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- Unreported Judgment
Walker v Ison QCATA 64
Walker v Ison  QCATA 64
On the papers
21 May 2017
IT IS THE DECISION OF THE APPEAL TRIBUNAL THAT:
APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – RESIDENTIAL TENANCY – where tribunal decision dismissed a minor civil compensation claim for unpaid excess water charges and the reasonable cost of replacing a damaged pool liner – no hearing or determination of the water charges claim – where lessor’s obligations to ensure rented residential premises and items are in good repair – where tenants have a duty to maintain and yield up premises in repair – whether lessor can recover reasonable loss suffered as a result of the tenants deliberate action to drain the pool as a precaution against health risks instead of chemically controlling algae growth – whether leave to appeal should be granted
Queensland Civil and Administrative Tribunal Act 2009, ss 32, 142
Residential Tenancies and Rooming Accommodation Act 2008, ss 185, 188, 217, 362, 419, 420, 421, 429
Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567
Gration v C Gillan Investments Pty Ltd  2 Qd R 267
Haskell v Marlow  2 KB 45
Jones v Bartlett (2000) 205 CLR 166
Joyner v Weeks  2 QB 31
Marsden v Edward Heyes Ltd (1927) 2 K.B. 1
Proudfoot v Hart (1890) 25 QBD 42
Warren v Coombes (1979) 142 CLR 531
APPEARANCES and REPRESENTATION:
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
- The lessors of residential premises in Charters Towers apply for leave to appeal a tribunal decision dismissing a minor civil compensation claim for unpaid excess water charges and the reasonable cost of replacing a damaged pool liner ($3,070).
- The respondents deny any liability for reinstating the pool but do not contest the extra water claim except for the 70kL @ $1.33 related to the pool liner claim.
- Liability for the pool liner expences was argued and decided as if it depended on whether the compensable loss was caused by a latent fault in the pool’s filtration system (the applicant’s responsibility) or the inactions of the respondents in allowing algae to build up in the pool in December 2015 and then “illogically” draining the pool.
- The tribunal formally dismissed the pool liner claim after a hearing but gave no specific consideration nor reasoned conclusions about the water charges.
- On 5 June 2015 the applicants handed over premises with a plastic lined above ground swimming pool for the respondents use and enjoyment.
- The pool is not specifically mentioned in item 5.2 as a non-standard inclusion but the respondents concede that they were impliedly obliged to monitor and maintain the pool by regularly treating it with chlorine.
- The pool liner was 10 years old but had an expected remaining serviceable life of another 20 years or so. The entry report recorded no visible damage, defect, water quality or algae problems. The respondents were given a copy of the report but failed to sign or amend it. At the hearing, however, they said that the pool liner was “hanging down near the filter box allowing water in between the liner and the pool” from when they first moved in. At the end of the tenancy on 10 March 2016 the pool was empty and liner was irreparable.
- They did not use the pool much in winter because it was too cold but the respondents complain about paying for “a lot of chemicals” and “having to empty half of the pool because of some kind of algae that was at the bottom of it”.
- Indeed, the respondents claim to have chemically maintained and vacuumed the pool until they “...first had a problem with the pool when something in the filter broke”. However, no complaint was made to the lessor’s managing agent, Raine and Horne, about the pool or the water quality until 12 November 2015 and the only documented expense was for $35 to stabilise the water early in the tenancy.
- The pool was inspected by Mr Babao, a technician with Towers Pool Care, on 25 November. The filter was not working and the water was “stagnant”. He diagnosed a faulty multiport. A replacement part had to come from interstate and was not expected to arrive for a month or so.
- Although the company denies it the respondents insist that Towers Pool Care advised them that the water was beyond “bombing” with chemicals and endorsed their proposal to drain the pool pending repairs as a precaution against infection.
- The respondents drained the ‘putrid’ water out of the pool on 22 December with a pump they say Towers Pool Care loaned them. They scrubbed the “whole pool once it was empty as it was quite toxic and stained from the green algae”. However, as the pool was being refilled with water in anticipation of the filter being fixed before Christmas the liner started to cave in “on a couple of sides”.
- According to Mr Babao, short cutting of the liner when it was initially installed contributed to it “just coming down altogether”, but he conceded, under cross-examination that the liner would probably have remained intact if the pool had not been drained and the water treated with chlorine pending repairs as a reasonable person would have done.
The lessor’s obligations
- Under cl 25(1), (2) of the standard tenancy agreement (corresponding with s 185 Residential Tenancies and Rooming Accommodation Act 2008 (RTRA Act)) a lessor must ensure rented residential premises and standard items are in good (a reasonable state of) repair at the start of the tenancy and maintained that way for the duration of the lease but not fixtures and inclusions supplied with the premises.
- The extent of a lessor’s repair obligations depends on the agreed or implied terms, the nature, age, condition and effective life of the premises at commencement and the defect to be remedied but probably include replacing defective motors or machinery.
- There is also an implied common law duty on owners to take reasonable care with the safety (and health) of tenants.
- The common law imposes a minimum irreducible duty on tenants to use rented residential premises and inclusions in a reasonable tenant like manner and to yield them up in tenantable repair when the term of the tenancy is over.
- However, the terms of a standard agreement and Ch 3 of the RTRA Act considerably expand tenant’s obligations in Queensland.
- Clause 37 of the general terms and s 188(4) RTRA Act oblige the tenant to leave the premises, as far as possible, in the same condition that they were in at the start except for wear and tear from normal use or aging.
- Clause 32 of the general terms and s 217 RTRA Act requires the tenant to give the lessor notice as soon as practicable of any known damage to the premises. Under the special terms the respondents agreed not to maliciously or negligently damage any part of the premises (cl 2(6)) and on vacating, fair wear and tear ‘accepted’ (sic), repair damage to the premises arising as a result of their actions.
- A tenant has no duty to remedy or make good inherent defects but cannot avoid or diminish the obligation to maintain (subject to the defect) and yield up premises in repair.
- If the premises were not handed over in good repair by the lessor in breach of lease obligations the tenant is not required to put them in a better state than they were in when he or she inherited them and is only bound to maintain and return them “as far as possible” in substantially the same condition they were in when possession was given unless the deterioration was due to wear and tear or the lessor’s own default.
- Thus, if reasonable inspection would have revealed that the entry condition of the premises were substandard or a defect that should have but wasn’t repaired the tenant will not be held liable for the landlord’s consequential losses. On the other hand, the applicants would be in breach of a repair covenant if a known pre-existing or readily discoverable defect in the pool filtration system was not fixed or reported to the owner within a reasonable time.
- The lessor may apply to QCAT under s 429 RTRA Act to recover any reasonable loss suffered as a result of or arising from the tenants acts or omissions, failure to comply with obligations under the RTRA Act or tenancy agreement and may rectify a tenant’s breach at the end of the tenancy and claim the cost from the rental bond or the tenant.
- In exercising its jurisdiction to make compensation orders for tenancy breaches the tribunal must have regard to the matters mentioned in RTRA Act s 421(1)(a)-(d) for compensation orders in favour of the lessor.
- The loss for a breach of the repair or restoration terms of the tenancy is the reduced value of the premises measured by the cost of bringing the premises up to the agreed standard i.e. restoration or reinstatement even if it exceeds the actual loss unless the tenant can prove that even if the repair obligation was fully met there would have been an equivalent loss.
- A lessor incurring loss or expense because of a tenant’s acts or omissions must take all reasonable steps to mitigate it and is not entitled to compensation for any actual but avoidable cost.
The tribunal findings
- Although, there was conflicting evidence about the state of the liner at handover, whether the respondents acted on professional advice in draining the pool, the maintenance regime and the pumps fitness for purpose between the end of winter and mid-November, the accuracy of the details in the entry condition report, and the serviceability of the creepy crawly resolution of the dispute by the tribunal did not depend on the demeanour or relative credibility of the parties and key witnesses. Nor is the expert evidence decisive.
- The tribunal found that the filter was “obviously” working sub optimally from as early as February 2015 and that the water quality and clarity problems “could have been” caused by its gradual deterioration.
- The tribunal inferred that the pump had slowly deteriorated from June without being noticed to the point that by November it was unserviceable which put the tenants in the difficult position of having to choose what to do in the month waiting on repairs.
- The respondents were held not to be liable for the replacement liner or water costs because those losses were due to “a combination” of pre-existing partial liner slippage and the reasonable action of tenants “left to their own devices” to deal with a crisis situation that had developed through no fault of theirs and because chemicals were ineffective.
- The real legal question, however, is not whether the respondents acted reasonably in draining the pool to avert a perceived health risk but how they got into the position of having to choose whether to do so or not.
The pool liner claim
- A dissatisfied party to minor civil dispute proceedings may appeal against a dismissed decision by the tribunal only if the appeal tribunal’s permission has been obtained.
- Although not articulated in precisely this way in the appeal documents the main appeal grounds all criticise the validity of the inferred facts and the tribunal’s approach to the liability issue.
- In grounds 1, 2 and 3 the applicants relate to the correctness of the legal test the tribunal applied in deciding liability. Grounds 5 and 6 complain about the opinion of the pool technician being ignored by the tribunal in two significant respects. Ground 11 (which challenges the overall adequacy of the tribunal’s reasons including, in particular, failure to consider the necessity as well as the reasonableness of the respondent’s actions) and ground 8 (concerning faulty reasoning and failure to consider the issues in context) also have overlapping relevance.
- Ground 4 alleges errors of fact based on allegedly discredited testimony of the respondents.
- Ground 9 consists of allegations of (i) procedural unfairness in admitting untested evidence from another pool technician via the respondent; (ii) taking into account evidence from the pool technician that the pool liner “was a bit short”; (iii) giving it too much weight in circumstances where it had not slipped in the previous ten years; (iv) allowing itself to be misled by the respondent’s irrelevant concerns about mosquitoes to justify their actions; and (v) denying a fair hearing by depriving the applicants of a realistic opportunity to consider and rebut unspecified belated adverse material.
- Ground 10 contends that the tribunal erred in not excluding the former property manager’s evidence of prejudicial, irrelevant and ‘confidential’ information intended to tarnish the applicants’ name and besmirch their character by implying that there were ongoing pool maintenance problems when there weren’t and that they were neglectful not safety conscious pool owners.
- Essentially the applicants argue that a breach of s 188(4) RTRA (corresponding with cl 37 of the tenancy agreement) is not tested against the unruly standard of reasonableness, and that, yielding up premises or inclusions in a state of disrepair at the end of a tenancy period without legal justification or excuse (such as an act of God or extraordinary emergency), prima facie, contravenes both obligations regardless of fault. They say even if reasonableness is the test so is necessity and rely on Mr Babao’s evidence a reasonable person would have treated the bacteria with chlorine pending repairs and that the liner would probably have survived if the pool had not been drained of water.
- Leave to appeal mistaken facts by way of rehearing, by contrast, will only be granted where the findings made were “glaring improbable” the inferences drawn from them are either not supported by any evidence or contrary to the only conclusion reasonably open or “other probabilities so outweigh that chosen by the primary (tribunal) that it can be said that his conclusion was wrong.”
- Where the appeal tribunal is in an equal position with the tribunal as to the available inferences from the primary facts and has more room to set aside doubtful ones but “even in that case ...[I]t is not enough that the appeal (tribunal) would itself, if trying the matter initially, have drawn a different inference. It must be shown that the (tribunal) was wrong. This may be achieved by showing that material facts have been overlooked, or given undue or too little weight in deciding the inference to be drawn: or the available inference in the opposite sense to that chosen...is so preponderant...”.
- The favoured test is whether the totality of the evidence is logically and legally capable of supporting the vital findings and inferences.
- The applicants have the heavy burden of meeting that challenge by showing that the probable explanation for their need to replace the liner is a breach of the repair or restoration conditions by the respondents and that the tribunal could not have reasonably reached the contrary conclusion without vitiating error.
- The key period for deciding whether the respondents are liable for loss caused by a breach of the restoration clause is the four (4) weeks the respondents spent waiting for the filter to be fixed and re-fitted.
- At its highest for the respondents the evidence is that at the start of the tenancy in June 2015 the pool was reasonably fit for purpose. They “… always cleaned and maintained the pool to the highest standards” and did not complain to the property agent of any loss of amenity or enjoyment of the pool nor of spending an inordinate amount of time or money to maintain it in a swimmable condition between June and November. Thus, there is no direct or circumstantial evidence reasonably capable of supporting the tribunal’s finding or inference that the filter was unfit or inefficient from February 2015.
- The respondents opted against the chlorine solution and chose to drain, clean and refill the pool instead. It was open to the tribunal to find – if it mattered – that they did not act unreasonably in doing so.
- However, in residential tenancies the legal obligations of the landlord and tenant are strict liability depends on whether or not the premises were left in the agreed condition compared with the actual state not the reasons for damage. A failure to properly perform is deemed to occur despite reasonable care or incompetent best efforts.
- A tenant breaches a residential tenancy if he or she wrongly fails to fully meet or defectively performs an agreed, implied or statutory requirement. Unless the contrary is specifically stated the breach is not normally excused by good intentions or accident. There is no basis for implying a defence of accident or excuse of reasonableness into the tenancy agreement.
- The tenancy obligation to return the pool in its original condition less wear and tear is not diminished by the reasonableness of their remedial actions. The only way of meeting the ‘yield up’ terms of the condition was to reaffix the liner or compensate the applicants for the cost of having to do it themselves.
- Applying the wrong legal test for deciding a tenant’s compensation liability is an error of law justifying leave to correct substantial financial injustice to the applicants.
- Accordingly, leave to appeal is granted and the dismissed order set aside.
The water claim
- Clearly, the tribunal inadvertently failed to resolve the excess water claim. Consequently, the parties were denied the merits based resolution of the dispute the law entitles them to.
- In these circumstances, leave to the appeal on ground 12 must be granted, the appeal allowed and the tribunal decision amended by adding an order that the respondents to pay the applicants $589.91 for unpaid excess water charges.
- The tribunal grants leave for the applicant to appeal.
- The tribunal decision of 25 November 2016 is set aside.
- The respondent is ordered to pay the applicants $3,659.91 ($3,070.00 plus $589.91) in compensation and $315.70 filing costs within 30 days.
 Transcript 1-17:13.
Jones v Bartlett (2000) 205 CLR 166.
 Marsden v Edward Heyes Ltd (1927) 2 K.B. 1.
 See Part 2, Div 1, Cl 2 – General Tenancy Agreement.
 Gration v C Gillan Investments Pty Ltd  2 Qd R 267; Graham v Markets Hotel Pty Ltd (1943) 67 CLR 567.
Haskell v Marlow  2 KB 45.
 Proudfoot v Hart (1890) 25 QBD 42.
 RTRA Act ss 419, 420.
 Joyner v Weeks  2 QB 31.
 RTRA Act s 362(1),(3).
 Transcript 1-31:25-40.
 QCAT Act s 142(3)(a)(i).
 Warren v Coombes (1979) 142 CLR 531, 542-543.
 Warren v Coombes (1979) 142 CLR 531, 542-543.
 Annexure E: 251 days tenancy from 05/06/15 – 10/02/16 at agreed consumption rate of 2.46kL per day.
 373.54kl x $1.33 = $496.81 plus 70kl x $1.33 = $93.10: total amount of $589.91.
- Published Case Name:
Peter Walker and Lisa Walker v Christopher Ison
- Shortened Case Name:
Walker v Ison
 QCATA 64
21 May 2017