Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Carr v NSW Land and Housing Corporation [2019] NSWCATAP 144 Hearing dates: 23 May, 2019, 30 May and 5 June 2019 (written submissions) Date of orders: 13 June 2019 Decision date: 13 June 2019 Jurisdiction: Appeal Panel Before: The Hon F Marks, Principal Member L Pearson, Principal Member Decision: (1) The appeal is allowed and the order made by the Tribunal on 19 February 2019 terminating the residential tenancy agreement between the respondent and the appellant is set aside; (2) The residential tenancy agreement between the respondent and the appellant is terminated on the date of these orders; (3) The stay of the operation of the order for possession made on 19 February 2019 is lifted; (4) Possession of the residential premises is to be given by the appellant to the respondent 28 days from the date of these orders; (5) If the appellant does not vacate the premises within 28 days of this date, the appellant is to pay to the respondent an occupation fee calculated in accordance with section 123 (2) of the Residential Tenancies Act until the date vacant possession is given. Catchwords: Residential tenancy – application for termination and possession of social housing based on breach of lease agreement – determination of matter on another basis – held constituted error – decision set aside – Appeal Panel conducted fresh hearing – commercial quantity of illegal drugs found on premises and drugs sold from premises – tenant vicariously liable – order made for termination of tenancy Legislation Cited: Residential Tenancies Act 2010 (NSW) Civil and Administrative Tribunal Act 2013 Drug Misuse and Trafficking Act 1985 Cases Cited: Parslow v NSW Land and Housing Corporation [2018] NSWSC 1909 Ritson v Leighton [2015] NSWCA 62 Category: Principal judgment Parties: Lesleigh Carr (Appellant) NSW Land and Housing Corporation (Respondent) Representation: Counsel: N Simpson (Respondent) Solicitors: S Calnan (Appellant) File Number(s): AP 19/11819 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal NSW Jurisdiction: Consumer and Commercial Division Citation: N/A Date of Decision: 19 February, 2019 Before: N Alamali General Member File Number(s): SH 18/41622 REASONS FOR DECISION Background 1. The respondent to these appeal proceedings, NSW Land and Housing Corporation brought an application in this Tribunal for orders, inter alia, terminating for breach a residential tenancy which it had granted over certain premises to the appellant, Lesleigh Carr. That application was granted by a Member in the Consumer and Commercial Division of this Tribunal, who, in a decision published 19 February 2019 found that a breach had occurred, terminated the tenancy on 7 March, 2019 and gave possession to the respondent on that date. In essence, the Member found that the appellant was in breach of the provisions of the residential tenancy agreement because she had used or caused or permitted the premises to be used for an illegal purpose. 2. The Notice of Appeal lodged on 8 March 2019 stated the grounds of appeal to be that the Tribunal erred in terminating the tenancy under s 91 of the Residential Tenancies Act 2010 (the RT Act) in the absence of an application by the respondent under that section, and erred in failing to determine whether the respondent's application was made within time. In an Amended Notice of Appeal filed on 10 May 2019 the grounds of appeal were that the Tribunal erred in making findings of fact not based on rationally probative evidence, erred in the findings under s 91, and asked itself the wrong question in relation to its consideration of s 154E of the RT Act. The appellant sought leave to appeal on the grounds that the decision was not fair and equitable and was against the weight of the evidence. 3. We note for completeness that the appellant filed her appeal some few days out of time. This was explained by the need to obtain advice. The respondent neither consented to nor opposed the grant of extension of time. In all the circumstances we confirm an order made during the course of the hearing extending the time for the filing of the Notice of Appeal. 4. A stay of the operation of the order for possession made on 19 February 2019 was granted on 4 April 2019 until further order of the Tribunal, on condition that the appellant not permit any drugs or illegal substances to be brought onto or remain on the premises, and that she give access to the respondent to inspect the premises on or before 18 April 2018. 5. In conformity with the protocols of this Tribunal, we have anonymized the contents of these reasons for decision to the extent necessary to protect the privacy of persons other than the parties. Evidence and other material on the appeal 1. The Appeal Panel had a Tender Bundle filed on behalf of the appellant which contains the Termination Notice; the Tribunal's procedural directions; the respondent's bundle of evidence filed at first instance, which includes a copy of the residential tenancy agreement, and documents obtained by the respondent from the NSW Police Force including witness statements; and a medical certificate dated 17 April 2019. 2. The Appeal Panel was provided with a transcript of the proceedings at first instance, which the parties agreed was accurate. That transcript indicates that the appellant had not filed or served any evidence as directed by the Tribunal, and that she gave sworn oral evidence and was cross examined at the first instance hearing. 3. The appellant's representative and the respondent's representative provided written submissions, filed respectively on 7 May 2019 and 21 May 2019. The appellant was permitted to provide additional written submissions on whether, if the tenancy were terminated, there were exceptional circumstances for the purposes of s 154G of the RT Act justifying a date for possession longer than 28 days after the date of termination. Those submissions were received on 30 May 2019, and submissions in reply by the respondent on 5 June 2019. The provisions of the residential tenancy agreement and the basis for the alleged breach 1. Clause 7.1 of the residential tenancy agreement dated 3 July 2007 provided that the tenant agrees "not to use the residential premises, or cause or permit the premises to be used, for any illegal purpose." 2. A Notice of Termination issued by the respondent to the appellant dated 29 August 2018 stated that it was given in respect of a breach of cl 7.1 of the residential tenancy agreement. Particulars of the breach were given. In summary, the respondent alleged that NSW Police had executed a search warrant at the premises the subject of the residential tenancy on 9 May, 2018 and had located a number of items including multiple bags and another container containing an amount of a crystal substance with a total weight of 34.5g, $640 in the appellant's wallet, 3 sets of scales, and 2.5g of green vegetable matter wrapped in foil. It was not suggested that all of those items were the personal property of the appellant. The Termination Notice specified 23 September 2018 as the date on which vacant possession was to be given, and stated that it was sent by pre paid post on 29 August 2018. The factual background 1. The narration which follows is based upon material contained within the NSW Police brief of evidence prepared in connection with proceedings taken against a family member of the appellant who stayed with her from time to time, and which contained details of the material discovered by NSW Police when the search warrant referred to above was executed. That material was before the Member and was made available to us for the purpose of the appeal hearing. Because the basis of the appeal substantially revolved around findings made by the Member having read that evidence, and heard oral evidence, we have undertaken our own analysis of this material which we now proceed to set out. 2. On 27 April 2018 police officers observed a person entering a block of 5 terrace style houses in a Sydney suburb. The appellant rented one of those terrace style houses from the respondent. The police observed a person entering the block, and then leaving it. They apprehended that person and found a quantity of prohibited drugs in his possession. They ascertained that he had made a telephone call to a designated mobile number just before he entered the building. 3. On 3 May 2018 police officers observed another person enter the same building and leave it and drive away in a motor vehicle. They apprehended the occupants of the vehicle and found a quantity of prohibited drugs in their possession. The mobile telephone of one of the occupants contained an SMS message to the same mobile phone referred to above. 4. Police later ascertained that the mobile phone had been purchased in the name of a family member of the appellant, and was being used by her son, ("the cousin's son"). 5. On 9 May, 2018 police officers executed a search warrant on two apartments in the residential building. The warrant was executed in the appellant's apartment at about 7:15 AM. The appellant was present, as were five other persons. Prohibited drugs were found in a dining table seat, under the kitchen sink, in the laundry, on the dressing table in 2 separate bags in the appellant's bedroom and in a second bedroom. In addition, there was found in the appellant's wallet $640 in cash, and 3 sets of scales on the lounge room floor and in the laundry. There was also "green vegetable matter" found in the appellant's bedroom. 6. Analysis undertaken by the police indicated that there were 3 separate bundles of methamphetamine found in the premises consisting of 27.36 g, 1.66 g and 2.99 g. 7. On 10 May 2018 the appellant and the cousin's son attended at Maroubra police station and were interviewed by a police officer. The cousin's son volunteered that he had come to the police station to admit that all of the "stuff" which he later identified as "ice" in his aunt's "room" and the laundry belonged to him. The police officer then told the cousin's son that there were 30g of ice worth around $6000 which were not accounted for and had to be pursued. The cousin's son insisted that it be examined for fingerprints. After a short while when the appellant, another family member, and the cousin's son had been left alone in the room, the cousin's son then volunteered that all of the 30 g of "ice" belonged to him. 8. On 17 May 2018 the appellant attended Maroubra police station and made a statement. She said that the last time that the cousin's son had stayed at her house "was a couple of days" before the police raid on 9 May. He stayed there on the Saturday night and left on Sunday afternoon. She said that when he stayed, he slept on the lounge and sometimes left clothes and other items at the house. She was adamant he had access to the whole of the house when staying over. She said that in the week leading up to the police raid another cousin had also stayed in the house. 9. The appellant told the police that she lifted up part of a chair in the dining room on 8 May 2018 and noticed a bag "with white stuff on it. It looked like crystal which I know is a drug so I didn't know what to do. I just closed the chair and left it there. I was shocked and didn't know what to do with it. The bag was a clear plastic bag, with white crystals in it." She said she had no idea how the bag had been placed there. She said she may have touched the bag. 10. In her statement the appellant said that she saw the cousin's son on 10 May 2018, told him about the police raid and asked him to go to the police station to "sort it out" because they were asking for him. She then went with the cousin's son to the police station and alleges that he said that all of the drugs in her room were his and not hers. He was arrested and she left the police station. 11. In the course of giving oral evidence before the Member, the appellant said, inter alia, that the police must have put some of the material which they had found on her bed while conducting the raid. She also said that the cannabis that had been found in the premises belonged to a cousin who was staying with her and was using it because he had cancer. She denied that any of the illicit drugs found on the premises belonged to her. She stated that she knew the crystal she found under the chair seat was a drug only after the police told her. She disputed that the police officers had left the room before the cousin's son had told them that all the drugs were his. The decision under appeal 1. In her reasons for decision the Member correctly identified the relevant law as involving a consideration of the provisions of sections 87 and 154E of the RT Act which are in the following terms; 87 Breach of agreement (1) A landlord may give a termination notice on the ground that the tenant has breached the residential tenancy agreement. (2) The termination notice must specify a termination date that is not earlier than 14 days after the day on which the notice is given. (3) The termination notice may specify a termination date that is before the end of the fixed term of the residential tenancy agreement if it is a fixed term agreement. (4) The Tribunal may, on application by a landlord, make a termination order if it is satisfied that: (a) the tenant has breached the residential tenancy agreement, and (b) the breach is, in the circumstances of the case, sufficient to justify termination of the agreement, and (c) the termination notice was given in accordance with this section and the tenant has not vacated the premises as required by the notice. (5) In considering the circumstances of the case, the Tribunal may consider (but is not limited to considering) the following: (a) the nature of the breach, (b) any previous breaches, (c) any steps taken by the tenant to remedy the breach, (d) any steps taken by the landlord about the breach, (e) the previous history of the tenancy. (6) The Tribunal may refuse to make a termination order if it is satisfied that the tenant has remedied the breach. Note. Section 154E sets out additional matters to be considered if the residential tenancy agreement is a social housing tenancy agreement. 154E Exercise of discretion to make termination order (1) In considering whether to make a termination order for a social housing tenancy agreement, the Tribunal must have regard to the following: (a) the effect the tenancy has had on neighbouring residents or other persons, (b) the likelihood that neighbouring residents or other persons will suffer serious adverse effects in the future if the tenancy is not terminated, (c) the landlord's responsibility to its other tenants, (d) the history of the current tenancy and any prior tenancy arising under a social housing tenancy agreement with the same or a different landlord, (e) whether the tenant, wilfully or otherwise, is or has been in breach of an order of the Tribunal. (2) This section does not limit any other matter that may be considered by the Tribunal under this Act. 1. As we have previously observed, the basis for the application brought by the respondent was an alleged breach by the appellant of a provision of the residential tenancy agreement. This clearly enlivens the provisions of section 87 and, as the tenancy was a social housing tenancy, requires a consideration of the provisions of section 154E. 2. However, in addition to identifying section 87 as being the relevant law, the Member also referred to section 91 of that Act, which is in the following terms; 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. (3) The termination order may specify that the order for possession takes effect immediately. (4) A landlord may make an application under this section without giving the tenant a termination notice. (5) The Tribunal may make a termination order under this section that takes effect before the end of the fixed term if the residential tenancy agreement is a fixed term agreement. 1. After reciting the statutory provisions, and referring to the evidentiary material and the submissions of the parties, at paragraph [14] of the reasons the Member stated: The question for the Tribunal is whether the tenant breached clause 7 of the RTA which states that the tenant agrees not to use the residential premises, or cause or permit the premises to be used for any illegal purpose. In doing so the Tribunal will consider whether the tenant contravened s 91(1) (a) of the RT Act and if so is the breach serious enough to warrant a termination. 1. However, it is not clear why the Member referred to s 91. The transcript confirms that neither the Member, nor the parties' representatives, referred to the provisions of section 91 of the RT Act during the course of the hearing. The Notice of Termination was based on breach of cl 7.1 of the residential tenancy agreement, and the application to the Tribunal made on 26 September 2018 sought a termination order based on s 87 of the RT Act, "where the tenant has breached the residential tenancy agreement". 2. After considering the evidence the Member found (at paragraph [17]) that it was more probable than not that the drugs found on the premises belonged to the appellant. While she did not accept that the evidence established that the drugs belonged to the cousin's son, the finding of three sets of scales led to a probable conclusion that more than one person was engaged in the activity of packaging drugs at the premises. The Member concluded at paragraph [21] that she could "comfortably find that the tenant intentionally caused the premises to be used for the supply of prohibited drugs. However if I am wrong in this regard, the tenant has at a minimum, recklessly caused or permitted the premises to be used for the supply of drugs." The Member then stated at at paragraph [22]: 22 The question for the Tribunal is whether the tenant's contravention of s 91(1)(a) of the RT Act is serious enough to warrant a termination of the tenancy. In considering section 87(5), I find the breach involved the supply of prohibited drugs. The police search was a result of surveillance on the premises which resulted in sufficient evidence to support the issuing of a search warrant. The seriousness of the breach is high. As the landlord pointed out in his submission, the amount of drugs found is ten times the amount prescribed as trafficable quantity in Schedule 1 of the Drug Misuse and Trafficking Act 1985. The amount found is six times the prescribed indictable quantity. There are no other breaches by the tenant. The evidence does not reveal the tenant has taken any steps to remedy the breach as she has denied the drugs belonged to her and has not provided evidence how she may prevent her premises being used to supply drugs in the future. The steps taken by the landlord has been the issuing of a Termination Notice. I accept the tenant's evidence that the landlord has not convened a meeting with her prior to issuing the Termination Notice. The tenant has been in the premises since 2007 with no adverse history provided by the landlord. 1. The Member then referred to the factors in s 154E of the RT Act, finding that the activity of sale of drugs from the premises as observed by the police on two occasions will have an impact on the neighbouring residents, that the respondent as landlord had a duty to take action against a tenant whose activities result in drug users attending the complex of units which would more than likely make other residents feel unsafe, the absence of evidence of breaches before 9 May 2018 in a tenancy since 2007, and that the appellant had not been in breach of any Tribunal order. The Member considered at paragraph [29] the submissions on behalf of the appellant that she and her three children were at risk of homelessness. 2. The Member concluded: 31 The Tribunal finds on the evidence before it, the tenant has breached s91(1) (a) of the RT Act by intentionally or recklessly causing or permitting the use of the premises for the supply of prohibited drugs. Furthermore the seizure of the three scales along with the drugs being packaged into various plastic bags leads the Tribunal to comfortably find that the tenant was allowing the premises to be used to package prohibited drugs for the supply to others. 32 In Sciclina v NSW Land and Housing [2008] NSWCA 277 where the NSW Court of Appeal held that there is no prima facia presumption that the Tribunal would evict once a breach was established. However, there is no material put by the tenant that would sway the Tribunal to exercise its discretion not to terminate the tenancy. The grounds of appeal 1. Leave was granted at the appeal hearing for the appellant to rely on the Amended Notice of Appeal filed on 10 May 2019. The respondent's Reply to Appeal filed on 12 April 2019 addressed the grounds of appeal identified in the original Notice of Appeal. However, the respondent's written submissions filed on 21 May 2019 addressed the amended grounds of appeal Consideration of the appeal 1. The difficulty that we have in considering the grounds of appeal on which the appellant relied, and her submissions, is that the Member did not address the correct question when seeking to determine these proceedings. As we have said, neither party referred to the provisions of section 91(1)(a) in the course of the proceedings before the Member. The application of the respondent was based solely upon a breach of the provisions of the residential tenancy agreement, that is, under s 87. Accordingly, the only matter that needed to be considered by the Member was whether the appellant had used the residential premises, or caused or permitted the premises to be used, for an illegal purpose, namely for the storage or supply of illegal drugs. Such a consideration does not involve a determination as to whether or not the conduct of the appellant was intentional or reckless. 2. Furthermore, as the respondent pointed out, reliance on a breach of a provision of the residential tenancy agreement allowed it to in turn rely on the provisions of section 54 of the RT Act which is in the following terms; 54 Liability of tenant or co-tenant for actions of others (1) A tenant is vicariously responsible to the landlord for any act or omission by any other person who is lawfully on the residential premises (other than a person who has a right of entry without the tenant's consent) that would have been a breach of the residential tenancy agreement if it had been an act or omission by the tenant. (1A) Subsection (1) does not apply to a tenant who is the victim of a domestic violence offence, or an exempted co-tenant, if the relevant act or omission constitutes or resulted in damage to the residential premises and occurred during the commission of the domestic violence offence. (1B) In this section, an exempted co-tenant means a tenant under the same residential tenancy agreement as the tenant referred to subsection (1A) who is not a relevant domestic violence offender (within the meaning of Division 3A of Part 5) nominated in a document referred to in section 105C (2) and annexed to a domestic violence termination notice (within the meaning of section 105B) for the residential tenancy agreement. (2) This section is a term of every residential tenancy agreement. 1. Section 54 imports notions of vicarious liability, and the appellant submitted that the conduct of the cousin's son in storing illegal drugs and in supplying them from the residential tenancy premises ipso facto constituted a breach of the residential tenancy agreement by the appellant. 2. Even though the appellant's submissions were confined to the consideration by the Member of the provisions of section 91(I)(a), and despite the fact that the respondent did not itself lodge any appeal against the basis upon which the Member reached her conclusions leading to her decision, we are of the opinion that the Member fell into error in considering the provisions of this section. It had never formed the basis of the application brought by the respondent, it was not mentioned by the parties during the course of the proceedings, and it compelled consideration of matters which are arguably irrelevant to the question which she was asked to consider. 3. We appreciate that the provisions of section 91(1)(a) as they apply to the factual circumstances of these proceedings create a substantial area of overlap with a consideration of whether the appellant was in breach of the residential tenancy agreement. Nevertheless, we understand section 91(1)(a) to create a separate and independent basis for the termination of a residential tenancy agreement which may operate concurrently with a right to seek termination based upon a breach of a provision of the agreement itself. That section 91(1)(a) has a different role to play in the scheme of the RT Act is supported by the fact that in contrast to termination for breach under s 87, which requires at least 14 days notice of the termination date and precludes an application to the Tribunal until after the termination date, a termination notice under s 91 may specify that the order for possession takes effect immediately, and an application for a termination order may be made to the Tribunal without giving the tenant a termination notice. 4. These matters were canvassed with the parties during the course of the proceedings. We informed them of the conclusion which we had reached. In that the Member fell into error, the decision must be set aside. To this extent the appeal should be allowed and the decision set aside. The further course of the proceedings 1. Having informed the parties during the course of the appeal proceedings that we had formed the view that the Member had fallen into error in the manner described above, we discussed with their representatives what consequences should follow. We formed the view that because the parties had had an opportunity of producing all of the evidence upon which they wished to rely before the Member, and that evidence was available to us including extracts from transcript of the testimony of the appellant, it would be appropriate for us to conduct a hearing of the proceedings and determine them to finality. 2. In forming this view we were cognisant of the provisions of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) which apply to internal appeals, the relevant sections of which we set out below; 80 Making of internal appeals (1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made. Note. Internal appeals are required to be heard by the Tribunal constituted as an Appeal Panel. See section 27 (1). (2) Any internal appeal may be made: (a) in the case of an interlocutory decision of the Tribunal at first instance—with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance—as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. (3) The Appeal Panel may: (a) decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and (b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances. 81 Determination of internal appeals (1) In determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) orders that provide for any one or more of the following: (a) the appeal to be allowed or dismissed, (b) the decision under appeal to be confirmed, affirmed or varied, (c) the decision under appeal to be quashed or set aside, (d) the decision under appeal to be quashed or set aside and for another decision to be substituted for it, (e) the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel. (2) The Appeal Panel may exercise all the functions that are conferred or imposed by this Act or other legislation on the Tribunal at first instance when confirming, affirming or varying, or making a decision in substitution for, the decision under appeal and may exercise such functions on grounds other than those relied upon at first instance. 1. We note in particular that the course of action that we proposed was clearly contemplated by the provisions of sections 81 (1) (e) and 82. 2. Our decision to proceed in this way was also informed by the provisions of section 36 of the NCAT Act which is in the following terms; 36 Guiding principle to be applied to practice and procedure (1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: (a) exercises any power given to it by this Act or the procedural rules, or (b) interprets any provision of this Act or the procedural rules. (3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal: (a) a party to proceedings in the Tribunal, (b) an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal. (4) In addition, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings. (5) However, nothing in this section requires or permits the Tribunal to exercise any functions that are conferred or imposed on it under enabling legislation in a manner that is inconsistent with the objects or principles for which that legislation provides in relation to the exercise of those functions. 1. In all the circumstances, it was appropriate to deal with the substantive proceedings in the course of conducting the appeal hearing in order to facilitate the just, quick and cheap resolution of what are the real issues in the proceedings, namely the entitlement of the respondent to seek to terminate the residential tenancy, the appropriateness of doing so and whether an order for possession should be made having regard to the provisions of section 145E of the RT Act. The determination of the proceedings 1. We now come to determine for ourselves the application brought by the respondent in the original proceedings. It is based on an alleged breach of clause 7.1 of the residential tenancy agreement. If there was any doubt concerning the nature and effect of such a provision, reference should be made also to section 51 of the RT Act the effect of which is to import by subsecs (1)(a) and (5) a provision to the same effect as a term of every residential lease. 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, (b) cause or permit a nuisance, (c) interfere, or cause or permit any interference, with the reasonable peace, comfort or privacy of any neighbour of the tenant, (d) intentionally or negligently cause or permit any damage to the residential premises, (e) cause or permit a number of persons to reside in the residential premises that exceeds any number specified in the residential tenancy agreement. (2) A tenant must do the following: (a) keep the residential premises in a reasonable state of cleanliness, having regard to the condition of the premises at the commencement of the tenancy, (b) notify the landlord of any damage to the residential premises as soon as practicable after becoming aware of the damage. (3) On giving vacant possession of the residential premises, the tenant must do the following: (a) remove all the tenant's goods from the residential premises, (b) leave the residential premises as nearly as possible in the same condition, fair wear and tear excepted, and, if there is a condition report, as set out in the condition report applicable to the premises when the agreement was entered into, (c) leave the residential premises in a reasonable state of cleanliness, having regard to the condition of the premises at the commencement of the tenancy, (d) remove or arrange for the removal from the residential premises of all rubbish, having regard to the condition of the premises at the commencement of the tenancy, (e) return to the landlord all keys, and other opening devices or similar devices, provided by the landlord to the tenant. (4) In this section: residential premises includes everything provided with the residential premises (whether under the residential tenancy agreement or not) for use by the tenant. (5) This section is a term of every residential tenancy agreement. 1. The appellant submitted that she had no or only fleeting knowledge of the presence of illegal drugs in the rented premises and said that at all times they were the property of her cousin's son, save for the marijuana used by a family member. We reject this submission because it is clear on the evidence which we have set out above that, on her own admission, the appellant was aware that there was a crystal like substance, at least in the dining room chair. We find it difficult to believe that the appellant had no knowledge of the bags of crystal like substance in her bedroom, let alone the laundry. We have the same difficulty in accepting her evidence concerning the presence of the scales in the premises. They are also clearly associated with dealing in illegal drugs. 2. However, the determination of this aspect of the proceedings is not governed by the actual knowledge of the appellant that illegal drugs were in her premises. This is because of the provisions of section 54 of the RT Act which we have earlier set out. Applying the Briginshaw standard, there can be no doubt that the cousin's son had stored illegal drugs in commercial quantities in the rented premises, and that he was dealing in those drugs at least on the two occasions when persons were apprehended by the police. The appellant is vicariously liable to the respondent for all of these activities, and such liability may be taken into account in determining whether there has been a breach of the provisions of the tenancy. 3. We are comfortably satisfied that the appellant has permitted the premises to be used for an illegal purpose. On this basis, the respondent was entitled to issue a notice of termination. No issue was taken at first instance or on appeal with the compliance of the termination notice dated 29 August 2018 with the formal requirements of s 82, or that it had been properly served. 4. Section 87(4)(b) of the RT Act requires that the Tribunal be satisfied that "the breach is, in the circumstances of the case, sufficient to justify termination of the agreement", and s 87(5) lists factors that may be considered in considering the circumstances of the case. 5. The appellant submitted that the Tribunal would not, in all the circumstances, terminate the tenancy. Such a submission was based in part on the professed lack of knowledge of the appellant, the fact that she had occupied the premises for 11 ½ years and no other adverse conduct of any kind had come to the attention of the respondent, and that the conduct complained of was an isolated incident confined to the behaviour of one individual. The appellant submitted that there is a risk of homelessness and a very significant effect on the appellant if evicted. 6. We acknowledge that on the evidence, there is no suggestion of any prior conduct of the appellant which would give the respondent cause for concern. However, we do not accept that the appellant had no or little knowledge of the presence of the illegal drugs in the premises, or the presence of the scales, and we do not accept that this was an isolated incident. There was a period of 10 days in between each of the incidents where the police effected arrests. A further period of 6 days elapsed before the police executed the search warrant and found a large quantity of illegal drugs on the premises. This smacks more of a continuing operation than an isolated event. 7. The supply of methamphetamine in the community is a serious matter, and is clearly inconsistent with responsible conduct associated with the duties and responsibilities of tenants. Indeed, the legislature has seen fit to reinforce the seriousness of conduct of this kind within the provisions of section 51(1)(a) of the RT Act which we have set out above. 8. As this is a social housing tenancy, in considering whether to make a termination order we must take into account the provisions of section 154E which we have set out above. Section 154E(1) lists five factors to which regard must be had. 9. In considering the provisions of section 154E(1) we note that there is no evidence that any neighbour or other person has been unduly affected by the conduct which is at the heart of these proceedings. The respondent conceded that there was no such evidence. The appellant submitted that the incidents of May 2018 were a single instance, and the likelihood of serious adverse effects in the future on neighbouring residents is not high; the respondent disagreed, submitting that given the serious nature of the offences the likelihood is high. As discussed above, we do not accept that this was an isolated incident. We take into account as a matter of common sense that firstly possession of a commercial quantity of illegal drugs is a serious criminal offence, secondly that the sale of drugs from premises will attract persons engaging in criminal activities some of whom may be taken to engage in antisocial behaviour from time to time. Accordingly, we agree with the Member's conclusion that bringing undesirable persons into the neighbourhood is likely to have a serious adverse effect on neighbouring residents. We also conclude that the respondent as a substantial provider of social housing has an undoubted obligation to keep and maintain its premises in which a range of disadvantaged members of the community and their families reside as safe as possible and as far removed as possible from any illegal activity, which may require the respondent as landlord to take action against a tenant whose activities result in drug users attending the complex of units There is no evidence of any previous issues in this tenancy which at the time of these events had been on foot for close to 11 years, or since. There is no evidence that the tenant has been in breach of any Tribunal order. We have also taken into account the fact that the appellant lives in the rented premises with 3 children, aged 17, 10 and 9. Clearly, other members of her family also stayed with her from time to time. However, the seriousness of the activities in May 2018 and the grievous circumstances which apply to these proceedings militate against the exercise of any discretion to decline to make an order to terminate the tenancy. 10. Having so determined that it is appropriate to make an order terminating the tenancy, and being required by s 83(1) of the RT Act to make an order giving possession of the premises to the respondent, it is also necessary that we determine the date that the order for possession is to take effect. This matter is governed by section 154G of the RT Act which is in the following terms; 154G Order for possession (1) If an order is made for termination of a social housing tenancy agreement, the order for possession must not specify a day that the order for possession is to take effect that is later than 28 days after the day on which the termination order is made unless the Tribunal is satisfied that there are exceptional circumstances justifying a later day. (2) The order for possession cannot be suspended for a period that would result in it taking effect later than 28 days after the day on which the termination order was made unless the Tribunal is satisfied that there are exceptional circumstances justifying a longer period of suspension. 1. The appellant submitted that there were exceptional circumstances which justified a period of suspension of the order for possession of up to 90 days. The appellant submitted that she was suffering from a physical disability or illness which could be said to amount to special circumstances. Reference was made to a medical report of a named general practitioner dated 17 April 2019 which certified that the appellant was "suffering from chronic both legs pain from varicose veins starting on 2017 and was seeing (a named specialist), still on medication for pain." It was said in submissions that her condition would make it "more physically difficult than a person in normal or usual circumstances for her to vacate the premises that are the subject of her tenancy." 2. The respondent disagreed. The respondent objects to the admission of the medical report of 17 April 2019, given that the rehearing was in relation to the evidence provided to the Tribunal below and that no attempt was made at the appeal hearing to admit this document into evidence. If the document is admitted, the respondent submits that it would not establish that there are exceptional circumstances warranting longer than 28 days. The appellant's condition and consumption of medication does not take her circumstances outside of what is normal or usual and would not fall within the meaning of exceptional. 3. As both parties noted, there is little authority on what constitutes "exceptional circumstances" for the purposes of s 154G. The decisions to which the parties referred, including Parslow v NSW Land and Housing Corporation [2018] NSWSC 1909 and Ritson v Leighton [2015] NSWCA 62 provide some guidance in different contexts. In the latter decision Ward JA referred to authority which establishes that "exceptional circumstances" are those which while not unique or unprecedented or very rare, are those which are out of the ordinary course or unusual. 4. Even if we were to admit the document, we are not persuaded that pain associated with varicose veins being treated by pain medication is so disabling that it would physically preclude the appellant from seeking alternative accommodation such that the date for possession should be extended beyond 28 days. We do not regard these circumstances as being so out of the ordinary as to enable us to characterise them as "exceptional." 5. We readily appreciate the difficulties which the appellant might encounter in seeking and obtaining alternative accommodation. However, it is a fact that, at the least, by permitting a family member to reside in the rented premises from time to time, to keep illegal drugs in commercial quantities in those premises, and to deal in those drugs from those premises, the appellant has jeopardised her entitlement to remain in social housing. 6. We propose to make an order postponing possession for a period of 28 days. Orders 1. We make the following orders; 1. The appeal is allowed and the order made by the Tribunal on 19 February 2019 terminating the residential tenancy agreement between the respondent and the appellant is set aside; 2. The residential tenancy agreement between the respondent and the appellant is terminated on the date of these orders; 3. The stay of the operation of the order for possession made on 19 February 2019 is lifted; 4. Possession of the residential premises is to be given by the appellant to the respondent 28 days from the date of these orders; 5. If the appellant does not vacate the premises within 28 days of this date, the appellant is to pay to the respondent an occupation fee calculated in accordance with section 123 (2) of the Residential Tenancies Act until the date vacant possession is given. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar 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: 13 June 2019