Commissioner for Social Housing v Black (Residential Tenancies)

[2017] ACAT 20

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

COMMISSIONER FOR SOCIAL HOUSING v BLACK (Residential Tenancies) [2017] ACAT 20

RT 967/2016

Catchwords:              RESIDENTIAL TENANCIES – practice and procedure – application to set aside an ex-parte unconditional termination and possession order – whether the respondent had a reasonable excuse for non-attendance at an tribunal hearing – whether the respondent has an arguable case

Legislation cited: ACT Civil and Administrative Tribunal Act 2008 ss 7, 44, 56

Cases cited:Allesch v Maunz (2000) 203 CLR 172

Commissioner For Social Housing v Hutchings & Gottschalk- Krutsky [2016] ACAT 88

Commissioner for Social Housing v Bradnam [2016] ACAT 143

Pesi v Commissioner for Social Housing in the ACT [2012] ACAT 77

Thornthwaite v Commissioner for Social Housing [2012] ACAT 11

Tribunal:                   Senior Member H Robinson

Date of Orders:  10 February 2017

Date of Reasons for Decision:         27 March 2017

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          RT 967/2016

BETWEEN:

COMMISSIONER FOR SOCIAL HOUSING

Applicant/Lessor

AND:

MS BLACK

Respondent/Tenant

TRIBUNAL:Senior Member H Robinson

DATE: 10 February 2017

ORDER

The Tribunal orders that:

1.The Termination and Possession order of 1 December 2016 is set aside.

2.The matter is listed for hearing on Thursday 9 March 2017 at 10:00am.

……………Signed………..

Senior Member H Robinson

REASONS FOR DECISION

1.By way of this application, the respondent seeks to set aside an unconditional termination and possession order (T&P Order) made by this Tribunal on 1 December 2016. This application was heard 9 February 2017 and oral reasons delivered 10 February 2017. This is an edited version of those reasons. In light of the personal information disclosed in this proceeding, the names of the respondent and her mother have been changed in these published reasons to Ms Black and Ms Anne Black respectively.

Legal Framework

2.Section 44 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) expressly provides that if a party fails to appear either personally or by a representative, the tribunal may proceed to hear the matter in that party’s absence.

3.The tribunal’s power to set aside a decision made in the absence of one party is found in section 56(c)(i) of the ACAT Act, which provides that the tribunal may:

amend or set aside a tribunal order if—

(i)     the order was made after hearing an application in the absence of a party; or

...

4.The ACAT Act does not set out any criteria for the exercise of power under section 56, which allows the Tribunal a broad discretion. However, significant case law within the Tribunal has set out a series of considerations that guide the exercise of the discretion.

5.The starting point for any consideration should be the principles in section 7 of the ACAT Act. These relevantly provide that:

7   In exercising its functions under this Act, the tribunal must—
     (a)       ensure the procedures of the tribunal are as simple, quick, inexpensive and informal as is consistent with achieving justice; and

(b)       observe natural justice and procedural fairness.

6.The concepts of natural justice and procedural fairness encompass the right to a fair hearing. A fair hearing requires, amongst other things, that a person whose interests are affected by a decision must ordinarily be given a right to be heard.

7.However, as was recognised by the High Court is Allesch v Maunz (2000) 203 CLR 172 the right to be heard does not always require that a person actually be heard.

8.As his Honour Justice Kirby observed at [38]:

... Sometimes, through stubbornness, confusion, misunderstanding, fear or other emotions, a party may not take advantage of the opportunity to be heard, although such opportunity is provided. Affording the opportunity is all that the law and principle require.

9.This is a practical provision. Proceedings should not be delayed indefinitely, or a party denied justice, because the other party is unwilling to participate in the proceedings.

10.However, there are occasions when a party who has failed to appear has a reasonable reason for not doing so, or where the result in some way amounts to an unjustifiable injustice. Section 56(c)(i) operates to give the Tribunal a discretion to set aside ex-parte decisions where leaving them in place would amount to a ‘miscarriage of justice’.

11.In Thornthwaite v Commissioner for Social Housing [2012] ACAT 11 the test to be applied was set out follows:

The first test is, is there a good reason why the applicant did not turn up at the original hearing? And secondly, if that is the case, is there then a reasonable case? Does the applicant actually have a reasonable case which indicates the matter should be set aside and the case be heard?

12.This is a two-pronged test, and both limbs are needed to succeed.[1] Additionally, there may be other factors that may be relevant in a given case.[2]

The Dual Test

[1] Commissioner For Social Housing v Hutchings & Gottschalk- Krutsky [2016] ACAT 88

[2] Pesi v Commissioner for Social Housing in the ACT [2012] ACAT 77

13.The T&P order was made at the second hearing of the matter, on 1 December 2016. The reason why the respondent was not at the second hearing on 1 December 2016, when the orders were made, is not seriously in dispute, although it requires some brief background.

14.The matter first came before the Tribunal on 24 November 2016. On that occasion Ms Black did not appear, and I made orders that the listing notice be served by SMS and email. Her evidence is that she did not receive either message, as she has no working phone and no internet access. Given her financial circumstances, I accept her evidence that she did not have a phone or internet access. Accordingly I accept that Ms Black had a good reason for non-attendance on 1 December 2016.

15.However, in considering whether I should set aside the decision, I do not believe it appropriate to limit my consideration to what happened at that final hearing. The decision to make a T&P order was part of a process, a process set out under the Residential Tenancies Act 1997, which begins with the notice to remedy, continues through tribunal proceedings, and culminates in the making of final orders.

16.If the respondent has missed only one step in this process – for example, just the 1 December 2016 hearing – having otherwise participated in the proceedings, then the question of reasonable excuse would be a straightforward consideration. However, the respondent has failed to engage in this process at all. The reasonableness of her excuse must encompass the entire pattern of her conduct throughout these proceedings and the steps that precede it.

17.So, does the respondent have a reasonable excuse?

18.One of the difficulties I had with this matter is that the respondent’s evidence before me was incomplete and unhelpful. This is no criticism of her representatives, Canberra Community Law, who I understand accepted instructions from Ms Black only on the morning of this proceeding. However, it is a reflection on Ms Black. The final hearing of this set aside application was the third occasion the application was before the Tribunal, and on both previous occasions Ms Black was clearly advised (by myself on one occasion, and the Registrar on another) as to what kind of evidence she would need. It was frustrating that she made so little attempt to comply with those instructions.

19.The problems with her evidence were twofold. First, Ms Black was vague as to timeframes and sequence. This is particularly frustrating given that I requested a timeline at the hearing on 19 January 2017, and the Registrar again asked for a timeline at the hearing on 9 February 2017. I accept that her vagueness and inconsistencies in her evidence may be because of her medical condition, but it may also be a deliberate attempt at evasion. I have given her the benefit of the doubt and accepted the former explanation.

20.This leads to the second issue. I had little in the way of medical evidence. The letter from Dr Hamilton, dated 2 February 2017, simply stated that the respondent has a depressive condition and that Dr Hamilton anticipates that she will be unable to work for the next three to six months. It says nothing about her condition over the past six months or the proceedings before the Tribunal. The letter from Directions indicates that Ms Black accessed the service for drug issues in the past in 2013, when she attended ‘several’ counselling sessions, and that she was ‘intending’ to re-engage, but it did not give any detail as to her current condition. There is no medical evidence justifying the claimed current drug addiction or the ‘nervous breakdown’, or setting out how these affect her capacity. Ms Black gave some passing evidence about a period during which she was in Calvary Hospital, but gave no dates or details or discharge information and no records were produced. On balance, I accept the evidence of Ms Black as to her experience of a medical condition, as far as it goes, but it does not go very far.

21.Fortunately for the respondent, her mother, Ms Anne Black, was able to articulate something of a timeframe and context. I accept Ms Anne Black’s evidence, and it adds support to some aspects of the respondent’s evidence.

22.I accept that some years ago, Ms Black had very serious drug and health issues. I accept that she got those issues under control, and was relatively stable for some time.

23.During the period from 2014 through to mid-2016, Ms Black was consistently in arrears with her rent. The arrears were not great in total, but were not insubstantial having regard to her weekly rent, after rebate, of only $64. Still, she tended to bring the arrears down regularly. She actually brought the account back in credit in May 2016, albeit only for a brief period.

24.Sometime early in 2016, Ms Black’s personal circumstances began to spiral out of control. In March, she attempted to wean herself off methodone. Her daughter was removed by child services and placed with her mother, and she lost the stability that her caring responsibilities had enforced on her. In perhaps June 2016 she started using drugs again. She then had a nervous breakdown, and fell out of contact with her support networks. She also re-commenced employment in a brothel, and then started to reside there on at least a part time basis. She returned to her house less and less. In June or July her child support payments were cut off, and her former partner took her daughter from the country.

25.Ms Black’s evidence was that around this time she was too mentally ill to organise the payment of rent. She was in and out of her accommodation and regularly staying elsewhere. She was, on her evidence, not functioning.

26.I asked Mr Black if she received the notice to remedy or the notice to vacate issued by Housing when she fell into arrears. She said that she did not. She said that her mail reception was irregular, and that it was often stolen by the children in her apartment block. She was still, she said, waiting for a new key card, and she believed that letter had been stolen too. She also said that she was not at home much, so her mail tended to pile up.

27.One of the most common excuses offered by parties in these kinds of proceedings is that they did not get relevant documents because “my mail is being stolen”. I have no doubt that mail does go awry, whether because it is stolen, left unattended and disposed of, or simply delivered into the wrong slot on a bank of mailboxes. However, I do not accept the ‘my mail is being stolen’ as a legitimate reason for not attending to the payment of rent. First, if Ms Black knew that her mail was being stolen, then the appropriate thing to do would be to report this to Housing and request that a lock be placed on her mailbox. Secondly, even if she had not actually read her mail, she must have known that her rent was in arrears. She must have known action would be taken for arrears.

28.I also do not accept that the respondent’s failure to get her mail compromises the issue of service. The documents, I am satisfied for the purpose of these proceedings, were appropriately served in accordance with the requirements of the Residential Tenancies Act 1997.

29.What I do accept, however, is that at this time notices were served, Ms Black was unwell, that she was barely at her premises, and that even if she did receive the correspondence, she likely did not read it. Perhaps, due to her illness, she could not focus on her rent debt, or did not have the capacity to do anything about it. I accept that, to the extent that Ms Black was ignoring or avoiding her problems with the rent, this was tied up with her deteriorating mental state. Her circumstances are similar to those of the respondent in Commissioner for Social Housing v Bradnam [2016] ACAT 143. In both cases, the actions of the respondents were not reasonable by the standards of a reasonable person, but they were believable having regard to the unique and difficult circumstances that the respondents were experiencing, and were explainable when viewed in that context.

30.The above circumstances are not necessarily an excuse for not paying rent, but rather are an explanation for the respondent’s failure to take action in response to the mounting rental arrears and the notices threatening legal action. The above circumstances are therefore relevant to consideration as to whether to set aside the T&P Order.

31.In any case, the respondent’s life continued to spiral out of control, and her mother’s evidence was that by October she was, in summary, “at rock’s bottom”.

32.By this time, the Commissioner had tried numerous times to contact Ms Black, including through her mother, to no success. It appears that the house became something of a mess, and the Commissioner sought access orders, but withdrew the application. The Commissioner then lodged, quite appropriately, an application for a termination and possession order on 20 October 2016.

33.The matter was listed for hearing on Thursday 24 November 2016 (first hearing).

34.The listing notice for the first hearing was mailed to Ms Black’s address by the registry. The mail was not returned. I take the application to have been validly served. I appreciate that Ms Black says that she did not receive the listing notice. I have no reason to doubt this evidence, but also refer to my comments above.

35.Housing attended Ms Black’s premises on 9 November 2016 and left a calling card. Again, Ms Black did not respond. She acknowledges that she received the card, but it is apparent that she did not take any real steps to follow up.

Is this reasonable?

36.As I said above, in considering this matter, I must take Ms Black’s evidence on face value, and draw my own conclusions from it. The case would be much more straightforward if I had a timeline and more medical evidence, but unfortunately I do not. As is often the case with matters before the Tribunal, I must simply make the best decision I can on the available evidence.

37.If I accept the evidence of Ms Black, and most particularly her mother, I must accept that Ms Black has been suffering from a serious mental health condition and had problems with substance abuse and that her actions were informed by the combined effect of those things. Further, if I accept that evidence, then I must consider that her actions, when viewed in the global circumstance of her conditions, provide some excuse for non-attendance.

38.The alternative interpretation is that Ms Black simply failed, through ignorance, carelessness or stubbornness, to pay the rent or to take care of her personal affairs for an extended period of time. It must be noted that Mr Black’s comment to the housing officer who attended her property in January that she should “pay some rent” provides some basis for this conclusion. Still, on balance, I accept that the prior explanation is the more likely, although I note that this is a borderline decision.

39.Accordingly, I am satisfied that the respondent has a reasonable excuse for non attendance at the first and second hearings.

40.The next issue is: would the respondent’s attendance have made a difference?

41.The respondent is very significantly in debt – she owed over 30 weeks in rent at the time of the first hearing, and over 36 weeks as at the date of this decision. She has been consistently in debt for a long time, albeit for varying amounts. She has been in credit on her account only once, briefly, in the last few years. It may be legitimately argued that she shows something of a blasé attitude toward the payment of rent as and when it falls due, although she does try to catch up when she falls seriously behind.

42.In such circumstances, it is highly unlikely that the application for a termination and possession order would have been dismissed.

43.Rather, the issue for the Tribunal, had it heard the matter on the second occasion, would have whether the Senior Member could have made a conditional order rather than an unconditional order, or perhaps dealt with the matter in a manner that did not involve making final orders.

44.Ms Black’s representative, Ms Nursoo, pointed to a number of matters that could be taken into account had Ms Black been in attendance. I accept the following as being relevant:

(a)Ms Black provided an explanation for her failure to pay rent – being the medical issues and drug addiction.

(b)She provided some, albeit perhaps minimal, evidence that she may be bringing those issues back under control, including some evidence that she had engaged with Directions.

(c)She gave evidence that the last time she fell substantial arrears in the past, she paid it back.

(d)She was working on sorting out her payments with Centrelink and would be able to make repayments once she had that in order.

45.Even having regard to the above, it is unlikely that the Senior Member hearing this matter on 1 December 2016 would have, even had Ms Black been in attendance, been able to make a conditional T&P order. However, in considering whether her attendance would have made a difference, I consider it appropriate to consider not just whether it would have made a difference to the final orders that could be made on the day, but whether it would have steered the proceedings in a different direction and resulted in a different outcome overall.

46.At the hearing on 1 December, the Senior Member had other discretions open to her, including a brief adjournment to allow Ms Black to sought out her affairs with Centrelink, or to seek further information. I am not suggesting that she would have taken that option, but she could have done so. I note also that Registrar Soper adjourned the set aside hearing on 31 January 2017 to allow similar evidence to be gathered, prior to the matter being listed before me.

47.The requirement that the respondent have an arguable case does not require that I be satisfied that her presence would actually have made a difference – an interim application is not a full hearing on the merits, and I need only be satisfied that the grounds are at least arguable. I am satisfied that this test is met, albeit barely, in this case.

48.Accordingly, I am satisfied that the respondent had an arguable case and that her attendance may have made a difference. I do not put it any higher than that.

Other considerations

49.This leaves me with my final consideration – that of the relative prejudice to the parties.

50.I note that the entitlement of the Tribunal to consider matters beyond simply the ‘dual test’ was acknowledged in both Pesi[3] and in Gottschalk-Krutsky[4]. Consideration of these additional factors is consistent with the broad discretion in section 56(c)(i).

[3] Pesi v Commissioner for Social Housing in the ACT [2012] ACAT 77

[4] Commissioner For Social Housing v Hutchings & Gottschalk- Krutsky [2016] ACAT 88

51.The prejudice to Ms Black of being denied a set aside is very grave. She will lose her entitlement to a Government house, which provides some degree of stability and certainty in her chaotic life. She will lose that house in circumstances where she has not had a full hearing.

52.It is possible to overstate this prejudice. It is often said that the Commissioner is the housing provider of last resort – and while correct, this is not always the whole story. Eviction from a government house does not invariably mean homelessness. There are charities and refuges that may be options, as well as other arrangements, including family, boarding and hostels and even share house arrangements. Some tenants may return to social or government housing. But even if eviction does leave some tenants homeless, questions may be raised as to whether the Tribunal is or should be the appropriate body to regulate that. There are hundreds of people waiting for government housing. The Commissioner has a social objective of managing that limited resource. While any exercise of discretion must involve a consideration of the tenant’s personal circumstances[5], latitude must also be given to Housing to manage its housing resource as it considers appropriate, having regard to its social objectives, and its weighing of the relative needs to all beneficiaries, not just the person before the Tribunal.

[5] See Williams v Commissioner for Social Housing (Appeal) [2016] ACAT 93 at 42

53.Nonetheless, what I am considering today is not a final decision about a T&P order, but rather whether a social housing tenant should be given an opportunity – a final opportunity – to state her case as to why she should not be evicted. The prejudice to the tenant is significant. The prejudice to the Commissioner, by contrast, is fairly limited. Yes, it is administratively inconvenient for the Commissioner to have to come back on another occasions. It is inconvenient for the tribunal as well. It is a waste of public resources. In jurisdictions where costs may be more readily awarded, such wastages can be addressed through costs orders, but that option it not readily available to the Tribunal, and it would be unlikely to be particularly effective in this case, where the respondent has little in the way of assets in any case.

54.However, unlike, for example, the neighbours who were witnesses in Gottschalk-Krutsky, no parties other than the Commissioner are directly affected. As its highest, there is indirect prejudice to others on the social housing waiting list, but that prejudice is difficult to properly assess, particularly given the uncertain outcome of any substantive hearing of the T&P application. In any case, all social housing tenants have an interest in ensuring Tribunal proceedings are procedurally fair.

55.This matter has already gone on for some time – not, I note, through any fault of the Commissioner. Administrative and tribunal processes do take time. But I do not think it is unreasonable, having regard to the weighing exercise that I set the current decision aside and set the matter down for another T&P hearing next week. At most, the delay, if the T&P order is again granted after a hearing, is a delay of a few weeks.  

56.Consequently, although I do so with some reluctance, I am satisfied that in this case, it is appropriate to set aside the decision of 1 December 2016.

57.Accordingly, I order that:

1.The termination and possession order made 1 December 2016 is set aside.

2.The matter is relisted for hearing on 16 February 2017.

………………………………..

Senior Member H Robinson

HEARING DETAILS

FILE NUMBER:	RT 967/2016
PARTIES, APPLICANT:	Commissioner for Social Housing
PARTIES, RESPONDENT:	Ms Black
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	Canberra Community Law
TRIBUNAL MEMBERS:	Senior Member H Robinson
DATES OF HEARING:	10 February 2016