Hurst v Pyatt[2017] QCATA 101

REASONS FOR DECISION

What is this appeal about?

1. [1]
   Daniel Hurst rented a residential property to Christopher Pyatt and Thanyaporn Kruthbangyang. Under the General Tenancy Agreement, the tenancy was from 6 February 2016 to 3 February 2017. However, the tenants vacated early on 19 December 2016.  
2. [2]
   On 22 March 2017, the Tribunal, constituted by two Justices of the Peace, ordered that the Residential Tenancies Authority pay $307.09 to the Lessor and $757.37 to the tenants, from the bond balance of $1064.46. The Tribunal also ordered the Lessor pay $1125.00 to the Tenants as a retrospective rent reduction.
3. [3]
   Mr Hurst wants to appeal that decision.
4. [4]
   Because this is an appeal from a minor civil dispute, leave is required.^[1] In determining whether to grant leave, the Tribunal will consider established principles including:

1. (a)
   whether there is a reasonably arguable case of error in the primary decision;^[2]
2. (b)
   whether there is a reasonable prospect that the appellant will obtain substantive relief;[3]
3. (c)
   whether leave is needed to correct a substantial injustice caused by some error;[4]
4. (d)
   whether there is a question of general importance upon which further argument and a decision of the Appeal Tribunal, would be to the public advantage.^[5]

5. [5]
   I will address the grounds of appeal below.

Was the evidence capable of supporting the Tribunal’s findings?

6. [6]
   The learned Justices awarded water usage for the period from November 2016 to the vacate date of 20 December 2016. Mr Hurst submitted that he should have been awarded water usage from August 2016 to November 2016, being an extra $90.00.
7. [7]
   Lessors are entitled to have tenants pay water usage charges only if the premises are individually metered,^[6] the Tenancy Agreement provides that the tenant must pay,^[7] and the premises are water efficient.^[8] Fixed water charges in a bill (water access and sewerage access) are never payable by a tenant and remain the lessor’s responsibility.
8. [8]
   The Tenancy Agreement provides that the tenant is required to pay water consumption charges for the premises.^[9] The Tribunal must then determine whether the premises were water efficient and the level of water consumption. These are findings of fact. The Appeal Tribunal will not usually disturb findings of fact on appeal if the evidence is capable of supporting the conclusions.^[10] However, the Appeal Tribunal may interfere if the conclusion is ‘contrary to compelling inferences’ in the case.^[11]
9. [9]
   Because the only evidence before the learned Justices to support the claim for water usage comprised invoices from the property agent without evidence of water efficiency or a legitimate utility invoice to establish usage,^[12] the claim for water usage was not sufficiently substantiated.^[13]
10. [10]
    The learned Justices were in error in awarding the Lessor water usage and leave to appeal must be granted to correct a substantial injustice. Because the appeal is on a finding of fact, the Appeal Tribunal must decide the matter by way of rehearing.^[14]

Was the Tribunal able to award $1125.00 as a rent reduction or compensation for the dishwasher?

11. [11]
    The Lessor submitted that the Tribunal erred in awarding a rental reduction of $25.00 per week for the broken dishwasher because the Tenants made the claim outside the six-month time limit under s 419 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld).
12. [12]
    However, the Tenants’ claim was not for an order from a breach of the Tenancy Agreement. Rather, the Tenants’ claim was for a rent decrease from loss of amenity under s 94 of the Act because of the loss of use of the dishwasher. This means that the time limit does not apply:

When section 94 is relied on, the time limit in section 419 is beside the point. The (Act) 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.^[15]

13. [13]
    The learned Justices based their decision on the Tenants’ loss of use of the dishwasher for 45 weeks. That relates to a loss of amenity or standard under s 94. Their decision was not based on a finding of a breach a term of the Tenancy Agreement. Section 94 is not subject to the time limit attached to s 419.^[16] 
14. [14]
    However, 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,^[17] or the amenity of the premises decreases substantially other than because of malicious damage by the tenant.^[18] This requires a finding of fact that the issues with the dishwasher resulted in the premises being at least partly unfit to live in or the amenity or standard of the premises decreased substantially.^[19]
15. [15]
    The learned Justices did make a finding that the Tenants did not have use of the dishwasher for 45 weeks^[20] - the entire period of the tenancy. However, the learned Justices did not then proceed to make any finding whether this resulted in the premises being partly unfit to live in or resulted in a substantial decrease in amenity. In the absence of any such finding, the Tribunal was unable to award a rent reduction under s 94.
16. [16]
    Awarding a rent reduction without such a finding is an error of law and leave to appeal must also be granted on this ground. Because this is an error of law, the Tribunal may set aside the decision and substitute its own decision.^[21]
17. [17]
    The Lessor noted on the Entry Condition Report at the start of the tenancy that the dishwasher door had dents and scratches, while the Tenants noted that the dishwasher door handle was broken. As these problems with the dishwasher were present from the start of the tenancy, there could not have been a reduction in amenity because of them.^[22]
18. [18]
    The Tenants then claim to have reported the drawers were falling off due to the run-down nature of the dishwasher at the first routine inspection by the agent on 9 August 2016. Despite this, the Tenants did not apply for any rent reduction at that time or for the remainder of the tenancy. Instead, they applied for a “retrospective rent reduction” by way of counter-application filed on 7 March 2007 – some three months after they vacated.
19. [19]
    The Appeal Tribunal has previously held that s 94 does not provide for compensation by way of a lump sum:

All section 94 permits, upon application, is a decrease of rent for a specific amount rather than lump sum compensation calculated by the amount of the rent reduction and the period of time over which the amenity or standard of the premises has been decreased… The section contemplates that if there is a change in the liveability, amenity or standard of the premises, absent agreement between the lessor and the tenant as to the amount of the reduction, a tenant would make application to the Tribunal for an order decreasing the rent and presumably that rent would continue for the remainder of the term or until the premises are brought up to the standard they were at the commencement of the tenancy.^[23]

20. [20]
    In other words, 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.
21. [21]
    Moreover, the remedy is discretionary and the Tribunal may refrain from making an order reducing the rent if it would be unjust to make such an order.^[24] Delay may be relevant.^[25]
22. [22]
    I am not satisfied that s 94 permits a “retrospective” rent reduction, nor would it be just in 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.
23. [23]
    Although the Tenants did not apply for compensation for breach of the residential tenancy agreement under s 419, for completeness I would say that any such application would need to have been made within six months of the Tenants becoming aware of the breach.^[26] The Tenants claim that the dishwasher was broken on entry. They did not file their counter-application until 9 March 2017, nor a Dispute Resolution Request with the Residential Tenancies Authority at all.^[27] Accordingly, any such application is well out of time.
24. [24]
    The learned Justices were in error in awarding the Tenants a rent reduction. Having considered the evidence as set out above, I am not satisfied that any rent reduction is allowable. 

Should the Lessor be awarded an amount for water usage?

25. [25]
    To support his claim, the Lessor filed a water utility invoice^[28] as a document attached to his Application for leave to appeal or appeal. The document attached to the Lessor’s appeal application is fresh evidence. Fresh evidence will only be accepted if it was not reasonably available at the time the original proceeding was heard and determined. Ordinarily, an applicant for leave to adduce fresh evidence must satisfy three tests. Could the parties have obtained the evidence with reasonable diligence for use at the trial? If allowed, would the evidence probably have an important impact on the result of the case? Is the evidence credible?^[29]
26. [26]
    The Lessor did not explain why he did not submit this invoice at the original hearing. The Tribunal is not bound by the rules of evidence and may inform itself in any way it considers appropriate.^[30] However, the Tribunal must observe natural justice.^[31] Parties must be allowed to test the evidence and present evidence in response. The Tenant was not given this opportunity.  An application for leave to appeal is not, and should not be an attempt to reargue a party’s case at the initial hearing.^[32]
27. [27]
    Moreover, the invoice would not have an important impact on the result of the case because without evidence of water efficiency, water usage charges cannot be claimed. The invoice’s only relevance would be to determine any excess consumption above average consumption.^[33]
28. [28]
    However, this is only one factor the Tribunal must consider in order to decide an amount payable for excess water usage - other factors include the area of the relevant land, the presence or absence of water-saving devices and the quantity of water for which the Lessor should reasonably be liable.^[34] Without evidence of these other factors, the utility invoice will have little impact and should not be admitted. The application for leave to appeal must proceed on the evidence before the learned Justices.
29. [29]
    Because the claim for water usage is not substantiated, it must be dismissed.

Should the Lessor be awarded compensation for repairs?

30. [30]
    The Lessor submitted that the Tribunal should have awarded him $340.00 to $390.00^[35] for repairs to the front media room, hallway, family room and bedroom 2. To support his claim, the Lessor attached to his Application for leave to appeal or appeal an unsigned and undated Exit Condition Report.
31. [31]
    Again, this document is fresh evidence. The Lessor did not explain why he did not submit this Report at the original hearing. At the Appeal Hearing, Ms Sullivan for the Lessor said to the best of her recollection it was created between January and March 2017.  It is therefore unclear whether it came into existence before or after the original hearing. Certainly, it was not created at the time the Tenant vacated. As it is not signed and dated and has not been established as a contemporaneous document, little - if any - weight can be attached to it. The Report should not be admitted and the application for leave to appeal must proceed on the evidence before the learned Justices.
32. [32]
    The learned Justices dismissed the Lessor’s claim because they found that the marks on the walls noted in the Entry Condition Report were the same problems experienced on exit.^[36]
33. [33]
    The Entry Condition Report noted marks on the walls of all bedrooms except bedroom 1. It does not note any existing damage to the hallway or media room. However, Mr Pyatt gave oral evidence about the marks at the start of the tenancy^[37] and refuted how the Entry Condition Report had been completed on behalf of the Lessor:

MR PYATT: Might I also add to that, that the real estate agent did not notice any of these marks or make any notification (sic) on their side of the entry condition report, other than to state that the walls were painted cream. They didn’t do an entry condition report. They did a – sort of like this is what the house looks like, rather than have the condition of the property.^[38] 

34. [34]
    Although the learned Justices did not expressly refer to all the evidence when delivering their findings, it is implicit that they preferred Mr Pyatt’s evidence over the Agent’s evidence when making their findings about the repairs. I have read the transcript and considered the material before the learned Justices. The Entry Condition Report is but one fabric in the tapestry of evidence. The Agent had changed property managers since the start of the tenancy, while Mr Pyatt had been present both at the start and upon vacating. The learned Justices were entitled to give more weight to his evidence.
35. [35]
    Nothing in the material or the transcript persuades the Appeal Tribunal to depart from the finding about the repairs by the learned Justices. 
36. [36]
    The Lessor’s claim for repairs is dismissed.

Should the Lessor be awarded an amount for cleaning?

37. [37]
    The Lessor submitted that because the Tenant only paid for a part bond clean due to the assumption that the Lessor was renovating, the Tenant should be responsible for the cost of cleaning the remainder of the property of $132.00.
38. [38]
    The Lessor attached two statutory declarations to his Application for leave to appeal or appeal.^[39] Again, these documents attached to the Lessor’s appeal application are fresh evidence.
39. [39]
    The Lessor did not explain why he did not obtain this evidence earlier, other than it was prepared in response to what the Tenant had said at the hearing and he did not previously know the Tenant would say it.
40. [40]
    However, as the person making the claim, the Lessor must prove his case. The appeal process is not an opportunity for a party to again present their case.^[40] It is the means to correct an error by the Tribunal that decided the proceeding.^[41] The minor civil disputes jurisdiction requires the Tribunal to deal with matters fairly, quickly and economically.^[42] This means that parties may not be aware of every argument and submission to be raised by their opponent before the hearing.
41. [41]
    Moreover, the statutory declarations would not have any impact on the result of the case because they do not address the finding by the learned Justices that the Lessor failed to establish that the two visits by the bond cleaner were insufficient to get the cleaning done to a proper standard.
42. [42]
    Although both the Agent and the Tenant gave hearsay evidence about what the bond cleaner told them about renovations, this was not the basis for the learned Justices dismissing the claim. They simply found the Tenant’s bond clean was done to a proper standard. The learned Justices having received oral evidence from both the Agent and the Tenant about the cleaning, I find no reason to depart from their finding. 
43. [43]
    The Lessor’s claim for cleaning is dismissed.

Should the Lessor be awarded an amount for carpet repairs?

44. [44]
    The Tenants requested that the Appeal Tribunal overturn the decision to order them to pay repairs for the carpet of $276.60 because the evidence was “sketchy and the general tone of their claim is based on false and misleading information”.
45. [45]
    The learned Justices were in the best position to assess credibility. I have read the transcript and other material. Nothing in that material establishes that the agent’s evidence was false and misleading. The Lessor’s claim is supported by a contemporaneous invoice.^[43] Mr Pyatt’s evidence was unclear about which carpets were stained at the start of the tenancy.^[44]
46. [46]
    Having read the transcript and other material, nothing persuades me to depart from the finding of the learned Justices to allow the claim.

Should the Tenants be refunded $28.94 due to the non-working water pump?

47. [47]
    The Tenants sought a refund of $28.94 for a water bill they paid. Unfortunately, they did not provide a receipt or any other evidence to prove they had paid this amount.
48. [48]
    Without supporting evidence of the amount paid, the claim for a refund is not substantiated and must be dismissed,

Should the Tenants be compensated $466.00 for increased electricity charges from the replacement hot water system?

49. [49]
    The Tenants sought $466.00 for increased electricity charges due to the Lessor replacing the hot water system with a less efficient system after an alleged faulty valve. However, the Tenants did not file any documentation to support the amount claimed or when they suffered any loss.
50. [50]
    Again, without supporting evidence of any loss, the claim is not substantiated and must be dismissed.

What are the appropriate Orders?

51. [51]
    Because the Tribunal erred in awarding to the Tenants a rental reduction of $1125.00 and in awarding to the Lessor water usage of $31.09, leave to appeal is granted and the appeal is allowed. This means that the Lessor has succeeded only in his claim for carpet damage of $276.60, while all the Tenants’ claims have been dismissed, including the rent reduction of $1125.00.
52. [52]
    The bond held by the Residential Tenancies Authority was $1064.46. Accordingly, upon rehearing the matter the appropriate Orders are:

    1. Leave to appeal granted.
    2. The appeal is allowed.
    3. The Tribunal’s decision of 22 March 2017 is set aside.
    4. The Tribunal substitutes its own decision as follows:

1. The Residential Tenancies Authority pay the bond of $1064.46 as follows:

1. To the Lessor $276.60;
2. To the Tenants $787.86.

2. The counter-application is dismissed.

53. [53]
    The Appeal Tribunal notes that in reality, the Residential Tenancies Authority has already paid out the bond of $1064.46 and the Lessor has paid the Tenants $1125.00, as ordered by the learned Justices. The parties will need to adjust their respective positions in accordance with these reasons.