Civil and Administrative Tribunal New South Wales Medium Neutral Citation: NSW Land and Housing Corporation v Sara McGuiness [2014] NSWCATCD 140 Hearing dates: 1 July 2014 Decision date: 24 July 2014 Before: A McMurran, General Member Decision: 1.The residential tenancy agreement is terminated immediately pursuant to s 91 of the Residential Tenancies Act 2010. Catchwords: Use of premises intentionally or recklessly for other unlawful purpose Legislation Cited: Residential Tenancies Act, 2010 ("the Act") s 91; s 51 Category: Principal judgment Parties: Ms Hook, for NSW Land and Housing Corporation (applicant) Ms K Mackenzie, Sydney Tenants' Advice & Advocacy Service for Sara McGuiness (respondent) File Number(s): SH 13/39360 Application 1 The applicant commenced these proceedings by application filed 24 July 2013 seeking to terminate a residential tenancy agreement and an order for possession of premises. 2 The respondent is a 33 year old Aboriginal woman who has lived at the premises for approximately 9 years. The respondent has been the occupier pursuant to a residential tenancy agreement dated 6 April 2005 ("the agreement") for a three bedroom unit situated at unit […..] Moloney Street Eastlakes in Sydney ("the premises"). 3 The tenant has been residing in the premises since the commencement of the agreement and up until the circumstances relied upon in this application, occurring in or about July 2013. 4 There have been a number of adjournments during these proceedings leading up to the hearing on 1 July 2014. 5 The Tribunal has jurisdiction to deal with this matter relating to a residential lease within the Consumer and Commercial Division pursuant to the Civil and Administrative Tribunal Act 2013, Schedule 4. Agreed Facts 6 The agreement was in writing and contains the standard provision at clause 7 that the tenant agrees: "7.1 Not to use the residential premises, or cause or permit the premises to be used, for any illegal purpose;" 7 The provision at clause 7 of the lease reflects section 51 of the Act which sets out: "51 Use of premises by tenant (1) A tenant must not do any of the following: (a) use the residential premises, or cause or permit the premises to be used, for any illegal purpose," 8 On 17 July 2013, NSW Police executed a search warrant authorising them to enter the premises. 9 The respondent tenant was in occupation at the time with at least one of her children and was spoken to by the police and then arrested following a search of the unit by the police. 10 Details of the search and of items seized by the police at the time are set out in a police Facts Sheet which was tendered as evidence by the applicant without objection, and commencing at page seven of the applicant's bundle of documents. 11 Items seized by the police are not disputed and appear by way of a police property seizure/exhibit form at pages 25 to 164 of the applicant's bundle. 12 Those items include: 10.1 A cash bundle containing $13,450.00 found in a locked cupboard; 10.2 Further cash in the sum of $1,110.00 found in the respondent's purse; 10.3 A skimmer device; 10.4 Approximately 100 items relating to credit cards and other identification documents together with credit cards themselves in the names of various persons; 10.5A backpack containing a black replica pistol; 10.6 A tomahawk found under the respondent's bed; 10.7 A number of mobile phones. 13 The respondent was arrested and charged the same day with two indictable offences being: 11.1 Deal with property suspected proceeds of crime; and 11.2 Possess identification information to commit, facilitate commission of indictable offence. 14 The respondent was held on remand and subsequently pleaded guilty to the offences on 22 January 2014 for which she received a nine month custodial sentence concluding on or about 21 October 2014, with a non-parole period of six months. 15 As at the date of hearing, the respondent remains in custody also in respect of other matters, and is not due for release until on or about February 2015. Applicant's Evidence 16 At the hearing, the applicant relied upon a tender bundle admitted into evidence and marked Exhibit "A", without objection, together with a copy of the signed residential tenancy agreement dated 6 April 2005, also tendered without objection and marked Exhibit "B". 17 The applicant then called oral evidence from detective Joshua Lavender who was a member of the Gangs Squad. 18 The oral evidence from detective Lavender dealt primarily with the execution of a search warrant at the premises on 17 July 2013. Details of the search are set out in the tendered fact sheet of detective Lavender and his statement, made 24 July 2013 and which documents are contained in the applicant's bundle. 19 The Tribunal's attention was drawn to the conversation between detective Lavender and the respondent, referred to at paragraph 11 of the statement by the witness. In that statement, the detective referred to specific items found in the respondent's bedroom at the premises and the following exchange took place: I said: "Sara, I am going to ask you some questions about the money. As I told you earlier, you do not have to say or do anything if you do not want to. But anything you do say can be used in court at a later stage. A large amount of Australian currency was just found inside your locked wardrobe. What can you tell me about the money?" The accused said: "Umm … what do you mean? What do you want to know?" I said: "Have you seen that before?" The accused said: "Umm … no comment." I said: "Do you know how much money is there?" The accused said: "No comment." I said: "Do you agree that the money was found in the same area as women's clothing?" The accused said: "Yep." I said: "Are they your clothes?" The accused said: "Yep." I said: "Do you access that wardrobe often?" The accused said: "Yep." I said: "Can you tell me why it is locked up?" The accused said: "Obviously cos there is money in there." I said: "Ok, can you tell me whose money it is?" The accused said: "No comment." I said: "Do you work at the moment?" The accused said: "No." I said: "Can you tell me how you could come into possession of that quantity of money?" The accused said: "No." 20 The statement from the witness also refers to the seizure of exhibits which was set out in a property seizure exhibit form attached to the statement. 21 One of those items was a skimmer device which is used in conjunction with a computer to extract information from credit cards. The skimmer device is able to upload that information into a computer. The witness gave evidence that such a device is used with a USB connection and that he saw in the premises a number of electrical leads leaving the premises and into the unit next door. No computers however were located on the premises. The skimmer device was found inside a backpack in the respondent's bedroom. 22 Other than the tendered bundle and the lease document, the applicant produced no further evidence. Respondent's Case 23 Ms K Mackenzie, on behalf of the respondent, did not call any evidence. The respondent herself did not attend the hearing, nor provide any statement. 24 The respondent relied upon written submissions which were tendered without objection. 25 The principal submission by the respondent advocate was firstly that there was no "sufficient connection" established between the illegal activity and the premises. The respondent asserted that only when there is a "substantial connection" between illegal activity and the premises, does the matter fall within Section 91 of the Act. 26 The Tribunal rejects this submission. The Act relevantly provides: 91 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)…… (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. (3) The termination order may specify that the order for possession takes effect immediately. …. 27 The section refers to "use (which) is sufficient to justify the termination" and is not limited in the manner suggested by the respondent to some illegal purpose or use which is "substantial". The term "use" is not otherwise defined. 28 The respondent cited a number of authorities in support of that proposition, including New South Wales Land and Housing Corporation v Marshall [2007] NSW CTTT 575 which carefully reviewed the authorities as at that date in respect of "illegal purpose" and "use" within the meaning of the equivalent provision under the Residential Tenancies Act 1987 which relevantly sets out: 23 Use of premises by tenant (1) It is a term of every residential tenancy agreement that: (a) the tenant shall not use the residential premises, or cause or permit the premises to be used, for any illegal purpose 29 The respondent asserts that "the mere presence" of stolen goods at the premises is not sufficient to establish "use" for an illegal purpose. The respondent submitted that there was insufficient evidence to enable the Tribunal to find that the respondent had in fact "used the property in a way that would constitute the use of that property to perpetuate any sort of criminal activity". 30 The further submission of the respondent's advocate was on the basis that the evidence against the respondent was circumstantial only and did not meet the high standard required in Briginshaw v Briginshaw (1938) 60 CLR 330, which required that the standard be one of reasonable satisfaction, meaning more than "inexact proofs, indefinite testimony, or indirect inferences". 31 The Tribunal in this instance is of the view that the reference to the Briginshaw standard does not preclude a finding or a proper inference to be drawn on the facts as presented here, which would fail to be more than "inexact or indefinite or indirect". On the contrary, the respondent by pleading guilty has admitted facts to a necessary criminal standard of proof which is more exact and definite than the Briginshaw standard, not less. 32 The respondent further submitted that it would be an incorrect exercise of the Tribunal's general discretion were it to make a termination order on the basis of the circumstances of this particular case. 33 Reference was made to the decision in Cain v New South Wales Land and Housing Corporation [2014] NSW CA 28, where the New South Wales Court of Appeal (per Basten JA) declined to limit the matters which could be taken into account by the Tribunal in exercising its discretion. 34 In this instance, the Tribunal was urged to have regard to the fact that the respondent had served time in prison, would be severely disadvantaged upon her release without the benefit of the premises and likely to find that she was disqualified or prohibited from further social housing as a consequence. 35 In response to these submissions, the applicant informed the Tribunal that the applicant maintains a policy whereby if a tenancy is terminated on the basis of unlawful purpose or illegal use, the occupant is likely to be categorised as an ineligible further tenant. The applicant confirmed that such policy remains, irrespective of whether there is an actual finding or determination by the Tribunal. In other words, the Department will make its own decision based on its policy (which was not in evidence) as to whether or not it classifies such an occupant as "ineligible". Unlawful Use and "Illegal Purpose" 36 The applicant submits that the only possible inference to be drawn by the Tribunal from the facts and circumstances in this case is that the premises were being used for an unlawful purpose. The use must be attributed in the circumstances to the respondent and there should be a finding of intentional or reckless use of the premises by the respondent. 37 In so finding, the Tribunal is urged to consider that without the use of the premises, the illegal purpose could not take place. The location of cash in a locked cupboard, in a bedroom, and accepted by the respondent as being in her possession, strongly points towards the use of the premises for an unlawful purpose. 38 The Macquarie Dictionary defines "use" to mean "to employ for some purpose" and "to act or behave towards, or treat in some manner" and in so doing to exercise "the power or right of using something". It contains implicitly the right to exercise some control or authority as in this case over the activity which occurs on the premises. 39 The provision of a locked cupboard employed for the specific purpose of secreting cash, and "treating" that property by virtue of the authority to use the premises pursuant to the lease, in the Tribunal's view creates a sufficient nexus between the use of the premises and the illegal purpose, namely to secrete property which is stolen so as to prevent its discovery. 40 Documents spread across the bed indicate a system of sorting or "use" of the documents which were stolen or improperly obtained, containing the information of numerous persons and a method involving use of the respondent's bedroom. 41 Those stolen papers were being used to steal identities and to defraud persons by using their information illegally obtained. Again, without the use of the premises, the ability to use that information in the manner described, by spreading documents for sorting and review on the respondent's bed, would not have been possible. 42 It could have been done perhaps in some other fashion, but it is to the point that on the facts of this case, the premises were being used for that purpose and the necessary connection between the use of the premises and the illegal purpose is made out. 43 The further evidence of the unlawful purpose was the reference by the detective in his oral evidence to the electrical leads which exited the premises into the unit next door, the assertion being that these were electrical leads for connection to computers. 44 Further, the quantity of items seized at the premises which related to the identification of more than 100 other persons who are clearly not related to the respondent or connected with the premises, gives rise to the logical inference the premises were being used for the illegal purpose of compiling and referencing the personal identification information improperly obtained, whether by spreading those items on the bed or otherwise. 45 It is open in the Tribunal's view to again draw the inference quite properly between the use and the premises and the illegal purpose and the respondent therefore being in breach of the agreement. 46 The applicant asserts that these facts go beyond "mere speculation" and support the only logical inference, namely that the premises were being used by the respondent for an illegal purpose. 47 The Tribunal for the reasons set out above, accepts that submission based upon the facts in this instance, which point inexorably to a finding that the agreement has been breached, as well as the mandate contained in section 51 of the Act. Decision 48 The Tribunal has had regard to the authorities referred to above and in submissions and which are in no way conclusive as to a definition for "unlawful purpose" and "illegal use". These are matters which will depend logically on the particular facts and circumstances of the case. 49 The Tribunal further notes the decision in New South Wales Land and Housing Corporation v Robertson [2008] NSW CTTT 1197 wherein the Tribunal declined to follow the decision in Marshall which could be distinguished on the basis that in Marshall it was not necessarily evident that the premises were being used for some "substantial part of the illegal undertaking and that the mere presence of stolen goods on the premises did not constitute a breach". In Marshall, stolen goods were on open display by a tenant who was not directly involved in any form of "illegal undertaking". 50 In this particular circumstance, the respondent having pleaded guilty to the indictable offences and having been sentenced, has acknowledged her role as a principal in those activities, and which activities were conducted at least in part at the premises by virtue of the storing of the cash and the use of the skimmer device with computer equipment and the sorting and accessing of stolen identification documents. 51 In Robertson, the Tribunal found that "the possession and storage of stolen goods is an illegal activity and the use of the premises in question as a vehicle for that storage is a necessary part of the crime such as may constitute a breach". 52 The Tribunal as presently constituted agrees with that approach and accepts that in the circumstances of this case, the storage of stolen goods including bundles of cash and the credit cards and identification information found at the premises, were a necessary part of the crimes admitted to by the respondent and which constitutes a breach of Section 91 of the Act. 53 The Tribunal is further asked to take into account in Section 91(2) as set out at paragraph 26 above, the circumstances of any previous unlawful use, the previous history of the tenancy, the nature of the unlawful use and discretionary factors such as the effect this decision may have on the respondent following a termination order. 54 The Tribunal was informed that there was no history of any previous unlawful use by the tenant. The premises had been leased to the respondent for a continuous period of almost nine years. The respondent was residing in the premises with her children at the time of her arrest, which children have now been relocated during the period of the respondent's present incarceration. 55 Additionally, the respondent submitted that additional factors which should weigh in the exercise of the Tribunal's discretion include the fact that the tenant is unlikely to be able to apply again for public housing and that this termination will in some way prevent the respondent from again being accepted by the applicant as a suitable public housing tenant. This would have the effect that the respondent may not be able to resume living with, and be able to house, her children. 56 The applicant confirmed that there is a policy concerning public housing applicants which takes into account any prior history and convictions. The details of the policy were not before the Tribunal and the Tribunal is not in a position to take into account any relevant pre-determination of that issue without evidence. It is in fact merely speculating about this respondent's possible options. 57 Those matters in the Tribunal's view do not sufficiently weigh on the exercise of the Tribunal's discretion in this case to warrant the refusal of an order for termination, taking into account the serious nature of the illegal use and purpose, the admissions by the respondent when convicted and the lack of any additional factors which might otherwise persuade the Tribunal to exercise its discretion by dismissing the application, as provided for within the ambit of Section 91 (2). 58 In the circumstances, the Tribunal is satisfied that the applicant has proved to the requisite civil standard that there has been use of the premises by the respondent for an unlawful purpose within the meaning of Section 91(1) (b) and that in the circumstances of this case, the proper exercise of the Tribunal's discretion requires that a termination order follow. 59 This is so, notwithstanding that there is no evidence of a previous unlawful use by the respondent. This case is to be distinguished by the decision in NSW Land and Housing Corporation v Nihanguan Ozen [2014] NSW CATCD 27, where the Tribunal found that the possession of a quantity of drugs and a Blackberry mobile phone which were found by police exercising a search warrant and whereupon the tenant in that instance was subsequently convicted, did not warrant a termination order. The Tribunal in that matter found that the use of the premises was not unlawful "because it was merely the location of where an offence occurred or of such a minor matter as to not justify a finding of it being an unlawful use". 60 In this instance, the Tribunal is satisfied that the use of the premises was unlawful, and that the "other unlawful purpose" within Section 91 (1) (b) was not minor or petty. 61 The Tribunal is satisfied that the "use" of the premises as a tenancy was sufficiently proximate to the unlawful use of the stolen goods and the equipment found, which was being used to facilitate the crimes, as to warrant the drawing of a reasonable inference as to a continuing unlawful purpose. To that extent therefore the Tribunal distinguishes the facts and circumstances in this instance from those in Ozen and Marshall where the termination order was refused. 62 No other submissions relevantly were put to the Tribunal which might affect the exercise of its discretion not to make an order for termination and the Tribunal declines to do so. Orders 63 The tenancy agreement is terminated and the applicant is entitled to possession of the premises effective immediately. A McMurran General Member Civil and Administrative Tribunal of New South Wales 24 July 2014 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: 11 September 2014