North Coast Community Housing Company v Whittick

[2019] NSWCATCD 58

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:	North Coast Community Housing Company v Whittick [2019] NSWCATCD 58
Hearing dates:	20 June 2019
Date of orders:	10 July 2019
Decision date:	10 July 2019
Jurisdiction:	Consumer and Commercial Division
Before:	W Priestley General Member
Decision:	The application is dismissed
Catchwords:	Undue hardship
Legislation Cited:	Residential Tenancies Act 2010 – sections 91 and 154D
Cases Cited:	Orr v NSW Land and Housing Corporation (No. 2) [2018] NSWSC 1909 Newcastle City Council v General Limited (1997) 191 CLR 85 Re Wilson and Minister for Territories (1985) 7 ALD 225 Balmain v French CTTT 1997
Texts Cited:	Anforth, Christensen and Bentwood “Residential Tenacies, Law and Practice, New South Wales, 6th edition, Federation Press 2014
Category:	Principal judgment
Parties:	North Coast Community Housing Company (Applicant) Christina Whittick (Respondent)
Representation:	Ms Kylie Faamoe– Housing Officer (for the applicant) Ms Decle, Barrister, instructed by NSW Legal Aid (for the respondent tenant) Solicitors: NSW Legal Aid (for the respondent tenant)
File Number(s):	SH 19/17215
Publication restriction:	Nil

Reasons for Decision         

The application

1. The applicant seeks orders under section 91 (1) and section 187 of the Residential Tenancies Act (“the Act”), for termination and possession in respect of residential premises it leases to the respondent in Tweed Heads (“the premises”). The ground for seeking the orders is that the premises were searched by Police on 18 December 2018, and 1.2 kilograms of cannabis leaf was found, along with two cannabis plants which were being grown hydroponically. The application was lodged on 10 April 2018.

The hearing

2. The applicant was represented by its employee Ms Faamoe. The respondent was represented by Ms Decle of Counsel, instructed by NSW Legal Aid. The applicant put into evidence a copy of the Residential Tenancy Agreement between the parties, and a copy of a two page document from the NSW Police describing the search on 19 December 2018, and its results. The respondent tendered a bundle of documents which included affidavits sworn by the respondent and her husband, a Merit Final Court report and Pathology report about the tenant’s husband, a medical report of Dr Ng about the tenant’s husband, a medical report from Dr Kabat about the tenant, a letter from the Gold Coast University Hospital about one of the tenant’s daughters, and a medical certificate from a Dr Wai about the tenant’s husband. The respondent also put into evidence an email trail, showing a “print date” of 24 April 2019, of the applicant’s communications between it and the NSW Police. Ms Faamoe was cross-examined about that. Detailed written submissions were also provided on behalf of the tenant.

3. The respondent was given the opportunity to reply to the detailed written submissions of the applicant. Other than to explain the reason for the delay in making the application (if the Tribunal found the application was out of time), was the need to wait for written confirmation of oral advice from the Police about their search of the premises on 19 December 2019, then refer it to the CEO for consideration, the applicant made no submissions, other than to assert the tenancy should be terminated.

Jurisdiction

4. The Tribunal has jurisdiction to hear and determine the matter under sections 91 and 187 of the Act, and sections 28 and 29 of the Civil and Administrative Tribunal Act.

Findings

5. Having considered all of the evidence the Tribunal makes the following findings of fact, none of which are in dispute.

6. The respondent tenant commenced residing at the premises on 16 January 2013 under a standard form written tenancy agreement dated the same day. The tenant continues to reside there, and the tenancy is now periodic.

7. Clause 15.1 of the tenancy agreement says the tenant agrees “not to use the residential premises, or cause or permit the premises to be used, for any illegal purpose ..” Clause 16.3 of the tenancy agreement says “that the tenant is responsible to the landlord for any act or omission by a person who is lawfully on the premises if the person is only permitted on the premises with the tenant’s consent, and the act or omission would be a breach of this agreement if done or omitted by the tenant”.

8. The tenant suffers from depression, anxiety, asthma, bronchitis and osteoporosis. These are disabilities as defined in the Anti-Discrimination Act 1977.

9. The tenant lives at the premises with her husband. He suffers from chronic polymyositis and rheumatoid arthritis, and receives a disability support pension. These are disabilities as defined in the Anti-Discrimination Act 1977. The tenant’s husband is a person jointly occupying the residential premises with the tenant.

10. The tenant receives a carer’s pension to care for her husband. The total weekly income of the tenant and her husband is $1,323.00 which includes payments for board of $75 each from their two oldest sons, aged 23 and 19, who live at the premises. The average weekly expenditure of the tenant and her husband is $1,228, plus other small occasional expenditures.

11. As well as the tenant’s husband and two oldest sons, three other children of the tenant live at the premises, a daughter aged 16, a son aged 11 and another daughter aged 10, who all attend school in the area. The youngest daughter has problems with her eyesight which are being investigated by local doctors. She is also experiencing behavioural difficulties which the tenant fears will be exacerbated, if she is forced to relocate as a result of the tenancy being terminated.

12. The rent is currently $346 per week. The premises contains 5 bedrooms.

13. On 19 December 2018 Police executed a search warrant at the premises and found 2 cannabis plants growing hydroponically in the bedroom occupied by the tenant’s husband. 1.2 kilograms of cannabis leaf was located in another room. The tenant’s husband admitted to Police he had given some cannabis to one of his sons. The Tribunal finds the tenant’s husband intentionally used the residential premises for the purpose of cultivating a prohibited drug, within the meaning of the Drugs Misuse and Trafficking Act 1985.

14. On 8 January 2019 the applicant was informed Police had attended the premises shortly before Christmas. In accordance with a protocol established between the respondent and NSW Police (an “ROU”), on 15 January 2019 the respondent requested information from Police about the circumstances of their attendance on 19 December 2018. On 21 January, one of the applicant’s employees received information over the phone from Police stationed at Byron Bay, that they had discovered a “small hydroponic set up” at the premises, and that the tenant’s husband was on bail. I find that was the time when the applicant became aware the tenant had breached clause 15.1 of the tenancy agreement. The applicant continued to follow up on the ROU, and was awaiting written confirmation that cannabis had been cultivated at the premises before lodging an application. That written information was received by the applicant on 28 February 2019. The information was then passed to the applicant’s CEO, who considered it and instructed that the application be lodged.

15. At the time of the search, and for a considerable period of time before that, the tenant had been “separated under the same roof” from her husband. Police had previously executed a search warrant in 2017, and found eight small cannabis plants in the garage of the premises. The tenant had no knowledge of her husband growing or storing cannabis at the premises until after the second search on 19 December 2018.

16. The landlord has had no concerns with the tenant’s occupation of the premises, except for the breaches of the Act discovered by the Police in the two searches they conducted. There have been no complaints made against the tenant, or any of her family, while they have been living in the premises.

17. Since being charged with drug offences after the Police searched his home on 19 December 2018, the tenant’s husband has successfully completed the Merit program, and has been free of cannabis, as evidenced by periodic drug testing described in the Merit Court report dated 1 April 2019.

18. The applicant is a social housing provider in the Tweed area, which extends from the Queensland border south to Grafton. It has 57 four bedroom homes and 268 three bedroom homes under its management in the area. Waiting times for those seeking social housing can be as much as 15 years, and are growing. Homelessness, and people sleeping “rough” is significant, and increasing.

19. Market rents for houses suitable for the tenant and her family are between $500 and $750 per week.

20. If the tenancy agreement is terminated, the tenant, her five children, and her husband will likely become homeless. It would also “undoubtedly increase her depression” (Dr Kabat’s report at page 28 of the respondent’s documents”).

Application of the law to the facts   

Preliminary issue – is the application within time

21. The respondent contends the application has not been made within time. This is said to come about because the application is made under sections 91 and 187 (1) (i) of the Act, and as there is no time stipulated in the Act about the time within which an application should be made under section 91, Rule 23 (3) (b) of the Civil and Administrative Tribunal Rules operates. That Rule says “an application must be made…. within 28 days from the day on which the applicant became entitled under the enabling legislation to make the application”. As the applicant became aware on 21 January 2019 that the premises had been used for the cultivation of drugs, the applicant submits the application was required to be lodged within 28 days of that date.

22. In the Tribunal’s view that submission is incorrect, because it fails to take into account section 190 (1) of the Act, and clause 22 of the Regulations. Section 190 says an application may be made for an order in relation to a breach of a residential tenancy agreement within the period prescribed by the Regulations. Regulation 22 (9) says for the purpose of section 190, the prescribed period in relation to an application in relation to a breach of a tenancy agreement, is within 3 months after the applicant becomes aware of the breach. Although it is not particularised, the application is clearly in relation to a breach of clause 15.1 of the tenancy agreement. That clause mirrors section 51(1) (a) of the Act and is, by virtue of section 51 (5), a term of every residential tenancy agreement. By applying for a termination order under section 91, as well as section 187, the applicant is seeking to utilise the provisions in section 154D which directs the Tribunal to make a termination order, except in circumstances which will shortly be discussed. Nevertheless it is still an application “in relation to a breach of the residential tenancy agreement”.

23. If the Tribunal is wrong in that conclusion, the Tribunal would, of its own motion under section 41 of the Civil and administrative Procedure Act, extend the time within which the application can be made, to 10 April 2019. There is a reasonable explanation for the delay, being that the applicant waited until it received written evidence from the Police on 28 February 2019, about the results of their search. The information was then passed to the applicant’s CEO for consideration, and a decision taken to apply to the Tribunal for a termination order. The delay (if the prescribed period is 28 days rather than 3 months) is only about 2 months, and the Tribunal rejects the respondent’s submissions the tenant has suffered prejudice as a result.

The application for a termination order

24. As submitted by the respondent, in Orr v NSW Land and Housing Corporation (N0. 2) [2018] NSWSC 1909, the Court held that in deciding whether to terminate a social housing tenancy agreement under section 91, the Tribunal must first determine whether the elements of section 91 (1) (a) have been made out. If so, the Tribunal must determine if any of the persons in section 154D (3) would be likely to suffer undue hardship if the termination order is made. If that is made out, then the Tribunal has a discretion as to whether to order termination, and must consider the matters in section 154E.

25. Section 91 of the Act reads;

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:

1. 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

2. the use of the residential premises for any other unlawful purpose and that the use is sufficient to justify the termination.

2. (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:

1. (a) the nature of the unlawful use,

2. (b) any previous unlawful uses,

3. (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.

Section 154D of the Act reads;

Tribunal required to make termination order in certain circumstances

1. Subject to subsection (3), the Tribunal must make a termination order on the application of a landlord under a social housing tenancy agreement if:

1. an application for the order is made under section 90 and the Tribunal is satisfied of the matters set out in section 90 (1) (b) and the injury constitutes grievous bodily harm within the meaning of the Crimes Act 1900 , or

2. an application for the order is made under section 91 and the Tribunal is satisfied of the matters set out in section 91 (1) (a), or

3. an application for the order is made under section 91 and the Tribunal is satisfied that the tenant, or any person who although not a tenant is occupying or jointly occupying the social housing premises, has intentionally or recklessly caused or permitted the social housing 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) to be used for the purposes of:

1. storing a firearm for which a licence or permit is not held under the Firearms Act 1996 , or

2. a show cause offence within the meaning of the Bail Act 2013 ,

3. and the tenant or other person has been charged with an offence relating to those circumstances (whether or not the person is or has been found guilty of the offence).

2. (2) Subject to subsection (3), the Tribunal must make a termination order on the application of a landlord if:

1. an application for the order is made under section 90 and the Tribunal is satisfied of the matters set out in section 90 (1) (and subsection (1) of this section does not apply), or

2. an application for the order is made under section 91 and the Tribunal is satisfied that the tenant, or any person who although not a tenant is occupying or jointly occupying the social housing premises, has intentionally or recklessly caused or permitted the social housing 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) to be used:

1. as a brothel within the meaning of the Environmental Planning and Assessment Act 1979 , or

2. for the purposes of an offence against section 91H (Production, dissemination or possession of child abuse material) of the Crimes Act 1900 , or

3. for the purposes of an offence against section 154G (Facilitating organised car or boat rebirthing activities) of the Crimes Act 1900 , or

3. an application for the order is made under section 91 and the Tribunal is satisfied that the tenant, or any person who although not a tenant is occupying or jointly occupying the social housing premises, has intentionally or recklessly caused or permitted the social housing 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) to be used for any other unlawful purpose and that the use is sufficient to justify the termination.

3. However:

1. subsection (1) (a) does not apply if the application for the termination order is based on an act of a person who although not a tenant is occupying or jointly occupying the residential premises and not on an act of the tenant, and

2. subsections (1) and (2) do not apply if the Tribunal is satisfied that the termination order would be likely to result in undue hardship being suffered by a child, a person in whose favour an apprehended violence order could be made or a person suffering from a disability within the meaning of the Anti-Discrimination Act 1977 who is occupying or jointly occupying the social housing premises, and

3. subsection (2) does not apply if the tenant satisfies the Tribunal that there are other exceptional circumstances that justify the order not being made.

4. For the purposes of the application of section 91 (1) (b) to social housing premises under this section:

1. the reference to residential premises in section 91 (1) (b) is to be taken to be a reference to the social housing 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), and

2. if the Tribunal is satisfied that an offence of a kind referred to in subsection (1) (c) or (2) (b) has been committed by a person on the social housing 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), the Tribunal must assume that:

1. the premises or property has been used for an unlawful purpose, and

2. the use is sufficient to justify termination of the agreement.

5. If the Tribunal does not make a termination order as a consequence of subsection (3), the Tribunal must provide written reasons for the decision (emphasis added).

26. The Tribunal has found the necessary elements of section 91 (1) have been established by the applicant.

“Undue hardship”

27. In the Tribunal’s view the common understanding of the term “hardship”, is as set out in the CTTT decision of Balmain v French 1997, which quotes the definition in the Business and Law Dictionary Butterworths 1997 as “Adverse repercussions, whether mental or physical, ranging from temporary inconvenience to some permanent and unalterable evil…” [1]

    1. Cited in Anforth, Christensen and Bentwood “Residential Tenacies, Law and Practice, New South Wales, 6th edition, Federation Press 2014 at p 230

28. “Undue” is not defined in the Act, but its meaning has been considered in Re Wilson and Minister for Territories (1985) 7 ALD 225, Liberian Shipping Corp “Pegassus” v King & Sons Ltd [1967] 2 QB 86, and Austin Australia Pty Ltd v Ani Mining Services Ltd [1992] WASC 690. Having considered the relevant passages of those decisions, I consider the term “undue” is not capable of precise definition and means excessive in the circumstances. That requires an evaluation of those circumstances, including the seriousness of the use of the premises for the purposes specified in section 91 (1) (a).

29. The circumstances are;

27. The tenant was unaware cannabis was being cultivated on the premises;

28. The cultivation involved only two plants, and there is no allegation it was for anything but personal use for the purposes of pain relief by the tenant’s husband;

29. The tenant, her husband and five children will likely be made homeless if a termination order is made;

30. The tenant’s husband is now no longer consuming cannabis;

31. The tenant’s depression, and other disabilities will likely be worsened if the termination order is made;

32. The behavioural difficulties experienced by the tenant’s 10 year old daughter, will likely be worsened if the termination order is made;

33. The education of the tenant’s three children of school age will likely be adversely affected, as will their social development.

34. In the Tribunal’s view, the tenant has established that a termination order would result in undue hardship to the tenant, her husband and her five children. The hardship that would be caused to all occupants of the premises if a termination order is made, would be disproportionate to the seriousness of the cultivation.

The section 154E considerations

38. The tenancy has had no adverse effects on neighbouring residents or other persons.

39. There is no likelihood that neighbouring residents or other persons will suffer serious adverse effects if the tenancy is not terminated.

40. The landlord’s responsibilities to its other tenants is irrelevant, as there is no evidence about this.

41. The current tenancy has an excellent history, save for the fact that in 2017 Police found eight cannabis seedlings there, of which the tenant knew nothing until after the Police search in December 2018. The tenant has maintained the premises, and kept up to date with her rental payments.

42. The tenant has not been in breach of any orders of the Tribunal.

Conclusion

43. Having considered the matters set out in section 154E, and all of the circumstances of the case, the Tribunal should exercise the discretion created by section 154D (3) so as not to make a termination order.

44. Accordingly the application is dismissed.

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Endnote

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

Decision last updated: 29 October 2019