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- Unreported Judgment
Hughes v Garnett QCATA 26
Hughes & anor v Garnett  QCATA 26
On the papers
Senior Member Stilgoe OAM
17 February 2017
APPEAL – LEAVE TO APPEAL – LANDLORD AND TENANT – RESIDENTIAL TENANCIES LEGISLATION – OBLIGATIONS, PROHIBITED MATTERS AND PROTECTION FOR LESSEES – OTHER MATTERS – where lessor’s claim for rent accepted by the tribunal – where tenant said tribunal had no jurisdiction – where tenant said lessor’s claim out of time – where tenant said lessor failed to mitigate loss – whether grounds for leave to appeal
APPEAL – LEAVE TO APPEAL – ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – JURISDICTION – where lessor filed claim for compensation – where tenant said tribunal had no jurisdiction to entertain claim – whether grounds for leave to appeal
APPEAL – LEAVE TO APPEAL – ADMINISTRATIVE LAW – ADMINISTRATIVE TRIBUNALS – QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL – POWERS AND PROCEDURE – where tenant claimed lack of procedural fairness – whether grounds for leave to appeal
Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 13, s 142(3)
Residential Tenancies and Rooming Accommodation Act 2008 (Qld) s 173(2), s 362, s 416, s 417(2), s 419(3)
British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd  AC 673
Castieau v Gubecka  QCAT 644
Chambers v Jobling (1986) 7 NSWLR 1
Dearman v Dearman (1908) 7 CLR 549
Fox v Percy (2003) 214 CLR 118
Harvey v Phillips (1956) 95 CLR 235
Pickering v McArthur  QCA 294
R T Company Proprietary Limited v Minister of State for the Interior (1957) 98 CLR 168
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
- Stephanie Hughes and Valerie Agnew rented a property from Junko Garnett. At the end of the tenancy, Ms Garnett applied for compensation for unpaid rent and break lease re-letting costs. The tribunal ordered, apparently by consent, that Ms Hughes and Ms Agnew pay Ms Garnett $2,231.50 by weekly payments of $50.
- Ms Hughes and Ms Agnew want 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.
- Ms Hughes and Ms Agnew say the tribunal had no jurisdiction to hear the proceeding because s 416 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRA Act), imposes conciliation as a condition precedent on any claim in the tribunal, which did not occur. They say that the tribunal erred in giving Ms Garnett compensation because she brought her claim outside the six-month time limitation provided for in s 419(3) of the RTRA Act. They say the tribunal failed to consider Ms Garnett’s duty to mitigate her loss, as required by s 362 of the RTRA Act. They say the tribunal erred in fact. They say the tribunal did not provide procedural fairness and natural justice.
Should I consider the application for leave to appeal if the order of the tribunal was made by consent?
- Ordinarily, the tribunal will not entertain an application for leave to appeal a consent order. A consent order can be set aside or varied:
The question whether a compromise embodied in a consent order is to be set aside depends on the existence of a ground which would suffice to render a simple contract void or voidable or to entitle the party to equitable relief against it.
- Alternatively, the tribunal may set aside a consent order if it had no power to make the order in the first place.
- The tribunal does not have a broad jurisdiction for ‘simple contracts’. Therefore, if a party wants to set aside a consent order, an application about the underlying contract should be made to a court of appropriate jurisdiction.
- However, after reading the transcript, I am not persuaded that the tribunal order was by consent. Ms Hughes and Ms Agnew had earlier entered into a repayment agreement for arrears and water bills but fell behind in their repayments. Ms Hughes made it clear to the tribunal that she was challenging the amount of the debt and the number of repayments. The tribunal asked Ms Hughes if she was happy to start up the repayment plan again and Ms Hughes said that she was, if the repayment amount was $50, not $100. I cannot, however, find any point in the tribunal proceeding where Ms Hughes agreed to the actual amount owing. I will, therefore, consider the grounds for leave to appeal.
Did the tribunal have jurisdiction to hear the proceeding?
- Section 416 of the RTRA Act states that a party may apply to the tribunal about an issue only if that party has first made a dispute resolution request.
- The file shows that Ms Garnett did make a dispute resolution request. By letter dated 2 July 2015, the Residential Tenancies Authority issued a Notice of Unresolved Dispute. There is no merit in this ground of appeal.
Was Ms Garnett’s claim out of time?
- Section 419(3) of the RTRA Act states that an application about a breach of agreement must be made within six months after the lessor becomes aware of the breach. Section 417(2) of the RTRA Act states that reference to making an application includes the making of a dispute resolution request.
- Ms Hughes and Ms Agnew say they broke their lease on 27 April 2015. The Notice of Unresolved Dispute is dated 2 July 2015, less than three months later. The request for conciliation must have been made within the required six-month period specified by s 419(3). There is no merit in this ground of appeal.
Did the tribunal fail to consider Ms Garnett’s duty to mitigate her loss?
- Ms Hughes and Ms Agnew say that Ms Garnett’s representatives claimed at the hearing that it was not her sole responsibility to secure new tenants and that they also had that responsibility.
- Ms Stehr, who appeared for Ms Garnett at the hearing, said this:
But in saying that, I spoke to Stephanie’s mother and said, “You’re welcome to advertise. You’re welcome to follow all that up yourself as well. It’s not just on our shoulders if you wanted to break the lease.”
- I agree that Ms Stehr’s comments can be interpreted as imposing a joint responsibility to mitigate loss.
- Ordinarily, the duty to mitigate loss lies on the person seeking compensation. The wording of s 362 of the RTRA Act, however, is not so clear:
362 Duty to mitigate loss or expense
- This section applies to the lessor if the lessor incurs loss or expense because of—
- the tenant's failure to hand over vacant possession of the premises after a termination order is made by a tribunal; or
- the tenant's abandonment of the premises; or
- another act or omission of the tenant.
- This section applies to the tenant if the tenant—
- incurs loss or expense because of an order made by a tribunal or registrar declaring that the tenant abandoned the premises on a stated day; and
- contends that the premises were not abandoned or were only abandoned on a day after the day stated.
- The lessor or tenant—
- must take all reasonable steps to mitigate the loss or expense; and
- is not entitled to receive compensation for any loss or expense that could have been avoided by taking the steps.
- I do not think that s 362 contemplates both parties having a duty to mitigate any loss resulting from a breach. The use of ‘or’ in s 362(3) is, I suspect, a shorthand way of imposing the obligation on the lessor, if it is the lessor who suffers loss pursuant to s 362(1) or the tenant, pursuant to s 362(2).
- It is, however, good sense for a tenant who has broken a tenancy agreement to bear some responsibility for mitigating any loss which might flow from that breach. However, as the tribunal did not rely on or accept Ms Stehr’s statement, there is no error by the tribunal.
- Ms Hughes and Ms Agnew also say that Ms Garnett did not demonstrate she took steps to mitigate her loss.
- Ms Stehr told the tribunal that:
We had open homes. We didn’t have anybody suitable. We didn’t have anyone that had good references. Unfortunately, that was the timeframe.
- That is some evidence of mitigation of loss. It is not good evidence, but it was uncontradicted.
- Ms Hughes and Ms Agnew also state that the tribunal assumed that the real estate market had ‘a lot of properties available, but not a lot of people looking’. The tribunal did say:
I’m told by the other real estate people that we see that the market’s pretty tight at the moment.
- Ms Stehr agreed with the tribunal’s observation. The tribunal then made the observation to which Ms Hughes and Ms Agnew referred. Again, Ms Stehr confirmed the truth of the statement. Although not an ideal way to obtain evidence that would justify a delay of three months to find a new tenant, it was evidence of the current market and the tribunal was entitled to rely on it.
- Ms Hughes and Ms Agnew take issue with the fact that the tribunal ordered they pay a break lease fee. Ms Hughes and Ms Agnew admit they broke the lease. The first paragraph of the tenant acknowledgement they signed is an acknowledgement that they will pay a break lease fee of one week plus GST if they break the lease.
- Section 173(2) of the RTRA Act states that a term of a tenancy agreement is not void if it provides that, if a tenant terminates the agreement in a way not permitted under the Act, the tenant is liable to pay the reasonable costs incurred by the lessor in reletting the premises.
- Ms Hughes and Ms Agnew have not demonstrated that the break lease fee was not a reasonable cost incurred by the lessor in re-letting the premises.
- Ms Hughes and Ms Agnew refer to the tribunal decision of Castieau v Gubecka as authority for the proposition that a tenant is not liable for rental after the agreement has ended. The proposition is correct but a tenant may be liable for damages for breach of a tenancy agreement, and the measure of that damage may be the amount of rent that would otherwise be payable.
- There was no error by the tribunal.
Was there an error of fact?
- Findings of fact by a tribunal will not usually be disturbed on appeal if the facts inferred by the tribunal, upon which the finding is based, are capable of supporting its conclusions, and there is evidence capable of supporting any inferences underlining it. An appellate tribunal may interfere, however, if the conclusion at first instance is ‘contrary to compelling inferences’ in the case.
- Ms Hughes and Ms Agnew say that the tribunal failed to consider the reasons behind the break lease. They say that there were problems with the water bills the lessor sent. They submit that the property was not water efficient. They say that the water bills were excessive because the lessor failed to take action on leaks and was using the water for its own purposes.
- The first lease that Ms Hughes and Ms Agnew signed, in 2013, had detailed provisions about who should pay for water consumption and under what circumstances. There was no evidence before the tribunal that Ms Hughes and Ms Agnew ever raised the issue of water efficiency with the lessor, or asked for evidence that the property was water efficient.
- As Ms Hughes and Ms Agnew know, there is a six-month time limit on claims arising out of a breach of contract. They cannot argue, in July 2016, a reduction due to a breach of contract that arose before April 2015. The tenants’ reasons for their decision to break lease do not, therefore, translate into a reason not to pay damages for the break lease.
- Ms Hughes and Ms Agnew also say the tribunal did not take into account the bond wrongfully retained by the lessor. That is not correct. The tribunal found that the lessor used the bond to cover damage to the property, the water bills, and some rent.
- Ms Hughes and Ms Agnew also say that the tribunal failed to take into account the amounts they had paid to the date of the hearing. That assertion is also incorrect. Over ten pages of the transcript are devoted to a discussion about what money the lessor received and what money Ms Hughes and Ms Agnew said they paid. One of the members of the tribunal undertook the task of calculating the amounts paid and the amounts due. The lessor’s ledger showed that Ms Hughes and Ms Agnew made more payments than they thought. The tribunal was not in error.
Did the tribunal give Ms Hughes and Ms Agnew adequate notice of the material relied on at the hearing?
- Ms Hughes and Ms Agnew say that the lessor did not file and serve their evidentiary material prior to the hearing.
- The lessor’s application, filed 21 April 2016, included the notice of unresolved dispute, the tenancy agreements, a note about the fate of the bond, four tax invoices, and the tenant ledger. The tribunal sent a copy of the claim and annexures to Ms Hughes and Ms Agnew on 21 April 2016. Based on this material, and in the absence of Ms Hughes and Ms Agnew, on 5 May 2016, the tribunal ordered Ms Hughes and Ms Agnew pay the lessor $2882.51.
- Ms Hughes and Ms Agnew successfully applied to reopen the proceeding. At the reopened hearing, the lessor provided a letter of explanation in response to Ms Hughes and Ms Agnew’s bank statements and comments. The lessor did not fail to file ‘evidentiary material’. I am not satisfied that Ms Hughes and Ms Agnew were denied procedural fairness.
- Ms Hughes submits that, under s 13 of the QCAT Act, the tribunal must make orders that it considers fair and equitable. She submits that, because she is a single mother of two children, the youngest born on 25 June 2016, and because she is unemployed, the tribunal should exercise its power under s 13 to allow the appeal.
- The case for leniency may be relevant to enforcement. It is not relevant to whether or not the tribunal was in error.
- There is no reasonably arguable case that the tribunal was in error. Leave to appeal should be refused.
 QCAT Act, s 142(3)(a)(i).
 Pickering v McArthur  QCA 294 at .
 Harvey v Phillips (1956) 95 CLR 235.
 R T Company Proprietary Limited v Minister of State for the Interior (1957) 98 CLR 168.
 Transcript page 1-19, line 41 to page 1-20, line 24.
 Transcript page 1-13, lines 35 – 44.
 Transcript page 1-20, line 26.
 Transcript page 1-20, line 36.
 Transcript page 1-21, lines 21 – 24.
 British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd  AC 673, 689.
 Transcript page 1-21, lines 20 – 21.
 Transcript page 1-21, lines 29 – 30.
 Transcript page 1-21, line 34.
 Transcript page 1-21, line 36.
 Transcript page 1-21, line 38.
  QCAT 644.
 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 1-19, lines 21 – 22.
 From page 1-5 to page 1-13; 1-15 – 19.
 Transcript page 1-13, lines 11 – 12.
 Transcript page 1-13, lines 5 – 7; page 18, lines 34 – 36.
- Published Case Name:
Stephanie Hughes and Valerie Agnew v Junko Garnett
- Shortened Case Name:
Hughes v Garnett
 QCATA 26
Senior Member Stilgoe
17 Feb 2017