Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Franken v NSW Land and Housing Corporation [2016] NSWCATAP 154 Hearing dates: 24 February 2016 Date of orders: 21 July 2016 Decision date: 21 July 2016 Jurisdiction: Appeal Panel Before: M Harrowell, Principal Member T Simon, Senior Member Decision: (1) The orders made by the Tribunal on 27 October 2015 are set aside; (2) The proceedings are remitted for rehearing by a differently constituted Tribunal; (3) The proceedings are listed for directions in the Tribunal on 5 August 2016 for the purpose of fixing a hearing date and making any other appropriate orders Catchwords: Residential Tenancies Act- Termination- use of premises for illegal purposes Procedural fairness- departure from expected process Stay of Civil proceedings- criminal proceedings raising related issues Legislation Cited: Civil and Administrative Tribunal Act, 2013 Drugs Misuse and Trafficking Act, 1985 Evidence Act, 1995 Residential Tenancies Act 2010 Cases Cited: Attorney General (NSW) v Quin [1990] HCA 21 Commissioner of the Australian Federal Police v Zhao [2015] HCA 5 Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26 Hamod v State of New South Wales and Anr [2011] NSWCA 375 McMahon v Gould (1982) 7 ACLR 202 Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; (1995) 183 CLR 273 Mikel v Dudley [2008] NSWSC 1090 Niven v SS [2006] NSWCA 338 Prentice v Cummins (No6) [2003] FCA 1002 Re Minister for Immigration and Multicultural and Indigenous Affairs: Ex Parte Lam [2003] HCA 6; 214 CLR 1 Wolf v State of New South Wales [2013] NSWSC 1800 Zag v NSW Trustee and Guardian [2016] NSWCATAP [19] Texts Cited: Nil Category: Principal judgment Parties: Marcia Franken (Appellant) NSW Land and Housing Corporation (Respondent) Representation: Counsel: M Kloucek (Appellant) P O'Connor (Respondent) Solicitors: Legal Aid NSW (Appellant) Legal Services Branch Housing NSW (Respondent) File Number(s): AP 15/61336 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 27 October 2015 Before: M Eftimiou, General Member File Number(s): SH 15/34017 reasons for decision Introduction 1. The appellant is a tenant under a residential tenancy agreement which was terminated by order of the Tribunal made 27 October 2015 in accordance with s 91 of the Residential Tenancies Act 2010 (RT Act). 2. The landlord was NSW Land and Housing Corporation (respondent). The respondent applied to the Tribunal to terminate the residential tenancy agreement by application dated 25 May 2015 (the application for termination). The application for termination was heard on 9 October 2015. The Tribunal delivered reasons for decision on 27 October 2015 (Decision). 3. In short, the Tribunal found that the appellant used the premises for illegal purposes. Notice of Appeal and Reply to Appeal 1. The original Notice of Appeal was filed on 11 November 2015, the appellant having received the Decision on 29 October 2015. 2. When the matter was listed for directions on 24 November 2015 the orders made by the Tribunal on 27 October 2015 were stayed by consent until further order of the Tribunal. At that time the Appeal Panel also made directions for the parties to file and serve material in support of the appeal. 3. These directions included granting leave to the appellant to file an amended notice of appeal which was lodged on 8 December 2015. In this document the appellant raised six grounds of appeal, namely: 1. That the appellant had been denied procedural fairness because her adjournment request to permit the police charges against her to be first determined was refused and she had pleaded not guilty in respect of those charges in proceedings in the Local Court of New South Wales; 2. The Tribunal was in error in concluding it had no legal obligation to await the outcome of the appellant's criminal proceedings before determining the dispute without having regard to s 38(2), 38(4) and 38(5)(c) of the Civil and Administrative Tribunal Act, 2013 (NCAT Act); 3. The Tribunal denied the appellant procedural fairness in permitting the hearing to proceed in circumstances where the appellant was given no opportunity to test the respondent's evidence by cross examining witnesses; 4. The Tribunal failed to ensure that the appellant, who was unrepresented had the benefit of a certificate pursuant to s 128 of the Evidence Act, 1995 (Evidence Act) in respect of her sworn evidence; 5. The Tribunal erred in reaching its conclusion that the appellant was unable to provide a reasonable explanation for the police charges in circumstances where: 1. The appellant had pleaded not guilty and therefore the Tribunal's decision effectively reversed the onus of proof; and 2. None of the evidence relied upon by the respondent, including inadmissible hearsay evidence relied on by the police, had been tested; and 1. The Tribunal erred in making a finding of fact at Decision [26] that the appellants conduct had a serious adverse effect on the neighbouring residents which was against the weight of the evidence given by the appellant and accepted by the Tribunal to the effect that she had a good relationship with her neighbours. 1. The respondent filed a Reply to Appeal in essence asserting there had been no denial of procedural fairness and that the Tribunal, in proceeding to hear the application on 9 October 2015 "acted according to equity and good conscience". 2. The respondent also said that the appellant had been provided with an opportunity to file and serve evidence in the proceedings and the Tribunal afforded the appellant a reasonable opportunity to be heard. In doing so the Tribunal acted consistently with the guiding principle found in s36 of the NCAT Act, namely to facilitate the just, quick and cheap resolution of the real issue in dispute. 3. In relation to the issue of a s 128 certificate under the Evidence Act, the respondent said that no error had been committed or, if it had, the appropriate remedy was for an order pursuant to s 64 of the NCAT Act prohibiting publication of evidence. 4. In relation to the finding that the appellant had failed to provide a reasonable explanation for the police charges against her, again the respondent said the appellant had an opportunity to provide evidence in opposition to the claims made and the fact that the appellant had pleaded not guilty, was not, of itself sufficient evidence so as to demonstrate relevant error by the Tribunal. 5. In relation to the Tribunal's finding that there was a serious adverse effect on neighbouring residents, the respondent says that the evidence of the appellants supply of prohibited drugs and the nature and extent of the appellant's conduct in connection of that supply meant that it was open to the Tribunal to make the finding that there was an adverse effect on persons living near the appellant's premises irrespective of whether or not she had a good relationship with many of her neighbours. Hearing of the appeal 1. At the hearing of the appeal the parties were represented by counsel. 2. The appellant tendered an affidavit sworn 15 February 2016. The affidavit sought to explain why the appellant did not apply for an adjournment of the hearing listed on 9 October 2015 before the hearing commenced. The affidavit set out her belief that the hearing of the application for termination by the Tribunal would occur after the hearing of the criminal proceedings by reason of what occurred at the directions hearing in the Tribunal on 17 August 2015. At paragraph 9 of affidavit the appellant said: During the hearing on 9 October 2015 I told the tribunal that my criminal law hearing had been relisted to 1 December 2015 and asked for an adjournment. I was shocked when the Tribunal Member would not grant the adjournment, especially because of what the Tribunal Member had said on the last occasion. I did not know what to do because I had no evidence other than my word that I did not supply drugs because my criminal law hearing had not happened yet. 1. The appellant was cross examined. She gave evidence that: 1. she was aware the respondent was seeking to terminate her residential tenancy agreement; 2. she had previously engaged a Mr Wheeler at an earlier stage of the proceedings, who appeared on her behalf on 16 June 2015. However, she had not subsequently engaged him as she had no confidence in him to appear on her behalf; 3. she did not attempt to lodge any documents with the Tribunal before the directions hearing on 17 August 2015 despite directions having previously been made; 4. she was aware that on 17 August 2015 the Tribunal had informed her she was required to provide documents in support of her claim; 5. she agreed that any statement she might obtain from her neighbours would have nothing to do with the criminal proceedings; 6. she agreed she was told she needed to provide "all evidence" and that the Tribunal would make directions as recorded in the transcript of the directions hearing on 17 August 2015 at page 11, line 9 and following; 7. she agreed that she knew her evidence was due by 24 September 2015 and that the matter would be listed for hearing in early October 2015. 8. Lastly, she agreed she did not engage Mr Wheeler to act on her behalf nor did she attempt to get another lawyer or contact the Tribunal prior to the hearing. However, she said she thought the matter could be adjourned and that the Tribunal could not make a decision without the criminal proceedings being first resolved. 1. In re-examination the appellant said she understood the Tribunal could not reach a conclusion without her being convicted and that any evidence she was required to serve was the evidence of the outcome of the criminal proceedings. She said she had been told this by the Tribunal Member on 17 August 2015. 2. At the conclusion of this evidence, the parties made oral submissions. Submissions 1. The parties filed written submissions prior to the hearing and made oral submissions before the Appeal Panel. Appellant's submissions 1. The appellant provided written submissions under three headings: 1. Grounds 1 and 3 - Failure to accord procedural fairness. 2. Ground 2 - Tribunal's legal obligations. 3. Grounds 4 and 5 - Interrelationship of Local Court and Tribunal proceeding. 1. Ground 6 was not pressed. The appellant also provided written submissions in reply. Grounds 1 and 3 – failure to accord procedural fairness 1. The appellant had been charged under the Drug Misuse and Trafficking Act, 1985 (DMT Act) with two counts of supply prohibited drug under section 25 (1) of the DMT Act (criminal proceedings). 2. The appellant submitted that, at an earlier directions hearing on 17 August 2015, the appellant had been informed that the Tribunal would "postpone the hearing until after (her) court date". Here the Tribunal was referring to the criminal proceedings in the Local Court of New South Wales. At the time of the directions hearing on 17 August 2015, the hearing of the criminal charges had been scheduled for 25 September 2015. However, the criminal charges were subsequently adjourned for a hearing to commence on 1 December 2015. 3. On 17 August 2015 the Tribunal adjourned the application for termination and made directions for the filing and service of evidence. The application for termination was thereafter listed for hearing on 9 October 2015 which occurred despite the appellant submitting to the Tribunal that she believed a hearing of the application for termination would not occur until after determination of the criminal proceedings. 4. The appellant submitted that the failure to adjourn the proceedings on 9 October 2015 until after determination of the criminal proceedings constituted a failure by the Tribunal to afford her procedural fairness. In this regard the appellant submitted there was an obligation upon the Tribunal to avoid "practical injustice" and that the appellant had "a subjective expectation … that the determination of the Tribunal proceedings would occur after the hearing of her criminal proceedings". The appellant relied on the decision of the High Court in Re Minister for Immigration and Multicultural and Indigenous Affairs: Ex Parte Lam [2003] HCA 6; 214 CLR 1 per Gleeson CJ at [37]. The appellant referred the Appeal Panel to various extracts from the transcript of the directions hearing on 17 August 2015 to support these contentions. 5. Further, the appellant submitted that she had "lost the opportunity to advance a submission, if she was successful in defending the criminal proceedings, that her tenancy ought not to be terminated in circumstances in which she had not been convicted of any crime under the Drug Misuse and Trafficking Act against a background of the Appellant consistently denying the charges, the Appellants good tenancy history etc". 6. In relation to being denied the opportunity to cross-examine police witnesses, the appellant referred to the decision of Mikel v Dudley [2008] NSWSC 1090, and submitted that Mikel was distinguishable because in that case the Court concluded the cross-examination opportunity said to have been denied was on issues not relevant to the cause of action about which the Tribunal was required to adjudicate. In the present case, cross examination of police witnesses would be about issues central to the matters in dispute. Ground 2 - Tribunal's legal obligation 1. The appellant submitted that the Tribunal was in error to conclude that it had no legal obligation to await the outcome of the appellant's criminal proceedings before determining the dispute. The appellant submitted that the Tribunal failed to have regard to sections 38 (2) (4) and (5) (c) of the Civil and Administrative Tribunal Act, 2013 (NCAT Act). 2. The appellant referred to the comments of Beazley JA (as she then was) in Hamod v State of New South Wales and Anr [2011] NSWCA 375 at [131]. In this regard the appellant submitted that a determination of whether or not an adjournment should be granted was to be determined by the "overall requirements of justice in the particular circumstances". The appellant contended that she had a reasonable and legitimate expectation that the application for termination would be dealt with by the Tribunal after the criminal proceedings because: the appellant consistently maintained her position that she would defend the Local Court proceedings; the appellant was unrepresented on each occasion she appeared before the Tribunal; the hearing on 17 August 2015 was adjourned specifically to allow the appellant's criminal proceedings to be finalised; and the appellant was therefore not given an opportunity to test the allegations in the Police Brief in the Tribunal proceedings on 9 October 2015. 1. Therefore, the appellant submitted that the Tribunal inappropriately focused upon a "speedy" hearing at the expense of affording the appellant an opportunity "to argue her case as contemplated by Beazley JA". 2. In her written submissions in reply, the appellant also points to the fact that the Tribunal, on 9 October 2015, had said (at sound recording time mark 20:16) that "there was nothing in the file notes or Notice of Hearing that was sent to the (appellant) to indicate why the (appellant) would think that the matter would not be heard on 9 October 2015". However, the appellant submits that what was said to her at the directions hearing on 17 August 2015, as recorded in the transcript of that day, "confirms that the reason that the proceedings were adjourned on 17 August 2015 was to permit the Local Court proceedings to be heard". Grounds 4 and 5-Interrelationship of Local Court and Tribunal proceedings 1. The appellant submitted that the Tribunal was in error when it found "the appellant 'was not able to provide any reasonable explanation' to the Tribunal for the laying of the police charges" and that this determination effectively constituted a reversal of the onus of proof, particularly when the Tribunal proceedings in relation to the application for termination proceeded despite the appellant seeking an adjournment to allow the criminal proceedings to be heard first. 2. The appellant relied on the decision of the High Court in Commissioner of the Australian Federal Police v Zhao [2015] HCA 5. The appellant accepted that the High Court found civil proceedings brought under the Proceeds of Crime Act, 2002 (Cth) were separate and distinct from any criminal proceedings and that the fact of criminal proceedings was not generally an impediment to the continuation of civil proceedings. However, relying on Zhao at [39] and [40], the appellant submitted that there was no absolute rule that the present proceedings should "proceed 'at all costs', and at the risk of potentially prejudicing the criminal proceedings". 3. The appellant also submitted that a review of the transcript recording the exchange between the appellant and the Tribunal demonstrates that the Tribunal proceeded on an erroneous assumption that it was for the appellant to explain why the police had "been watching (her) for some time". This comment, the appellant submitted, demonstrated a flawed approach because "while the (Tribunal) seems to accept the appellant's assertion that the Brief did not implicate her there must have been a reason for her coming to the attention of the Police". 4. In relation to this ground the appellant sought leave to appeal in the event the Appeal Panel determined that the decision at first instance was not vitiated by errors of law. The appellant relied on five matters in support of her application for leave: 1. she had an expectation she would be allowed the opportunity to have the criminal proceedings determined first; 2. the Tribunal effectively reversed the onus of proof; 3. the appellant was a long-standing tenant with "nothing adverse known to the Tribunal regarding the prior history of the tenancy or any other social housing tenancy"; 4. the Tribunal found the appellant maintained her defence of the criminal proceedings; 5. the Tribunal accepted that the appellant suffered from a range of medical conditions, was very attached to her home and has a good relationship with her neighbours. 1. The appellant then submitted that finalisation of the criminal proceedings would have permitted the evidence in the Police Brief to be adequately tested and would have allowed the appellant an opportunity to make submissions, if she was successful in defending the criminal proceedings and found not guilty. 2. In short, the appellant says that the present proceedings should have been stayed pending determination of the criminal proceedings and that this was the proper balance in order to do justice as between the parties in accordance with the principles set out, inter alia, in McMahon v Gould (1982) 7 ACLR 202. 3. In oral submissions, the appellant submitted that the evidence confirmed that the adjournment had been allowed on the basis that the criminal proceedings would be finalised first. The appellant was unrepresented at both the directions hearing on 17 August 2015 and on 9 October 2015 and, in light of what had occurred at the directions hearing on 17 August 2015 she had a legitimate expectation that a resolution of the application for termination in the Tribunal would be delayed until finalisation of the criminal proceedings. 4. The appellant also submitted that while the Tribunal was not bound by the rules of evidence, the appellant should have been afforded an opportunity to advance at any hearing the fact that she was found not guilty, if that was the outcome of the criminal proceedings. The appellant also submitted that the following circumstances were relevant and should have been taken account of by the Tribunal so as to grant an adjournment of the application for termination until after the criminal proceedings had been determined: 1. the appellant was self represented; 2. if she was unsuccessful in the application for termination, she would lose her house; 3. the appellant had a belief that the criminal proceedings would be determined first. 1. In relation to whether or not the discretion to not adjourn the proceedings had miscarried, the appellant also relied on the fact that the Tribunal did not provide any reasons as to why it was necessary for the hearing to proceed. 2. The appellant also submitted she was not provided with an opportunity to cross-examine police witnesses on whose evidence the respondent relied. The appellant said that the police evidence was essential to the respondent's application for termination and the Tribunal should have informed her of a right to cross-examine even if no request was made. In this regard the appellant referred to the decision of Zag v NSW Trustee and Guardian [2016] NSWCATAP [19] at [38]-[39]. Respondent's submissions 1. The respondent provided written submissions in respect of each of the 6 grounds of appeal. Ground 1 - Refusal of adjournment request 1. The respondent submitted that the applicable principles concerning legitimate and reasonable expectation are derived from the High Court decisions in Attorney General (NSW) v Quin [1990] HCA 21, Lam (supra) and Minister for Immigration and Ethnic Affairs v Teoh [1995] HCA 20; (1995) 183 CLR 273. These principles include: 1. where a legitimate expectation has been held entitled to protection, protection has taken the form of procedural protection, by insisting that the decision-maker apply the rules of natural justice; 2. a notion of legitimate expectation is concerned with the fairness of the procedure adopted, rather than the fairness of the outcome, that is procedural, not substantive, rights are involved; 3. the existence of a legitimate expectation that a decision-maker will act in a particular way does not necessarily compel him or her to act in that way; 4. to be legitimate, and expectation need only be objectively reasonable and it is not necessary that the applicant would personally entertain the expectation; 5. what must be demonstrated is unfairness, not merely departure from a representation as not every departure from a stated intention necessarily involves unfairness, even if it defeats an expectation; 6. the content of the requirements of fairness may be affected by what is said or done during the process of decision-making, and by developments in the course of that process, including representation is made as to the procedure to be followed; 7. fairness is an essentially practical concept and in those circumstances if a decision-maker has made a representation about the procedural steps to be followed it will be difficult to conclude the departure from the promised procedure is unfair if the party claiming relief had no "subjective expectation in consequence of which he did, or omitted to do, anything". 1. The respondent says that a consideration of the transcript of proceedings on 17 August 2015 (at T5.41-45) confirms that: 1. the hearing was not adjourned "precisely for the reason to permit finalisation of … the criminal proceedings"; 2. the primary reason for adjourning the hearing were that Mr Wheeler had not appeared to represent the appellant and the fact that the appellant had not filed any documents in the proceedings; 3. the Tribunal merely noted that a benefit of adjourning the hearing until 25 September 2015 was that when the matter was next listed for hearing in October 2015, the outcome of the criminal proceedings (which the Tribunal had been advised were listed for hearing, and not for mention, on 25 September 2015) could be considered by the Tribunal, although the Tribunal noted the different standards of proof might apply in the criminal proceedings to that in the Tribunal. 1. The respondent then referred to various statements by the Tribunal found that pages 6 and 7 of the transcript and said that the effect of the Tribunal's comments was that it would relist the matter for hearing shortly after 25 September 2015, at which time the Tribunal would hear and determine the respondent's application for termination. Consequently, the respondents submitted that nothing the Tribunal said could have given rise to a legitimate and reasonable subjective expectation in the appellant's mind that the application for termination would not be heard until after finalisation of the criminal proceedings. Further, having received a notice of hearing from the Tribunal, no attempt was made by the appellant to seek to adjourn the hearing fixed for 9 October 2015 despite the criminal proceedings having been adjourned from 25 September 2015 until 1 December 2015. Lastly, the respondent says that the appellant had failed to file her evidence and arrange for representation. In these circumstances, the Tribunal was correct to conclude that the appellant had no basis to expect the hearing of the application for termination listed on 9 October 2015 would be adjourn. 2. Consequently, what occurred on 9 October 2015 did not give rise to a practical injustice. Ground 2 - Obligation to await outcome of criminal proceedings 1. The Respondent submitted that there had been no failure of the Tribunal to afford procedural fairness and that the Tribunal did not proceed "in a speedy manner" or acting in a way that did not permit a "just resolution". 2. The respondent repeated earlier submissions concerning what had occurred at earlier directions hearings and noted that the proceedings had in fact been listed on 16 June 2015 and 28 July 2015 as well as on 17 August 2015. Respondent also noted that the directions made by the Tribunal on 17 August 2015 required the appellant to notify the Tribunal of the name of her representative by 31 August 2015, an order which she failed to comply with. 3. As part of these submissions the respondent said (respondents written submissions paragraph 36 (d)): the appellant was given a number of opportunities to test the allegations of the Police Brief prior to the hearing on 9 October 2015 but failed to comply with the Tribunal's orders dated 16 June 2015, 7 August 2015 (sic) and 17 August 2015 in respect of filing documents and in respect of arranging and confirming representation; 1. Consequently, the respondents submitted that there had been no relevant failure by the Tribunal in its conduct of the hearing on 9 October 2015 to comply with obligations in relation to affording the appellant procedural fairness or complying with the Tribunal's obligations under s 38 of the NCAT Act. Ground 3 - Failure to allow cross examination 1. The respondent submitted that from August 2015 until 9 October 2015 the appellant was aware that the respondent was relying on various police statements, drug analysis report and information reports provided to the Police by members of the public from July 2013 until December 2014, those information reports alleging the appellant was supplying products from the premises. The respondent also submitted that the appellant failed to file and serve any documents or comply with directions made by the Tribunal. 2. The respondent submitted that the Tribunal was not bound by the rules of evidence and the material provided by the applicant was sufficient to establish illegal purpose in breach of s 91 of the RT Act. 3. The respondent also submitted that in the circumstances of the present case the appellant had been given opportunities to arrange representation prior to the hearing on 9 October 2015 and, having regard to the police evidence relied upon by the respondent to establish a breach of s91 of the RT Act, the fact the police witnesses were not cross-examined did not give rise to a denial of procedural fairness. Ground 4 – failure to give certificate under section 128 of Evidence Act 1. While the appellant gave sworn evidence at the hearing on 9 October 2015, the respondent says this evidence was to the effect that she denied all knowledge of the charges and that she did not supply drugs from the premises. 2. The respondent said that while the proceedings were sound recorded, the actual recording is mostly indecipherable and therefore a transcript could not be produced. Consequently, the respondent submitted that any evidence given by the appellant "could not, and has not, been used in the criminal proceedings". 3. In any event, the respondent submitted that the Tribunal could make an order prohibiting or restricting publication of the evidence pursuant to s 64(1)(c) of the NCAT Act, and that such an order could be made even now. In those circumstances, the failure to issue any certificate under s 128 of the Evidence Act does not support or justify the setting aside of the orders made on 9 October 2015 ordering a further hearing. Ground 5 - reversal of owners or proof 1. In effect, the respondent submits that the statement by the Tribunal that the appellant "was not able to provide any reasonable explanation" for the laying of criminal charges was no more than a statement that, having received evidence from the respondent concerning the police investigations and what had occurred, the appellant was unable to provide any evidence to the contrary. In this regard the respondent refers to the Decision at [12] where the Tribunal said: The Tribunal is satisfied on the evidence before it that the respondent has used or caused or permitted the premises for the purpose of the sale or supply of a prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985. The respondent has denied the breach. However the Tribunal is satisfied on the evidence before it…" and thereafter set out in [12] the evidence that supported that conclusion. 1. The respondent then said that the Tribunal correctly identified that the respondent (the applicant in the application for termination) had the onus of proof in establishing a breach of s 91 of the RT Act, a matter recorded in the Decision at [12]. 2. As to the appellant's submission that "the member seems to accept the appellant's assertion that the Brief did not implicate her", a statement said to have been made at 48:50 in the sound recording, the respondent says that the exchange between the Tribunal and the appellant was no more than the Tribunal seeking from the appellant any evidence she might wish to put in response to the evidence from the respondents witnesses. This, the respondent says, was a proper approach taken by the Tribunal to afford the appellant procedural fairness in circumstances where the appellant had failed to comply with the Tribunal's directions for the filing and service of evidence. 3. Otherwise, the respondent reiterated that there was no obligation on the Tribunal to adjourn the application for termination until after the criminal proceedings had been resolved. The respondent referred to the decisions in Zhao and the decision of McCallum J in Wolf v State of New South Wales [2013] NSWSC 1800, particularly at [4]. 4. Lastly, the respondent said that if the proceedings were remitted, they are required to be dealt with under s154D(1)(b) RT Act and the Tribunal must make a termination order if it is satisfied of the matters set out in s91(1)(a) of the RT Act. Therefore the interests of justice do not require setting aside the termination order or granting a stay until finalisation of the criminal proceedings because even if the appellant is found not guilty the evidence relied upon by the respondent is compelling and justifies a finding of breach of s91. Ground 6 1. As this ground of appeal was not pressed in written submissions, the respondent did not provide any submissions in reply. 2. Oral submissions from the respondent were to the same effect. It is sufficient to set out the following specific matters which provided some further detail to what had been said in written submissions: 1. In relation to the failure to allow cross examination, the respondent said that the appellant must point to an injustice arising from such a failure. The respondent referred the Appeal Panel to the decision in Mikel and the decision of Sackville J in Prentice v Cummins (No6) [2003] FCA 1002. The respondent also said that the absence of cross examination would not have changed the outcome; 2. There was no satisfactory explanation of why the appellant failed to comply with the directions of the Tribunal. While the appellant may have identified evidence she wished to call from neighbours when the matter was listed on 17 August 2015, she did not subsequently file and serve this evidence nor did she arrange for representation. Consideration 1. This is an appeal pursuant to s80(2)(b) of the NCAT Act. The appeal was lodged in time, namely 14 days after the date of the Decision. 2. There is a right of appeal on a question of law and otherwise with leave. As the proceedings are from a decision of the Consumer and Commercial Division, leave may only be granted if the appellant demonstrates she may have suffered a substantial miscarriage of justice: see cl12 of Schedule 4 of the NCAT Act. 3. The appellant says she was denied procedural fairness. Two bases were put forward: 1. the appellant had a legitimate expectation that criminal proceedings brought against her under the DMT Act would be determined prior to the respondent application for termination of the residential tenancy agreement under s91 of the RT Act; and 2. the appellant was denied an opportunity to cross-examine police witnesses in relation to evidence adduced at the hearing on 9 October 2015. 1. Secondly, the appellant said the Tribunal was in error in failing to grant an adjournment of the application for termination and that the proceedings in the Tribunal should have awaited the outcome of the criminal proceedings. To an extent this ground overlaps with the procedural fairness ground based on legitimate expectation. 2. Thirdly, the Tribunal was in error in deciding that the appellant was not able to provide a reasonable explanation for why the police had laid criminal charges because that finding effectively reversed the onus of proof which was upon the respondent to satisfy the Tribunal that an order for termination should be made. Procedural fairness ground - legitimate expectation 1. On 9 October 2015 the Tribunal effectively refused to adjourn the hearing of the application for termination until after the criminal proceedings were finalised. The Tribunal said at Decision [1]: The respondent told the Tribunal she thought that the Tribunal would wait until her criminal proceedings were finalised before proceeding. The criminal proceedings were due to be determined on 25 September 2015 however, the NSW Police were granted an adjournment and the criminal matters are now before the Local Court on 1 December 2015. The respondent was not able to provide any reason or evidence to support her belief that the Tribunal would wait until the criminal proceedings were determined before hearing the matter. The Tribunal has no legal obligation to await the outcome of criminal proceedings before determining the dispute. The guiding principle of the Tribunal is to determine the issues in dispute between the parties in a just, quick and cheap manner. 1. The appellant asserts she had a subjective expectation that the Tribunal would not determine the application for termination until after the criminal proceedings had been determined. She says this expectation arose from what she was told by the Tribunal at a directions hearing on 17 August 2015. A transcript of that directions hearing is in evidence before the Appeal Panel. 2. The appellant provided evidence to the Appeal Panel about her expectation and, when cross-examined in the course of the appeal gave the answers recorded at paragraph 13-15 of these reasons. 3. There appears no dispute that the appellant did not comply with the Tribunal's directions to file and serve her evidence by 24 September 2015 as required by the directions made 17 August 2015 or that it was necessary for her to provide evidence in support of any claims that she wished to make. However, the appellant did give evidence in re-examination to the effect she thought the Tribunal could not reach a conclusion unless she was convicted and that the evidence she was to serve was as to the outcome of the criminal proceedings. 4. Consequently, the appellant submits that the principles set out in Lam apply and, in the circumstances that have occurred, she was denied procedural fairness because the process adopted by the Tribunal at the hearing on 9 October 2015 was contrary to the procedure which the appellant was informed would apply at the directions hearing on 17 August 2015. 5. The appellant also sought to rely on the decision in the High Court in Zhao and submitted that the proceedings should have been stayed in any event. However, in our view there is no principle of law that required the Tribunal to adjourn the application for termination until after the hearing of the criminal proceedings. 6. The principles applicable in determining whether there should be a stay of civil proceedings pending the outcome of the criminal proceedings were set out in the decision of Wootten J in McMahon v Gould (1982) 7 ACLR 202. This decision has been approved by the New South Wales Court of Appeal in Halabi v Westpac Banking Corporation (1989) 17 NSWLR 26 per McHugh J at 59 and in Niven v SS [2006] NSWCA 338. In McMahon, at 206-207 Wootten J said: (a) Prima facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court; (b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds ; (c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff's ordinary rights should be interfered with; (d) Neither an accused nor the Crown are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding; (e) The court's task is one of 'the balancing of justice between the parties', taking account of all relevant factors; (f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors; (g) One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused's 'right of silence', and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding. I return to this subject below; (h) However, the so-called 'right of silence' does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings. The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgment, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding; (i) The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings; (j) In this regard factors which may be relevant include: (i) the possibility of publicity that might reach and influence jurors in the civil proceedings; (ii) the proximity of the criminal hearing; (iii) the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses; (iv) the burden on the defendant of preparing for both sets of proceedings concurrently; (v) whether the defendant has already disclosed his defence to the allegations; (vi) the conduct of the defendant, including his own prior invocation of civil process when it suited him; (k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant's obligation to the plaintiff; (l) In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and then stayed." 1. As is clear from the above, there is no universal right of a respondent to have civil proceedings postponed until after the hearing of criminal proceedings. To the contrary, the obligation is upon a respondent in the civil proceedings to show "it is just and convenient that the (applicant's) ordinary rights should be interfered with". As to the "right to silence", a respondent to civil proceedings must show there is a "real and not merely notional danger of injustice in the criminal proceedings". In this regard the High Court said in Zhao at [35]: Courts will not grant a stay of civil proceedings merely because related charges have been brought against a person and criminal proceedings are pending. More is required. To warrant a stay of the forfeiture proceedings, it must be apparent that the person whose property is in question is at risk of prejudice in the conduct of his or her defence in the criminal trial. 1. No matters were raised by the appellant before the Tribunal as to what prejudice might be suffered. Indeed, the appellant had said to the Tribunal on 17 August 2015 at T3 line 26: Ms Franken: there was no illegal use, since I lived there in 2008 by been a survivor of lung cancer, I had a lung removed, I had an aneurysm, I was still … 1. Further, the only matter raised by counsel for the appellant in the appeal was that if the application for termination was heard first the appellant would lose the opportunity to provide evidence of any acquittal to the criminal charges, if she was successful in defending those charges. However, the possibility of acquittal, of itself, is not a sufficient reason for the application for termination to be delayed. Indeed, even if there had been an acquittal, that would not have prevented the respondent landlord from continuing with its application to terminate the residential tenancy agreement. 2. As to the submission concerning legitimate expectation, the relevant principle is stated by Gleeson CJ in Lam, at p12 para [33], in the following terms: The decision of the Privy Council stands for the proposition that, when a public authority promises that a particular procedure will be followed in making a decision, fairness may require the public authority be held to its promise. That was the basis on which it was explained by Dawson J in Attorney-General (NSW) v Quin… Expectation created by a decision-maker may affect the practical content of the requirements of fairness in a particular case. 1. Similarly, with McHugh and Gummow JJ said at [48] in Lam: It often has been remarked in this Court that the particular requirements with the rules of natural justice will depend upon the circumstances. Different procedures may be required, even in the same repository of power, from one situation to the next, a point made by Aicken J in Heatley v Tasmanian Racing and Gaming Commission… Further, the expectations of a particular party as to the exercise of the power in question may be relevant to the way in which the repository of the power is to exercise it in the particular case. In Attorney General (NSW) v Quin, Brennan J observed: "[I]f an express promise be given or a regular practice be adopted by a public authority, and the promised practice is the source of a legitimate expectation, the repository is bound to have regard to the promisor practice in exercising the power, and it is unnecessary to enquire whether those factors give rise to a legitimate expectation. But the court must stop short of compelling fulfilment of the promisor practice unless the statute so requires or the statute permits the repository of power to bind itself as to the manner of the future exercise of the power." The reference to "express promise" puts the matter too narrowly in light of later decisions, in other respects this statement should be accepted. 1. However, in Lam the High Court rejected the applicant's claim that he had been denied procedural fairness. In doing so, the comments of Gleeson CJ are instructive in understanding what are the relevant considerations in determining whether or not there has in fact been a denial of procedural fairness. The Chief Justice said at [36]-[37]: [36] The more fundamental problem facing the applicant, however relates to the matter of unfairness. A statement of intention, made in the course of decision-making, as to the procedural step to be taken, is said to give rise to an expectation of such a kind that the decision-maker, in fairness, must either take that step or give notice of a change of intention. Yet no attempt is made to show that the applicant held any subjective expectation in consequence of which he did, or omitted to do, anything. Nor is it shown that he lost an opportunity to put any information or argument to the decision-maker, or otherwise suffered any detriment [37] A common form of detriment suffered where the decision-maker has failed to take a procedural step is loss of an opportunity to make representations. Attorney-General (Hong Kong) v Ng Yuen Shiu…. was such a case. So, according to the majority, was Haoucher v Minister for Immigration and Ethnic Affairs… A particular example of such detriment is a case where the statement of intention has been relied upon and, acting on the face of it, a person has refrained from putting material before the decision-maker. In a case of that particular kind, it is the existence of a subjective expectation, and reliance, that results in unfairness. Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice. 1. At first blush, when tested against the yardstick described by Gleeson CJ, the appellants challenge on this ground should fail. This is because although the application for termination was adjourned on 17 August 2015 until after hearing of the criminal proceedings which had apparently been fixed for hearing on 25 September 2015, the Tribunal had nonetheless directed the appellant to file and serve her evidence by 24 September 2015 and had otherwise adjourned the matter for final hearing, not for further directions. Further, the application for termination was not otherwise stayed pending a determination of the criminal proceedings. 2. However, in deciding not to adjourn the hearing on 9 October 2015 the Tribunal did not have the benefit of a transcript of the proceedings on 17 August 2015. That is not a criticism of the Tribunal or its conduct of the hearing on 9 October 2016. Rather, it is a matter which the Appeal Panel must examine in deciding whether there was a reasonable expectation in the mind of the appellant that the criminal proceedings would be determined prior to the application for termination and that if this did not occur the Tribunal hearing would not proceed on 9 October 2015. In this sense the Appeal Panel must consider whether there has been a "practical injustice" in the sense explained by Gleeson CJ in Lam. 3. In the present case, this requires an examination of what was in fact said on 17 August 2015 at the directions hearing at which the appellant was required to file and serve their evidence and at which the matter was fixed for hearing. At T5 line 36 the following exchanges occurred between the Tribunal, the respondent (represented by Mr Spackman) and the appellant: Mr Spackman: I'm conscious of the fact that Mr Wheeler is not here today to represent Ms Franken and I note what she said in relation to the criminal matter. Also we will be led by you as to how you consider the matter should continue. Member: It's fairly serious allegations obviously. I think I'm inclined to adjourn it. I know it's unfortunate but I think there would be some advantage in adjourning it, and I don't know whether anybody has but granting leave for Mr Wheeler or someone to represent her and adjourning it until after the court date which it wouldn't get on before that anyway and it might then be clearer as to what the position is if there had been an event mounted which was or was not (indistinct). Admittedly that would be on a criminal standard of proof but it would be indicative of the situation. Do you have any objections to that? Mr Spackman: (indistinct) Member: No. Say you have no concerns about any risks associated with the tenancy continuing at the moment? Mr Spackman: No, certainly I've received no information. Member: Right, okay. What that means Ms Franken is that I'm not going to actually do anything further today. I'm going to postpone the hearing until after your court date. Tell me again, what was that, 20… Ms Franken: 25 September. 1. The Tribunal noted at T6 line 25 that the appellant had not provided any documents and discussed what evidence may be required. Then at T7 line 1 the following exchange took place: Ms Franken: Yes. As well as evidence put forward on my behalf which-like what types of forms of evidence? Member: No, there isn't-what you will need to do is talk to Mr Wheeler, but what I'm saying is there's two aspects to this, one is whether you have in fact breached the Act. If this is after the court case it may be more clear cut as to whether that's been out (sic), but presume for the sake of argument that you are convicted, right, but you are not given a custodial sentence which means you will want to go back and live at this place. Ms Franken: Yes. Member: I still have to consider whether to terminate that tenancy, right? If the court has convicted you then obviously I will do the same, not convict you but find that you have breached the lease. Then I have to decide whether to terminate and I have to look at all the circumstances including what you did that was illegal, any previous illegal use and the previous general history of the tenancy. You have to provide the evidence if you want to rely on any of those arguments. So will obviously Mr Mr Spackman but it is more in your interest to show why it shouldn't be terminated because a) it might be the first time it happened, there have been no previous issues, you're a good tenant in every other aspect, it was a one off. I don't know, right, but whatever, your own personal circumstances, if you have illness and so forth, why it would be detrimental to move, all those kinds of things. But you have to get that ready before your court case. Ms Franken: Okay. Member: If you come to the hearing after your court case and you haven't got that then it does not exist as far as the Tribunal is concerned. Ms Franken: Yes, I understand. 1. It seems clear from the above extracts that the respondent landlord made no objection to the matter being adjourned from 17 August 2015 until after the hearing of the criminal proceedings fixed for 25 September 2015. Specifically, when the respondent was asked by the Tribunal about any "risks associated with the tenancy continuing at the moment" no objections were raised. The Tribunal then said to the appellant: What that means Ms Franken is that I'm not going to actually do anything further today. I'm going to postpone the hearing until after your court date (emphasis added). 1. Thereafter, the Tribunal appeared to focus upon evidence that might be relevant to the question of whether or not, if illegal use was found, the tenancy ought otherwise be terminated. While the Tribunal identified that there were "two aspects" to be considered, namely whether there had in fact been a breach of the RT Act and whether as a matter of discretion the tenancy should be terminated, the Tribunal said that: If this is after the court case it may be more clear cut as to whether that's been (made) out". 1. The Tribunal then discussed that if the appellant was convicted but not given a custodial sentence and wished to remain in the residential premises the Tribunal would "still have to consider whether to terminate (the) tenancy". 2. Tribunal finally said: If you come to the hearing after your court case and you haven't got that then it does not exist as far as the Tribunal is concerned. 1. The transcript indicates that the parties attempted to conciliate their dispute however this was unsuccessful. Consequently, directions were made. However, when these directions are considered in the context of the transcript, in our view what was said to the appellant could give rise to a reasonable expectation that the hearing of the application for termination would not occur until after the hearing of the criminal proceedings. There was no discussion about what would occur if the criminal proceedings were not resolved prior to any date fixed for hearing. Rather, the discussions when considered as a whole presuppose the criminal proceedings would be heard prior to the application for termination by which time it would be known whether or not the appellant had been convicted. 2. This is an unusual case where 1. the landlord had made no objection to the application for termination being adjourned until after a date fixed for hearing related criminal proceedings; 2. the application for termination was adjourned for hearing after the date the criminal proceedings were to be heard; and 3. no clear statement was made by the Tribunal: 1. that the application for termination would be heard before the criminal proceedings if the criminal proceedings were further adjourned; or 2. that the appellant was required to file and serve all evidence in relation to issues of breach as well as whether or not, on discretionary grounds, the tenancy should be terminated. 1. no application for an adjournment was made by the appellant prior to the hearing on 9 October 2015 1. On 9 October 2015, Tribunal did not have the benefit of a transcript of what occurred on 17 August 2015. However, the appellant gave evidence of what occurred, or at least made submissions as to her "belief" to the Tribunal. As we have indicated above, the evidence before the Appeal Panel corroborates the position that she put. In this regard we are satisfied she had the subjective belief that the criminal proceedings would be determined before the application for termination. 2. While there was evidence that the appellant did not seek to appoint a representative for the hearing on 9 October 2015, the failure to do so is not, in our opinion, a matter relevant to determining whether or not she had a reasonable expectation are rising from what occurred on 17 August 2015. Further, her failure to file and serve any evidence by 24 September 2015 is not, in the present circumstances, a factor which should lead to the conclusion that any expectation that the application for termination would await the criminal proceedings was unreasonable. This is because, on one view of what was said by the Tribunal on 17 August 2015, the evidence which was to be provided was only evidence concerning the history of the tenancy generally and the appellant's personal circumstances that might be relevant in exercising any discretion not to terminate the tenancy despite any conviction in the criminal proceedings. 3. In circumstances where: 1. The appellant was self represented at the directions hearing on 17 August 2015 and at the final hearing on 9 October 2015; 2. what was said to at the directions hearing on 17 August 2015 could reasonably have led her to believe that a final hearing of the application for termination would occur after the criminal proceedings had been dealt with; and 3. the appellant had a subjective belief that the criminal proceedings would be heard before the application for termination, 4. in our view the failure to adjourn the proceedings on 9 October 2015 was a denial of natural justice in the sense used in Lam. 1. Accordingly, in our opinion the orders made on 27 October 2015 should be set aside. 2. In reaching this conclusion, the Appeal Panel notes that the respondent at all times maintained she was not guilty of the charges and gave evidence to that effect at the hearing on 9 October 2015: Decision [9(e)]. The Tribunal rejected this evidence because the appellant "was not able to provide any reasonable explanation to the Tribunal to explain why she had been charged by the NSW Police, why the NSW Police were able to obtain a controlled warrant and why there would be such a large number of information reports alleging that the respondent has been supplying drugs from the premises": Decision [13]. 3. At Decision [12] the Tribunal notes the evidence provided by the respondent upon which the Tribunal reached its conclusion that the premises had been used for illegal purposes. At 12(3) of the Decision, the Tribunal says: There are a number of statements made by various Police Officers setting out the evidence that the officers would be prepared if necessary to give in court as a witness. The statements all go to the question of the respondent supply of drugs from the premises. 1. This summary suggests that the particular witnesses were not in attendance and therefore not available for cross examination. The respondent appears to concede there was no cross examination of police witnesses: see respondent's written submissions at [47]-[48]. While the Decision suggests there was a substantial body of evidence against the appellant upon which a finding could be based that the premises had been used for an illegal purpose, in the absence of any clear indication that cross examination of these witnesses had been permitted, and therefore the appellant had had a reasonable opportunity to be heard, it is appropriate that the proceedings be remitted for rehearing. 2. In essence, the actual hearing process did not in fact ameliorate the consequences arising from the expectation that the criminal proceedings would be heard first because the process adopted at the hearing on 9 October 2015 did not allow the appellant to test the evidence of the police witnesses in cross examination. 3. Accordingly, in circumstances where there was a reasonable expectation that the criminal proceedings were to be determined first and absent of a clear opportunity for the appellant to cross-examine the respondent's witnesses in circumstances where she denied the charges under the DMT Act which were of a serious criminal nature, the Appeal Panel is satisfied that the appeal should be allowed. 4. Finally, having regard to our reasons above, it is not necessary to consider the other grounds raised. Orders 1. The Appeal Panel makes the following orders: 1. The orders made by the Tribunal on 27 October 2015 are set aside; 2. The proceedings are remitted for rehearing by a differently constituted Tribunal; 3. The proceedings are listed for directions in the Tribunal on 5 August 2016 for the purpose of fixing a hearing date and making any other appropriate orders. ********** 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 Amendments 21 July 2016 - Corrected date in order (3) to 5 August 2016 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: 21 July 2016