New South Wales Supreme Court CITATION : Pedro Alfaro v Consumer, Trader and Tenancy Tribunal [2007] NSWSC 1035 HEARING DATE(S) : 2 July 2007, 6 July 2007, 31 July 2007 JUDGMENT DATE : 2 November 2007 JURISDICTION : Supreme Court JUDGMENT OF : Rothman J (i) The summons discloses no reasonably cause of action, is an abuse of process and frivolous and vexatious; DECISION : (ii) Pursuant to Rule 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), and the inherent jurisdiction of the Court, the proceedings are dismissed; (iii) The plaintiffs shall pay the costs of and incidental to the proceedings, as agreed or assessed. CATCHWORDS : ADMINISTRATIVE LAW – APPEAL – CONSUMER, TRADER & TENANCY TRIBUNAL – residential lease – summary dismissal of appeal – waiver/election – unequivocal inconsistency of rights – bias – incautious remarks at conclusion of proceedings – no pre-judgment or prejudice Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) LEGISLATION CITED : Residential Tenancies Act 1987 (NSW) Uniform Civil Procedure Rules 2005 (NSW) AJ Bignell v SG Edenden [2004] NSWSC 27 Australian Gaslight Co v Valuer-General (1940) SR (NSW) 126 Ebner v Official Trustee in Bankruptcy (2001) 205 CLR 337 Grygiel v Baine [2005] NSWCA 218 General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 Immer (No 145) Pty Ltd v Uniting Church (1993) 182 CLR 26 CASES CITED : Johnson v Johnson (2000) 201 CLR 488 Kostas v HIA Insurance [2007] NSWSC 315 Livesey v NSW Bar Association (1983) 151 CLR 288 Ngo Ngo Ha & Anor v The State of New South Wales (1996) 70 ALJR 611 R v Australian Stevedoring Industry Board; ex parte Melbourne Stevedoring Company Pty Ltd (1953) 88 CLR 100 R v Watson; ex parte Armstrong (1976) 136 CLR 248 Re JRL; ex parte CJL (1986) 161 CLR 342 Re Polites; ex parte Hoyts (1991) 173 CLR 78 First Plaintiff: Pedro Alfaro Second Plaintiff: Silvia Gladys Alfaro Third Plaintiff: Diana Alfaro PARTIES : Fourth Plaintiff: Richard Alfaro First Defendant: Consumer, Trader and Tenancy Tribunal Second Defendant: NSW Land and Housing Corporation Third Defendant: Bridget Brooker FILE NUMBER(S) : SC 30156/2006 COUNSEL : Plaintiffs: P. Alfaro Second and Third Defendants: A. Jungwirth SOLICITORS : Plaintiffs: - Second and Third Defendants: M. Callen (NSW Department of Housing) LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal of NSW LOWER COURT JUDICIAL OFFICER : Member Farey LOWER COURT DATE OF DECISION : 07/11/06 IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ROTHMAN J 2 NOVEMBER 2007 30156/06 Pedro ALFARO v CONSUMER, TRADER & TENANCY TRIBUNAL JUDGMENT 1 HIS HONOUR: Pedro Alfaro is a public housing tenant of the NSW Land and Housing Corporation. On 7 November 2006 the Consumer, Trader & Tenancy Tribunal, on application of the Corporation, terminated the tenancy agreement and granted it possession of the premises. Mr Alfaro appeals that decision to this Court. 2 The circumstances can be briefly stated and are the subject of factual findings of the Tribunal in its Reasons for Decision published at the request of Mr Alfaro on 1 December 2006. 3 The Tribunal found (and it is confirmed by uncontested evidence before the Court) that the subsidised rent of $43.65 per week was last paid on 29 May 2006 for the period up to and including 11 June 2006. After a number of requests for payment of rent due, the Corporation took action to terminate the lease. The actions of the Corporation, the terms of the lease and the jurisdiction of the Tribunal are governed, at least in part, by the Residential Tenancies Act 1987 (NSW). 4 In June 2007 termination of the lease occurred and Mr Alfaro unsuccessfully appealed to this Court. The termination was not effected and at the time of the proceedings before the Tribunal on 7 November 2006, Mr Alfaro owed $2,133.03 in back rent. 5 At the hearing on 7 December 2006, the Corporation proved its case. In answer, Mr Alfaro, it seems, submitted that, on the basis of correspondence to which I will return, the Corporation had waived both any right to rent the arrears and any rights to terminate. 6 The letter upon which Mr Alfaro predominantly relied was a letter from the Department of Housing dated 11 October 2006. The Corporation is a business entity of the Department. That letter was an assessment of Mr Alfaro's application for rent subsidy and increased the rent payable to $99.95 per week on and from 9 October 2006. The rent subsidy is based on income and, in the case of Mr Alfaro, the amount received as Newstart Allowance. Mr Alfaro maintains that the adjustment to his rent is unreasonable. The reasonableness of the rent was not the subject of application before the Tribunal, nor is it relevant to these proceedings. 7 The letter of 11 October 2006 does not refer to past rent but refers only to the commencement of new rent payable on a weekly basis and the amount of subsidy. Summary Dismissal 8 The Corporation moves on a motion relying on Rule 13.4 of the Rules which is in the following relevant terms: "13.4 Frivolous and vexatious proceedings (1) If in any proceedings it appears to the court that in relation to the proceedings generally or in relation to any claim for relief in the proceedings: (a) the proceedings are frivolous or vexatious, or (b) no reasonable cause of action is disclosed, or (c) the proceedings are an abuse of the process of the court, the court may order that the proceedings be dismissed generally or in relation to that claim. (2) The court may receive evidence on the hearing of an application for an order under subrule (1)." 9 Before this Court exercises its power to dismiss a proceeding summarily, it must first be demonstrated by the moving party that the claim that is being made is so clearly untenable that it cannot possibly succeed: see General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 per Barwick CJ at 130. 10 As put by Kirby J in Ngo Ngo Ha & Anor v The State of New South Wales (1996) 70 ALJR 611, albeit in the context of a challenge to the constitutional validity of a law: "[1] The rule of law requires that, ordinarily, a claim should be heard on its merits in open court and determined after all pleading and interlocutory proceedings have been completed. The jurisdiction to strike out a claim must be sparingly used. It must be conserved to a very clear case, although the establishment of that case may take time and argument: see Dey v Victorian Railways Commissioners (1949) 78 CLR 62 at 91; General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 130. 11 Barwick CJ, in his oft-cited dicta in General Steel, stated that for the claim to be dismissed summarily the lack of a reasonable argument must be "'so to speak apparent at a glance'" (at 129). 12 The most oft-cited passage from the judgment is: "It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action—if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal—is clearly demonstrated. The test to be applied has been variously expressed; 'so obviously untenable that it cannot possibly succeed'; 'manifestly groundless'; 'so manifestly faulty that it does not admit of argument'; 'discloses a case which the Court is satisfied cannot succeed'; 'under no possibility can there be a good cause of action'; 'be manifest that to allow them' (the pleadings) 'to stand would involve useless expense'." ( General Steel , supra, per Barwick CJ at 129) 13 It should be borne in mind what Barwick CJ then said: "I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed." ( General Steel , supra, at 130) Grounds of Appeal 14 Mr Alfaro has a right of appeal to the Court from any decision of the Tribunal with respect to a question of law: see section 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW). 15 Mr Alfaro has not clearly identified the questions of law sought to be challenged: Grygiel v Baine [2005] NSWCA 218 per Basten JA at [29]. Further, the findings of fact of the Tribunal were not only open (i.e. there was evidence before the Tribunal on which they could be based), they were unassailable: see Australian Gaslight Co v Valuer-General (1940) SR (NSW) 126; Kostas v HIA Insurance [2007] NSWSC 315 at [159]-[163]; AJ Bignell v SG Edenden [2004] NSWSC 27. 16 However, the two issues that require attention and are, or may be, questions of law, are: the issue of waiver/election said to arise from the letter of 11 October 2006; and, the allegation of bias/natural justice in the Tribunal member (which I shall take to include apprehended bias). Waiver/Election by Letter of 11 October 2006 17 The terms of the letter do not need repeating. The letter is to the effect already summarised. In my view an objective and fair reading of the letter of 11 October 2006 is that it deals only with the amount payable after the reassessment of the rent and says nothing about amounts owing previously. 18 In order for the letter to act to waive past default, it must be an unequivocal act inconsistent with the exercise of those past rights. An act that is consistent with the continued reservation of rights said to be waived, is not an election not to pursue those rights, nor a waiver of them: Immer (No 145) Pty Ltd v Uniting Church (1993) 182 CLR 26 at [3], [20]; Kostas, supra, at [132]-[137]. 19 While it would be preferable if the letter, which I assume is in standard form, were to contain an express disavowal of waiver and/or election, in relation to past or existing rights, the letter of 11 October 2006 did not arguably elect in the manner necessary, nor did it arguably have the effect of waiving the rights of the Department or Corporation in relation to the Plaintiffs' outstanding rent at that time. Natural Justice/Bias 20 Before proceeding with the principles of natural justice or bias and their application, it is necessary to set out some events both before this Court and the Tribunal and as they relate to the relationship between Mr Alfaro and employees or officers of the Department. 21 When the matter was first listed before the Court as presently constituted, the file was not in Court. The file, the parties and judge were informed, could not presently be located. In order to expedite the matter, I directed the legal representatives of the Corporation to "reconstruct" the file by filing another copy of all documents filed by the parties and providing the Court and Mr Alfaro with an index (in neutral terms) of the documents provided. I gave Mr Alfaro the opportunity, if he chose so to do, to supplement the documents or object to the provision of any document. 22 The matter came back before me, whereupon Mr Alfaro objected (for the first time) to the matter proceeding on that basis as it was a denial of natural justice to reconstruct the file. I rejected that assertion. The original file has now been located and there is nothing in the documents provided that had not otherwise been filed, nor, I hasten to add, was any document of relevance omitted. 23 Further, I should note that the attitude of Mr Alfaro at the bar table was belligerent and almost contemptuous. Evidence before the Court disclosed threats of various kinds (mostly of suit) against employees of the Corporation. The Tribunal in the Reasons for Decision recounts threats made to it and those representing the Corporation. The Reasons state: "The Respondent was given the opportunity to negotiate some agreement with the Applicant with the view that the Respondent would pay rent as required by the Tenancy Agreement, and make regular contributions towards rent arrears. The parties were unable to come to any agreement. At the hearing of the matter, a number of measures were taken to ensure that the Respondent was fully aware of the consequences should the orders sought be made. He was encouraged to consider resuming rental payments and even a token regular amount towards the arrears. Although given every opportunity to do so, the Respondent did not address the issues before the Tribunal, preferring to raise matters which were not relevant to the application. The Respondent was adamant that he would neither pay rent nor make any contributions towards the arrears. Having threatened all present the Respondent left the hearing prior to any orders being made." 24 I recite the above for reasons that will now become obvious. At the hearing before the Court, I indicated that, in order to deal with the "unarguability" of the natural justice/bias point, I would need to have a record of the Tribunal proceedings. I was provided a sound recording of the proceedings. That record disclosed that threats of suit were made against the Department officers personally and against the Tribunal. I understand from statements made by Mr Alfaro (and referred to in the Summons) that there are now defamation proceedings against some at least of the defendants in these proceedings. 25 Further, some of the documents before the Tribunal related to threats to officers of the Department in their personal capacity. 26 The sound recording of the proceedings before the Tribunal reveals a discussion about the issues and an invitation, on one or more occasions, by the Tribunal to Mr Alfaro to have him address the issues and give evidence. At one point the Tribunal, somewhat pleadingly said: "I am willing to hear your evidence." 27 During all of that time there was no occasion where the Tribunal displayed anything other than an appropriate degree of empathy for Mr Alfaro and, in some trying circumstances, went to some lengths to ascertain the arguments he was pursuing. 28 There is some discussion before the Tribunal on the effect of the letter, mentioned above, of 11 October 2006. Mr Alfaro then does something at the bar table to which there is a response and he says: "Just make the orders and I'll sue (possibly, "see") the Department of Housing in the Supreme Court." Mr Alfaro then walks out. 29 At that point there is an unfortunate exchange between the Tribunal and the representative of the Corporation. In this Court, it was described as "incautious". This, of course, was after the Tribunal had, at least implicitly, indicated its attitude to the application and after Mr Alfaro had walked out inviting the Tribunal to make the orders, so that he could take these proceedings. The Tribunal can be heard to respond to comments from the Corporation's representative to the effect that Mr Alfaro had physically threatened the Department's staff. The exchange was in or to the following effect: MEMBER: "I'm going the other way. I'd get them out today. You don't have to put up with this crap." … [inaudible] "Call the police." … [inaudible] COUNSEL: "We have previously called the police." … [inaudible] MEMBER: "Who finances that?" … [inaudible] MEMBER: "Isn't it amazing, because it wouldn't work for you or me, would it?" At another point, it seems as a general response to a threat made by Mr Alfaro to sue the Member, the Member remarked (not to Mr Alfaro): "I'll get my husband to represent me, we need some money …". 30 The principles on bias are well established. Generally bias is, for obvious reasons, raised at the commencement of proceedings, or during them, to preclude a judicial (or quasi-judicial) officer from hearing a matter. 31 The general principle is that a judge should not hear a case if, in all the circumstances, the parties or the public might entertain a reasonable apprehension that the judge might not bring an impartial and unprejudiced mind to the resolution of the questions involved in it: Livesey v NSW Bar Association (1983) 151 CLR 288, at 293-294; R v Watson; ex parte Armstrong (1976) 136 CLR 248 at 258-263. 32 Judicial officers (and most members of most tribunals) are under a duty to hear and determine matters allocated to them: see Re JRL; ex parte CJL (1986) 161 CLR 342 at 352; Re Polites; ex parte Hoyts (1991) 173 CLR 78. 33 The High Court (Gleeson CJ, McHugh, Gummow and Hayne JJ) in Ebner v Official Trustee in Bankruptcy (2001) 205 CLR 337, at 345, [8] discusses the underlying philosophy behind the principle in a way that informs its application. Their Honours said: "The apprehension of bias principle admits of the possibility of human frailty. Its application is as diverse as human frailty. Its application requires two steps. First, it requires the identification of what it is said might lead a judge (or juror) to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits. The bare assertion that a judge (or juror) has an 'interest' in litigation, or an interest in a party to it, will be of no assistance until the nature of the interest, and the asserted connection with the possibility of departure from impartial decision making, is articulated. Only then can the reasonableness of the asserted apprehension of bias be assessed." 34 It is prejudice and/or a lack of impartiality that must be displayed. Leaving aside the reference to "high probability", which is no longer the test, the passage in R v Australian Stevedoring Industry Board; ex parte Melbourne Stevedoring Company Pty Ltd (1953) 88 CLR 100 and 116 (cited by Kirby J. in Johnson v Johnson (2000) 201 CLR 488, at 498) bears repeating: "Bias must be 'real'. The officer must so have conducted himself that a high probability arises of a bias inconsistent with the fair performance of his duties, with the result that a substantial distrust of the result must exist in the minds of reasonable persons." 35 Where, as here, the infelicitous comments arise at the end of the proceeding and are the expression of a view formed on the material before the Tribunal, during the proceeding, the Tribunal member is not disclosing prejudgment or bias or a prejudice inconsistent with a fair performance of duties. The Tribunal member is expressing conclusions from the material presented. Those conclusions may be wrong. They may be expressed poorly or inappropriately. The Tribunal member may both reach the wrong conclusion and express them inappropriately. But none of that evidences bias. If there is to be a challenge to the finding, it must be on another basis. Conclusion 36 The Tribunal has made no arguable error of law. There has been no arguable waiver of rights and the termination by the Corporation was effective as soon as the Tribunal made the orders. 37 Further, the Tribunal member approached the matter in a manner that was, on the evidence, unbiased and unprejudiced. There is no basis for an argument to the contrary. The inappropriate expression of the conclusions on the material presented does not qualify that lack of bias. 38 Further, the material before the Tribunal was overwhelmingly to the effect that Mr Alfaro had breached the lease and continued to do so. A finding against the Corporation by the Tribunal, on the material before it, would have disclosed legal error; it would have been based on no evidence and would have amounted to an error of law: Australian Gaslight, supra. In that situation there is an alternative basis to find the test in General Steel, supra, satisfied. 39 In the above circumstances, I make the following orders and declarations: (i) The summons discloses no reasonably cause of action, is an abuse of process and frivolous and vexatious; (ii) Pursuant to Rule 13.4 of the Uniform Civil Procedure Rules 2005 (NSW), and the inherent jurisdiction of the Court, the proceedings are dismissed; (iii) The plaintiffs shall pay the costs of and incidental to the proceedings, as agreed or assessed. ********** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. 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