Thompson v Collison[2017] QCATA 123

REASONS FOR DECISION

1. [1]
   Ms Thompson was a tenant of premises owned by Ms Collison.  The tenancy commenced in December 2015 and ended on 5 December 2016.
2. [2]
   There was a service scheduled for 9 December 2016 for an air-conditioning unit at the premises.  The refrigeration mechanic who attended found the unit at the back of the house behind a bedroom damaged.  Someone or something had damaged the unit’s air-cooling fins.
3. [3]
   Ms Collison said the unit was new as at early December 2015 immediately before Ms Thompson moved in.  An exit condition report had been prepared on 5 December 2016 and there was no mention of damage to an air-conditioning unit.
4. [4]
   Ms Collison brought proceedings in the tribunal to recover the costs of replacement of the air-conditioning unit.  Ms Thompson said she knew nothing about damage to the unit and suggested there was a period of some 4 or 5 days between her leaving and the refrigeration mechanic going out to service the unit when the unit could have been damaged.  The tribunal found that despite there being no mention of damage to the air-conditioner in the exit condition report, the damage was done during the currency of the tenant’s occupation, the unit was new at the start of the tenancy and that the tenant should be responsible for the costs of replacement.  The bond of $1,840 was ordered to be paid to the lessor plus a further sum of $1,022.50 representing the balance cost of a replacement unit and the filing fee of $112.50.
5. [5]
   Ms Thompson now seeks leave to appeal that decision.  Given this is an appeal from a decision made in the tribunal’s Minor Civil Dispute jurisdiction, leave to appeal must first be obtained.^[1] 
6. [6]
   Leave to appeal will usually be granted only where an appeal is necessary to correct a substantial injustice to the appellant and there is a reasonable argument that there is an error to be corrected.^[2]
7. [7]
   Ms Thompson’s grounds of appeal are: 

   1. a)
      That the tribunal denied the tenant natural justice by disregarding the tenant’s evidence set out in an affidavit;
   2. b)
      That the tribunal disregarded a cleaner’s statement of evidence;
   3. c)
      That the tribunal failed to consider evidence from an air-conditioning specialist;
   4. d)
      That the tribunal failed to address an issue about the lessor’s claim being out of time under the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRAA);
   5. e)
      That the tribunal failed to consider that a quote relied on to award costs of replacement of the unit to the lessor did not detail what unit was being quoted upon;
   6. f)
      That the tribunal failed to take into account the depreciated value of the unit when awarding costs of replacement to the lessor.
8. [8]
   The tribunal heard evidence from both parties.  Ms Thompson’s complaint about the tribunal disregarding her affidavit evidence is really a complaint that the evidence tendered by her under cover of the affidavit was not accepted by the tribunal as sufficient for the tribunal to find in her favour.  The exit condition reports attached to her affidavit, the statement of the cleaner saying the air-conditioner was running without any sign of problems during her attendance at the property to clean, the quote relied on by Ms Collison being a quote from her husband’s firm, an air-conditioning company and that quote simply being for the costs of a ‘replacement’ unit were all matters raised at hearing before the tribunal.  There was no denial of natural justice.
9. [9]
   The tribunal found that though the air-conditioner unit was working, the air-conditioner was damaged and that damage was not readily apparent to either the tenant or the agent completing the exit condition inspection.  The tribunal accepted the air-conditioning unit was new at the start of the tenancy and it was found to be damaged within days of the tenancy expiring. The tribunal therefore determined that the unit was damaged during the currency of the tenancy.  This was not an unreasonable conclusion to make in those circumstances.
10. [10]
    The evidence from the independent air-conditioner specialist was hearsay evidence provided by Ms Thompson to the tribunal.  There was no report available from that specialist however and Ms Collison’s evidence was that the technicians referred to damage possibly caused by a blunt object or an animal.  There was no necessary obvious causal link between the damage to the unit and evident physical harm to a person. 
11. [11]
    The tribunal did not allude to an issue about the lessor’s claim being out of time by virtue of s 66(2) of the RTRAA in its reasons for decision.  The matter was raised at hearing by Ms Thompson.  Section 66(2) stipulates that a lessor or agent must sign a copy of an exit condition report prepared by the tenant within 3 days after receiving the report.  There is no stipulated sanction for breach of that provision and there is no limitation placed upon a lessor’s entitlement to claim compensation or damages from a tenant in respect of damaged property discovered more than 3 days after receipt of an exit condition report.  Though the matter was not addressed by the tribunal in its reasons for decision, s 66 did not assist the tenant in any way in so far as the issue was the liability of the tenant for damage to the air-conditioning unit during the currency of the tenancy. 
12. [12]
    That there was no mention of the damaged air-conditioning unit in the exit condition report was covered in concept by the tribunal however the tribunal accepted the damage was not readily apparent to either the tenant or an inspecting agent attending for the purpose of completing an exit condition report.
13. [13]
    Finally there is the issue concerning the quote for cost of replacement accepted by the tribunal.  Ms Collison’s husband was a partner in an air-conditioning company. A copy of an invoice dated 7 December 2017 for the original cost of supply and installation of an 8KW Samsung air-conditioning unit for a price of $2,750 was filed with the initiating application.  The supplier was Mr Collison’s company Air Control Pty Ltd and the clients were Mrs and Mr Collision.  A quotation from Mr Collison’s company dated 16 December 2016 for a replacement unit for the same cost was also submitted.  There was no allowance made for depreciation in the tribunal’s award.
14. [14]
    The tribunal appears to have erred in this respect.  In the reasons for decision the tribunal noted the air-conditioner unit was new prior to Ms Thompson moving in “and therefore, it’s the respondent’s duty to have the premises in the same condition as when they moved in, as when they move out.  The air-conditioner would have been part of that condition.”^[3]
15. [15]
    That view of the law applicable to tenancies does not accord with the provisions of s 188(4) of the RTRAA which provides “At the end of the tenancy, the tenant must leave the premises and inclusions, as far as possible, in the same condition they were in at the start of the tenancy, fair wear and tear excepted.”
16. [16]
    Generally a lessor’s loss where a tenant damages inclusions in a demised property is the depreciated value of replacement.  Though the air-conditioner was new in early December 2015 it was one year older in December 2016 and its value decreased by that one year of use, the wear and tear of use for one year.  The depreciated value of the unit was the true measure of damages applying s 188(4). 
17. [17]
    It is clear that the tribunal accepted the quote of Ms Collison’s husband’s company as the cost of replacement.  It was entitled to do that despite the relationship between the applicant and the company’s principal.  There were no other quotations tendered for replacement of an 8KW Samsung air-conditioning unit, which was the stated size and type of the unit in the original invoice, again supplied and installed by the husband’s firm.  There was a quotation of $2,300 inclusive of GST for a Mitsubishi Heavy Industries 7KW air-conditioner, however the original invoice of December 2015 referred to a bigger 8KW Samsung unit.
18. [18]
    The tribunal made an error of law which resulted in an incorrect award of money to the lessor.  There was no evidence led in respect of depreciated value of the air-conditioning unit at end of lease which prevents the Appeal Tribunal setting aside the decision and substituting its own.  I am satisfied that an appeal is necessary, however, to correct what may be a substantial injustice to the appellant given the depreciated value of the air-conditioning unit is unknown but may be significantly less than new.
19. [19]
    Leave to appeal is granted.  The appeal is allowed.  The decision of 18 April 2017 is set aside.  The matter is returned to the tribunal for determination of value of the replacement air-conditioning unit with the hearing of such additional evidence as deemed necessary by the tribunal.