Davis v South Australian Housing Trust - [2011] SADC 16

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Under Residential Tenancies Act 1995)
DAVIS v SOUTH AUSTRALIAN HOUSING TRUST
[2011] SADC 16
Reasons for Decision of His Honour Judge Soulio
24 February 2011
LANDLORD AND TENANT - TERMINATION OF THE TENANCY
Residential Tenancies Act. Appeal against findings and orders of Tribunal terminating tenancy pursuant to s 90 of the Act.
Appeal allowed.
Residential Tenancies Act 1995 ss 32, 41, 90, referred to.
Grey v Stephens (unreported judgment of Duggan J, delivered 26 August 2002); Timms v South Australian Housing Trust (2003) 226 LSJS 42; Kozlowski v Murray, Creevy, Blott, Bassett and South Australian Housing Trust [2001] SADC 129 (unreported judgment of Judge Smith delivered 18 September 2001); Annetts v McCann (1990) 170 CLR 596; Spiers v SA Housing Trust [2010] SADC 70 per Judge Boylan delivered 21 May 2010, considered.

DAVIS v SOUTH AUSTRALIAN HOUSING TRUST
[2011] SADC 16
History

Ms Davis has been a tenant of Housing SA (‘the Trust’) at 7 Ward Street Davoren Park, South Australia, (‘the premises’) pursuant to a residential tenancy agreement which commenced on 28 January 2006.
Clause 7 of the Conditions of Tenancy provides that:
The tenant must not:
(d) Commit or permit the breach of any law on the premises.
On 8 September 2010 the Trust was notified by police that a room in the premises had been converted in order to grow cannabis hydroponically, that several floorboards had been cut up, and that the electricity supply had been diverted.
As a result of the electricity supply being diverted, the Office of the Technical Regulator disconnected the power supply to the premises. On 9 December 2010 the Trust brought an application in the Residential Tenancies Tribunal (‘the Tribunal’) pursuant to s 90 of the Residential Tenancies Act 1995 (‘the Act’) which provides:
(1)The Tribunal may, on application by an interested person, terminate a residential tenancy and make an order for possession of the premises if it is satisfied that the tenant has—
(a)     used the premises, or caused or permitted the premises to be used, for an illegal purpose; or
(b)     caused or permitted a nuisance; or
(c)     caused or permitted an interference with the reasonable peace, comfort or privacy of another person who resides in the immediate vicinity of the premises.
(2)If the Tribunal terminates a tenancy and makes an order for possession under this section—
(a)     the Tribunal must specify the day as from which the order will operate, being not more than 28 days after the day on which the orders are made; and
(b)     the Tribunal may order the landlord—
(i)to take such action as is specified in the order for the purpose of taking possession of the premises; and
(ii)not to permit the tenant to occupy the premises (whether as a tenant or otherwise) for a specified period or until further order (and any agreement entered into in contravention of such an order is void).
(2a)   However—
(a)     the Tribunal must not make an order under this section unless the landlord has been given a reasonable opportunity to be heard in relation to the matter; and
(b)     if the landlord objects to the making of an order under this section, the Tribunal must not make an order unless the Tribunal is satisfied that exceptional circumstances exist justifying the making of the order in any event.
(3)     In this section—
interested person means—
(a)     the landlord; or
(b)     a person who has been adversely affected by the conduct of the tenant on which the application is based.
Evidence Before the Residential Tenancies Tribunal
The hearing of the application took place on 23 December 2010 at which time evidence was given by officers of the Trust, Mr Cawood and Mr Campbell, and Detective Sergeant Sheldon. The Tribunal received a bundle of photographs, taken by police officers, of the premises.
The tenant did not give evidence, on the basis that she was facing criminal charges. She took that course without the benefit of legal advice. She was, however, assisted in the presentation of her opposition to the application, by an advocate from the Tenant’s Information and Advocacy Service.
Mr Cawood said, in evidence, that the Trust had been informed by police of the cultivation of marijuana on the premises, and by the Officer of the Technical Regulator of the diversion of electricity supply. Detective Sergeant Sheldon gave evidence of her direct observations at the premises on 8 September 2010 as to the presence of a relatively elaborate hydroponic set-up, including the presence of a hole in the floor to act as a drain, and a hole in the ceiling to act as a vent. She also gave evidence of the discovery of over $2000 in cash in that room. She told the Tribunal that the tenant had been charged with a number of offences arising from that discovery.
The Tribunal member found that the Trust is an “interested person” for the purposes of s 90, and found that there was a residential tenancy agreement subject to the provisions of the Act.
Although the tenant’s advocate made the submission before the Tribunal that the criminal charges were irrelevant to the Trust’s application for eviction, as the charges had not been determined, the Tribunal, quite properly, made a finding that cannabis was being cultivated for a commercial purpose in the leased premises and that the cultivation set-up was sophisticated, and obviously not temporary. The Tribunal found that the premises had been used for an illegal purpose.
It is apparent from the reasons that the Tribunal member accepted the evidence of the witnesses called by the Trust. The Tribunal member concluded that:
It is clear from the evidence of and photographs submitted by Detective Sergeant Tania Sheldon that the equipment found in bedroom 3 and the associated items located throughout the house, that cannabis was being cultivated on a commercial basis. The arrangements in bedroom 3 were sophisticated and extensive. They were not intended to be only temporary or for the cultivation of cannabis for personal use
Accordingly I am satisfied that the evidence establishes on the balance of probabilities that the property was being used for an illegal purpose and therefore the SAHT has satisfied the requirement of Section 90(1)(a) of the Act.
The next question for me to consider then is whether it is appropriate to terminate the tenancy.
The commercial cultivation of cannabis is a serious matter, particularly on the scale which had been occurring in the property. In all the circumstances of this case, I think it is appropriate to terminate the tenancy.
At the hearing, Mr Cawood said that if the Tribunal decided to terminate the tenancy, then the SAHT would agree to allow the tenant to remain in the property for 28 days due to the difficulty in locating another property at this time of the year
The Tribunal member granted the application and made an order in the following terms:
ORDER (made under Section 90 of the Act).
The tenant must move out of the premises by 11.00am on Friday 21 January 2011 but if the tenant does not move out this order may only be enforced by the Tribunal bailiff.
Nature of the Appeal
The appeal is brought pursuant to s 41 of the Residential Tenancies Act 1995. The powers of this Court on appeal are set out in s 41(2) of that Act as follows:
(2)     On an appeal, the District Court may (according to the nature of the case) –
(a)     re-hear evidence taken before the Tribunal, or take further evidence;
(b)     confirm, vary or quash the Tribunal’s decision;
(c)     make any order that should have been made in the first instance;
(d)     make incidental and ancillary orders.
The appeal to this Court is not an appeal to the District Court in its Administrative and Disciplinary Division.[1]
[1] Grey v Stephens (unreported judgment of Duggan J, delivered 26 August 2002); Timms v South Australian Housing Trust (2003) 266 LSJS 42.
Section 41(2)(a) specifically empowers a “re-hearing of evidence taken before the Tribunal”, or the taking of “further evidence”. The Tribunal is in the nature of an expert Tribunal and so some regard ought to be accorded to its determination. The power to re-hear, in the way provided for by s 41(2)(a) should only be invoked by this Court when no other course is reasonably open to enable an appeal to be fully and properly conducted. In other words, there should not be a duplication of the primary hearing process unless justice cannot be done without doing so.[2]
[2] Kozlowski v Murray, Creevy, Blott, Bassett and South Australian Housing Trust [2001] SADC 129 (unreported judgment of Judge Smith delivered 18 September 2001).
Section 32 of the Act provides that:
The Tribunal's proceedings must be conducted with the minimum of formality and in the exercise of its jurisdiction the Tribunal is not bound by evidentiary rules but may inform itself as it thinks appropriate.
As the Tribunal’s determinations affect the legal rights and interests of persons appearing before it, it is nevertheless obliged to comply with the rules of procedural fairness.[3] By implication, this Court, in exercising its entitlement to re-hear evidence, or take fresh evidence, is similarly not bound by evidentiary rules and is entitled to inform itself as it thinks appropriate.
[3] Annetts v McCann (1990) 170 CLR 596.
Over objection from counsel for the Trust, I admitted a number of documents into evidence and heard evidence from the tenant. I also heard evidence from Mr McNulty, an officer of the Trust.
Evidence and Submissions Upon Appeal
There were three principal grounds of appeal articulated by counsel for the tenant:
1. Change in Allegations of Breach
The tenant asserted that the Trust had, during the course of the process of internal review up to the hearing of the application in the Tribunal, changed the nature of its allegations of breach, from unauthorised alterations to the premises; to damage caused to the premises; to using the premises for an illegal purpose, or permitting them to be used for such a purpose.
The tenant’s contention was based on the differing assertions by the Trust set out in the contents of correspondence she received from the Trust, and an internal hearing which occurred prior to the application to the Tribunal.
On 9 November 2010 Mr McNulty directed the tenant by letter to vacate the premises and explained that:
The decision of the Housing Trust to terminate your tenancy is based upon your failure to comply with certain conditions of the tenancy. Under clause 5(c), the failure to comply with any conditions of tenancy gives the Housing Trust the right to terminate the tenancy. A copy of the Conditions of Tenancy signed by you is attached to this Notice.
Particulars of your failure to comply are that you made or permitted to be made alterations to the premises, namely for the cultivation of cannabis.
The Housing Appeal Panel, an internal review panel, confirmed the Trust’s decision. The Panel noted the Trust’s submissions in the following terms:
Mr Campbell told the Panel that the Trust’s decision to terminate Miss Davis’s tenancy was based on allegations of illegal activity occurring in the property, details of which were provided by the police pursuant to its Memorandum of Understanding with the Trust. Mr Campbell told the Panel that the police advised the Trust on 16 September 2010 that, on attendance at Miss Davis’s premises on 8 September 2010, a room converted to a “hydroponic grow room” had been discovered in the premises. The police advised that floorboards had been cut in the room and power had been diverted to support this activity, and a number of charges associated with possession and cultivation of cannabis and diversion of electrical power had been made against Miss Davis.
Mr Campbell told the Panel that following this report, the Office of the Technical Regulator had advised the Trust that the premises had been inspected and it had been discovered that because of a power diversion, apparently instigated by Miss Davis, the supply of electrical power to the premises did not comply with legislative requirements and that the electricity had been disconnected from the premises. The Technical Regulator required that the issues found at the premises (which included both safety issues and issues relating to diversion of power) had to be rectified and an Electrical Certificate of Compliance had to be provided.
In its written decision the Panel said:
The Panel accepts that this submission is consistent with the requirements of Trust policy, but notes that the ground for the Notice of Termination in this matter is not unlawful use of the premises alleged by the police and the subject of police charges, but rather that Miss Davis “made or permitted to be made alterations to the premises, namely for the cultivation of cannabis”. This is not an assertion of unlawful activity of the same nature as that referred to in the policy which is concerned with “breaches involving external authorities”, and police and the courts are referred to in the context of police investigations and/or court proceedings. The Panel is satisfied that this aspect of the policy is not applicable in this matter.
Upon the hearing of the application for an eviction order before the Tribunal the Trust alleged the following:
“Housing SA was notified by SAPOL on the 8^th September 2010 that the tenant had allegedly converted a room to grow cannabis hydroponically by cutting up several floorboards as well as having the electricity supply diverted. As a result of the electricity being diverted, the Office of the Technical Regulator disconnected the power supply to the property.
Housing SA has no other option than to seek to have the tenancy terminated based [on] the tenant not complying with certain conditions of tenancy.”
Whilst it is correct to say that there was a change in emphasis in the Trust’s complaint, and that the Trust’s original notice referred to the breach of a different lease condition, I do not consider that any change of the basis for eviction, in the circumstances of this case, is fatal to the Trust’s application for an order for eviction. The constant theme is that the alterations, or the damage, alleged to have been caused to the premises was caused in the context of the conduct of an illegal activity in the premises. I dismiss the appeal insofar as it relies on this ground.
2. The Trust had Failed to Comply with its Own Policy in Relation to the Eviction of Tenants
Counsel for the tenant relied on a Trust document entitled “Eviction Guidelines”, and updated as at 30 November 2010. The Guidelines state in part:
2.6     Any other breaches of the conditions of tenancy
2.6.1 Prior to recommending that a tenant be evicted for a breach of the conditions (other than those already listed in sections 2.1 to 2.5), the Housing Officer will:
·    Ensure all reasonable efforts have been made to manage or address the issue(s) associated with the breach in accordance with any relevant policy and guidelines;
·    Check the Conditions of Tenancy applicable to the tenancy and confirm that it contains a clause covering the particular issue that the tenant is allegedly breaching; and
·    Ensure there is sufficient documentary evidence on file to support the decision to evict the tenant.
Note: In the case of breaches involving external authorities (e.g. SAPOL, Courts), the Housing Officer must await the outcome of any police investigations and/or court proceedings prior to recommending eviction. This will ensure the allegations against the tenant can be substantiated.
The tenant complained that the Housing Officer did not await the outcome of court proceedings prior to recommending eviction. Leaving aside any question of whether the guidelines can restrict the action to be taken, I do not consider that the guidelines do more than require the Housing Officer to ensure that there is sufficient documentary evidence to support the decision to evict, and that it is sufficient for the Housing Officer to await the outcome of police investigations for that purpose, without a necessity to await the outcome of court proceedings, which might involve a lengthy period.
In Spiers v SA Housing Trust,[4] a case similarly involving an allegation of premises being used for an illegal purpose, namely a clandestine laboratory, the tenant submitted that the proper course would have been for the Tribunal to adjourn the proceedings until the criminal charges had been dealt with. Judge Boylan held that it would be inappropriate for the Tribunal to do so. He held, admittedly in circumstances where the illegal activity used potentially hazardous chemicals, that the only safe course for the Tribunal to take was to hear and determine the matter.
[4] Spiers v SA Housing Trust [2010] SADC 70, per Judge Boylan delivered 21 May 2010.
In the present case the Trust had a statement from a police witness, and photographs of the hydroponic marijuana set-up found in the premises. That, in my view, was a sufficient basis to mount an application for eviction, and a sufficient compliance with the guidelines, if compliance was required. Further, the tenant, upon the preliminary hearing of the appeal, made submissions consistent with a knowledge of the use of the premises for an illegal purpose, and, upon the hearing of the appeal proper, gave evidence of having such knowledge.
The tenant conceded in cross-examination that she had known at all relevant times, that the Trust’s complaint was that there had been a breach of the lease both by making alterations to the premises, and because the premises were being used for the purpose of growing marijuana.
Counsel for the tenant also submitted that statements made by the Chair and Director of the Trust in the Trust’s Annual Report meant that the present eviction was inconsistent with the Trust’s purposes, and with a statement in the Annual Report that “Eviction action is only undertaken when all other efforts to address the debt or breach of tenancy have failed”.
I do not consider that there is any force in that latter submission. I dismiss the appeal insofar as it relies on the ground that the Trust failed to comply with its own guidelines in seeking to evict the tenant.
3. The Personal Circumstances of the Tenant (including her limited involvement in the illegal activity)
The relevant grounds pleaded by the tenant in the Notice of Appeal are:
3.If evicted I will face severe and unusual hardship. I am the single parent of my daughter aged four who resides [with] me. My thirteen year old son spends time with me every weekend and during school holidays.
4.I receive a Centrelink benefit and will suffer financial hardship if seeking accommodation in the private rental market.
5.I have multiple medical problems which will affect my ability to obtain employment.
6.I suffer from stress and anxiety related to a sexual assault when I was a child. I am a witness in a prosecution against the offender in relation to another victim.
7.The Residential Tenancies Tribunal erred in failing to take into account the hardship an eviction will cause.
A complaint was made by counsel for the Trust that evidence of personal circumstances could have been led by the tenant on the hearing before the Tribunal. However, I note, as mentioned earlier, that the tenant was not legally represented, but rather had the assistance of a tenancy advocate at that hearing. I received evidence as to the tenant’s personal circumstances over objection by counsel for the Trust.
At a preliminary hearing of this matter I received a letter dated 16 December 2010 from the tenant’s General Practitioner stating merely that the tenant “has multiple medical problems”.

At the appeal I heard evidence from the tenant. I say at the outset that she struck me as a vulnerable and troubled young woman. She is 32 years old. She is not in a relationship. She has a 13 year old son, by her former husband, a Mr Harrison. She has a close relationship with her son who lived with her until he was eight years old, but he now lives with Mr Harrison in the Riverland. She has a four year old daughter who lives with her.
Her daughter has just commenced school, at a ‘super school’ at Davoren Park. Concerns have apparently been expressed regarding the child’s social and intellectual development. Arrangements have been made for a speech therapist to attend upon the child at school, and she will be receiving speech therapy for six months before she enters grade one.
The tenant has lung problems and requires medication, and the use of an inhaler on a permanent basis. She has had an abnormal pap smear and is tested regularly because of the prospect of cervical cancer. She suffers from psychological difficulties which she attributes to being the victim of a sexual assault as a child. The man accused of that offending has been charged, and she will soon be required to give evidence. She left school without completing year nine.
The tenant is in receipt of Commonwealth benefits. After paying her current rent to the Trust, which is a subsidised rent, and other expenses, she has a disposable income of $244.00 per fortnight. She assessed the value of her household effects at about $800.00 in addition to her and her daughter’s clothes, and when asked how much money she currently had in the bank said “probably not even 40 cents”.
She has been a tenant of the Trust at her present address for a period of some five years. There is no suggestion of any other breach of the lease. She has always paid her rent.
In order to maintain contact with her son, arrangements were made for her former husband to bring her son to Adelaide from the Riverland. Mr Harrison did not have accommodation available in Adelaide and, the tenant said, he would only agree to bring her son if he was allowed to stay at the premises on the weekends that he attended to bring her son. The tenant said that she believed the only way she would be able to maintain a relationship with her son was by acceding to that request.
She said that Mr Harrison was responsible for the establishment of the hydroponic set-up, and for diverting electricity, which she said she did not know had occurred. She gave evidence that she did not benefit in any way from the cultivation of drugs, which had commenced only some weeks prior to the police inspection of the premises which resulted in charges being laid against her, and against Mr Harrison.
That may well be consistent with the state of the plants shown in the photographs of the premises, and with the evidence of the police officer who gave evidence at the Tribunal, saying that there were six plants which were about 40cm in height.
A not insignificant sum of money, mainly in fifty dollar notes, was found in the room containing the hydroponic set-up. The tenant denied that she was involved in selling drugs from the premises, and denied that anyone had sold drugs from the premises. She said that the money was not hers. She said in evidence that the money had been earned by her 13 year old son selling sports shoes on the internet. I reject that evidence. I am prepared to accept her evidence that the money was not hers. I need make no other finding.
The Trust’s Evidence Upon Appeal
Counsel for the Trust tendered an extract from the Trust’s business records entitled “Housing SA New Wait List Customers by Household Grouping & Category”. It is apparent that there is a significant number of deserving tenants seeking housing assistance at any given time. The document showed that as at 31 January 2011 there were 2716 applications for public housing assistance by Category 1 applicants, that is, those in the most urgent category. Those applications constituted 13% of all applications for housing assistance.
Mr McNulty, the author of the original eviction letter, gave evidence regarding the waiting list. He said that Category 1 is designated for people with the highest need. He said that categorisation did not depend on one circumstance, but rather a whole range of circumstances including health, mental health, homelessness, and the existence of dependent children. He was asked whether, having heard the tenant’s evidence, she would fall into that category and said “I believe she probably would, yes.”
He said that it was Trust policy that if a person was evicted for a breach of the conditions of tenancy, including for permitting illegal activity, they would not be re-housed in a Trust property within a six month period. That is, the person would be placed in the Category 1 list, but not be advanced through that list for a period of six months. He agreed that if the person was in desperate circumstances, for example, suffering health or mental problems, or was homeless with a young child, attempts would be made for the person to be then urgently placed in accommodation either directly through the Trust, or by referral to a funded housing provider.
Conclusion
Counsel for the tenant criticised the Tribunal member, in that she appeared to have asked herself the question as to whether she was satisfied on the balance of probabilities “that the property was being used for an illegal purpose”, rather than asking herself the question as to whether she was satisfied that the tenant had “caused or permitted the premises to be used for an illegal purpose.”
Strictly speaking that is so. The Tribunal member must, however, have inferred, quite properly, that the tenant had caused or at least permitted the premises to be so used, on the basis that the tenant was in residence, and the premises were obviously being used for such a purpose. It seems to me that the tenant must have known that the premises were being so used, and permitted that use, albeit on the basis that she saw that that was the only way in which she could continue to have access visits by her son, and maintain a relationship with him. As I have said, I accept that she was not deriving any direct financial benefit from the illegal activity.
There is clearly a significant demand for housing, by persons in need. The use of Trust premises for illegal purposes such as the cultivation of marijuana is a serious matter. Indeed persons who use premises they own for such an illegal purpose, face the risk of an application for confiscation.
In the general course the Trust is justified in taking action to evict tenants who breach the conditions of their lease by causing or permitting illegal activity to be conducted on Trust premises.
The present case is an unusual one. The illegal activity, whilst serious, was not of itself dangerous. The activity was not caused, but rather permitted by the tenant, for reasons very personal to her, namely that it was in effect a condition of permitting access to her son with whom she would not otherwise have been able to maintain a relationship. She has been a long term tenant of the Trust, and a long term resident of the premises in question. There have been no other complaints of breach by her. She suffers a combination of health problems, and mental health problems. She is a single woman with the sole care of a young child who, it appears, may have learning and social difficulties and require therapy. Were she to be evicted, I accept that she would have significant difficulty in obtaining private rental accommodation, and could not afford such accommodation. Although she was bailed to her mother’s address upon being released after being charged with the present offences, she has a fractious relationship with her mother. Further, her two younger sisters, each of whom are single mothers with young children, live with their mother and there is not sufficient accommodation for her. Having regard to her circumstances, if evicted, she, in all likelihood, would become a Category 1 applicant to be reinstated in Trust accommodation. If she were, in addition, to become homeless for a period following eviction, that would place her and her young child in desperate circumstances.
It seems to me that had the Tribunal member had before her the evidence that was led before me on appeal, a different result might have followed. It is appropriate, having regard to the approach taken by the Tribunal member, and having regard to the additional evidence led on the appeal, that I exercise the discretion afresh. Whilst, as I have said, there are many countervailing factors, in the particular circumstances of this case, the appeal should be allowed, and the order of the Tribunal quashed.