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Stewart v Penrose QCATA 119
Stewart v Penrose  QCATA 119
Application and Appeals
On the papers
25 October 2017
THE APPEAL TRIBUNAL ORDERS THAT:
APPEAL – LEAVE TO APPEAL – LANDLORD AND TENANT – RESIDENTIAL TENANCIES LEGISLATION – OTHER MATTERS – where the landlord issued an abandonment notice – whether the notice was capable of review by way of rehearing – where the tenant was in rental arrears – where an urgent matter was referred by the tribunal for mediation – whether prior mediation can satisfy a statutory requirement for conciliation in a related but separate claim – where leave to appeal refused – where the respondent’s claim is struck out for non – compliance with a mandatory conciliation condition
Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 3, 4, 36, 75, 77, 138
Residential Tenancies and Rooming Accommodation Act 2008 (Qld) s 355, 356, 357, 359, 361, 363, 398, 415, 416, 419
Adams v Scowcroft  QCATA 25
Big4 Brisbane Northside Caravan Village v Schliebs  QCAT 277
Delahoy & Grevell v Wuiske & Anor
 QDC 276
Devayne v Noble (1816) 1 Mer 572
Macdav Pty Ltd v Alliswell Pty Ltd
 VACT 2436
Raymond v Doidge  QCAT 163
Aurisch v Millsons Pty Ltd & Ors
 QCAT 245
APPEARANCES and REPRESENTATION (if any):
This matter was heard and determined on the papers without the attendance of either party in accordance with s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (“QCAT Act”).
REASONS FOR DECISION
- This is an application for leave to appeal tribunal decisions in residential tenancy claims 1120/16 (misnumbered 34/16 in the application), 42/16 and 69/16.
- The decision in 1120/16 was made in Gympie on 13 September 2016 in a review of 34/16 filed in Brisbane on 29 April 2016.
- The issue was whether and when a tenancy agreement was terminated by abandonment.
- The decisions in 42/16 and 69/16 were made in related proceedings. 42/16 was filed by the applicants on 8 April 2016 seeking the urgent return of goods seized from the premises after deemed termination under s 355 Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRAA). 69/16 is the respondent’s claim filed on 25 May 2016 for compensation of the costs of retaking and reinstating the abandoned premises.
- The tribunal ordered the parties mediate 42/16 before any decision was made in 69/16.
- Mediation was held on 26 April 2016 but it did not settle the dispute and 42/16 was relisted for hearing on 10 May 2016. It was later adjourned together with 69/16 and 1120/16 to the 14 June 2016.
- An applicant for leave to appeal has the burden of demonstrating one or more of the following grounds: an arguable case of error of law or fact, a reasonable possibility of obtaining a better result or alternative relief, a substantial injustice in need of correcting, or that the appeal tribunal’s consideration and decision on a question of general importance would be to public advantage.
QCAT proceeding 1120/16
- The applicant relies on five grounds to obtain leave.
Ground 1 – Error interpreting s 361 RTRAA
- The tribunal is said to have misstated the law as to the effect of s 361 RTRAA. That section allows for the review of an abandonment decision or order made under s 357 RTRAA. It does not expressly apply to disputes about abandonment termination notices.
- An abandonment termination notice can be given under s 355(1) RTRAA by the lessors to the tenant in the approved form if there are reasonable grounds to believe that the premises have been abandoned.
- A tenant may apply within seven days of receiving an abandonment termination notice to set it aside or for compensation under s 356 RTRAA.
- However, if an application to set aside is not made within the 7 day time limit the premises are deemed by s 355(4) RTRAA to have been abandoned by the tenant and the tribunal may make any of the orders mentioned in s 356(3)(b) RTRAA including in (iii) any order (in addition to termination or compensation) it considers appropriate.
- The practical effect is that tenants automatically deemed to have abandoned the premises by operation of s 355(4) are precluded from ever again challenging the terminating effect of the notice.
- An abandonment order by contrast involves an application to the tribunal under s 357 RTRAA as an alternative to giving an abandonment termination notice. The application may be decided by the tribunal or registrar having regard to factors listed in s 357(6). If the premises are declared abandoned the tenant is taken to have left on the day stated in the order. A dissatisfied former tenant may apply under s 361 for the declaration of abandonment to be reviewed by the tribunal by way of rehearing within 28 days. The only order the review tribunal can make, if satisfied that the premises were not abandoned as at the stated day, is compensation.
- The problem here is that abandonment is deemed under s 355(4) RTRAA if the stated action is not taken within 7 days of receiving the abandonment termination notice, whereas an order setting aside the notice under s 356(3)(a) may only be made if the application “was made within 7 days after the notice was given”.
- The tenants denied receiving the abandonment termination notice until they returned to the premises around 7:30-8:00pm on 16 March 2016. By this time the gates had been locked and their vehicles impounded by the lessor on account of $5,000 rental arrears. The applicant applied within 28 days but after the lapse of 7 days for an order about the notice under s 361 RTRAA.
- Section 361(1) RTRAA serves much the same functional purpose as a reopening under s 138 QCAT Act and its analogues. It can alleviate hardship or disadvantage when (instead of giving an abandonment termination notice under s 355 RTRAA) a lessor chooses to apply for an abandonment order under s 357 RTRAA and a declaration is made ex parte on misleading or equivocal indicia.
- Here an abandonment termination notice was left in a letterbox at the unoccupied premises by the lessor’s agent on the night of 8 March 2016. As the applicant points out, when a tenant is given an abandonment termination notice and when he or she receives one may not actually coincide unless as a matter of construction a notice is received for RTRAA purposes when it is given.
- The tribunal ruled at  of the published reasons that:
I accept that the abandonment notice was in fact served on the 8 March, 2016 and that no application was made to dispute it within the timeframe and therefore the application to set it aside was determined. … I do not believe that section 361 provides for a review of that decision given that it was not an abandonment order as issued by the Tribunal but a deemed abandonment pursuant to section 355. Nonetheless if I am wrong on that matter the matter proceeded again on the 13th September and on the balance of probabilities for the reasons already set out I would decline to set aside the abandonment notice and dismiss the application to set it aside and thus the premises are deemed abandoned.
- As to this the applicant says at 1.15 of their written submissions –
If it is accepted that a deemed abandonment under s 355(4) cannot be the subject of an application for review under s 361, but a finding under s 356 potentially can, where it includes, as it often would, a declaration that the person abandoned the premises on a stated day, then it can be seen that the apparent error of law in finding that the notice was received by the tenants when it was placed in their letter box, is actually the reason for the lack of such a declaration and hence lack of jurisdiction.
- No error of law is made out.
- When the dispute concerns a termination notice, a tenant is taken to have abandoned the premises unless action about the notice is taken under s 356 RTRAA.
- The “action” a tenant can take under s 356 is to apply for an order setting aside a disputed notice, if the application is made within 7 days after the notice was given under RTRAA s 356(1)(3)(a) or, if made between 7 and 28 days, an order terminating the agreement, compensation, or any other appropriate order under RTRAA s 356(3)(b)(i)-(iii).
- The relief in s 356(3)(b)(i) seems superfluous because s 355(1) and (4) have the combined practical effect of automatically terminating the tenancy agreement on the tenant’s failure to take remedial action under s 356 with 7 days after receiving the notice.
- The provisions of s 356 are for the benefit of a tenant disputing an abandonment termination notice within 28 days “after the notice was given” and if the action of applying under s 356(1) is not taken “within 7 days after receiving the notice” the tenant is deemed to have abandoned the premises and by necessary implication the notice terminates the tenancy agreement making any order to that effect unnecessary.
- Section 361, on the other hand, is unambiguously concerned with reviewing a decision or order of the tribunal or registrar declaring the premises to have been abandoned on a stated day.
- Only a dissatisfied “former tenant” may apply to the tribunal under s 361 RTRAA for a review of a decision declaring the person abandoned the premises on a stated day.
- What makes a tenant into a former tenant in this context is the declaration under s 357(4) RTRAA and not a deemed abandonment under s 355(4) RTRAA or an order under s 356(1).
- The effect of an abandonment termination notice (which can be an abandonment order made under s 357(4)) is not disturbed under a s 361(1) review, even if the tribunal is satisfied at the rehearing that the finding about when the premises were abandoned was in fact wrong. A former tenant who succeeds on the rehearing is only entitled to ‘an order under this section’ identified in s 361(5) RTRAA as “compensation for any loss or expense incurred by the applicant by the termination of the agreement”.
- The remedy for an alleged erroneous finding en route to making or refusing to make an order under s 356(3)(a) is an application for leave to appeal not a review by rehearing of the tribunal’s decision declaring that the person abandoned the premises. It is not appropriate to treat 1120/16 as an application for leave to appeal.
- Whether s 356(3)(b)(iii) is wide enough to allow the tribunal to make an order setting aside a s 355(1) abandonment notice more than seven days after it was given but within seven days of it actually being received is a moot point here because as the tribunal held at - of its reasons, s 361 RTRAA allows for the review of orders made under s 357, and not of a decision under s 356 RTRAA.
- Regardless of the correctness of the tribunal’s construction and application of s 361 RTAA the applicants have now had what they wanted anyway – a rehearing.
- Granting leave to appeal to argue this ground is not justified where to adopt the applicant’s own words at [2.2] of their submissions, “the tenants aren’t entitled to a review, but if they were, they have had one and they still lose”.
Ground 2 – Apprehended prejudgment or bias
- The applicants contend that it was wrong for the same Magistrate to hear both the application to set aside the abandonment termination notice on 31 March 2016 and the ‘rehearing’ or review of the application.
- There is no merit in this ground.
- Bias is not just a legal error but a breach of natural justice going to jurisdiction.
- There is no principle of natural justice precluding a regional tribunal from reviewing a deemed abandonment on the merits and, in any case, no recusal application was made and, therefore, any objection to the constitution of the tribunal was impliedly waived.
Ground 3 – Failure to consider formality of termination notice
- The tribunal made a credibility based finding reasonably open on the evidence that the respondent issued and gave four forms – the entry notice (Form 9), notice to remedy breach (Form 11), notice to leave (Form 12), and the abandonment termination notice (Form 15), all on the same day viz., 8 March 2016.
- The applicant contends, however, that there is “something fundamentally wrong” with a decision that allows a notice to leave to be issued before the expiry of the notice to remedy breach and at the same time as an abandonment termination notice.
- While some criticism of the respondent’s action can be made on this score the tribunal was deciding whether to make an order declaring that the premises were abandoned or not on the 8 March 2016 by reference to the considerations in s 357(6)(a)-(g) at a review by way of rehearing under s 361.
- Therefore, the legality of giving notice to leave before a remedy notice expires was not a matter of dispute the tribunal had to resolve to make a final order.
- The service of the documentation was in issue, not its formality.
- Leave on this ground is not warranted.
Ground 4 – Error in finding rent was paid in arrears
- The applicants assert that rent was up to date on 8 March 2016 – the date the notice to remedy arrears was given – because a pay authority they subsequently cancelled facilitated the payment on 22 February 2016 of rent two weeks in advance, or up to 9 March 2016. However, the tribunal found that rent was paid a fortnight in arrears and was due, but not paid, on 8 March 2016.
- The respondent testified that he “… obtained a copy of the (Centrelink) statements which confirmed the rent was paid to 22 February and that rent was paid in arrears”.
- The male applicant at the rehearing “… conceded that no rent had come through on the 8 March”.
- It was open to the tribunal to accept that rent was in arrears before and as at the termination date based on the respondent’s hearsay based testimony over evidence to the contrary by the applicants, whom the tribunal found to be generally untrustworthy witnesses of what had happened in the past.
- There is no merit in this ground.
Ground 5 – Error in relying on accrued rental arrears as a sign of abandonment
- This complaint relates to the review tribunal’s conclusion on 13 September 2016 in 1120/16 that the premises were abandoned from 8 March 2016 partly on the basis of unpaid rent.
- The failure of a tenant to pay rent under the tenancy is mentioned in s 357(6)(a) RTRAA as a factor the tribunal may have regard to in deciding whether to make an order declaring whether and when rental premises were abandoned.
- Historical rental arrears were, therefore, a contextual fact which together with the last rent payment in February 2016 “concerned” the respondent enough that by 7 March 2016 he unsuccessfully tried to contact the applicants about their intentions, triggering the abandonment termination process.
- Moreover, there was also uncontested evidence to the effect that the applicants were $5,000 behind in rent as early as 2011 and had been paying an extra $25 a week by way of repayment but stopped in 2013; that is, before the amount owing was paid in full.
- Weight and relevance are different evidentiary concepts. The RTRAA is clear that the existence of rental arrears is relevant evidence making abandonment of the premises more likely than not.
- There is no error of fact despite the matters referred to in the applicants’ written submissions at [5.4.1] – [5.4.3].
- This ground is not reasonably arguable.
QCAT proceeding 42/16
- This unresolved ‘urgent’ application is for the return of the applicants’ farm vehicles and machinery held by the respondent as security for outstanding rent before “the storage period expires next week”. It was filed under ss 365 and 415(5)(t) RTRAA on 8 April 2016 based on the contention that the property was towed away despite the notice requirements of s 363(7) being met.
- Urgent tenancy claims do not require Residential Tenancies Authority (RTA) conciliation.
- Also, section 365(1) allows former tenants claiming ownership of goods left on the premises (when they are dissatisfied with how the goods are being dealt with) to make an application for a tribunal order. The remedy provided for is compensation or “any other order it considers appropriate”. The applicants claimed full recovery of the goods.
- A former lessor may sell or dispose of goods left behind when a tenancy agreement ends if they are believed to be worthless or the cost of storage would exceed their market value. Otherwise, they have to be stored for a prescribed period before they can be sold, unless they are reclaimed by the former tenant or owner before the end of the mandatory storage period. A former lessor must let the person entitled to the goods retake possession of them if written notice is given before they are sold on the proviso that the owner of the goods pays for the reasonable removal and storage costs.
Grounds 6 & 7 – Errors referring an urgent matter to mediation and failing to order return of applicants’ property
- The grounds in 6 and 7 are intrinsically linked making it appropriate to consider them together.
- The applicants’ claim in ground 6 is that the Magistrate erred in requiring the parties to attend mediation in relation to the ‘urgent’ matter of 42/16. Ground 7 contends that the Magistrate erred in not ordering the applicants’ property be returned to them.
- In ordering QCAT mediation of the dispute the tribunal said at :
While it is accepted that the application for the return of goods was an urgent application and thus did not require conciliation process prior to lodgement the use of the term urgent … relates only to the process within the Act in terms of the prerequisites and does not mean urgent in the normal sense of the word. Therefore there is no basis to argue that the tribunal could not require the parties attend a compulsory mediation in a bone fide endeavour to resolve the issues.
- The applicants say at [6.6]-[6.7] of their written submission that because s 363(7) RTRAA permits tenants to reclaim possession on payment of reasonable storage costs for unsold goods left behind when a tenancy ends or claim compensation for loss under s 356(3)(b)(ii), the “finding (at ) that the “issue of the return of goods is extrinsically tied up in the counter claim of the landlord for compensation of the costs of the abandonment and should be considered together” is wrong at law.
- It is also said to be wrong for an ‘urgent’ matter within the meaning of the RTRAA to be sent to mediation further delaying the return of goods which were arguably seized for an illegal purpose described in section 95 and adding to the tenant’s loss and expense of the type envisaged by section 356(3)(b)(ii).
- Thus, the ‘urgent’ recovery claim proceeded to private mediation without the parties consent.
- According to the applicants the tribunal should not have forced mediation on the parties but used the opportunity of the hearing on 14 June 2016 of 1120/16 regarding the abandonment notice to take evidence as to what the reasonable removal and storage costs were and made orders for the return of goods in exchange for payment of those amounts ordered.
- The tribunal has a responsibility to achieve the objects of the QCAT Act by encouraging early and economical resolutions including, if appropriate, through alternative dispute resolution methods using available expertise, experience and specialist knowledge. Referring an ‘urgent’ matter to compulsory mediation is unobjectionable if it was done for the purpose of promoting settlement instead of litigation of the dispute.
QCAT proceeding 69/16
Ground 8 – Error in concluding RTA conciliation satisfied by prior mediation
- Ground 8 involves an alleged error of law in concluding that the RTA conciliation process was satisfied by mediation conducted under the QCAT Act.
- The respondent’s compensation proceeding was commenced as a non-urgent tenancy claim in a Form 2 (application for minor civil dispute – residential tenancy dispute) for rent outstanding up to the termination date and the cost of reinstating the property, but was allowed by the tribunal to proceed as a Form 3 (application for minor civil dispute – minor debt), so as to avoid the compulsory conciliation condition in s 416 RTRAA which applies to non-urgent money claims.
- Except for urgent matters, an RTRAA application to the tribunal may be made under s 416(1) only if the applicant has first made a dispute resolution request about the issue and “the conciliation process” has ended without resolution.
- 69/16 is not an urgent matter and the respondent did not make a ‘dispute resolution request’ about the rent arrears or compensation issues before filing it.
- However, the tribunal decided it could treat the failed mediation on 26 April 2016 in relation to 42/16 (the return of the applicants’ property) as meeting the compulsory conciliation condition for 69/16 because both matters were “(i)ntrinsically tied up … together”.
- The tribunal then set it down for an on the papers hearing based on oral evidence already given in 1120/16.
- The tribunal does not have jurisdiction to hear a non-urgent matter requiring attempted conciliation with an urgent hearing that does not, regardless of how closely connected they are.
- In Raymond v Doidge the tribunal held at - that urgent claims under ss 359 or 360 RTRAA and non-urgent claims under s 419 RTRAA are fundamentally different, therefore they cannot be joined together in a Form 2 to avoid the imperative requirement of s 416 for RTA conciliation.
- The conciliation process referred to is conducted by the RTA. Dispute resolution requests made to the RTA must start “a conciliation process” (as defined in s 398(1) RTRAA) for the parties to the dispute as soon as practicable after receiving a dispute resolution request.
- A tribunal mediation process conducted for 42/16 a month before 69/16 was filed does not qualify as an RTA conciliation process for the purposes of the mandatory procedural requirement in s 416 RTRAA.
- QCAT mediation under s 75(1) QCAT Act is not RTA conciliation. Though similar they are distinct procedures and spring from different sources. One cannot be substituted for the other just because it is more convenient and accessible.
- The tribunal has no discretion to waive compliance with s 416 RTRAA.
- Accordingly, 69/16 should have been rejected at the time of filing under s 35(3)(c) QCAT Act for non-compliance with a mandatory jurisdiction condition under the RTRAA. However, its acceptance means a tribunal proceeding has started and the only way it can be terminated early is by dismissing it or striking out under ss 47(2)(a) or 48(1)(b) QCAT Act.
Ground 9 – Error of law in permitting the inclusion of rental arrears beyond the six month time limit
- When an urgent or non-urgent application alleges there is a breach of the tenancy agreement the six month time limit in s 419 RTRAA applies.
- Subsection (3) of s 419 RTRAA limits the recovery of rental arrears claims by landlords to six months after becoming aware of non-payment. This applies even where arrears are characterised as a minor debt and the clock stops on the date the Form 2 is filed in the tribunal.
- A lessor’s right of action to recover a debt accrues on and not before the last payment but part payment does not extend the time for claiming the balance.
- In this case, the amount of unpaid rent the respondent is entitled to recover from the applicant can only be ascertained by an evidence based forensic accounting process and consideration of the duty to mitigate losses in light of the inferred reason for any delay by the landlord. It would also involve a decision as to whether or not s 61(1) QCAT Act can be employed to extend the time for starting a proceeding despite s 43A Limitation of Actions Act 1974 (Qld) which declares limitations on enforcement of a right of action by reference to the time a proceeding is started to be part of the substantive law and not merely a matter of procedure.
- However, it is unnecessary to resolve these issues in light of the incompetency of 69/16.
Ground 10 – Error of law in allowing 69/16 to proceed as a minor civil dispute contrary to s 416(1) RTRAA
- To achieve the main objects of the QCAT Act ‘non urgent’ rent claims can validly be commenced as an application to recover a minor debt rather than as a “tenancy matter”, provided that any procedural irregularity can be waived under s 61(3) QCAT Act without undue prejudice or detriment to the tenant.
- However, non-compliance with s 416 RTRAA (as discussed above – ground 8) is not a waivable procedural irregularity. It is an incurable jurisdictional defect. Accordingly, the Form 2 issue is moot.
- Leave to appeal is refused for the tribunal decisions in QCAT proceedings 1120/16 and 42/16.
- Leave is granted to appeal the tribunal decision in QCAT proceeding 69/16 on grounds 9 and 10.
- Appeal allowed.
- QCAT proceeding 69/16 is struck out.
 A party cannot apply to the tribunal about a non-urgent issue unless they have first attempted RTA conciliation.
 RTRAA s 357(1),(3).
 RTRAA s 357(5).
 RTRAA s 361(2).
 RTRAA s 361(4)(a),(5).
 Under RTRAA s 356.
 RTRAA s 361(4)(b).
 See  of the reasons.
 See  of the reasons.
 See - of the reasons.
 See  of the reasons.
 RTRAA s 416(2).
 QCAT Act ss 3(b), 4(b), 75(1),(2), 77, cf. 4(g).
 See  of the reasons.
 42/16 was adjourned part-heard to 9 August 2016 but was not finalised then because of the applicants’ delay in filing a response to the respondent’s claim.
 RTRAA s 415(5).
 See  of the reasons.
Big4 Brisbane Northside Caravan Village v Schliebs  QCAT 277.
  QCAT 163.
 Adams v Scowcroft  QCATA 25 .
 QCAT Act s 36.
 QCAT Act s 419(3).
 Delahoy & Grevell v Wuiske & Anor  QDC 276 .
 Limitation of Actions Act s 35(4).
 Devayne v Noble (1816) 1 Mer 572.
 Macdav Pty Ltd v Alliswell Pty Ltd  VACT 2436 .
Aurisch v Millsons Pty Ltd & Ors  QCAT 245.
- Published Case Name:
Stewart v Penrose
- Shortened Case Name:
Stewart v Penrose
 QCATA 119
25 Oct 2017