Quaresmini v L J Hooker[2018] QCATA 116

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

The nature of the application..............................................................................................................................................2

Procedural issues and timing of the applications............................................................................................................4

“Fresh evidence”....................................................................................................................................................................5

The Applicant’s statement...................................................................................................................................................5

The hearing............................................................................................................................................................................5

The findings...........................................................................................................................................................................7

The relevant legal principles................................................................................................................................................7

The nature of the application

1. [1]
   This is an application for leave to appeal, simultaneously seeking to appeal a decision of this Tribunal made on 31 January 2018 that the Applicant (who was the Respondent below and a tenant of the Respondent here), pay the Respondent here the sum of $2,730.08 within 30 days. That award reflected an amount of $4,450.08 for rental arrears held to be due, less the sum of $1,720.00 which had been received by the Respondent by way of rental bond. The practical effect of the order was that the Applicant had been found to be liable for rental arrears in that total amount of $4,450.08 before the bond monies were brought into account.
2. [2]
   The original application was brought by the respondent under s 419 and s 429 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld). The orders originally sought were for the tenant to pay rental arrears and for the cost of removal of material left at the house, and the cleaning of the house after the Applicant, the tenant, vacated 188 Sherbrooke Road, Willawong. The Applicant vacated the premises on 27 July 2017. A notice to remedy breach had been served on the tenant on 4 July 2017 in respect of rental arrears and unpaid water accounts. A notice to leave was sent on 15 March 2017.
3. [3]
   The original application sought that the following be paid :

   1. (a)
      Rental arrears - $4,450.08,
   2. (b)
      carpet cleaning - $100;
   3. (c)
      Rent arrears from 2012 - $500;
   4. (d)
      House cleaning - $350.00;
   5. (e)
      Removal of ‘junk’ from the premises - $2,215.00; and
   6. (f)
      Water bill - $367.66.

Only the rental arrears at a) was allowed.

4. [4]
   The material before the Tribunal included a tenancy agreement commencing 17 February 2015, and a further agreement of 17 February 2016 and a final one for six months from 2 October 2016 ending 1 April 2017. Each of those agreements references the existence of an entry condition report that was not before the Tribunal. There are also photographs on the file, and other materials which indicate that the subject site had been used by the Applicant as a storage area for building and construction materials, and not by him to reside on the site.
5. [5]
   An order was made by this Tribunal pursuant to a claim filed 23 May 2017, and a decision made on that on 12 July 2017 refusing reopening of the case, and issuing a warrant for possession.
6. [6]
   The application for leave to appeal sets out as the grounds of appeal that:

   1. (a)
      There has been a serious miscarriage and denial of natural justice because the Tribunal failed to properly take into consideration the poor standard of the premises and the lessor’s breach of maintenance obligations when making a decision, tenant liability to pay rent; and
   2. (b)
      The QCAT Member refused any evidence from the tenant and the tenant’s witnesses regarding the terrible standard of the premises which had become non-liveable.
7. [7]
   The matter came on for hearing before an Adjudicator at the Tribunal at 12.30pm on 31 January 2018. Initially there was no appearance for the present Applicant but sometime later he was located and participated in the hearing.
8. [8]
   The matter had in 2017 been heard and determined in the absence of the Respondent, and there was later a reopening application on the basis that there had been some kind of medical emergency on his part made on the date of the initial hearing. An order was made permitting a rehearing on the basis of medical evidence put before the Tribunal.
9. [9]
   The orders sought on the appeal are that the appeal be granted and that there be a rehearing of the application and indeed that the Tribunal hear some further non-articulated application by the Applicant for a rent decrease, due to the standard of the rental property having declined due to the lessor’s alleged failure to do maintenance on the property.
10. [10]
    There were directions in this Tribunal that the Applicant was to file submissions detailing the alleged errors of fact and law made by the decision maker and any further submissions in support of the application for leave to appeal, and that neither party be permitted to rely upon any evidence that was not before the original decision maker without the leave of the Appeal Tribunal.
11. [11]
    A separate application was filed by the Applicant on 24 April 2018, together with two affidavits, and also a report from Mr David Tacon from an organisation known as All Inspect. That report was dated 20 June 2017. It described the condition of the property. That followed on from an inspection made on 19 June 2017. That report lists, in various ways, numerous defects which were found about the condition of the house and other improvements on the site. It describes the condition generally having regard to those defects as being below average. It does not specifically deal with the habitability of the premises, and does not deal with the question of whether the rental which was being paid for it was commensurate with market rent.
12. [12]
    By orders of the Tribunal dated 27 April 2018, it was ordered that the Applicant’s application to rely on fresh evidence be determined on the application of the leave to appeal or appeal. The fresh evidence that appears to be sought to be relied upon is a statement dated 31 January 2018 by Ms Esther Wu Deng, and another statement of the same date by Petrina Francille Campbell.
13. [13]
    The affidavit of Ms Deng, who was apparently the employer of the Applicant, refers to the fact that she helped the Applicant clean the house but that it was impossible to clean for various reasons, particularly concerning the condition of the kitchen. There were tiles coming off in the bathroom and the bathtub had lost its enamel. The windows would not stay shut. The front stairs were dangerous and there was missing guttering above the stairs. There was no inside toilet, and the toilet which was there was at the rear of the house is a rotted out floor.
14. [14]
    The affidavit of Ms Campbell identified that she was a tenant of the property at an earlier time from January 2014. She described the condition of the house as ‘fair at best' but needing accommodation, lived there anyway. She referred to the extent of flooding under the house when it rained, lack of guttering, problems cleaning the bath, the age of the stove, the condition of the toilet floor and similar matters. She identified earthmoving equipment at the back of the property. The rent she originally paid was $385.00 per week, but from March 2015 the figure was $430.00 per week.

Procedural issues and timing of the applications

15. [15]
    There are procedural issues concerning the appeal, not the least of which is that although the decision was provided to the Applicant within a few days of its having been made, namely on 2 February 2018, the appeal was not initiated within the time required by s 143 because it was filed on 7 March 2018, more than 30 days after notice of the decision was given.
16. [16]
    In the end, however it does not seem to me that these few days of lateness have resulted in any prejudice to the Respondent, and to the extent that leave may be given to appeal out of time, it would have been appropriate, were the merits otherwise with the Applicant, to give leave to appeal out of time or to extend time for the filing of the application for leave to appeal.
17. [17]
    For the Respondent, detailed submissions have been put forward as to why that non-compliance with the time for filing a notice of appeal ought be fatal. It is unnecessary to revisit what has been said in some of the decisions to which reference has been made in the Respondent’s outline, because in each case they involve delays which were or have been identified as having been lengthy, and in those circumstances, in the absence of an explanation for that inordinate delay, the waiver of the procedural irregularly was not permitted. This is not such a case.
18. [18]
    The Respondent also complains about a non-compliance with directions dated 19 March 2018 which required other steps to be taken by the Applicant within certain timeframes. It is suggested that the application for leave to appeal was served two days late. Again, it does not seem to me that this ought be treated as fatal to the application.

‘Fresh evidence’

19. [19]
    The Respondent’s submissions otherwise address the question of whether fresh or additional evidence ought be allowed on the part of the Applicant. The issue is whether in fact it is fresh evidence, and whether it was always available and in broad terms, by reference to legal principle, whether the application generally has merits.
20. [20]
    This is a minor civil dispute in respect of which leave is necessary to appeal. It has been accepted that leave to appeal will ordinarily only be granted where there is some question of general importance upon which further argument should be allowed, and a decision of the Appeal Tribunal would be to the public advantage, or there is a reasonably arguable case of error in the primary decision and reasonable prospects that the Applicant would obtain further substantive relief: per Senior Member Stilgoe AO in Graves v Paul Vertullo Real Estate [2011] QCATA 270.
21. [21]
    As was also identified in the Graves decision, the second question is whether leave is necessary to correct a substantial injustice to the Applicant, caused by some error.
22. [22]
    Other than to raise those issues, the Respondent does not address in specific terms the merits of the grounds set out in the application, or indeed the question of whether there has been a miscarriage and a denial of natural justice, as the application asserts.

The Applicant’s statement

23. [23]
    In his statement, the Applicant contends that the Adjudicator erred in not taking into consideration that the house was in unliveable condition, that the toilet was away from the house, and other aspects of the condition of the property. He complains that the house flooded underneath causing damage to some of his property and described various other aspects of what he perceived to be dangerous or unsatisfactory conditions about the property. He contends that he told LJ Hooker that he was not going to pay anymore rent unless the repairs were completed, although there is no independent evidence that such a request was made. He contends that had the Adjudicator who was hearing the matter looked at his witness statements he would have agreed the house was in an un-rentable condition. He contends that after he moved out, the Respondent could not rent the property without doing certain repairs, and even then reduce the rent by $35.00 per week, effectively as a storage space.
24. [24]
    There was no objective evidence that during the subject tenancy, the Applicant issued any notice or complaint or other application suggesting there had been alleged breaches by the Respondent lessor of the tenancy agreement.

The hearing

25. [25]
    There is a transcript of the hearing before the Adjudicator. In the course of that hearing, for which the Applicant was present throughout, it was identified that the sum of $4,450.08 was being claimed for unpaid rent for the period from 15 May 2017 until 26 July 2017 at $430.00 per week, plus house cleaning costs for the inside of the property, junk removal and the other matters listed in these Reasons above. Both of the Applicant’s witnesses were at the hearing and available to be called.
26. [26]
    In the course of the hearing, he explained that he rented the property in 2014 as a place to store his heavy equipment. He approached Ms Campbell who was living in the house, and he offered to rent the backyard space of the property from her.
27. [27]
    He then approached LJ Hooker and arranged himself to lease the property, and sublet the back section off to Ms Campbell. He spent, he claims, $20,000.00 dumping rubbish and putting down road base and levelling the block. He said that it was never intended to be a residential lease, because he did not in fact live there himself. Then later, his subtenant moved out and he was somehow or other made the tenant.
28. [28]
    When asked to explain how this was relevant to the issues to be determined in the application, he responded that he himself and owned nine houses in the past, and that this house was not in a rentable condition. He claimed that he had issued a breach notice as a tenant, although there was no direct evidence of that apart from assertion. He accepted that he had not brought any proceeding in QCAT in relation to the state of the premises.
29. [29]
    The Adjudicator took the position that the question of whether the property was in a terrible condition, and indeed caused him to suffer an injury, was a separate question to whether the rent was owing and that if he moved out without bringing and getting an order from the Tribunal terminating the agreement, he was in breach of the agreement insofar as it required rent to be paid.
30. [30]
    He then referred to having some kind of agreement separate from the residential tenancy agreement saying that he could use the back of the property until the property was sold, having regard to the amount of money he spent on the place. These assertions went no further as a basis to resist the obligation to pay rent. The Applicant asserted that this was an agreement in relation to an industrial site, and should be in the Court system rather than in QCAT.
31. [31]
    Some consideration was given by the Adjudicator as to whether to adjourn the matter to allow the Applicant to get some kind of tenant’s advocate to appear to argue the issue, because he could not understand why the fact that the house itself was unliveable meant that no rent was required to be paid.
32. [32]
    There was then an exchange between the Adjudicator and the Applicant about the circumstances of the signing of the tenancy agreement, when it was signed, and how it came to be signed. The Adjudicator indicated that his inclination was to order that the rent be paid, but that the other monies sought to be recovered for cleaning up should not be ordered.
33. [33]
    When asked to indicate why rent was not required to be paid independently of whether there was a failure to comply with a maintenance obligation, his response was to indicate that it was a duty on the agent to keep the premises in an appropriate condition. There was no reference to any legal principle, even obliquely, which would justify the conclusion that rent did not continue to accrue whilst premises were in a poor condition.
34. [34]
    Implicit in what the Adjudicator was saying in the course of argument was that he was willing to accept what the Applicant was saying was the poor condition of the premises. He indicated that he was not satisfied that the claim should be allowed for rubbish removal or cleaning or the like because there was not sufficient evidence to justify those claims, but even if she was to make a finding specifically that the state of the premises was substandard, that nevertheless left the question of what rent was to be paid.

The findings

35. [35]
    At the conclusion of the hearing, the Adjudicator gave brief reasons. He concluded by stating that he was not making any specific findings as to whether there was an agreement on foot for the conduct of a business, but held that there was ‘sufficient oral evidence’ and other evidence to show that there was:

…potentially another agreement or that there is some arrangement or agreement between the Respondent and the landlord regarding the use of the subject land at the residential premises is contained upon (sic).

He nevertheless held that it was a residential tenancy agreement and that rent was due and payable up to and including 26 July 2017.

36. [36]
    In relation to the state of the premises, he held that it was not necessary for the Tribunal to make findings in that regard because even if it was the case that it made those findings, it did not mean that there was no requirement to pay the agreed rent. As to whether there is a claim in relation to a rent reduction, that was a matter that the Tribunal held it could not give advice about as to whether such a claim should be brought, but noted there was no claim before the Tribunal in that regard. He concluded that there was an agreement in relation to the use of the land involving heavy machinery and that therefore be no order in respect of compensation regarding rubbish removal.

The relevant legal principles

37. [37]
    None of what follows was referenced in the submissions below or by either party to this appeal.
38. [38]
    At common law, a landlord has no general liability towards a tenant to do repairs during the term of the lease or to put the premises into a reasonable state of repair at the commencement of the lease, however poor the state of repair might be. As Erle CJ said in an oft quoted dictum in Robbins v Jones: ‘there is no law against letting a tumble down house’ [1863] 143 ER 768 at 776. The landlord assumes a duty to repair, or to maintain, or to place premises into a habitable condition only if there is an express term in the lease, or because there is a statutory duty to that effect, or alternatively an implied term in the lease to that effect.
39. [39]
    Even where such a duty exists, subject to there being a right to set off against rent which might otherwise be payable, the cost of bringing a property into an appropriate state of repair in circumstances in which the lessor has breached a duty in that regard, there is no general right held by a tenant to withhold the payment of rent merely because a landlord has not met under the lease to repair or the like.
40. [40]
    It has long been established, since Smith v Marrable (1843) 11 MNW 5, 152 ER 693, that there is an implied condition in leases of furnished premises that the premises are fit for human habitation at the commencement of the lease. In a recent Victorian Supreme Court decision of Shields v Deliopoulos [2016] VSC 500, it was held that landlords should ensure that residential premises are maintained in good repair, even if the property is dilapidated when the tenant goes into occupation. Even there, the Judge acknowledged that the conclusion could reduce the supply of very low cost residential housing.
41. [41]
    At common law, it is clear that a tenant is entitled to an abatement of rent where he or she expends money on repairs which are necessary as a result of the default of the landlord in satisfying the repair covenant,^[1] or if money is expended on the premises by the tenant at the request of the landlord. These principles are subject to the requirement that the landlord must be notified of the want of repair and that the sum be a fixed and ascertained amount that has been acknowledged by the landlord or an amount which the landlord could not question. It should be made clear that a tenant cannot merely withhold rent in an effort to force a landlord to repair.^[2]
42. [42]
    This will result in the landlord being entitled to seek forfeiture for non-payment of rent, although a tenant may have thereby an action for damages or be able to seek specific performance of the repair covenant. In emergency situations where a landlord is bound to repair, so as to avoid further damage a tenant may be entitled to a right to abatement but without the need to give notice to the landlord.
43. [43]
    There is no suggestion here that the Applicant has expended money on repairs which were necessary as a result of the default of the landlord in satisfying the repair covenant.
44. [44]
    There is authority that unliquidated damages for breach of covenant cannot be set-off against the liquidated claim for rent (McDonnell & East Limited v McGregor (1936) 56 CLR 50)
45. [45]
    In Knockholt Pty Ltd v Graff [1975] Qd R 88, Campbell J referred to the decision in Fingland & Mitchell v Howie (1926) SC 319, where a tenant averred that the landlord was in breach of his obligation to keep the premises in tenantable condition, retained the rent and counter-claimed for damage suffered by her. The defender claimed to be entitled to set off the loss against the lessor’s claim for rent and also to counter-claim therefor. The Sheriff-substitute held that the defences were irrelevant and the counter-claim incompetent, but, on an appeal, the Court remitted it to the Sheriff-substitute to allow a proof before answer. Lord Ormidale said, at page 323, that he thought that:

…there may be nice enough questions, after the actual facts have been ascertained, whether or not the defender is entitled to retain her rent in consequence of the damage which she suffered.

His Lordship thought that there was sufficient in the tenant’s allegations to infer that the landlord was in breach of his contract to give her, in the fullest sense, full possession of the house. Lord Anderson, although expressing the opinion that a counter-claim on personal grounds unconnected with the contract of tenancy could not be an answer for a claim for rent, was of the opinion that the ‘counter-claim’ was competent and relevant so as to entitle her to retain the rent. He appeared to use the word ‘counter-claim’ as including both a set-off and a counter-claim. Lord Hunter said, at pages 323–324:

A claim for rent in order to be a liquid claim must be put forward by a landlord who has fulfilled the obligations imposed upon him by the lease, because the contract is a mutual contract involving rights and obligations upon both parties to the lease.

46. [46]
    His Lordship went on to state that if the claim for rent was a liquid claim then the unliquidated claims for damages could not be set against it.
47. [47]
    W. B. Campbell J thought that:^[3]

…the view of Lord Hunter that a claim for rent can only be treated as a liquid claim when the landlord has fulfilled his obligations under the lease is an interesting one. It emphasises the mutuality of the contract between landlord and tenant, and lends support to the view that such a claim on the part of a tenant should be treated as an equitable set-off. I think that it would so be regarded by a Court of equity as a basis for giving protection on equitable grounds to a tenant. On the authority of Waters v. Weigall (supra) I am of the view that, on this application, I should consider that the lessees may validly claim to have expended money to the use of the applicant and to set-off such money against the rent. Consequently, I am not prepared to hold that they have failed to comply with the conditions precedent to the exercise of the option. I refuse to make an order for summary judgment for possession of the land.

48. [48]
    Although the reasons of the Adjudicator did not fully articulate the relevant legal principles which might be applied to relieve a tenant of an obligation to pay rent even when the lessor failed to let the premises in a habitable condition in the first place or to meet responsibilities to maintain and repair during the term of the lease, there was no demonstrated error in the approach that the Adjudicator took in arriving at the conclusion that the rent was payable for the period during which the tenant was in occupation, albeit of premises which were in a very poor condition.
49. [49]
    The grounds of appeal contend that there was a denial of natural justice because the Member failed to take into consideration the poor standard of the premises and the lessor’s alleged breach. That ground is not made out on the face of the record, because whilst no clear findings have been made about the standard of the premises, it is clear that the Adjudicator received the evidence in that regard, and reached at least preliminary views by which he accepted what the Applicant’s witnesses had to say about its condition in that regard. The proposition that there was a failure to accord natural justice, or some other legal error in failing to take those matters into consideration when deciding whether there was a liability to pay rent is without substance.
50. [50]
    There is no suggestion that the Adjudicator did not take into account the evidence in the statements from the Applicant’s witnesses. It is simply not true that the QCAT Member refused any evidence from the tenant and the tenant’s witnesses regarding the terrible standard of the premises which had become non-liveable. It would appeal that the member did not regard what was said in those statements as bearing upon the issue of whether rent was payable.
51. [51]
    The orders which it is sought be made here are that there be a rent decrease. To contend that this Tribunal on appeal ought make such an order is misconceived. There is no basis upon which, on an appeal the Applicant can bring such an application nor is there any foundation identified for making such an order, whether on the facts, or as a matter of legal principle.
52. [52]
    If there was some right which arose to have the rent reduced, it arose during the term of the tenancy, and if some relief were available in that regard it was required that the Applicant initiate an application in that regard well before this Tribunal was seized of the matter on appeal. It therefore follows that the application for leave to appeal is dismissed, and insofar as there is an appeal which does not require any leave, the appeal is dismissed as being without substance.
53. [53]
    As may be seen from these Reasons, they have taken into consideration the material which is described as ‘fresh evidence’. Because of the findings that I have made, it has not been necessary to decide whether there should be any specific ruling about whether the Applicant ought be entitled to rely upon that material because, even having had regard to it, it cannot alter the result.
54. [54]
    I order that the application for leave to appeal and the appeal be dismissed. I need not rule on the Applicant’s application to rely on fresh evidence because I have set out what it provides, and have made findings which assume for the purposes of this appeal the facts that are set out there but concluded that they could not alter the result even if accepted.