Exit Distraction Free Reading Mode
- Unreported Judgment
Meyer-Rochow v Lim QCATA 71
Meyer-Rochow v Lim & anor  QCATA 71
John David Somerville
26 April 2017
Senior Member Stilgoe OAM
Ex tempore 26 April 2017
APPEAL – LEAVE TO APPEAL – LANDLORD AND TENANT – LEASES AND TENANCY AGREEMENTS – RESIDENTIAL TENANCIES LEGISLATION – early termination – where lessees gave 29 days notice – where lessees paid break lease fee – where lessor could not find new tenants until they reduced the rent – where Tribunal below awarded lessees refund of break lease fee – whether grounds for leave to appeal
Mr Rembert Meyer-Rochow
Mr Bill Darling, Tenants Queensland
REASONS FOR DECISION
Application to adduce fresh evidence
- I’m refusing any implied application to adduce fresh evidence in this matter. As I have indicated, the three limbs to the test of whether or not to allow fresh evidence are firstly, that the evidence was not reasonably available at the time of the hearing, secondly, that the evidence is credible, and thirdly, that it will have an important impact on the result of the case.
- I accept that the evidence is credible to the extent that it is information put on the RTA website, and that will have some bearing. I do not necessarily accept that it would have an important impact on the result of the case, and the reason I say that is that while there are trends evident in tenancy matters, there is specific and clear evidence before the Tribunal about what happened in this particular instance where a tenant could not be found until the rent went down.
- In terms of whether it was reasonably available, I do not accept Mr Meyer-Rochow’s submission that it was Mr Darling’s duty to bring this to the attention of the Tribunal. Mr Darling, in the counterclaim on behalf of Ms Lim and Mr Somerville, made a submission that the rent had to be dropped in order to obtain a tenant. It was then up to Mr Meyer-Rochow, or his representatives, to bring evidence to the Tribunal that would support a contrary view. That information was reasonably available. It wasn’t brought to the Tribunal.
- The application for fresh evidence is refused, and I will be determining this matter on the basis of the evidence that was before the Tribunal, and I should say, with one caveat, that Mr Meyer-Rochow has only provided a transcript of the reasons, not of the hearing generally. So I am constrained in that respect, that the only evidence that I can rely on is that which is recited in the reasons or which is documented in the file.
Application for leave to appeal or appeal
- Mr Somerville and Ms Lim rented a property in Paddington through Paddington Partners Pty Ltd, trading as Place West Rentals. They gave notice of an intention to vacate about 29 days from the end of the usual tenancy period. They signed an agreement to terminate at some point shortly after that.
- Place West Rentals brought an application for compensation to the tribunal. The tenants, Ms Lim and Mr Somerville, made a counter-application. The tribunal, having heard both parties, ordered Place West Rentals to pay to Ms Lim and Mr Somerville overpaid rent and a refund of the break lease fee and an advertising fee.
- Mr Meyer-Rochow is the owner of the premises and he brought an application for leave to appeal that decision. Because he was, effectively, a party in the tribunal below, through his agents, Place West, the appeal has proceeded.
- Mr Meyer-Rochow has, essentially, two grounds of appeal: firstly, that the tribunal’s findings that the rent should be less than what the tenants were paying at the time that terminated, was a mistake of fact, and, secondly, that the tribunal erred in deciding that the termination agreement was void.
- Because this is an appeal from the tribunal and its minor civil disputes jurisdiction, leave is necessary. In order to establish leave, two things are necessary: firstly, an error by the tribunal, and, secondly, that there was a substantial injustice in the error.
- Turning to the submissions made by Mr Meyer-Rochow, I should at first reiterate my ruling that I refused leave to produce fresh evidence. The fresh evidence Mr Meyer-Rochow wanted to rely on was general trends in the Paddington rental market over a period. That was not allowed for the reason that it did not satisfy the test for leave to adduce fresh evidence, in that it was reasonably available at the time of the hearing and Mr Meyer-Rochow was not able to tell me why it was not produced.
- Secondly, there was direct evidence before the tribunal that, in order to achieve a reletting of this premises, it was necessary to reduce the rent. The application that was filed by Place West Rentals refers to an over-supply of rentals in this area. What the general trend might establish through RTA data, as opposed to the specific evidence in relation to this tenancy, leads me to conclude that the general evidence of the RTA database was neither cogent nor compelling. For that reason, as I have indicated, I have heard this application for leave to appeal based upon the evidence that was before the tribunal below.
- Mr Meyer-Rochow said, in passing, that Mr Darling, who appeared on behalf of the tenants, owed the tribunal a duty of care, if you like, to ensure that the tribunal had all relevant information before it.
- Mr Darling has a duty not to mislead the tribunal and he has a duty to present factual information in an appropriate way before the tribunal. The material before the tribunal below shows that there was a decrease in the rental before the tenancy could be rented out and that information was put before the tribunal and relied on by the tribunal. That is where Mr Darling’s duty to the tribunal ended.
- The issue was clearly raised before the tribunal. Place West Rentals was put on notice that this was an issue. It was really up to Place West Rentals to bring evidence to demonstrate that the reduction of rent in this case was either an aberration or was not necessary.
- The evidence was, in fact, to the contrary. As the tribunal’s reasons demonstrate, the representative for Place West spoke to the tenants and suggested that the property be reduced in rent, and that was not accepted by Mr Meyer-Rochow. I do not accept, and it is not a ground of appeal, that Mr Darling owed a duty of care to produce factually correct information to the tribunal. I am satisfied that he undertook his duty to the tribunal appropriately.
- The other issue is whether the tribunal made a mistake of fact in determining that rentals had fallen. As I have indicated, the only evidence before the tribunal was that the rent had to be reduced to enable new tenants to be found. As Mr Darling has correctly pointed out, the tribunal will not overturn a finding a fact if the evidence before the tribunal can support that fact. It will only overturn a finding if it is contrary to the compelling inferences of the evidence in the tribunal below.
- I have read the material before the tribunal below. I have looked at what the tribunal said in coming to its decision. The evidence can support the tribunal’s finding of fact, that the rent was reduced in this particular case. I can find no compelling inference in the material below, which would justify setting aside that finding of fact.
- Finally, Mr Meyer-Rochow says that the tribunal should not have found that the termination agreement was void. He puts two arguments in support of that. First of all, that finding a break lease agreement to terminate void in circumstances such as this creates uncertainty in the industry. I can put Mr Meyer Rochow’s mind at rest in relation to that. The tribunal regularly engages in educational seminars with the REIQ and the tribunal has made it very plain through those educational opportunities and the decisions of the appeal tribunal, that, in order for a termination agreement to be valid, it must comply with section 173 – that it has to be reasonable. And the tribunal has said on a number of occasions that simply writing down a figure does not make it reasonable.
- So then we come to the issue of reasonableness and it is an exercise of the tribunal’s discretion. The appeal tribunal is not going to overturn the exercise of a discretion, unless it can be shown that the tribunal acted on a wrong principle or made a finding of fact, which was not available to it, which affected the decision or was influenced by irrelevant matters.
- In this case, the tribunal was aware that the tenants had given 29 days’ notice. It was aware that the rental had to be reduced. It was aware that the notice to terminate had been given very close to the end of the fixed tenancy period, which meant that the agent was likely going to have to find a new tenant in any event. For that reason, the tribunal’s decision to require the refund of the advertising, which would have come due in 29 days in any event, and the break lease fee, which is an administration fee, which has to be referrable to the cost of finding a new tenant, which it would have had to find in any event in about 29 days, was a reasonable exercise of the discretion.
- Mr Meyer-Rochow says that the test is that the costs were not unreasonable. That is not my reading of section 173. It is for the person who seeks to impose the fee to demonstrate that it is reasonable, not to impose the fee and then challenge somebody to find that it was unreasonable.
- The last point that Mr Meyer-Rochow raised was that there was no evidence of duress or that the tenants were forced to sign that agreement. I agree that there was probably no duress in the sense that is classically referred to in decisions such as Amadio; however, the tone of the email of the 1st of February 2016 does indicate that the tenants were given very little choice in signing that agreement, and that is contrary to the tenor the Act, which says, ‘well if you give the notice then the agreement – the appropriate notice with the appropriate timeframes then the agreement is terminated’.
- What flows from there is a matter for perhaps compensation for breaches under the Act – those sorts of things – but the Act does not allow for a landlord or landlord’s agent to arbitrarily fix the damages in anticipation of compensation for a breach further down the track and that is apparently what the lessor’s agent tried to do in the email of the 1st of February. For those reasons, leave to appeal is refused.
- Published Case Name:
Meyer-Rochow v Lim & anor
- Shortened Case Name:
Meyer-Rochow v Lim
 QCATA 71
Senior Member Stilgoe OAM
26 Apr 2017