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Pennell v Harrison-Gibb QCATA 151
Pennell & Anor v Harrison-Gibb & Anor  QCATA 151
12 August 2016
6 October 2016
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – FUNCTIONS OF APPELLATE COURT – IN GENERAL – where the applicants were the lessors of a rental premises – where the applicant seeks leave to appeal a tribunal decision to award the respondents compensation for rent paid to live in uninhabitable premises – where the tribunal made findings of fact based on photographic and oral evidence – whether the decision was unreasonable – whether the tribunal made a mistake of fact – whether those findings of fact should be overturned
LANDLORD AND TENANT – OBLIGATIONS, PROHIBITED MATTERS AND PROTECTION FOR LESSEES – INSPECTION AND REPAIR – where the parties entered a fixed term tenancy – where the respondents issued a maintenance request – where the request went unremedied – where a wet patch in one bedroom meant it was uninhabitable – where the respondents paid until the end of their tenancy – where the tribunal awarded compensation – whether the tribunal assessed the correct quantum of rent reduction
Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 6, 142(3), 147
Residential Tenancies and Rooming Accommodation Act 2008 (Qld) s 185
Campbell v Donker  QCATA 6
Fox v Percy (2003) 214 CLR 118
Johnson v Perez (1988) 166 CLR 351
APPEARANCES and REPRESENTATION (if any):
Ms L McIvor
Mr D Ferguson
REASONS FOR DECISION
- The applicants (lessors) apply for leave to appeal a tribunal tenancy decision in T108/15 because they claim that ordering them to pay the tenants compensation of $2035 for not maintaining the tenancy in a habitable state was based on a mistake of fact and unreasonable.
- The parties signed a general REIQ tenancy agreement for a fixed term of six months from 13 November 2014 to 12 May 2015 at a weekly rental of $370 (or $52.86 per day). The roof of the premises was covered with a tarpaulin throughout most of the tenancy and was replaced shortly after the tenants left.
- On 23 January 2015 (about two months into the tenancy), the tenants made a maintenance request to fix water that had apparently seeped down the walls from the roof and up through the carport to the fourth bedroom, making it “smelly, musty and stale”. A plumber found no evidence of leakage or water marks leading from the roof to the wet bedroom carpet but conceded that leaks were hard to find in that sort of roofing and left open the possibility of water entering under the tarpaulin covering the roof during rain. No further leaks were reported by the tenants or complaints made about mould until after the termination date but their son did not use the room for the rest of the tenancy because of health concerns.
- The tenants vacated on 2 April 2015 after serving the lessors with a Form 13 notice of intention to leave “without grounds” on 21 March 2015. The rent was up to date when the tenants left and was paid in full right up to the expiry date on 12 May.
- Lessors have a legal duty to provide, maintain and repair premises safe for the tenant to live during the period of the tenancy. Leakage, stale smells and mould can all amount to loss of amenity or breach of the liveability term in s 185(3)(a)&(b) but it is a matter of degree and trivial inconvenience will not suffice.
- Thus, the issue for the tribunal to decide was whether the lessors were in breach of the tenancy agreement in failing to provide a fully liveable four-bedroom house for the full tenancy period. The tenants did not have to prove total uninhabitability to recover compensation.
- The tribunal relevantly concluded at 1-87 from line 25:
“I have carefully considered all of the evidence, both in affidavit or statutory declarations, the attachments thereto and the evidence and cross-examination of all of the witnesses … (T)he cross-examination … did give me an opportunity to assess the witnesses’ credibility…and to make a determination about who I thought was being a reliable witness in the matter.
… (T)here was a complaint of water laying in the back room. Whether or not there was a complaint of mould … of water having egressed and laying in and a smell indicative of water laying in that room. Any resident of Central Queensland knows what that usually leads to, particularly through that time of the year. (The lessors) confirmed that there was other water egress into that room when the bathroom pipe burst or split one year earlier when there were other people occupying that residence under a tenancy. Those tenants apparently left the tenancy early…
(The lessors) submit… this claim for compensation is effectively a set up, that there was no water in the room, that the plumber came and made some inquiry and found nothing, there was no further complaint, there was the weather even of the cyclone and no further water damage, that the roof was replaced, although there was nothing wrong with it … that there was no mould. (The lessors) explained… the house having been fully renovated some time earlier and of the earlier incident with water leaking into that back bedroom in…2014… was fixed…
The (tenants) claim … even though there was a spare bedroom, no-one could use that room, the applicant’s daughters were in other bedrooms, and that the house became so uninhabitable, that they had to move out and take on another alternate residency on or from the 2nd of April 2015. … The incontrovertible evidence to my mind is that the roof was repaired at about the time of the application for the termination. Indeed, work commenced on that on the afternoon following the original application for termination of the residence…it strikes me of indicative of a problem with the roof to go to the trouble of actually replacing it…the tenants complied with their obligations, full rent was paid, notices were given about the water damage and water entry.. it would be a very elaborate scheme indeed to lay water about and then hide it, clean it, mop it up, dry it up and move all of the furniture when (a co-lessor) comes along to inspect it…
If the applicants were going to these measures to set up this claim for compensation and they were seeking to make up some water problem to get out of their lease, they’d hardly ensure that there was no evidence of it… and that this scheme was all done to be relieved of their rental obligation of the property that they actually continued to pay rent on right up until the end the term of the tenancy. Further to that, that they would go to the extent of actually moving out, go to the added expense of taking over another rental lease just to support this claim, to my mind, simply beggars belief. The material filed and the evidence provided before me is instead consistent with a valid complaint, which was initially made in January, which was followed by no action, a breakdown in communication and at – and after a level of frustration, led to the applicants actually vacating the premises…
…The lease expired on 12 May 2015…
(T)he claim is…a little in excess of $5000, being for the rent cost that they incurred at the residence…from the time of the initial water damage complaint in January…(T)hat claim I do not consider can be supported. However, I do consider it appropriate, considering all of the evidence and the submissions made to make a compensation order for the extra rental expenditure incurred for the final five weeks of the tenancy…
(T)he order that I make is that the Residential Tenancies Authority pay out to the tenants the sum of $1480 rental bond and further that the respondents pay to the applicants the sum of $2035 representing for compensation...”
The application for leave
- The lessors challenge the correctness of the tribunal’s findings on the basis that:
- the tribunal did not consider or give any weight to the fact that the respondent had been residing in the residence since November 2014 and did not complain about water, mould or any other issue relating to an alleged water leak apart from the one incident on 22 January 2015; and
- the tribunal wrongly mistook the mark as shown on each of the (deceptive) photographs as a water stain when it was actually a defect in the film or aperture of the camera and has nothing to do with the wall;
- the only evidence of water leakage through the roof or any other part of the house was the tenants’ complaint on 22 January 2015 that a patch of water was found on the carpet in a corner of an unoccupied fourth bedroom;
- the wet patch could have simply been a spillage;
- an independent plumber inspected the roof and found no indication of a leak to the house;
- the real estate agent found no evidence of any leak or ingress either;
- as a result of the complaint, the owners (out of an abundance of caution) erected a tarpaulin over the bedroom to prevent any further alleged water ingress;
- Cyclone Marcia hit the Gladstone area in February 2015; but there is no evidence of any leak occurring as a result of that (or any other) rain event.
- the tribunal placed excessive weight on the fact the roof was repaired in May 2015 but did not take into account the new roof had nothing to do with water leaks at all;
- the tribunal had no evidence whatsoever that the house was uninhabitable, because even if a small wet patch was present on 22 January 2015, this falls short of showing that the house was uninhabitable.
The appeal process
- Appeals from tenancy orders lie only with leave, regardless of whether they raise legal, factual or mixed questions. The distinction between a question of law and fact is elusive, but important because it governs the principles and procedures for deciding appeal proceedings. An appeal on a question of fact, or mixed fact and law, is decided by way of a full rehearing on the merits under s 147 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) with any additional evidence allowed. A major function of the leave requirement is to ensure that the tribunal’s finite judicial and administrative resources are reserved for viable appeals and not wasted on those lacking merit.
- The appeal tribunal’s role is remedial – that is, it corrects error and remedies substantial injustice. The inferences of fact on which the tribunal’s decision depends are appellable on matters of law (if they are only unsupported by any evidence or are glaringly improbable or contrary to overwhelmingly contrary or opposite inferences; in which case, the appeal tribunal must intervene to prevent injustice.
- If, by contrast, they are rationally open, they are unimpeachable – even if contestable. Properly characterised, the application for leave does not involve any alleged legal error and complains solely about suggested deficiencies in the fact-finding process, which is not easy to make out in an application for leave or on appeal.
- The tribunal’s conclusions about what happened and where fault lay cannot be faulted and (though arguably controversial) must stand. There is nothing inherent improbable about the basis of the tenants’ claim – even if some of their actions were contradictory or inconsistent. The tribunal was legally entitled, if not compelled, to accept that the bedroom was unfit for occupation even if the contrary was just as plausible. There is no error in preferring one logical inference to a rival other when deciding the liability issue, even if most other people would have found in the other direction.
Quantum of compensation
- However, in deciding that it was “appropriate, considering all of the evidence and the submissions made, to make a compensation order (for the payment of $2035) for the extra rental expenditure incurred for the final five weeks of the tenancy”, the tribunal has made an error of law needing correction on appeal to avoid financial injustice to the lessors.
- While it was clearly fair and equitable for compensation to be ordered to remedy the lessors’ breach, the tenants are only entitled to be put back in the same position (insofar as money can) as they would have occupied if they had actually got what they paid for a – a four bedroom home.
- Where, as here, there is no evidence of any real difference in rent for a comparable property and no claim is made for aggravated losses such as health concerns or significant discomfort, rent reduction is the standard means of compensation for partial loss of amenity. The amount payable is quantified as the market value of the unusable bedroom which, I think, can reasonably be fixed here at $60 in all the circumstances.
- As the tenancy had now ended, the tenants are entitled to have their rent account credited with 14 weeks and 4 days’ rent reduction at $60 per week or $874.20; that is, the total amount of the loss between the maintenance notice date (23 January 2015) and the tenancy expiration date (12 May 2015).
- Leave to appeal is granted.
- The original decision in T108/15 to award the respondents $2035 be set aside.
- The respondents’ rent account be credited in the amount of $874.20.
- The credit be discharged by a payment by the applicants to the respondents of $874.20.
Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRA Act) s 185.
 See RTRA Act s 185(2)(a), 3(a),(b).
 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) s 142(3).
 Fox v Percy (2003) 214 CLR 118.
 Johnson v Perez (1988) 166 CLR 351.
Campbell v Donker  QCATA 6; QCAT Act s 6.
- Published Case Name:
Pennell & Anor v Harrison-Gibb & Anor
- Shortened Case Name:
Pennell v Harrison-Gibb
 QCATA 151
06 Oct 2016