NCAT Legal Bulletin Issue 2 of 2022
The NCAT Legal Bulletin provides a summary of relevant and interesting case law of significance to the work of the NSW Civil and Administrative Tribunal.
This issue features case summaries of recent decisions from the New South Wales Court of Appeal and the Supreme Court of New South Wales, including:
Makowska v St George Community Housing Ltd [2022] NSWCA 5: The plaintiff sought judicial review of an Appeal Panel decision, circumventing her statutory right of appeal. As the plaintiff challenged findings of fact at first instance, which were not challenged before the Appeal Panel, her proceedings were dismissed. Hamzy v Commissioner of Corrective Services NSW [2022] NSWCA 16: An extreme high risk restricted inmate successfully challenged part of the Crimes (Administration of Sentences) Regulation 2014 as ultra vires. The regulation-making power in the authorising legislation did not support a regulation which substantially interfered with his right to private communications with lawyers. Fasko Pty Ltd v TianyD Beauty & Hairdressing Australia Pty Ltd [2022] NSWSC 49: The Court refused leave to appeal the decision of the Appeal Panel. The Appeal Panel had not erred in its construction of the obligations in a commercial lease directed to the rectification of building defects; nor had it committed discretionary error in determining issues which were said not to have been raised at first instance. Commissioner for Fair Trading v Matthew Geoffrey Rixon (No 5) [2022] NSWSC 146: Mr Rixon pleaded guilty to 18 counts of contempt of Court by breaching injunctive consent orders prohibiting him from being involved in certain construction work. Mr Rixon engaged in a sophisticated contempt for financial gain, with prior contempt convictions. He was sentenced to 21 months imprisonment.
| | New South Wales Court of Appeal | Makowska v St George Community Housing Ltd [2022] NSWCA 5 7 February 2022 - Meagher JA, Payne JA and N Adams J
In sum: The plaintiff sought judicial review of an Appeal Panel decision, circumventing her statutory right of appeal. As the plaintiff challenged findings of fact at first instance, which were not challenged before the Appeal Panel, her proceedings were dismissed.
Facts: Ms Makowska alleged that St George Community Housing Ltd (St George), which assumed all landlord responsibility under a concurrent lease, breached s 50(3) of the Residential Tenancies Act 2010 (NSW) (RTA). Section 50(3) RTA requires landlords to “take all reasonable steps” to ensure neighbouring tenants do not interfere with the “reasonable peace, comfort or privacy” of their tenant. On 30 October 2019 (and in St George’s absence) the Tribunal found St George was in breach of s 50(3) RTA and made a Compensation Order. However on 17 March 2020, the Appeal Panel set this decision aside, as St George had not been advised of the hearing date. On 9 July 2020, the Tribunal allowed Ms Makowska to amend her initiating application to include 136 alleged breaches and to reduce the amount of compensation sought, but denied her application to join another party to the proceedings. Ms Makowska appealed this decision on a question of law and for the denial of including another party. The appeal was allowed in part by the Appeal Panel. Subsequently, she sought a judicial review of the Appeal Panel’s decision to only partly allow the appeal on 30 June 2021, under s 69 of the Supreme Court Act 1970 (NSW).
Held (dismissing the summons for judicial review):
(i) Ms Makowska refused to exercise her statutory right to appeal under s 34(1) of the Civil and Administrative Tribunal Act 2014 (NSW) (NCAT Act). The Court noted that such a choice would usually be treated as a decision to avoid her statutory right of appeal which would result in a refusal by the Court to grant relief by way of judicial review (at [28]).
(ii) In examining the potential breaches under s 50(3) RTA, the Court held there was no error in the analysis of the Appeal Panel, which undertook an “objective” assessment. It determined that St George had taken “all reasonable steps” [39]. The Court held that Ms Makowska had incorrectly characterised the requirement of “all reasonable steps” to mean “literally do everything possible which was not unreasonable” irrespective of the “triviality of the complaint” or “regardless of the expense and effort involved” [40]. This ground was dismissed.
(iii) Ms Makowska argued the Appeal Panel’s decision to find St George not liable for breaches which pre-dated its assumption of responsibility as landlord, was in breach of s 38(4) NCAT Act (at [44]). Section 38(4) governs the procedure of the Tribunal, and requires it to “adopt a relatively informal approach” when conducting proceedings. The Court dismissed this ground on two bases. First, as this ground was not raised before the Appeal Panel, it was not part of the decision under review (at [45]). Second, the law had been correctly applied. In the absence of novation of the contractual liabilities, St George could not be held liable for the incidents: [48].
(iv) Finally, Ms Makowska challenged the Appeal Panel’s decision to set aside the Compensation Order. That order was in fact made by a differently constituted Appeal Panel. The Court held that the time to commence any judicial review proceeding against that order had “long since expired” [50]. Further, the Appeal Panel’s decision was “correct” as St George’s absence from the proceedings “resulted in the party’s case not being adequately” heard (at [52]). Although Ms Makowska had registered the Compensation Order in the Local Court, this was an “administrative” measure which did not prevent the order from being set aside (at [52]). Ultimately, the Court dismissed the judicial review in its entirety as Ms Makowska failed to establish any jurisdictional error or error on the face of the record.
Read the decision on the NSW Caselaw website. | Hamzy v Commissioner of Corrective Services NSW [2022] NSWCA 16 23 February 2022 - Bathurst CJ, Basten JA and Leeming JA
In sum: The Court held that the Crimes (Administration of Sentences) Act 1999 authorised a policy which restricts access of certain high-risk inmates to a solicitor, based on the solicitor’s criminal history but not “for any other reason”. Further, the Crimes (Administration of Sentences) Regulation did not authorise a policy of random monitoring of calls with legal practitioners. Finally, the Court rejected the claim that the policy requiring communications with lawyers to be in English, was not in contravention of the Racial Discrimination Act 1975 (Cth).
Facts: Mr Hamzy, a designated “extreme high risk restricted” inmate (EHRR inmate) in NSW, challenged the lawfulness of three policies made pursuant to the Crimes (Administration of Sentences) Regulation 2014 (NSW) (Regulation). Clause 15 of the Regulations indicates a person can be named as EHRR inmates where they pose a significant threat to security, incite harmful behaviour or pose a serious threat to the “peace and order” of the State. The three policies under challenge were; first, the power of the Commissioner of Corrective Services (Commissioner) to refuse visits by legal practitioners to EHRR inmates on the basis of “a criminal record check or any other reason” (cl 94 Regulation). Second, the monitoring of phone calls pursuant to the “drop-in” policy (which extended to calls with legal practitioners). Finally, that most communications (including those with legal practitioners) were to be conducted in English (cll 101, 116 and 199(6) Regulation). He argued the last requirement was contrary to ss 9 and 10 of the Racial Discrimination Act 1975 (Cth) (RDA).The primary judge dismissed all applications. The Court of Appeal allowed his appeal in part.
Held (allowing the appeal):
(i) Refusing visits – criminal record check: The Court reviewed the lawfulness of the Commissioner’s power to refuse visits based on a criminal record check. The issue was whether cl 94 extended to “visits by lawyers to their clients who are EHRR inmates” [204]. It was observed that the rights of EHRR inmates “are not absolute,” as the designation of the status “reflects an assessment of extreme risk and serious criminality” [203]. The Court held that, whilst the requirement for visitors to undergo a criminal record check may take some time to complete, it was not particularly “onerous” and was “unlikely to be a matter which materially impinges on an EHRR inmate’s rights” [202]. Whilst the policy “involves an intrusion” on a lawyer’s privacy, the limitation should not have significant impact given professional obligations to disclose criminal offending (at [202]). Ultimately, Mr Hamzy could not evidence how his legal representation had been “materially impacted”. The limitation based on a criminal record check was authorised by the Crimes (Administration of Sentences) Act 1999 (the Act).
(ii) Refusing visits - “for any other reason”: The Court considered whether cl 94 lawfully empowered the Commissioner to refuse a visit “for any other reason.” The Court acknowledged the term was “very broad” [206]. The primary consideration was the potential impact on an EHRR inmate from receiving face-to-face visits from his or her chosen lawyer. Whilst the term did not “entirely abrogate the right to representation,” it was considered that where the charges of criminality are usually of a more serious nature (as in the case for EHRR inmates), that meeting a client face-to-face “is highly advantageous and close to essential” (at [208], [210]). Relying on written or remote communication (where privacy and reliability could not be assured), placed an EHRR inmate in a significantly less advantageous position. The Court held that, if cl 94 were to apply to legal representatives, it “does substantially impact upon an EHRR inmate’s right to the lawyer of his or her own choice”. As such, the term “for any other reason” was read down “to the extent it had application to legal practitioners” because such a restriction to the inmate’s common law rights could not be supported (at [212], [254]).
(iii) The drop-in policy: Clause 119(6) of the Regulation empowered an officer to monitor phone calls for the purpose of confirming the identities of the parties and to confirm they were both speaking English. The Court held that where the policy applied to conversations with a legal practitioner, it materially invades the lawyer-client confidentiality [240]. Unlike the examination of papers for contraband products, dropping into a call necessarily involves listening to the words being spoken [243]. The indefinite period of time for monitoring also had significant impact on its lawfulness. Having “knowledge” the conversation was monitored was “apt to have a chilling effect on what was said” ([241], [242]). The Court held that is was a “substantial impairment” on the ability to provide “confidential” and “privileged” instructions or advice (at [243]). Accordingly, without needing to read the policy down, the Regulation did not provide a power to the Commissioner to arrange the monitoring of a conversation between an EHRR inmate and his or her lawyer; it was unlawful (at [252]).
(iv) Racial Discrimination: It was argued by Mr Hamzy, that the requirement to conduct most communications in English was discriminatory in its effect, pursuant to ss 9 and 10 RDA. The Court held that, although there could be a discriminatory effect on particular ethnic groups, it was not unlawful if the policy was implemented in pursuit of a proportionate, legitimate purpose which was not unreasonable. Critically, s 9 RDA does not expressly refer to “language”, which is not a necessary or invariable distinguishing characteristic of a particular group (at [89]). Section 10 RDA refers to the equal enjoyment of rights by all persons. The Court acknowledged that “imposing a constraint” on the use of language “will adversely impact on some groups in a multicultural society,” however, it could not be considered to engage ss 9 or 10 RDA as the adverse effects were not “disproportionate” [89]. It was further held that, as the restrictions on language were imposed by the State, “its effects will usually be ameliorated by the provision of translations, an interpreter service, or a mechanism for permitting exceptions” [274]. Ultimately, the restraint on the use of language was considered for a legitimate purpose and the adoption of a single language of public administration is reasonable and justifiable where the disadvantage is ameliorated.
Read the decision on the NSW Caselaw website. | Supreme Court of New South Wales | Fasko Pty Ltd v TianyD Beauty & Hairdressing Australia Pty Ltd [2022] NSWSC 49 3 February 2022 - Harrsion AsJ
In sum: The Court refused leave to appeal a decision of the Appeal Panel. The Court held that the grounds of appeal were only “reasonably arguable,” that the challenged factual findings were open; and that the Appeal Panel neither erred in law nor committed discretionary error.
Facts: Fasako Pty Ltd (Fasako), as lessor, entered into a commercial lease agreement with TianyD Beauty and Hairdressing Australia Pty Ltd (TianyD), as lessee. Prior to occupying the premise, modifications were required to comply with fire safety standards. Each party rejected responsibility for the modifications. After the lessor declined to undertake any repairs, TianyD issued a termination notice. Fasako responded by commencing proceedings in the Tribunal to enforce the lease. TianyD filed a cross-claim seeking damages and compensation for breach of the lease. At first instance, the Tribunal found the termination notice ineffective, Fasako had not breached the lease and there was an implied term that each party would maintain loyalty to the agreement. TianyD appealed. The Appeal Panel granted leave, and held there was no implied term and that the lease was validly terminated for breach. The application was remitted to the Tribunal to determine damages and compensation. Fasako sought leave to appeal the Appeal Panel’s decision in the Supreme Court. The Court refused leave.
Held (refusing leave to appeal):
(i) Appeal Panel did not err in hearing issues which were not raised on first instance: Fasako argued that TianyD had failed to rely on cl. 9.3 at first instance. That clause obliged the lessor to “keep the Building in “sound structural condition”. Fasako argued that they would have run its case differently if it had been specifically raised (at [88]). The Court recognised that whilst the termination notice did not explicitly reference a breach of cl 9.3, the substance of the claim referred to the inadequacy of the building’s fire services and the lessor’s obligation to upgrade the water pressure system. These were, in essence, matters central to both the proceedings and at the heart of cl 9.3 (at [90]). The Court held that the Appeal Panel’s decision to allow cl 9.3 to be argued “was based on factual and legal findings” [93]. The Appeal Panel did not err in its discretion to determine the issue on appeal (at [93]).
(ii) Appeal Panel did not misinterpret cl 9.3 of the lease: Fasako argued that the Appeal Panel erred in its construction of cl 9.3 of the lease. The Court adopted the Appeal Panel’s analysis of the term “structural nature” which “concentrates the mind upon the condition, state or quality of the building” [178]. It was determined to be a “matter of common sense” that, where the sprinkler system was “inadequate”, there was “an issue with the building’s structural condition” ([179], [185]). Therefore, the upkeep of the water pressure systems and the fire safety mechanisms were within the scope of the clause (at [180]). Consequently, Fasako’s failure to rectify the deficiencies constituted a breach of the clause (at [185]).
(iii) Findings of the Appeal Panel were made in the absence of evidence: The Court rejected a challenge to the finding that the premises could not have been lawfully occupied at the commencement of the lease. The Court did not fault the analysis of the Appeal Panel and supported the finding that the “fire safety system was defective at the commencement of the lease” [185]. Therefore, as the building was structurally unsound from that time, Fasako was obliged to rectify the defects prior to TianyD’s occupation (at [234]). The Appeal Panel had referenced the relevant considerations and the evidence before it to support its decision (at [182]).
(iv) Repudiation and Termination: Fasako argued that failing to upgrade the water system was not a sufficiently serious breach of an intermediate term to justify termination of the lease (at [236]). However, that there had been a “persistent failure of Fasako to comply with its obligations under cl 9.3” prior to and for the duration of the lease. The breach was significant, especially in the context of fire safety (at [253]).
Read the decision on the NSW Caselaw website. | Commissioner for Fair Trading v Matthew Geoffrey Rixon (No. 5) [2022] NSWSC 146 23 February 2022 - Dhanji J
In sum: Mr Rixon pleaded guilty to 18 separate counts of contempt of court following the breach of injunctive orders imposed by the Supreme Court, restricting him from undertaking any form of construction work. Mr Rixon pleaded guilty to 18 breaches, which were committed whilst serving a suspended sentence for 29 prior counts of contempt of court. He was sentenced to 21 months imprisonment.
Facts: The Orders prohibited Mr Rixon from undertaking any form of work associated with construction under the Home Building Act 1989 (NSW) and from contravening s 36 of the Australian Consumer Law (accepting payment or consideration for work to be completed within a reasonable time). Subsequently, he assumed an alias and established a subsidiary of his existing company. At all times, Mr Rixon “directed and controlled” the activities of the subsidiary. Between June and November 2018, Mr Rixon purported to conduct work on five separate properties across NSW. This included; advertising services for the subsidiary, quoted jobs, inspected and measured properties, formed contracts, invoiced for work or deposits, received deposits and conducted defective construction works, all in direct contravention of the injunctive Orders. He pleaded guilty to 18 counts of contempt of Court, following two prior convictions for similar conduct.
Held:
(i) The Court held that the purpose of contempt proceedings was to “uphold and protect the administration of justice” [25]. Whilst dealing with criminal contempt, the proceedings were in the civil jurisdiction (at [22]). Whilst alternatives to imprisonment for criminal contempt are available, there was “no alternative to a sentence of imprisonment” due to Mr Rixon’s history of repeated breaches (at [24]).
(ii) Dhanji J referenced two prior contempt proceedings where it was held that Mr Rixon was engaged in “extensive, persistent and very serious” offending, using “false names to deal with customers” to “intentionally” avoid the consequences of the Court’s orders. His conduct also involved collecting deposits for work which was never completed (at [9], [10]). In the previous proceedings, it was held that Mr Rixon’s “prospects of rehabilitation were poor and the likelihood of reoffending was high” [16]. It was evident in the present case that Mr Rixon’s prospects had not altered. The objective seriousness of the conduct was considered, which included; having committed the current offences whilst serving a suspended sentence, seeking to “minimise the prospect of detection” through creating a network of companies, and the “absence of any real contrition” [32]. Each of these factors distinguished this as significantly serious conduct and the behaviour was characterised as a “flagrant disregard for the authority of the Court” [32]. It was also observed that Mr Rixon was facing additional charges which generally related to fraud and obtaining property by deception. These outstanding charges were across Victoria, New South Wales and Queensland. Each of these factors contributed to the imposition of a prison sentence.
(iii) The above considerations were weighed against Mr Rixon’s difficulties in custody and the impacts of the pandemic. This included: periods of complete isolation, contracting Covid-19, periods where he was permitted to leave his cell for one hour a day and limited access to a telephone or loved ones. The Commissioner for Fair Trading accepted that “the implications of the pandemic” significantly affected Mr Rixon. This, paired with the guilty plea, contributed to a slightly reduced sentence (at [51]).
Read the decision on the NSW Caselaw website. | | DISCLAIMER: This publication has been prepared for information purposes only. The NCAT Legal Bulletin should not be relied on as legal advice nor is it a substitute for reading the decisions in full. NCAT does not accept any liability to any person for the information (or the use of the information) which is provided in this publication. |
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