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RWW Holdings Pty Ltd v Clavarino QCATA 63
RWW Holdings Pty Ltd t/as Living Here Wilston v Clavarino  QCATA 63
RWW Holdings Pty Ltd t/as Living Here Wilston
On the papers
Senior Member Stilgoe OAM
26 May 2017
APPEAL – LEAVE TO APPEAL – LANDLORD AND TENANT – RESIDENTIAL TENANCIES LEGISLATION – OBLIGATIONS, PROHIBITED MATTERS AND PROTECTION FOR LESSEES – INSPECTION AND REPAIR – where lessor’s agent claimed compensation for damage to tenancy – where tribunal dismissed claims as grossly exaggerated – whether evidence to support claims – whether grounds for leave to appeal
APPEAL – LEAVE TO APPEAL – COURTS AND JUDGES – JUDGES – DISQUALIFICATION FOR INTEREST OR BIAS – REASONABLE APPREHENSION OF BIAS GENERALLY – where lessor’s agent claimed compensation for damage to tenancy – where claims rejected – where tribunal found claims grossly inflated - where no evidence to support finding that claims grossly inflated – whether biased
Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 28(3)(b), 95(4)(b), 95(5), 142(3)(a)(i)
Residential Tenancies and Rooming Accommodation Act 2008 (Qld) ss 188, 362
Chambers v Jobling (1986) 7 NSWLR 1
Dearman v Dearman (1908) 7 CLR 549
Fox v Percy (2003) 214 CLR 118
Pickering v McArthur  QCA 294
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
- William Clavarino rented a house through RWW Holdings Pty Ltd t/as Living Here Wilston. At the end of the tenancy, RWW identified outstanding rental, water bills and repair costs of approximately $5,200. It filed a claim in the tirbunal. The tribunal ordered that Mr Clavarino pay RWW $1,490.01. It further order the distribution of the bond: $1,490.01 to RWW and $449.99 to Mr Clavarino.
- RWW wants 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.
- RWW says the tribunal erred in not swearing in the parties to the proceeding. It says the tribunal was biased in favour of Mr Clavarino. It says the tribunal erred in finding that RWW had not mitigated the lessor’s loss. It says the order is incorrect, because the bond was released prior to the hearing.
Did the tribunal err in not swearing the parties?
- In the busy minor civil disputes jurisdiction of the tribunal, where parties are often unable to distinguish between evidence and submissions, the tribunal often dispenses with the requirement for parties to swear or affirm their evidence.
- The tribunal may require a party to swear to their evidence if there is a significant conflict about the facts. There was no significant conflict in this case and, generally, where there was a dispute, the tribunal resolved it in favour of RWW.
- RWW was not disadvantaged by the tribunal’s decision not to have the parties give sworn evidence. The tribunal was not in error.
Was the tribunal biased in favour of Mr Clavarino?
- The learned Adjudicator used very strong words when he told RWW that it had not complied with the duty to mitigate loss. It is obvious that he holds firm views about a property manager’s duty to mitigate loss and the level of professionalism that he expects from commerical property managers. More termperate language may have been appropriate.
- The learned Adjudcator’s comments were unfortunate and unnecessary. I am not satisfied that the learned Adjudicator was biased towards Mr Clavarino but I am concerned that the learned Adjudicator showed bias against property managers in general.
Did the tribunal err in finding that RWW failed to mitigate its loss?
- RWW helpfully, and correctly, set out s 362 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRA Act), which deals with mitigation of loss. RWW also referred me to s 188, which sets out the tenant’s obligations and the terms of the tenancy agreement. In light of these sections, I will consider each of the claims the tribunal refused or reduced in turn.
- RWW claimed $470 for garden work. The tribunal gave RWW half of the claim. RWW cannot argue that the reduction was due to a failure to mitigate. Instead, RWW wants to challenge a finding 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.
- The tribunal was satisfied that Mr Clavarino did not hand back the gardens in a suitable state but it found that the invoice was:
…well over the top and I think your landlord has done work here.
- The tribunal later heard that the lessor no longer lives in the country and could not do the work himself. The tribunal did not change its mind in light of that information.
- Ms McDonald, who appeared for RWW at the hearing, attempted to explain the invoice to the tribunal. The tribunal was not satisfied with the detail of the invoice:
So I don’t know what he’s telling you, but he’s not telling me a thing. That’s a terrible invoice.
- I have looked at the invoice. It lists seven jobs that it carried out for $470. While it does not specify the hours for each job, or the hourly rate, I disagree with the tribunal’s finding that the invoice does not give sufficient information.
- There is another problem with the tribunal’s decision. After criticising the invoice, the tribunal said:
Anyway, in those cases, I split it in half;…
- The tribunal does not explain why a 50/50 split is appropriate. There is no explanation of why $235 for the listed work was reasonable but $470 was not. There was no evidence before the tribunal which challenged the reasonableness of the invoice and the tribunal did not explain why, by reference to evidence or matters that may be in the public domain, the invoice was excessive.
- The tribunal was in error. RWW is entitled to an additional $235 for the gardening costs.
Replacement of light globes
- RWW produced an invoice for $170.55 for the replacement of thirteen light globes. The tribunal rejected the invoice, stating that the work can be done for a lot cheaper than that.
- Once again, RWW’s complaint is not that the tribunal erred in finding that it failed to mitigate the loss. The complaint is that the tribunal erred in not giving it the cost of the invoice.
- The tribunal told Ms McDonald that it was unreasonable to send an electrician to replace light bulbs, saying that she was not mitigating matters.
- After the reasons for the decision, Ms McDonald questioned who she should send to change light bulbs other than an electrician. She made the point that property managers are not ‘covered’ if they go out to change light bulbs. The tribunal cut that conversation short but it seems as if Ms McDonald was telling the tribunal that the property managers are not covered by insurance if anything goes wrong through, or during, the installation of light globes.
- The tribunal later gave gratuitous advice that a handyman would charge $20 per hour as opposed to an electrician charging $80 per hour.
- The discussion about the cost of changing light globes is not a discussion about mitigation of loss. It is a discussion about whether the charges claimed were reasonable. What is reasonable is a question of fact to be determined according to the particular circumstances.
- I looked closely at the invoice. The electrician charged one hour’s labour to replace thirteen lights. The material cost was $75.50 plus GST. Maybe a handyman would charge $20 per hour but, against that, it might take longer, or he may not have the right globes, or he may require the owner to source the globes. The tribunal cannot unilaterally state that an invoice is unreasonable simply because a particular member might be able to get the same work done at a lower rate.
- The tribunal was in error. RWW is entitled to recover $170.55 for the replacement of light globes.
- The Tribunal gave RWW all of its claim for cleaning. The tribunal was not in error and there is no additional relief available to RWW in relation to this issue.
Damage to the bath tub and vanity top
- RWW claimed $535 for impact damage to the bath tub and $644 for damage to the vanity top. The tribunal rejected the claims because it could not tell what the damage was or how it occurred. Again, RWW’s complaint is not that the tribunal erred in considering mitigation but whether the tribunal erred in failing to find that Mr Clavarino was responsible for the damage.
- Mr Clavarino told the tribunal that he did not cause the damage to the bath tub. He said that his three-year-old daughter was the only person to use the bath. He did not deny that the bath was cracked, only that it was leaking.
- He told the tribunal he did not see the damage to the vanity and that his wife only used a particular hair straightener which could not burn a bench top.
- In finding that it could not tell from the photos how the damage was caused or what the damage was, the tribunal did not refer to Ms McDonald’s evidence, which may have clarified the position. The failure to refer to that evidence is not explained.
- The tribunal did say it tribunal refused to compensate the lessor for these items because they did not appear in a list of items for attention that RWW sent shortly after Mr Clavarino left the tenancy.
- The evidence does not support that finding. Mr Clavarino gave notice that he intended to terminate the tenancy on 15 August 2016. In an email dated 17 August, 2016, only one day later, RWW gave notice of the damage to the bath tub and vanity. The exit condition report, emailed the same day, also noted the damage. The conclusion that Mr Clavarino did not cause the damage to the bath tub and vanity is contrary to the compelling inferences of the case. The tribunal was in error.
- The tribunal went on to find that the claim for repair was ‘grossly overstated’ and, therefore, rejected. The tribunal cited two bases for a finding that the claims were overstated; firstly that the damage had not been repaired before the next tenant moved in and secondly that the claim did not take into account depreciation.
- Ms McDonald told the tribunal that the lessor had arranged for the repair of the bath tub with the new tenant, noting that the lessor was going to compensate the new tenant for 48 hours’ loss of the bathroom. That evidence was uncontradicted. It should be accepted.
- Unlike carpets, which are subject to depreciation, the Australian Taxation Office regards the replacement of bathroom fixtures such as tubs and basins as a capital works item. If the tub and vanity had not been damaged, the lessor would not have replaced them. RWW should be entitled to recover these items.
Damage to paintwork
- RWW claimed $2,097 to repair the damage to walls and ceilings. The tribunal rejected that claim, again, because the claim was grossly overstated and the next tenant had moved in.
- Mr Clavarino should not have to pay for damage that would be fair wear and tear over his 18 month tenancy. However, Ms McDonald notes that some of the damage was dues to stickers, which was expressly prohibited in the tenancy agreement. She says some of the damage is impact damage which, she says, is not ‘fair wear and tear’. She says some damage was caused by Mr Clavarino’s pet, although he was not permitted to keep pets inside during the tenancy.
- It was implicit in Ms McDonald’s evidence that, even though there was a new tenant in place, the lessor intended to have the work done. RWW has submitted evidence with its application for leave to appeal showing that some of the work has been completed.
- RWW took steps to mitigate the lessor’s loss by finding a new tenant quickly. It did not charge Mr Clavarino for the rent lost between the date he handed the property back and the date the cleaning was completed.
- As I have previously noted, there is a difference between mitigating a loss (by getting a new tenant for the property) and repairing what a tenant damaged. A lessor is required to mitigate loss but a tenant is required to return the tenancy in the same condition as it was in at the start of the tenancy, fair wear and tear excepted. The two concepts should not be conflated.
- A lessor is not entitled to hold off finding a new tenant while extensive repairs are undertaken if those repairs are not necessary. A lessor is not entitled to improve the property at the tenant’s expense. But a lessor is entitled to recover the cost of obvious damage.
- Although the tribunal found that the quote for repair of the damage was grossly inflated, it gave no reasons for that finding and there was no evidence to suggest that the quote was inflated. The quote was to patch and paint, not paint the entire house. The tribunal should have accepted the quote. It was in error. RWW should be entitled to recover this item.
Damage to the carpet
- RWW claimed 75 per cent of the cost of a new carpet. The tribunal rejected the claim. It found that there was no attempt to factor in depreciation of the carpet.
- The tribunal was wrong in that finding. RWW was not claiming the full cost of the carpet. Even if the tribunal was correct, it should not have rejected the claim completely but applied its own deliberations to what a reasonable claim should be.
- The carpet was seven years old. The Australian Taxation Office depreciation schedules indicate that carpet is depreciated to nil after ten years. RWW was entitled to 30 per cent of the cost of the carpet - $1,149.30.
The efficacy of the order
- The tribunal ordered the bond to be paid out in a particular way. Ms McDonald told the tribunal that RWW had already received the bond. The order was, therefore, ineffective and should be set aside.
Summary of findings
- The tribunal was in error and the errors did create substantial injustice. Leave to appeal should be granted and the appeal allowed. The decision of 18 October 2016 should be set aside and a new order, that Mr Clavarino pay RWW $4,380.85 should be substituted.
- I have calculated the new order as follows:
Painting and repair
Less bond refund
 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) s 142(3)(a)(i).
 Pickering v McArthur  QCA 294 at .
 QCAT Act s 28(3)(b).
 Ibid, s 95(4)(b).
 Ibid, s 95(5).
 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 1-10, line 8.
 Transcript page 1-20, lines 6 - 7.
 Transcript page 1-10, lines 11 - 12.
 Transcript page 1-10, lines 20 - 21.
 Transcript page 1-10, line 21.
 Transcript page 1-10, lines 22 – 24.
 Transcript page 1-21, lines 3 – 4.
 Transcript page 1-26, lines 19 – 20.
 Transcript page 1-26, lines 25 – 30.
 Transcript page 1-27, lines 16 – 17.
 Transcript page 1-24, line 27.
 Transcript page 1-25, lines 13 – 15.
 Transcript page 1-11, lines 15 – 28.
 Transcript page 1-14, lines 29 – 38.
 Transcript page 1-11, lines 40 – 42.
 Transcript page 1-14, lines 37 – 41.
 Transcript page 1-25, lines 20 – 21.
 Transcript page 1-25, lines 21, 31 – 32.
 Transcript page 1-10, lines 43 – 44.
 Transcript page 1-19, lines 18 – 19.
 Transcript page 1-17, lines 5 – 7.
 Residential Tenancies and Rooming Accommodation Act 2008 (Qld) s 362.
 Ibid, s 188.
 Transcript page 1-25, lines 21 – 25.
 Transcript page 1-2, line 38.
 Ms McDonald told the tribunal that the bond had been paid to RWW but that this claim was ‘for everything’. (Transcript page 1-3, lines 1 – 2.) Therefore, it is appropriate to deduct the bond from the claim.
- Published Case Name:
RWW Holdings Pty Ltd t/as Living Here Wilston v William Clavarino
- Shortened Case Name:
RWW Holdings Pty Ltd v Clavarino
 QCATA 63
Senior Member Stilgoe
26 May 2017