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Rental Express Pty Ltd v Finch & Sweeney QCATA 149
Rental Express Pty Ltd v Finch & Sweeney  QCATA 149
Rental Express Pty Ltd
On the papers
Senior Member Stilgoe OAM
1 October 2015
APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – RESIDENTIAL TENANCIES – where flooding of under-house area – where tenants broke lease – where tenants did not deliver necessary notices – where tenants sought relief from break lease fees and damages – where tribunal ordered relief – whether tribunal could waive compliance with requirement to give notices – whether grounds for leave to appeal
Dearman v Dearman (1908) 7 CLR 549
Fox v Percy (2003) 214 CLR 118
Pickering v McArthur  QCA 294
Chambers v Jobling (1986) 7 NSWLR 1
Negus t/as Run Property v Newell  QCATA 120
Marsellos Pike Real Estate v Pike  QCATA 316
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
- In April 2014, Sarah Finch and Glen Sweeney rented a house at Wynnum on a twelve-month tenancy. Like many houses in Queensland, this house was on stumps, with the laundry and car parking underneath. There was an additional space underneath the house, which was advertised as a storage area.
- Come summer, and the summer rains, the underneath of the house flooded. The flooding was inevitable, as there was a steep concrete driveway from the road which funnelled water straight down under the house. In addition, there was no obvious waterproofing of that underneath area.
- However, the tenants had set up the underneath of the house as a gym-cum-rumpus room. They were distressed about the damage to their goods and the loss of use of underneath the house as a living area. In December 2014, the tenants emailed the agent, Rental Express Pty Ltd, advising that they were considering moving out.
- The tenants were advised to issue a notice to remedy breach. They did not. After some fruitless negotiations with Rental Express, on 11 February 2015, the tenants moved out.
- Rental Express issued invoices for as break lease fee, rent due and owing and advertising for a total of $596.15. The tenants paid rent of $57.15 and Rental Express dropped the claim for $99 for advertising. The tenants then filed a claim in the tribunal for relief against payment of all three items. The tribunal agreed, and ordered the bond be paid to the tenants.
- Rental Express wants to appeal that decision. Because this is an appeal from a decision of the tribunal in its minor civil disputes jurisdiction, leave is necessary. Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.
- Rental Express submits that the tribunal erred in waiving compliance with the mandatory requirement for the tenants to issue a notice to remedy breach. It says that, as the tribunal has determined that the Residential Tenancy and Rooming Accommodation Act 2008 (Qld) (RTRA Act) is proscriptive, the tribunal had no discretion to waive compliance with a requirements of the Act. It wants an order that the tenants pay the break lease fee and rent from the time they vacated to the time a new tenant occupied the house.
- The tribunal was aware that, ordinarily, the tenants should have followed a process: they should have delivered a notice to remedy breach and, if the breach was not remedied, given a notice of intention to leave. The tribunal was referred to a decision of Senior Member Oliver in which he found that, if the RTRA is to be relied on, the procedures set out in the Act must be followed. However, the tribunal distinguished this case from that before Senior Member Oliver because of a representation by Ms Hartshorn from Rental Express: “Let’s all stay positive and see what we are dealing with after we get tenants and negotiate then” on which the tenants relied. The tribunal found that it was unfair to allow Rental Express to rely on the tenants’ failure to follow procedure when the failure was, on the balance of probability, attributable to the representations.
- Rental Express is correct that the tribunal has a long history of authorities which state that the Act is proscriptive and, unless there is a specific discretion to do so, the tribunal cannot waive compliance with the requirements of the RTRA Act. There is no such discretion for break lease situations. The tenants did not issue the correct notices. They breached their tenancy agreement when they vacated. Similarly, the appeals tribunal has found that the tribunal’s obligation to act fairly does not override the proscriptive nature of the RTRA Act. The result of this case may be unfair to the tenants but, if their claim is not supported at law, the tribunal has no capacity to craft what it consider a fair result.
- Because the tenants breached the tenancy agreement, Rental Express was entitled to claim damages. At the hearing, Rental Express quantified that claim as the break lease fee of $440 plus a week’s rent at $228.55.
- The tribunal made no finding about the claim by Rental Express, except that “the response to the claim fails because of the representation”. The tribunal’s reasoning was in error. There was no reason for a finding that Rental Express was not entitled to damages for the tenants’ breach of the tenancy agreement. The proper approach was to accept these damages and then examine whether the tenants had valid claim for compensation.
- It is apparent that the tribunal addressed the tenants’ claim on its face, and as a claim for misrepresentation, rather than assessing whether the tenants’ claim fell within any of the compensation provisions in the RTRA Act. In fact, the tenants appear to have claimed compensation for either breach of the tenancy agreement or a claim for a reduction in rent for loss of amenity.
- The difficulty with a claim for breach of contract is that the tenants did not quantify their loss or provide any evidence of a financial loss. Indeed, in an email from Ms Finch to Rental Express dated 24 November 2014, she noted that the tenants were able to save most things and it was just a question of cleaning. A claim for damages for breach, on the material before the tribunal, would not have succeeded.
- A tenant can apply for a reduction in rent if the premises are destroyed, made completely or partly unfit to live in, if facilities provided under the agreement are no longer available or if the amenity or standard of the premises decreases substantially. If I accept that this is the basis on which the tribunal declined to order the tenants pay Rental Express a break lease fee, then I must also accept that the tribunal found there was a basis for a rent reduction.
- The house was not destroyed. Flooding of a downstairs storage area, which was obviously not a habitable space, does not render a house unfit to live in, or even partially unfit. For the same reason, I do not accept that there was a substantial reduction in the amenity of the house simply because the under house storage space was flooded.
- It might be argued that the storage facility was no longer available to the tenants. The tenants argued that all the underneath area was designated as storage. Rental Express argued that, because the house was advertised with a tandem car park and a laundry, only the balance of the underneath could be classified as storage. It says that this area remained dry.
- The tribunal found that all the underneath area was within the meaning of storage. I disagree; the wording of the advertisement clearly notes two garage spaces and under-house storage. That the tenants found the car parking awkward and impractical does not transform a garage into storage space for which Rental Express is responsible. If the tenants chose to use the garage for storage, then they took that space as they found it.
- Even if I am wrong about the character of the space, I am satisfied that the tribunal erred. The effect of its order, to waive responsibility for the break lease fee and rent, was to give the tenants compensation of about $50 per week for the loss of the storage space. The weekly rent was $440. The tenants had the use of the house without interruption. A reduction in rent of over 10% for the loss of under-house storage is excessive.
- The area Rental Express nominated as storage area is about 1/6 of the total under-house area. I cannot find any basis for a finding that the flooding of 1/6 of a concreted area underneath a Queensland house at the bottom of a steep concrete driveway amounts to a substantial decrease in the amenity of the premises. There should be no finding that the tenants were entitled to a reduction in rent.
- Leave to appeal should be granted and the appeal allowed. The decision of 5 May 2015 is set aside. Because the bond has been paid to the tenants in error, I order that Sarah Finch and Glen Sweeney pay Rental Express Pty Ltd $668.55 by 22 October 2015.
 QCAT Act s 142(3)(a)(i).
 Pickering v McArthur  QCA 294 at .
 Transcript page 1-35, lines 7 – 11.
 Negus t/as Run Property v Newell  QCATA 120.
 Marsellos Pike Real Estate v Pike  QCATA 316 at .
 Transcript page 1-36, lines 15 – 16.
 RTRA Act s 419.
 RTRA Act s 94.
 Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125-126.
 Chambers v Jobling (1986) 7 NSWLR 1 at 10.
 Transcript page 1-34, lines 28 – 33.
 Transcript page 1-4, line 38 to page 1-5, line 7.
 Exhibit 1.
- Published Case Name:
Rental Express Pty Ltd v Finch & Sweeney
- Shortened Case Name:
Rental Express Pty Ltd v Finch & Sweeney
 QCATA 149
Senior Member Stilgoe OAM
01 Oct 2015