Civil and Administrative Tribunal New South Wales Medium Neutral Citation: NSW Land and Housing Corporation v Thorpe [2016] NSWCATCD 78 Hearing dates: 26 August 2016 Decision date: 19 September 2016 Jurisdiction: Consumer and Commercial Division Before: M Eftimiou, General Member Decision: 1. The Residential Tenancy Agreement is terminated in accordance with section 91 of the Residential Tenancies Act 2010. 2. The Residential Tenancy Agreement is terminated on 13 September 2016 and possession is to be given to the landlord on the date of termination. Catchwords: S91 Illegal Use Legislation Cited: Residential Tenancies Act 2010 Civil and Administrative Tribunal Act 2012 Drug Misuse and Trafficking Act 1985 (NSW). Cases Cited: Jackson v NSW Land and Housing Corporation[2014]NSWCATAP22 NSW Land & Housing Corporation v John Raglione [2015]NSWCATAP 75 Maxwell v Murphy(1975)96CLR261 Category: Principal judgment Parties: Applicant: NSW Land and Housing Corporation Respondent: G C Thorpe Representation: Mr Spackman for the applicant No appearance by the respondent File Number(s): SH 16/25736 Publication restriction: Unrestricted REASONS FOR DECISION Introduction and Background 1. By application filed on 1 June 2016 the applicant sought orders for termination and possession of the residential tenancy premises pursuant to section 91 of the Residential Tenancies Act (the Act). 2. The matter first came before the Tribunal on 7 June 2016 and was adjourned to determine the applicant's request for an extension of time to lodge the application and, if an extension is granted, the determination of the substantive matter. 3. A hearing was held on 26 August 2016. There was no appearance of the respondent at the hearing. A notice of hearing had been sent by the Tribunal to the respondent on 9 June 2016. The notice had not been returned to the Tribunal. The Tribunal is satisfied that the respondent has been served with a notice of hearing. 4. The guiding principle of the Tribunal is to determine the real issues in dispute between the parties in a just, quick and cheap manner. This is the second time that the respondent has failed to attend without reasonable explanation. The applicant has attended, has complied with procedural directions and is ready to proceed. Giving effect to the guiding principle of the Tribunal, it is determined that the applicant should not be further disadvantaged by the respondent's failure to attend and the matter should proceed to hearing. JURISDICTION 1. There is a residential tenancy agreement between the parties entered into on 12 November 2007. The respondent continues to reside at the premises. 2. On 14 March 2016 the applicant lodged an application with the Tribunal pursuant to s91 of the Act seeking an order terminating the residential tenancy agreement between the parties (SH 16/12503). On 5 April 2016 that application was dismissed because there was no appearance by either party and no satisfactory explanation had been given to the Tribunal for such non-appearance. 3. A new application was filed on 1 June 2016 pursuant to s91 of the Act seeking an order termination the residential tenancy agreement between the parties. 4. Section 91 of the Act does not specify a time period in which an application is to be made to the Tribunal. However, clause 23(3) (b) of the NCAT Rules provides that where the enabling legislation does not provide a time limit, the application is to be made within 28 days from the day on which the applicant became entitled under the enabling legislation to make an application. The uncontested evidence of the applicant is that it became aware of the Police proceedings against the respondent on 9 March 2016. The Tribunal accepts that the earliest date on which the applicant became aware that the respondent had breached the residential tenancy agreement was 9 March 2016, that is the date on which the applicant received a response to its MOU request form MSW Police. Therefore this application is to be filed on or before 6 April 2016. The application was filed on 1 June 2016. The application was not made within 28 days from the day on which the applicant became entitled under the enabling legislation to make an application. EXTENSION OF TIME 1. The applicant submits, in summary, that section 190(1) of the Act applies to an application for "an order in relation to a breach of a residential tenancy agreement." The applicant submits that the legislature's use of the works "in relation to" in section 190(1) of the Act evinces an intention to apply not only to applications made to the Tribunal on the ground that the tenant has breached the agreement (s87 of the Act) but also to applications made under s91 of the Act where facts and circumstances concerning the illegal use of the premises constitute a breach of the residential tenancy agreement. The relevance of this argument is that section 190 allows an application to be brought to the Tribunal within 90 days of the breach. If section 190 applied to an order under s91 of the Act then the application would be filed in time. 2. The Tribunal does not accept that the section 190 time provisions apply to an application filed pursuant to section 91 of the Act. For section 190 to apply the Tribunal determines that a termination notice must be issued to the tenant pursuant to section 83 of the Act. Without a termination notice being issued the Tribunal has no power pursuant to section 83 to make an order. Whilst it is true that using the premises for an illegal purpose is a breach of Clause 7 of the Agreement, the provisions of section 83 and 190 can only be enlivened if a termination notice is issued by the landlord to the tenant for breach of Clause 7 of the Agreement. 3. The Tribunal does not accept the applicant's submission that the operation of s190(1) of the Act applies to an application for termination pursuant to section 91 of the Act where no termination notice has been issued. 4. The applicant has submitted that if the Tribunal does not accept that section 190 of the Act applies, then the applicant seeks an extension of time pursuant to section 41 of the Civil and Administrative Tribunal Act 2013(NSW)(NCAT Act). Section 41 of the NCAT Act permits the Tribunal to grant an extension of time as follows: 1. The Tribunal may, of its own motion or an application by any person, extend the period of time for the doing of anything under any legislation in respect of which the Tribunal has jurisdiction despite anything to the contrary under that legalisation. 2. Such an application may be made even though the relevant period of time has expired. 1. The applicant became entitled to make an application under section 91 of the Act on 9 March 2016. The applicant initially filed an application (matter SH 16/12503) in substantially the same terms as the application before the Tribunal today, on 14 March 2016. That matter was first listed before the Tribunal on 5 April 2016 where it was dismissed as there was no appearance by either party. The applicant has submitted that it did not receive the Notice of Hearing in relation to the matter and that is why it failed to attend. On 29 April 2016 a letter was sent by the applicant to the respondent requesting that he attend Housing NSW on 11 May 2016 to discuss the use of the premises for an unlawful purpose. The respondent was warned if he did not attend the interview an investigation would be conducted. The respondent did not attend the interview on 11 May 2016. On 16 May 2016 a recommendation was made by a Senior Client Service Office to the Acting Director of Housing Services to refer the respondent's anti-social behaviour to the Legal Service Branch for an application to be commenced with the Tribunal under the Act. On 23 May 2016 the recommendation was endorsed by the Acting Direction of Housing Service. On 1 June 2016 the applicant was filed with the Tribunal. 2. The relevant principles in considering whether or not to extend time were summarised by the Appeal Panel in Jackson v NSW Land and Housing Corporation [2014] NSWCATAP 22 (hereinafter referred to Jackson). It is useful to consider the following passages: Under s 41, the Appeal Panel has power to grant an extension of time in which to appeal in the present matter. The discretion to grant an extension of time is unfettered under that section but it must be exercised judicially. It must also be exercised having regard to the statutory command in s 36 of the Act that the guiding principle for the Act "is to facilitate the just, quick and cheap resolution of the real issue in the proceedings". An informative exposition of the role and nature of provisions which permit a Court or Tribunal to extend the time limits established for the orderly conduct of proceedings, including the time in which to lodge an appeal, is found in the decision of McHugh J sitting as a single justice of the High Court in Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2]: The grant of an extension of time under this rule is not automatic. The object of the rule is to ensure that those Rules which fix times for doing acts do not become instruments of injustice. The discretion to extend time is given for the sole purpose of enabling the Court or Justice to do justice between the parties: see Hughes v. National Trustees Executors and Agency Co. of Australasia Ltd. [1978] VicRp 27; (1978) VR 257, at p 262. This means that the discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the applicant. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time: see Avery v. No.2 Public Service Appeal Board (1973) 2 NZLR 86, at p 92; Jess v. Scott (1986) 12 FCR 187, at pp 194-195. When the application is for an extension of time in which to file an appeal, it is always necessary to consider the prospects of the applicant succeeding in the appeal: see Burns v. Grigg [1967] VicRp 113; (1967) VR 871, at p 872; Hughes, at pp 263-264; Mitchelson v. Mitchelson (1979) 24 ALR 522, at p 524. It is also necessary to bear in mind in such an application that, upon the expiry of the time for appealing, the respondent has "a vested right to retain the judgment" unless the application is granted: Vilenius v. Heinegar (1962) 36 ALJR 200, at p 201. It follows that, before the applicant can succeed in this application, there must be material upon which I can be satisfied that to refuse the application would constitute an injustice. As the Judicial Committee of the Privy Council pointed out in Ratnam v. Cumarasamy (1965) 1 WLR 8, at p 12; (1964) 3 All ER 933, at p 935: "The rules of court must prima facie be obeyed, and in order to justify a court in extending the time during which some step in procedure requires to be taken there must be some material upon which the court can exercise its discretion.." Time limits, including the specification of the time within which an appeal from an internally appealable decision to the Appeal Panel of the Tribunal must be lodged, are established by legislation for the purpose of promoting the orderly and efficient conduct of proceedings in the Tribunal, providing certainty for the parties to proceedings, especially the party in whose favour orders have been made, and achieving finality in litigation. For these reasons, these time limits should generally be strictly enforced. That is not to say, however, that exceptions should not be made where the interests of justice so require. The express power in s 41 of the Act to grant extensions of time allows the Tribunal to prevent the rigid enforcement of time limits becoming an instrument of injustice. As the decision in Gallo v Dawson quoted above makes clear, it is generally the case that in order for the power to extend time to be exercised in an appellant's favour there must be material upon which the Appeal Panel can be satisfied that to refuse the application for an extension of time would work an injustice. The considerations that will generally be relevant to the Appeal Panel's consideration of whether to grant an extension of time in which to lodge a Notice of Appeal include: 1. The discretion can only be exercised in favour of an applicant upon proof that strict compliance with the rules will work an injustice upon the appellant - Gallo v Dawson [1990] HCA 30, 93 ALR 479 at [2], Nanschild v Pratt [2011] NSWCA 85 at [38]; 2. The discretion is to be exercised in the light of the fact that the respondent (to the appeal) has already obtained a decision in its favour and, once the period for appeal has expired, can be thought of as having a "vested right" to retain the benefit of that decision - Jackamarra v Krakouer (1998) 195 CLR 516 at [4], Nanschild v Pratt [2011] NSWCA 85 at [39] and, in particular, where the right of appeal has gone (because of the expiration of the appeal period) the time for appealing should not be extended unless the proposed appeal has some prospects of success - Jackamarra at [7]; 3. Generally, in an application for an extension of time to appeal the Appeal Panel will be required to consider: 1. The length of the delay; 2. The reason for the delay; 3. The appellant's prospects of success, that is usually whether the applicant has a fairly arguable case; and 4. The extent of any prejudice suffered by the respondent (to the appeal), - Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61at [55] (per Basten JA) but note also [14], Nanschild v Pratt [2011] NSWCA 85 at [39] to [42]; and 1. It may be appropriate to go further into the merits of an appeal if the explanation for the delay is less than satisfactory or if the opponent has a substantial case of prejudice and, in such a case, it may be relevant whether the appellant seeking an extension of time can show that his or her case has more substantial merit than merely being fairly arguable - Tomko v Palasty (No 2) [2007] NSWCA 369; (2007) 71 NSWLR 61 at [14] (per Hodgson JA, Ipp JA agreeing at [17]) and Molyneux v Chief Commissioner of State Revenue [2012] NSWADTAP 53 at [58] - [59]. Consideration 1. Whilst Jackson relates specifically to an application to extend time to appeal a decision of the Tribunal, the principles enunciated are equally applicable to the application for an extension of time to file an application being considered in these proceedings. Addressing each of the considerations in turn, the Tribunal finds as follows: Delay Reasons for delay 1. The applicant submits that its initial application to the Tribunal on 14 March 2016 was within time. The applicant submits that a failure to receive the notice of hearing is what led to the matter being dismissed on that application. The applicant then sought to try and work with the respondent to try and save the tenancy. The respondent did not respond to the invitation to contact the applicant. A decision was then made to pursue the matter through the Tribunal. The Tribunal finds the applicant's submission persuasive. Prejudice to the respondent 1. The respondent has not provided any evidence or submissions that would persuade the Tribunal that an extension of time may be prejudicial to the respondent. The applicant submits that the respondent is not prejudiced by an extension of time; rather, the applicant has had the benefit of remaining in the rented premises. Applicant's prospect of success 1. An applicant seeking an extension of time must establish that it has "a fairly arguable case" and that to not be granted an extension would result in an injustice. However, as referred to in Jackson v NSW Land and Housing Corporation, in circumstances where the explanation for the delay is less than satisfactory or the opponent has a substantial case of prejudice, it may be relevant whether the applicant (seeking an extension of time) can show that their case has more substantial merit than merely being fairly arguable. In this case the Tribunal is satisfied that the explanation for the delay is reasonable. No evidence has been provided of prejudice to the respondent if an extension is granted. The Tribunal must now consider whether the applicant has " a fairly arguable case". 2. It is necessary then, without determining the substantive matter, to consider the applicant's prospects of success in their application for termination and possession. The applicant sought a termination order under section 91 of the Act which provides (in part) as follows: 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) the use of the residential premises or any property adjoining or adjacent to the premises (including any property that is available for use by the tenant in common with others) for the purposes of the manufacture, sale, cultivation or supply of any prohibited drug within the meaning of the Drug Misuse and Trafficking Act 1985 , or (b) the use of the residential premises for any other unlawful purpose and that the use is sufficient to justify the termination. (2) In considering whether to make a termination order on the ground specified in subsection (1) (b), the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the unlawful use, (b) any previous unlawful uses, (c) the previous history of the tenancy. 1. The respondent has been charged and convicted of an offence under section 23(1)(a) of the Drug Misuse and Trafficking Act 1985, namely supply a prohibited drug. In addition the respondent has been charged and convicted of a number of offences under the Drug Misuse and Trafficking Act 1985 including possess prohibited drug. The respondent has also been charged and convicted of an offence under the Crimes Act 1900 namely deal with property suspected proceeds of crime. 2. The applicant has established that there are reasonable prospects of success in this matter. 3. Given the considerations in relation to the delay, the reason for delay and the lack of any evidence of prejudice to the respondent, and the reasonable prospects of success of the matter, the Tribunal determines that an extension of time should be granted to the applicant. Time is extended to make the application to 1 June 2016. SUBSTANTIVE APPLICATION 1. The respondent has been charged with a number of offences pursuant to the Drug Misuse and Trafficking Act 1985 (NSW). The respondent has pleaded guilty to these charges and the respondent was convicted of all offences on 5 February 2016. 2. The applicant sought to rely on the NSW Police Brief of Evidence and the sworn evidence of Detective Sergeant Steven Floyd Davies who provided a statement on 26 May 2015 and which sets out his sworn evidence. 3. The respondent has been charged with a number of criminal offences. The respondent has been charged with (a) Supply Prohibited Drug under the Drug Misuse and Trafficking Act 1985 and (b) Possess Prohibited Drug (Drug Misuse and Trafficking Act); and (c) Deal with suspected Proceeds of Crime (Crimes Act 1990). 4. The evidence before the Tribunal in accordance with the Police Fact Sheet can be summarised as follows: * As a result of information received on 10 March 2015 Police obtained a search warrant from Wollongong Local Court Registry for premises 25/78 Cliff Road Wollongong reference 14.15 in relation to firearm and drug offences. * The respondent was approached by Police in Crown Street Wollongong on 12 March 2015 and searched. He was found to be in possession of a quality of crystal, a quantity of cash totalling $735.00 in various denominations. The accused admitted possession of the item and that is was crystal methyl amphetamine. * The respondent was placed under arrest and advised that Police had a search warrant for his home. * During the course of the search warrant at the premises Police located a bowl of green vegetable matter in the lounge room: a plastic resealable bag containing green vegetable matter in the kitchen; a red cooler bag containing three ounce bags of cannabis in a bedroom. The accused admitted these items were his for his personal use and was cannabis. * Police located digital scales and a small amount of plastic bags within the kitchen area. * Police believe the accused had this cannabis in his possession for personal use but also for the purposes of supply. * The accused stated that he 'trades' cannabis with local residents and occasionally swaps it for crystal amphetamine. The combined weight of all cannabis seized was approximately 103 grams with potential street value of $2000.00. * During the search warrant police located a further resealable plastic bag containing crystal substance of the bedside table in the main bedroom. He admitted ownership of the item and stated it was methyl amphetamine for personal use. * Police further located a set of tanita brand scales in the bedside table drawer and underneath Police located a further plastic bag containing crystal substance. The combined overall weight of the crystal was 0.31grams with an approximate street value of $300.00. * During the course of the search warrant Police located a further quantity of cash $1275 in various denomination. * During the course of the search warrant Police located two Toshiba bran laptops computers in the main bedroom. Inquires reveal that the laptops are identified as being stolen (by serial number). In the circumstances Police believe that the computers have been 'traded' for prohibited drugs and in the circumstances the accused would have suspected they were stolen when he received them. 1. The respondent was charged with the following offences on 12 March 2015; 1. Possess prohibited drug section 10(1) Drug Misuse and Trafficking Act 1985 2. Possess prohibited drug: section 10(1) Drug Misuse and Trafficking Act 1985. 3. Supply a prohibited drug: Section 25(1) Drug Misuse and Trafficking Act 1985 4. Possess prohibited drug: Section10 (1) Drug Misuse and Trafficking Act 1985. 5. Deal with property suspected proceeds of crime: section 193x(1) Crimes Act 1990 6. Supply prohibited drug: Section 25(1) 1. On 5 February 2016 at Wollongong Local Court the respondent was convicted of all offences and given a section 9 Bond for 12 months to attend for counselling, educational development, drug or alcohol rehab and to be supervised by the NSW Probation and Parole Service. 2. The applicant has established that there was a contravention of section 91(1)(a) and/or (b) of the Act. The applicant has established a breach of section 91 (1) (a) and (b) of the Act. 3. The application was filed after 18 December 2015 however, the conduct complained of occurred prior to 18 December 2015. The Tribunal determines that the applicable law is the law as it stood before the Residential Tenancies and Housing Legislation (Public Housing Ant Social Behaviour) Act came into effect on 18 December 2015. 4. The Act was amended in late 2015 and those amendments (which restrict the Tribunal's discretion whether to terminate a tenancy under section 91(1) of the Act) came into effect on 18 December 2015. The Tribunal is of the view that the amendments only apply to breaches that occur on or after 18 December 2015. Therefore, it is the provisions of the Act pre 18 December 2015 that apply in these proceedings. That is, the Tribunal has discretion whether to terminate a tenancy because the Act provides that the Tribunal "may" make a termination order in circumstances where a tenant is found to have breached section 91(1) of the Act. 5. In exercising its discretion under section 91(1) of the Act, the Tribunal may consider, the factors set out in sections 87 and 152 of the Act (as it was on 15 December 2015) in relation to termination for breach of a residential tenancy agreement. 6. The applicant submits that this is not a matter in which the Tribunal ought to exercise its discretion because of the following factors: * The serious nature of the breach: the respondent has been charged and convicted of a number of serious offences, including supply prohibited drug and dealing with the suspected proceeds of crime (as per the summonsed police documents) * The respondent is in receipt of a Disability Support Benefit, yet on his own admission is purchasing $1000 per fortnight on cannabis (transcript of interview as per the summonsed police documents). * The respondent on his own admission is trading drugs with other residence within the complex ( as per the summonsed police documents) * The respondent has been supplying not trading prohibited drugs in order to be able to purchase $1000 of cannabis per fortnight ( conviction for supply) * This is not the first drug related charges the respondent has faced and there has been numerous prior convictions for prohibited drugs ( Police Fact Sheet) * Impact on the neighbours notwithstanding the respondents claim that he trades drugs he was in fact selling drugs. * The large number of items including money, bags, scales and drugs that were found on the premises indicate that the premises were being used for an illegal purpose (as per the summonsed police documents) 1. As stated earlier there was no appearance by the respondent and no evidence provided in accordance with Tribunal directions. No evidence was put by the respondent that would go towards the question of discretion. 2. The Tribunal finds on the evidence before it that the respondent intentionally or recklessly caused or permitted the use of the premises for the supply of a prohibited drug. The Police Facts together with the sworn statement of the Police Office and the respondent's convictions satisfy the Tribunal that the respondent was using the premises to measure and package drugs for supply propose to other people. 3. The Tribunal finds on the evidence that the respondent intentionally or recklessly caused or permitted the use of the premises for any other unlawful purpose. The Police Facts together with the sworn statement of the Police Officer and the respondent's record of interview and conviction for the offences charged establishes that the respondent used the premises for unlawful purpose of possession and use of cannabis and methyl amphetamine. 4. The matters set out in subsection 91(2) are required to be taken into account in respect of the breach of paragraph 91(1)(b) and are also relevant matters to take into consideration in the matters under paragraph 91(1)(a). 5. The first matter is the nature of the unlawful use. The findings in respect of the unlawful use have been set out above. The Tribunal is satisfied that drug supply from the premises is a serious matter. 6. The second matter is any previous unlawful uses: No evidence has been provided by the applicant in regards to this matter. 7. The third matter is the previous history of the tenancy. The Tribunal is satisfied that the tenancy commenced on 11 November 2007 and is continuing. There is no evidence of any breaches of the tenancy agreement or the Act other than the findings above in relation to breaches of paragraphs 91(1)(a) and 91(1)(b) of the Act. 8. The Tribunal determines that the grounds in paragraphs 91(1)(a) and (b) of the Act have both been established and in the circumstances each is sufficient to justify termination of the agreement. There is no material put by the tenant in relation to the exercise of the Tribunal's discretion. The Tribunal has considered the submissions of the applicant and is satisfied that the matters for which the respondent has been convicted are serious and this is not an appropriate matter for which the Tribunal's discretion should be exercised. 9. The tenancy is terminated and possession of the premises to be given to the applicant immediately. If the respondent does not comply immediately with the orders he must pay to the applicant an occupation fee calculated in accordance with section 123(2) of the Act. M Eftimiou General Member Civil and Administrative Tribunal of New South Wales 19 September 2016 ********** 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: 25 November 2016