Champion v Laterma Pty Ltd[2018] QCAT 392

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

Introduction

1. [1]
   Amongst other questions arising in this case is whether and when it is too late to file an application with the Queensland Civil and Administrative Tribunal (QCAT) for rent reduction orders pursuant to section 94 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (“the RTRAA”).

Facts

2. [2]
   Richelle Champion (Ms Champion) and Brian Daunter (Dr Daunter) leased a unit at 9/14 Vista Street, Surfers Paradise (the premises) on the Queensland Gold Coast from licensed real estate agent Laterma Pty Ltd (the agent) trading as Ray White Broadbeach between 15 January 2017 and 26 July 2018 under consecutive residential tenancy agreements.
3. [3]
   The premises are owned by Christopher Clayton and Grant Clayton (Messrs Clayton) and comprise a strata-titled unit in a three-story walk-up block of apartments with associated common areas (the property) one street removed from the beach.^[1] The premises and property are somewhere between 30 and 40 years old.^[2]
4. [4]
   Internally, the premises were in dilapidated condition. The property was (and is) structurally challenged. Also, by neglect and inadequate maintenance, parts of the common areas of the property were in a state of significant disrepair as will be seen from the evidence of the parties to which I will refer.
5. [5]
   Like many older beachside structures, the building, of which the premises are a part, is affected by what colloquially is called ‘concrete cancer’ from salt air corrosion. Anecdotally, it is endemic on the Gold Coast. If repairable at all, concrete cancer is very costly to address^[3] and has caused the gradual structural deterioration of the building over a long time.^[4]
6. [6]
   Australian Unit Administration (the body corporate manager) is, and at all relevant times was, the body corporate manager of the property saddled with the responsibility for properly administering the body corporate’s affairs and property on behalf of lot owners in the scheme.
7. [7]
   The term of the first lease of the premises for a year commenced on 15 January 2017 and ended on 14 January 2018^[5] at a rental of $300 per week.^[6] The tenants were happy to stay on in the premises despite their condition. They signed a second lease for a further twelve months to commence upon the expiry of the first lease.
8. [8]
   The second lease commenced on 15 January 2018 for a term ending on 13 January 2019 at a rental of $320 per week.^[7] Because it is relevant and was not addressed by the parties at the hearing, I have informed myself^[8] that the median rental for a two bedroom unit with one bathroom, which this unit is, is currently $470 per week in Surfers Paradise.^[9]
9. [9]
   On 15 June 2018, approximately halfway through the second lease, Ms Champion and Dr Daunter signed and emailed a Form 11 Notice to Remedy Breach (the breach notice) to the agent. This was the first and only such notice ever given by them. Critically however, because it is an essential requirement,^[10] the date by which the breach was to be remedied was not stated. It is therefore not open to me to infer that a reasonable time for remedy was implied. The omission invalidated the breach notice.
10. [10]
    Attached to the breach notice was a list of nine complaints in a letter drafted by Tenants Qld Incorporated. The tenants said in the letter that these complaints had not been addressed between June 2016 and February 2018. The letter went on to say that Ms Champion and Dr Daunter had ‘suffered loss of amenities as well as safety and security’ and that:

In accordance with s 94 of the Residential Tenancies and Rooming Accommodation Act 2008 Qld we seek a rent decrease of $75/week until (sic) the breaches are remedied.

11. [11]
    Though invalid, the breach notice and attached list led to sensible discussion between the parties and they ended the lease on 26 July 2018^[11] by agreement^[12] when the keys were returned. The agent immediately relet the premises to a new tenant from 27 July 2018. Ms Champion and Dr Daunter received their bond back promptly but meanwhile had needed to obtain, and obtained, an easyBondpay^[13] bridging loan recommended by the agent to secure alternative rental premises with which Laterma also assisted.
12. [12]
    Ms Champion and Dr Daunter lodged a Form 16 Dispute Resolution Request with the Residential Tenancies Authority (‘the Authority’) on 15 June 2018 concerning repairs and ‘breaches brought to the notice on each inspection’ of the premises. The commencement of six months backdated from 15 June 2018 is 16 December 2017. The Authority issued a Notice of Unresolved Dispute (known as a NURD). That cleared the way^[14] for filing an application with the Tribunal about the dispute.

Application

13. [13]
    Ms Champion and Dr Daunter filed their application with the Tribunal at Southport (the application) on 20 August 2018, approximately three weeks after their lease ended, naming the agent (alone) as Respondent because, by notice^[15] to the tenants at the start of the first lease, the agent was authorised to stand in the owner’s place in any Tribunal proceedings that might eventuate.
14. [14]
    Under the heading ‘Compensation’ in the application, Ms Champion and Dr Daunter make the following claims:

    1. (a)
       Rent refund 1^st year $240 (reduction $20/week: rent $300/week)
    2. (b)
       Rent refund 2^nd year $280 (reduction $40/week, approx. 6 months: rent $320)
    3. (c)
       Removal quote $900
    4. (d)
       Phone and internet connection $200
    5. (e)
       Loss of tutoring income $650
    6. (f)
       $1,920 borrowed from bond company as promoted by Ray White Real Estate
    7. (g)
       Two weeks rent deposit (of) $1,500 following signing lease and paying bond or the unit would not be available
    8. (h)
       QCAT fee $120

Total $5,810.00

15. [15]
    There appears to me to have been an arithmetical miscalculation in the claims for rent refund and rent reduction. A reduction of $20 per week for the year of the first lease calculates out as: 52 weeks x $20 = $1,040.00, not $240.00 as claimed; and for 6 months of the second lease the figure is 26 weeks x $40 = $1,040.00, not $280.00 as claimed. The total reduction claimed is $2,080.00.
16. [16]
    In circumstances where the applicants refer to their claims under the heading of compensation, it is appropriate that I treat the claim for rent reduction/refund as one for compensation of $2,080.00 in the alternative. I also note that the filing fee in fact is $120.50, not $120 as claimed. In total, including claims (c) to (h) recited above, the overall figure correctly calculated is $7,370.50. I will proceed on that basis.

Joinder

17. [17]
    Of my own accord, toward the end of the hearing, I ordered that Messrs Clayton be joined^[16] as Respondents because I considered that it would be unfair and inequitable^[17] that the agent might be held personally liable to the former tenants pursuant to section 206(3) of the RTRAA for any breach of lease by the owners without having recourse to indemnity from them in the same proceeding.
18. [18]
    The Tribunal, in my opinion, has jurisdiction to make an order that a property owner indemnify an agent where all are named as respondents in the proceeding and where, because the agent stands in the lessor’s place, the agent’s liability to a tenant by operation of section 206(3) of the RTRAA is ascertained by the Tribunal’s decision.^[18] Indemnity may be achieved in that situation by making an order that the owner reimburse the agent for the ascertained liability of the agent to the tenants because it is a liquidated demand of money of money within the meaning of section 12(4)(a) of the QCAT Act, with which the provisions of the RTRAA intersect.
19. [19]
    I am supported in that conclusion by the fact that section 419 of the RTRAA gives a lessor or tenant the right to apply to the Tribunal for an order about the breach of an agreement as does section 429 for an order in a general dispute between lessor and tenant. By section 35A of the Acts Interpretation Act 1954 (Qld), reference to a lessor in an Act includes reference to a lessor’s personal representative. Though not defined in the RTRAA, a personal representative includes a statutory agent (the agent in this case) in my opinion.  Section 4 of the Act provides that a person’s right or remedy under the RTRAA is in addition to, not in substitution for, a right or remedy the person would have apart from the Act. It seems to me that common law and other statutory rights and remedies (including for contribution or indemnity) available to a lessor, agent or tenant therefore co-exist with rights under the Act unless inconsistent.

Evidence

20. [20]
    By reference to an expanded list of complaints attached to the application, Ms Champion and Dr Daunter gave the following evidence at the hearing:^[19]

    1. (a)
       Throughout the first lease and for most of the second lease, they were without a key to the outside lockable mailbox for the premises. The agent only supplied the key on 22 July 2018,^[20] a mere four days before the second lease ended by agreement. They did not lose any mail.
    2. (b)
       Throughout the first lease and the second lease, a security light along the pathway to the stairwell did not work and was never replaced.^[21] They did not suffer any loss or injury.
    3. (c)
       Throughout the first lease and the second lease, the security door for stairwell access to the building was damaged and eventually became detached. It was neither repaired nor replaced.^[22] They did not suffer any loss.
    4. (d)
       Throughout the first lease and the second lease, the security door for access to internal garages 3, 6 and 9, was broken and left open, supported by a brick. Some internal garages, but not the garage allocated to Ms Champion and Dr Daunter, were entered^[23] by criminals who stole property.^[24] However they did not suffer any loss.
    5. (e)
       Throughout the first lease and the second lease, stairwell lights on some floors were missing. Where other stairwell lights were in place and working, they did not stay on long enough for a person to climb the stairs completely.^[25] Ms Champion slipped one night but saved herself by grabbing the handrail. She was not injured in the process.^[26]
    6. (f)
       Throughout the first lease and the second lease, the stairwell was never cleaned. Windblown debris accumulated. Wet leaves became slippery under foot.^[27] However neither Ms Champion and Dr Daunter suffered any associated loss or injury.
    7. (g)
       Throughout the first lease and the second lease, rain penetration made the stairwell steps slippery under foot because the stairwell windows could not be closed.^[28] They suffered no loss or injury.
    8. (h)
       Throughout the first lease and the second lease, landing floor tiles were broken in one place. Some tiles were separating and lifting from the concrete base at the entrance to the premises.^[29] They suffered no loss or injury.
    9. (i)
       Throughout the first lease and the second lease, the external part of the metal door frame at the entrance to the premises was rusted. The paint was peeling off. That was aesthetically displeasing. However the weather did not penetrate internally.^[30] They suffered no loss.
    10. (j)
        The lock on the security screen door to the premises ceased working in about June 2017 but it was fixed approximately six months later in December 2017 or thereabouts.^[31] They suffered no loss.
    11. (k)
        In or about June 2018, the kitchen light ceased working and Ms Champion had to use a desk lamp for food preparation, however it was replaced by July 2018 after notice.^[32] Other than inconvenience and some concern for safety, she suffered no loss.
    12. (l)
        Throughout the first lease and the second lease, wall architraves were progressively separating from the ceiling in the kitchen and bathroom^[33] with separation cracks increasingly visible. They suffered no loss.
    13. (m)
        Throughout the first lease and the second lease, floor tiles in the living area and corridor were cracked, flaking, lifting and disintegrating with grout breaking up.^[34] They suffered no loss.
    14. (n)
        Throughout the first lease and the second lease, some floor tiles by the sliding door to the balcony were crumbling into powder and the balcony floor tiles themselves were cracked, flaking, lifting and disintegrating with grout break up.^[35] However they suffered no loss.
    15. (o)
        During the first lease, though not at the start, and throughout the second lease, a chunk of the concrete slab on the underside of the balcony^[36] was broken off. Ms Champion and Dr Daunter say that they did not use the balcony because it felt unsafe to them.^[37]
    16. (p)
        Throughout the first lease and the second lease, the bathroom window was bowed which caused wall tiles to separate and allowed water to leak into the tenancy below^[38] but not into the premises leased by Ms Champion and Dr Daunter. They suffered no loss.
    17. (q)
        One end of the bath dropped which caused a misalignment with the waste pipe resulting in some water leaking and accumulating under the bath with the potential eventually to leak into the unit below as well,^[39] however there was no functional consequence for Ms Champion and Dr Daunter because the water did not need to be mopped. They suffered no loss.
    18. (r)
        Throughout the first lease and the second lease, cracks in the bathroom wall appeared to be widening.^[40] They suffered no loss.
    19. (s)
        Throughout the first lease and the second lease, the toilet cistern support was rusted and the cistern became loose from the wall attachment in June 2018 but still functioned.^[41] They suffered no loss.
    20. (t)
        From about June 2018 until the end of the lease on 26 July 2018, the hot water system lost pressure, the water was lukewarm, it did not heat to the required 60 degrees Centigrade to ensure the prevention of bacterial and fungal growth.^[42] In an email dated 30 May 2018 to the agent, Ms Champion and Dr Daunter said that ‘it doesn’t seem to last too long or get very hot’ but they suffered no adverse health consequences.
    21. (u)
        An electric wall plug (a GPO or general power outlet) in the second bedroom broke in or about June 2018 but was repaired in July 2018 after notice.^[43] They suffered no loss.
    22. (v)
        Lastly, throughout the first lease and the second lease, the garage remote did not work but that did not impact on Ms Champion and Dr Daunter.^[44] They suffered no loss.
21. [21]
    Ms Price, the agent’s property manager, gave the following evidence:

    1. (a)
       The complaints made by Ms Champion and Dr Daunter concerning body corporate common areas and the state of their disrepair were relayed to the body corporate manager for action. However, nothing happened. In her words, the body corporate manager was ‘very, very lax.’^[45]
    2. (b)
       The agent sent the body corporate manager emails to fix the issues listed in the attachment to the tenants’ Form 11 Notice to Remedy Breach dated 15 June 2018 which related to common areas. That was the only breach notice which Ms Champion and Dr Daunter ever issued.^[46] The manager apparently did nothing.
    3. (c)
       The body corporate areas included the pathway and security lights,^[47] the stairwell, the stairwell lights,^[48] the stairwell door, the stairwell tiles and windows, the stairwell landing, the balcony,^[49] and the garage security door.^[50]
    4. (d)
       The corroded lock on the mailbox was replaced as evidenced by A1 Locksmith’s tax invoice dated 22 July 2018.
    5. (e)
       Aus-tech Electrical Services replaced the burnt-out kitchen light at a cost of $228.80 as appears from a tax invoice dated 5 July 2018.
    6. (f)
       A quotation to replace the garage remote was sought on 2 July 2018.
    7. (g)
       As appears from the tax invoice of DJN Plumbing (the plumber) dated 11 June 2018, the plumber fitted tap washers on shower taps to stop water leaking, the water proofing had failed and gaps from structural movement of the building allowed water to leak into the unit below.
    8. (h)
       The plumber also noted that the building has ‘major structural issues’ which, in an email to the agent dated 12 June 2018, he said he thought was a body corporate matter.
    9. (i)
       In a quotation dated 9 August 2018, after the lease had ended, DJN Plumbing quoted $15,400 (including GST) to internally renovate the bathroom, laundry and toilet.
    10. (j)
        Fix a Tile provided a quotation dated 20 August 2018 for internal tile replacement at a cost of $7,465.70.
22. [22]
    In or about June 2018, Ms Price sent the body corporate manager a photograph of the corner underside of the balcony floor where the chunk of concrete had broken away. The photograph shows that the floor surface and balance of the slab thickness remained intact. The agent asked whether this was a body corporate or owner issue. Another email which Ms Price sent to the body corporate manager relayed complaints of the tenants about the lack of common area cleaning and forwarded photographs in illustration.
23. [23]
    Even as of the date of hearing, those and several previous emails to the body corporate manager remained unanswered. The owners also emailed the body corporate manager on 13 June 2018 and attached photographs and a copy of email from the agent noting that they (the owners) now had a ‘serious issue’ with the property. They asked: ‘what’s next here from a body corporate perspective?’ Again, the body corporate manager did not reply.
24. [24]
    Messrs Clayton did not themselves attend the hearing to give oral evidence. Nothing turns on that. As I have already noted, they were only joined as respondents late in the proceedings. Therefore, no adverse inference may be drawn from their failure to give direct evidence.

Law

Standard

25. [25]
    Section 185 is a core provision of the RTRAA prescribing the general standard of residential tenancy premises which the Act requires. At the start of,^[51] and throughout,^[52] a lease, the lessor must ensure that the premises are clean,^[53] fit to live in,^[54] and in good repair,^[55] that the lessor is not in breach of a law dealing with issues of health and safety of persons using or entering the premises,^[56] and that the premises and inclusions otherwise comply with any prescribed minimum housing standards which apply to them.^[57]
26. [26]
    However, minimum housing standards contemplated by section 185(2)(e) and section 185(3)(e) of the RTRAA are currently non-existent. There is presently no regulation for prescribed minimum housing standards that has been promulgated pursuant to section 17A^[58] of the RTRAA although public consultation is presently underway through an agency of the Queensland Government.
27. [27]
    Section 185 of the RTRAA has so far been interpreted by Australian Courts and this Tribunal in relative, not absolute, terms as the following cases illustrate.
28. [28]
    In the Queensland Supreme Court in Fine v Geier [2003] QSC 73 (Fine), Wilson J considered the analogous provisions of section 103(2) of the (then) Residential Tenancies Act 1994 (Qld) and at paragraph [56] said that:

Questions of fitness for habitation and repair are to be judged against a standard of reasonableness having regard to the age, character and locality of the residential premises and to the effect of a default on the state or condition of the premises as a whole: Bond v Weeks [1991] 1 Qd R 134 at page 138 (where the Court of Appeal discussed provisions to similar effect in earlier legislation).

29. [29]
    In the Queensland Court of Appeal in Gration v C Gillan Investments Pty Ltd^[59] (Gration), Williams JA considered section 103(2) of the Residential Tenancies Act 1994(Qld)^[60] and found that the obligation to ensure fitness is qualified and only ‘...obliges the lessor to take reasonable steps (sic) to ascertain and satisfy himself that the premises are in a state of good repair at the start of the tenancy’.^[61]
30. [30]
    In the words of Wilson J in Gration,^[62] ‘…(t)he Legislature stopped short of imposing a standard of perfect repair.’^[63]
31. [31]
    Though dissenting with the majority decision dismissing the appeal in Gration, Muir J in that case said that:^[64]

It would impose an unusually onerous burden on a landlord of domestic premises to require it, before the commencement of a tenancy, to have the premises inspected for defects by an appropriately qualified tradesman or tradeswoman unless there existed some evidence of a defect or defects of which the landlord was aware or ought reasonably to have been aware, or unless there were circumstances which would have caused a reasonable landlord to have such an inspection carried out.

32. [32]
    Brennan CJ, in the High Court of Australia in Northern Sandblasting Pty Ltd v Harris^[65] (Northern Sandblasting) quoted by Williams JA in Gration,^[66] held that the statutory obligation ‘…exclude(d) defects which could not have been discovered by reasonable care or skill on the part of any person concerned with ... the maintenance of the premises.’
33. [33]
    More recently, in a QCAT appeal decision in Challands & Anor v Jackson^[67] (Challands) citing the decision in The Owners Strata Plan 62930 v Kell and Rigby Holdings Pty Ltd,^[68] the Tribunal held that non-liveability is at the high end of the spectrum where defective housing is concerned and that lessor breaches of warranty frequently fall short of that extreme.
34. [34]
    The learned Member in Challands went on to say that it (unliveability) is ultimately a matter of fact, degree and judgment in all the circumstances including the amount of rent payable, climatic conditions, the remediability of existing defects, the reasonable expectations of people in the tenants’ position and the age and location of the premises.

Amenity

35. [35]
    Section 183(1) of the RTRAA requires (only) that a lessor take reasonable steps to ensure that a tenant has quiet enjoyment of premises. That obligation, together with others in the Act, is taken to be included as a term of the residential tenancy agreement by operation of section 52 of the RTRAA.
36. [36]
    Plainly, according to the language used, section 183(1) does not oblige a lessor to ensure the tenant’s quiet enjoyment absolutely. There is good reason for that. Situations not infrequently arise where amenity of a tenancy may be affected by extraneous circumstance or nuisance which is neither caused, nor contributed to, by the lessor or agent and over which they have no control and no right of intervention. See, for example, the Tribunal’s decision in Esposito v Hills [2017] QCATA 126 (Esposito) at [30].
37. [37]
    On the other hand, section 183(2) positively obliges a lessor not to interfere with a tenant’s reasonable peace, comfort or privacy in using the premises.

Remedies

Compensation

38. [38]
    In all non-urgent tenancy claims, section 416(1) of the RTRAA requires that a lessor or tenant lodge a dispute resolution request with the Residential Tenancies Authority about ‘an issue’ in dispute and that the process have completed before a party may make application to the Tribunal to adjudicate a claim.
39. [39]
    Where an application concerns an alleged breach of lease, section 419(3) of the RTRAA requires that an application to QCAT, whether by a lessor, provider or tenant, about the breach must be made within 6 months of becoming aware of the breach. The 6 month limitation is strict, the time limit is substantive,^[69] and therefore the Tribunal has no jurisdiction to waive or extend it. The word ‘application’ has an extended meaning for purposes of section 419(3). By section 417(2) of the RTRAA, it includes a reference to making a dispute resolution request.
40. [40]
    Therefore, for non-urgent money claims for compensation for lease breach, the expiry of the 6-month period within which an application must be filed is suspended upon the lodgement by the aggrieved person of a dispute resolution request with the Residential Tenancies Authority.  In other words, time ceases to run adversely against an aggrieved person provided that their ensuing application is filed within a reasonable time.
41. [41]
    By section 420(1)(e) of the RTRAA, the Tribunal may order compensation of a party to a residential tenancy agreement upon application by that party to the Tribunal. The statutory discretion is broad. In the absence of a statutory directive to the contrary, and there is none,^[70] the Tribunal assessing compensation must attempt to put a party back in the position that existed before the breach insofar as the payment of money may achieve that.^[71]

Rent reduction

42. [42]
    Section 94 of the RTRAA provides that, if premises are destroyed or made completely or partly unfit to live in, in a way that does not result from a breach of the agreement, or may no longer be used lawfully as a residence, or are appropriated or acquired compulsorily by an authority,^[72] then the rent payable under the agreement decreases ‘accordingly’ or, if an order for a rent decrease is made by the Tribunal, to the extent stated in the order.^[73]
43. [43]
    Section 94 also applies if services, facilities or goods to be provided to the tenant under the agreement are no longer available or are withdrawn other than because the tenant failed to meet the tenant’s obligations under the agreement;^[74] or if the amenity or standard of the premises decrease substantially other than because of malicious damage caused by the tenant.^[75]An application and order for rent reduction is required in any of those events.
44. [44]
    Also, the Tribunal may make an order for a rent decrease only if – the tenant applies for the order;^[76] and if subsection (4) applies because of sub-section (1) – the premises are partly unfit to live in.^[77] The threshold requirement of a withdrawal or unavailability of services or substantial reduction of amenity conjuncts with the requirement that the premises be partly unfit to live in.
45. [45]
    As Muir JA said in Underwood v Queensland Department of Communities (State of Queensland) [2012] QCA 158 (Underwood) at [24], sub-sections (3) and (4) of the section potentially give rise to awkward questions of construction.
46. [46]
    In Underwood, Muir JA, with whom Dalton J concurred,^[78] at [24], said:

On a literal construction of s 94(3) if circumstances within sub-sections (1) or (2) arise in respect of premises which are tenanted, the rent payable under the tenancy agreement “decreases accordingly” without the need for any order by a tribunal. Presumably, the extent of the decrease would relate to the extent to which the premises were unable to be enjoyed by the tenant. If premises are “destroyed” or made “completely unfit to live in” or are no longer able to be “used lawfully as a residence” or are “appropriated or acquired compulsorily” the ascertainment of the decrease in rent should be straightforward: in the great majority of cases, the rent would decrease to nothing. Section 94(4) appears to recognise this by confining the right to apply for a rent reduction where section 94(1) applies to circumstances in which the premises are “partly unfit to live in.”

47. [47]
    His Honour, at [28], went on to say that the wording of section 94(4) is permissive and that it is (also) implicit in sub-section (3) that an order for a decrease in the rent may not be made. Further, at [30] that:

If it is the case that a tribunal has discretion whether to order a reduction of rent under s 94, the better view is that the tribunal may refrain from making an order reducing the rent if it would be unjust to make such an order. For example, it may be unjust for an order to be made where an application has been made late or a lessor has been prevented by the conduct of a tenant from ascertaining facts and circumstances relevant to the determination of whether there should be a reduction in rent.

48. [48]
    In Underwood, at [31], Muir JA also said that:

The tenant may have accepted a tenancy at a lower than market rent on the understanding that the lessor would be unable for a variety of reasons to prevent the amenity of the premises from deteriorating substantially. …. Other examples may be given of circumstances in which it would be unreasonable and unjust for rent to be reduced solely by reference to the extent to which premises have become partly unfit to live in or to circumstances falling within s 94(2).

49. [49]
    His Honour, at [33], noted that section 94 offered no guidance on the factors that a court must take into account in determining the amount of a rent reduction and that he was unable to discern anything in the section or any other provision of the Act which would have prevented the tribunal (at first instance) from having regard to the quantum of rent payable in deciding whether an order should be made under section 94(3).
50. [50]
    However, the question of whether an application for rent reduction must be filed during the subsistence of a lease has not been expressly considered in any of the Supreme Court decisions to which I have referred. It seems to me that the oblique reference by Muir JA in Underwood to it being potentially unjust to order a reduction of rent where a claim is made late goes only to discretion and not to jurisdiction. Whether or not an application for rent reduction might be made after the end of a lease was not decided as the point was apparently not raised.
51. [51]
    So, in the context of section 94(2)(a) and (b), do subsections (3) and (4) of section 94 only operate prospectively upon an application for rent reduction filed during the term of a residential tenancy agreement or may they also be applied retrospectively in an application only filed after the tenancy has ended? There are divergent Tribunal decisions on the question as the following cases illustrate.
52. [52]
    In Hurst v Pyatt^[79] (Hurst), citing Campbell v Donker,^[80] the Tribunal held^[81] that:

For s 94 to apply, the Tribunal must be satisfied that the premises were completely or partly unfit to live in that does not result in a breach of the agreement,^[82] or the amenity of the premises decreases substantially other than because of malicious damage by the tenant.^[83]

53. [53]
    The learned Member in that case went on to say^[84] that s 94 only operates prospectively to allow a tenant to apply for a reduction in their rent while the tenancy continues or until the lessor restores the loss of amenity and that:^[85]

I am not satisfied that s 94 permits a “retrospective” rent reduction, nor would it be just in the circumstances where the tenant did not apply for a reduction until some 13 months after first becoming aware of issues with the dishwasher and some three months after vacating the property.

54. [54]
    On the other hand, in Masinello v Parker & Anor (No. 2) [2013] QCATA 325 (Masinello), citing Wilson J in Trimble v Babet [2013] QCATA 81 in reference to section 94 creating a cause of action separate and distinct from the remedy in section 419 of the RTRAA, the learned Member in that case said at [12] that:

When section 94 is relied on, the time limit in section 419 is beside the point. The RTRAA does not state that a section 94 claim must be brought within a particular time, or while the tenancy is current, and I am not prepared to read such a proviso into the Act, unless and until authority compels me to do so. The point was not raised in Underwood v Queensland Department of Communities (State of Queensland) although the time between commencement of proceedings and the end of the tenancy was very short,^[86] making it likely that the claim in that case involved some rent already paid, or overdue.

55. [55]
    I respectfully agree with the learned Member in Masinello that section 419 of the RTRAA does not apply to rent reduction claims and that section 94 does not say that a claim must be made within a specified time. See also, in this regard, Vloedmans v Malseed [2015] QCATA 174, per Thomas J at [15]. However, section 94 of the RTRAA must, in my respectful opinion, be interpreted according to the language and the tense of the language used, considered in statutory context. I will return to that shortly.
56. [56]
    In Grace v Metrocity Realty & Ors [2012] QCAT 663 (Grace), the learned Member in that case concluded at [57] that the six month rule in section 419 of the RTRAA did not apply to rent reduction claims pursuant to section 94. He went on to say that:

Instead it would appear that the correct time limit for such matters is 6 years under section 10(1)(d) of the Limitation of Actions Act 1974 (limitation period in case of an action to recover a sum recoverable by virtue of any enactment).

57. [57]
    I respectfully agree with the statement of the learned Member in Grace that section 10(1)(d) of the Limitation of Actions Act 1974 (Qld) (the LAA) allows 6 years within which an action may be commenced to recover rent paid in error where the liability to pay it reduced to nil automatically by operation of section 94 of the RTRAA.
58. [58]
    However, I respectfully do not agree with the proposition in Grace that it is otherwise open to a former tenant to apply for an order for rent reduction up to six years after the cause of action for reduction arose because, according to the wording of section 94, the cause of action and the associated right to apply for a rent reduction is extinguished with the discharge of the lease in one of the ways prescribed by section 277 of the RTRAA. The provisions of the LAA prescribe the limitation periods for commencing proceedings but they do not confer jurisdiction where an essential requirement for the cause of action no longer exists, i.e. the existence of a current lease. Put another way, the statutory cause of action does not survive discharge of the lease.
59. [59]
    I elaborate.
60. [60]
    The Tribunal must, by the application of accepted cannons or rules of construction, construe the intention of the legislature in the words used in an Act.^[87] The interpretive task requires that the objective intention of the legislature be identified. Legislative intention is usually ascertainable from a grammatical reading of the legislation, though not always so.^[88] Statutory text must be given its ordinary grammatical meaning where the language is plain and unambiguous. Though the interpretation of a provision of an Act that best achieves its purpose must be preferred,^[89] the intention of the legislature will be derived from considering the text of the relevant provision in its context.^[90]
61. [61]
    Plainly, as noted in Hurst, section 94 of the RTRAA is worded in the present and future tense, not in the past tense. The requirements are that services, facilities or goods to be provided to the tenant under ‘the agreement’ are no longer available or withdrawn^[91] or the amenity or standard of the premises decreases other than because of malicious damage caused by the tenant^[92] (my emphasis).
62. [62]
    In other words, the language of section 94 contemplates the currency of a residential tenancy agreement for its operation. It does not, for example, refer to services, facilities or goods that were, or were to be, provided under a former agreement and that were no longer available or were withdrawn or to the amenity or standard of the premises that decreased substantially. There is no provision in the Acts Interpretation Act 1954 (Qld) that would permit or require such an interpretation.
63. [63]
    It follows that the tribunal’s discretion to order a rent reduction is enlivened upon filing an application during the currency of a tenancy, not after it is discharged, where the premises are partly unfit to live in because of the unavailability or withdrawal of services, facilities and goods, other than because of a tenant’s failure to meet lease obligations, or a substantial  decrease in the amenity or standard of the premises other than because of malicious damage caused by a tenant.
64. [64]
    Looking at the statutory context in which section 94 stands also informs interpretation of the section.
65. [65]
    Section 94 of the RTRAA falls within the provisions of Part 2 - Rent, Division 1 – Residential tenancy agreements, of Chapter 2 of the RTRAA. Part 2 does not assist contextually because none of the other sections in Division 1 have any interpretive relevance, relating as they do only to rent increases, seizure of goods and rent apportionment. In that immediate context, section 94 stands alone. However, one must look beyond the immediate statutory context of Chapter 2 to the content of Chapter 6.
66. [66]
    Within Chapter 6 – Dispute Resolution, Division 3 – General Powers of Tribunals is section 419(4) of the RTRAA. It provides that an application for compensation for breach of a residential tenancy agreement may be made during the term, or after the end, of the agreement,^[93] whether or not an application for termination, or a termination order, has been made about the agreement^[94] and whether or not a rental bond for the agreement is held by the Residential Tenancies Authority when the application is made.^[95]
67. [67]
    The fact that section 94 is unaccompanied by any similar provision to section 419 of the RTRAA, stating that an application for rent reduction might be made after the end of the agreement, is significant. If the legislature had intended that an application for rent reduction could be filed after the end of a tenancy, months or years later, i.e. after discharge of the statutory tenancy contract by operation of law, it would have said so in the Act but did not.
68. [68]
    There is nothing in the wording of section 94 that gives the Tribunal jurisdiction to reverse the termination of a lease that has occurred by operation of section 297 of the RTRAA by reinstatement of the lease for purposes of then retrospectively reducing rent previously payable and/or paid and ordering that it be repaid to a tenant. Clear statutory language would be required to achieve that outcome since it goes to jurisdiction and the Tribunal is a creature of statute.
69. [69]
    Nothing in the explanatory notes to the RTRAA Bill 2008 or in the first and second reading speeches, to which I may have regard pursuant to section 14B of the Acts Interpretation Act 1954 (Qld), suggests that section 94 should be interpreted that way. There is nothing in the wording of section 94 of the RTRAA, or in the broader statutory context, that would imply a power to re-instate a tenancy agreement already discharged by operation of law for purposes of retrospective rent adjustment.
70. [70]
    In the fundamentally different context of the Tribunal’s discretionary power to award costs under the Queensland Civil and Administrative Tribunal Act 2009 (Qld), the Tribunal in McNab Constructions Australia Pty Ltd v Donovan Hill Pty Ltd & Ors^[96] said:^[97]

Courts have consistently held that the power to award costs (other than in the court of chancery) is a creature of statute and must be conferred expressly or by necessary implication.^[98] Power to make all such other orders as the case requires, have not been considered to create a necessary implication.^[99] A necessary implication may not be readily implied.^[100]

71. [71]
    It seems to me that the same principle applies by extension with respect to section 94 of the RTRAA. That a rent reduction order may be made pursuant to a discretion to reduce rent after the end of a tenancy may not be readily implied. Neither is it a case of implying a proviso that an application for rent reduction may not be made after the end of a lease. The literal wording of section 94, in the statutory context, prevails.
72. [72]
    Therefore, insofar as the meaning and application of section 94 of the RTRAA is concerned, though for the additional reasons to which I refer in this decision, I respectfully adopt the approach in Hurst, rather than the approach in Masinello and in Grace, in concluding that an application for rent reduction must be filed during the currency of a lease and not after it has ended in one of the ways prescribed by section 277 of the RTRAA.

Liability

73. [73]
    I will deal with the claim for rent reduction first and the compensation claims second.

Rent reduction

74. [74]
    Applying the law to the facts, I find that the threshold requirements of section 94 of the RTRAA for rent reduction are not met in this case for the following reasons.
75. [75]
    Firstly, though I find that they were not in good repair at any time as was readily ascertainable by the owners and their agent (see Gration and Northern Sandblasting) and the former tenants, the standard and amenity of the premises did not substantially reduce during the two consecutive leases.^[101] The standard of the property and associated common areas did not substantially reduce either,^[102] it was already substantially reduced at the start of the first lease. In the respects that I have referenced, both the premises and (more so) the property were in poor condition at the start of, and throughout, each of the leases. The deterioration of the premises and the property had been ongoing and gradually incremental over a long period.
76. [76]
    In the words of Thomas J in Vloedmans,^[103] a tenant must show that the character of the premises changed during the tenancy to a substantial degree. He went on to say that: ‘If the amenity was always poor, the relevant provision cannot apply.’^[104] Section 94 is the ‘relevant provision’ to which he was referring.^[105] His Honour found that the learned Magistrate sitting as a Member of the Tribunal at first instance had erred in law by not considering when each breach had occurred. He therefore set aside the original award of $13,200 to Mr Malseed for rent reduction for the 66-week term of the tenancy.^[106]
77. [77]
    Secondly, though the premises and property were in poor condition throughout both leases and though Ms Champion and Dr Daunter were apprehensive about using the balcony, their evidence does not, in my opinion, establish that the premises were partly unfit and unsafe to live in. Structural issues with the building notwithstanding, the renewal of the lease after a year for a second term is consistent with ongoing fitness and safety for habitation.
78. [78]
    Applying the test in Fine to which I referred earlier, fitness for habitation is to be assessed in this case having regard to the age (between 30 and 40 years), character (a dilapidated structurally challenged three story walk up building) and locality (beachside) of the premises and to the effect of a default on the state and condition of the premises as a whole. Were that not the case, countless beachside buildings of advanced age on the Gold Coast of Australia would be uninhabitable and stand condemned to demolition by their age and corrosive deterioration.
79. [79]
    Absent cogent evidence, e.g. a letter from the Gold Coast City Council (at least) with supporting inspection report or the report of a structural engineer, condemning the premises and property as unsafe and partly or wholly unliveable, which was not produced, I am unwilling to conclude that they fall within the high spectrum end for unliveability (whether wholly or partially) to which the learned Member referred in Challands.
80. [80]
    Thirdly, whether for purposes of assessing rent reduction or compensation if appropriate, the inescapable fact is that rent for the second term of the lease was set at $150 per week less than the median rent of $470 per week for equivalent premises in good condition in Surfers Paradise. Similarly, approximately, for the first term of the lease.
81. [81]
    Doing the arithmetic, the rent discount of $150 per week multiplied by 78 weeks (52 weeks for the first term and 26 weeks for the second) produces a figure of $11,700 less rent than the applicants will have paid for premises in good condition at median rental for the locality. If the rent reduction claim succeeded in this case, $2,080 would be added to the discount from the rental median for a total of $13,780.00. That is the sort of unjust outcome to which Muir JA was referring at [31] in Underwood.
82. [82]
    As I may,^[107] I infer from the facts and the evidence in this case that the weekly rent discount of $150 in the second term of the lease took account of the dilapidated condition of the premises and building. Any further rent reduction on top of the already reduced rent would amount to a double reduction, or, in the words of Thomas J in Vloedmans, ‘double dipping.’
83. [83]
    Fourthly, Ms Champion and Dr Daunter waited far too long in filing their application for rent reduction only after the second lease had ended by agreement. They delayed for 17 months from the start of the first lease before issuing their first and only notice to remedy breach. They gave no satisfactory explanation for waiting until after the lease had ended to commence proceedings. Muir JA’s observations concerning delay in Underwood apply in this case. It would, in my opinion, be unjust to make an order against the owners and agent in the circumstances.
84. [84]
    Tenants, lessors and agents respectively have rights according to the provisions of the RTRAA and the tenancy agreements which they sign. Parties must take steps to mitigate their losses. Lessors, agents, and tenants alike are entitled to know where they stand and to arrange their budgets and financial affairs, including provision for taxation, accordingly. Aggrieved parties must therefore assert and act on their rights without undue delay during a lease, follow the prescribed procedures for notification of breaches that require remedy, and apply to the Tribunal in a timely manner, or risk having their claim dismissed as a result.
85. [85]
    Fifthly, acknowledging that there is a divergence of Tribunal authority on the point which neither the Supreme Court of Queensland nor the Queensland Court of Appeal have to date ruled as far as I am aware, I am of the opinion that the Tribunal is not empowered by section 94 of the RTRAA to order a rent reduction after a tenancy agreement has been discharged by operation of law. As I said earlier, if that were the legislative intent then the section would have said so.
86. [86]
    However, even if I were found to be wrong about that, the rent reduction/refund claim of Ms Champion and Dr Daunter fails in any event for the other reasons in this decision.

Compensation

Rent compensation

87. [87]
    It is important to distinguish between the condition of the premises and the condition of the property, i.e. the building of which the premises form part and associated common areas, because, though they go together, Messrs Clayton as owners had authority and control only over the premises, not over the building and common areas. They were but one set of a number of owners of units in the strata titled complex.
88. [88]
    Upon their agent being served with the former tenants notice to remedy breach in June 2018, Messrs Clayton and the agent wrote to the body corporate manager, the owners noting the urgency of the situation that had developed. As in Esposito, there were no other steps that they could take in the relatively short timeframe between then and the end of the lease on 26 July 2018. Therefore, I find that Messrs Clayton did not breach section 183(1) of the RTRAA by reference to the condition of the building of which the unit formed part and the neglected parts of common areas of the property.
89. [89]
    On the other hand, I have found that the premises themselves were not in good repair at any stage during the two leases and that this was readily ascertainable by the owners. The amenity of the premises and of the property and common areas was already substantially reduced at the start of the first lease and remained so throughout the two leases. It follows that the owners were in breach of section 185 of the RTRAA throughout the two leases insofar as the state of repair of the premises was concerned.
90. [90]
    To the extent that Ms Champion and Dr Daunter claim compensation assessed as a ‘rent refund,’ in the alternative to a rent reduction order pursuant to section 94 of the RTRAA which I have declined to make, the Tribunal must approach assessment of compensation on the basis that they be put back in the same position as they would have been had the premises been in good condition. This is because the civil remedy under the RTRAA is compensatory, not punitive, in character.
91. [91]
    The former tenants therefore have the same difficulty in establishing a right to compensation with respect to the condition of the premises that I identified when considering the differential between median rent and the actual rent for the premises for rent reduction purposes. They can prove no compensable loss. They elected to take the premises as they found them at the reduced rent. They renewed the lease for a second term. That was their prerogative. However, double compensation in effect is not available as it would be unfair and unjust that the applicants be compensated twice in the circumstances.

Removalist claim

92. [92]
    Whether the lease ended by agreement, as it did on 26 July 2018, or on 13 January 2019 upon expiry of the term of the second lease, Ms Champion and Dr Daunter were faced with the same removalist costs in any event. There is therefore no compensable loss on that account. However, they are entitled to claim interest on the expenditure brought forward, i.e. interest on the sum of $900.00 for the period between 26 July 2018 and 13 January 2019, a period of 172 days. Using the Queensland Courts interest calculator, the figure is $16.96.^[108]

Phone and internet claim

93. [93]
    The same principle applies to the former tenants’ claim for $200 for telephone and internet termination and re-connection fees. Their only loss is interest on the expenditure of $200 brought forward. By the Queensland Courts interest calculator, the figure is $3.76 for a period of 172 days.^[109]

Loss of tutoring income

94. [94]
    Dr Daunter is a retired lecturer from the University of Queensland.^[110] He takes on tutoring for students from university^[111] and said that he could not tutor because of the condition of the premises, that he had to pass them on to a colleague.^[112] He did not produce proof of the loss of income other than by reference to emails from students which he did not bring with him to the hearing.^[113]
95. [95]
    Dr Daunter’s claim for loss of tutoring income is problematic for the following reasons.
96. [96]
    Firstly, there is no documentary evidence to support the claim and the quantification of it.
97. [97]
    Secondly, there is no evidence to establish that the commercial activity of tutoring for a fee from residential premises within the jurisdiction of the Gold Coast City Council was permitted. Certainly, neither the RTRAA nor the terms and conditions of the standard general tenancy agreement permit a tenant to carry on a business from residential premises. Doing so might also negate insurance cover (if any) for the premises.
98. [98]
    Thirdly, there is no evidence to establish that it was within the reasonable contemplation of the parties at the time of signing the leases that such loss would be the probable result of the breach of them. As Alderson B in Hadley v Baxendale (1854) 9 Ex.341 [156 E.R. 145] (Hadley and Baxendale) said:

Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be such as may fairly and reasonably be considered either arising naturally, i.e. according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probable result of the breach of it.

99. [99]
    The rule in Hadley and Baxendale is still good law in Australia, the case has stood the test of time. I can see no good reason why, in fairness and equity, the same principle should not be applied in this case.
100. [100]
     It follows that Dr Daunter’s claim for loss of tutoring income is not made out.

The easyBondpay claim

101. [101]
     The compensation claim for the new bond amount of $1,920 falls into the same category as the claims for removalist costs and utilities fees. The loss, if any, is the cost of fees incurred and interest in prematurely having to borrow the new bond through easyBondpay, however the bond for the premises leased by Ms Champion and Dr Daunter from Messrs Clayton was promptly repaid so their interest loss is negligible.
102. [102]
     Though Ms Champion did say that interest on the easyBondpay amounts was ’30-odd per cent,’^[114] she later resiled from that evidence when challenged by Ms Price^[115] and neither Ms Champion nor Dr Daunter provided any documents to substantiate their liability to pay loan raising fees and charges. The claim therefore fails.

The rent deposit claim

103. [103]
     Ms Champion and Dr Daunter claim $1,500 for a rent deposit of two weeks paid to the account of the agent for their new lease elsewhere. However, they would have to pay that at the end of the term of the lease in any event.
104. [104]
     The loss is not causally related to the ongoing breach by Messrs Clayton of section 185 of the RTRAA insofar as it related to the condition of the premises prior to the lease ending by agreement between the parties. If there is any compensable loss at all, it is to be calculated as the interest paid on $1,500 for (say) a month. The Queensland Courts interest calculator establishes that the figure is $6.78.^[116]

Other compensation

105. [105]
     It is, in my opinion, fair and equitable that I allow compensation for the malfunctioning hot water system which lost pressure and did not produce very hot water. The applicants notified the agent by email dated 30 May 2018. The problem was not rectified before the lease ended. The period of compensation is from 31 May 2018 to the end of the lease on 26 July 2018. I will allow $150.00 including interest.
106. [106]
     However, compensation is not warranted in the instances where identified breaches were remedied within a reasonable time of notification. Nor is it warranted where no compensable loss has been proven.

Filing fee

107. [107]
     It is appropriate in this case that Ms Champion and Dr Daunter be reimbursed $120.50 for the cost of the filing fee paid to QCAT registry even though their application has only succeeded to a limited extent. This is a complex dispute that could not be resolved through conciliation. The fee had to be paid to get them to this point.

Disposal

108. [108]
     The claims of Ms Champion and Dr Daunter for rent reduction/refund will be refused. Their claims for removalist costs, telephone and internet connection fees and charges, loss of tutoring income, the expenditure for the new bond and the rent deposit claim will also be refused.
109. [109]
     I will allow Ms Champion and Dr Daunter interest totalling $27.59 for the items to which I have referred, $150.00 inclusive of interest by way of compensation for the malfunctioning hot water system and the filing fee of $120.50, in sum $298.09.

Orders

110. [110]
     I order that:

     1. (a)
        The Respondents pay the Applicants Richelle Champion and Brian Daunter the sum of $298.09. 
     2. (b)
        If the Respondent Laterma Pty Ltd pays the Applicants Richelle Champion and Brian Daunter some or all of the sum of $298.09 then the Respondents Christopher Clayton and Grant Clayton must reimburse Laterma Pty Ltd that amount.

Distribution

111. [111]
     A copy of this decision together with formal orders will be mailed out to the parties by the QCAT Registry.