant test to be applied. 3. Again, the Tribunal's sequential findings on page seven of the reasons, first at [3] that no prospective undue hardship was established and then at [4] that the tenant was culpable in the illegal use of the premises, reinforces that view. 4. In our opinion, this issue is put beyond doubt by the Tribunal's summation at [5] on page seven where, in the penultimate paragraph of the reasons and the last to deal with these issues, the Tribunal concluded: The Tribunal finds on balance that neither s154D(3)(b) or (c) is made out and so s154D(3) does not apply for the reasons outlined above. The Tribunal finds the Tenancy should be terminated under sections 91(1)(b) and 154D(2)(c) and makes the orders set out above. (emphasis added) 1. Leaving to one side the loose reference to the section under which the termination would be effected, we are satisfied that, in the context of having confirmed a finding that removed from doubt that the termination of the tenancy was mandatory, the use of "should" in this paragraph makes it clear that the Tribunal was still of the view that is was exercising a discretion in terminating the tenancy. 2. This ground of appeal must succeed also. 3. It was a consent position of the parties that, in the event grounds One or Two succeed, there is no necessity for the Appeal Panel to consider the remaining grounds of the appeal. Conclusion 1. For the above reasons, the Appeal shall be allowed, the decision set aside and the matter is remitted to the Tribunal for determination according to law. Orders 1. The Orders of the Appeal Panel are as follows: 1. The Appeal is allowed. 2. Orders one to five made on 3 December 2019 in SH 19/34828 are set aside. 3. The application is remitted to the Consumer Commercial Division for determination according to law and in accordance with any Direction the Tribunal may make. ********** 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: 02 June 2020