Holt v Best[2018] QCATA 66

REASONS FOR DECISION

1. [1]
   This is an application by a former tenant for leave to appeal against a termination order on 15 August 2017 on the ground that the tribunal made an error of law “in finding the termination for failure to leave when the notice … was issued without ground prior to the end of the fixed term tenancy agreement subject to sections 329(2)(k) and 293 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld).^[1]
2. [2]
   To succeed the applicant must generally have an arguable case of factual, legal or mixed error and be able to demonstrate that she would suffer substantial injustice if it is not corrected on appeal.

The context

3. [3]
   The respondent (the applicant’s former brother-in-law) owns a rural property with two residences. Under separate agreements for a year ending 23 April 2016 the “top house” was leased to the applicant and the “bottom house” to her brother, Terrance Holt.
4. [4]
   Both the applicant and Holt are named as tenants on a new 3 year fixed term lease of the “top house” from 1 April 2016 at $125 per week rent (GTA) but only the applicant (on 5 April 2016) and respondent purportedly signed it.
5. [5]
   However, the respondent disavows his signature on the GTA as a forgery. He claims to have seen the GTA for the first time when the applicant produced it at mandatory RTA conciliation (around 10 May 2017) and that the only reasonable finding open on the evidence is that any tenancy in place after 23 April 2016 was periodic not fixed term.
6. [6]
   He specifically relies on the logical inferences allegedly supported by the following circumstances:

• one of the listed tenants has not signed the lease;
• the original lease was not due to expire until 23 April 2016 but the contested GTA is dated to commence on 1 April 2016 even though it was not executed until 5 April 2016;
• he could not have signed the agreement because he was in Gladstone not Gympie between 31 March and 5 April 2016;
• the signatures of the lessor and witness are undated;
• the lease makes no reference to the two houses on the property;
• the original lease was only for the applicant at $125 per week rent. Having both the applicant and Holt listed as tenants on the GTA with rent remaining $125 per week represents an effective rent reduction the respondent would never have agreed to; and
• the GTA contains no special conditions allowing for rent increases over the tenancy period to cover possible interest rate rises.

7. [7]
   The respondent’s signature is witnessed by Margaret Holt (the applicant’s sister and the respondent’s ex-wife). It looks, at least, to closely, if not exactly, resemble his signature on the earlier genuine 1-year lease.
8. [8]
   The strongest evidence for the respondent’s forgery is that he was not in Gympie^[2] at the time the lease was purportedly signed, that is, 5 April 2016, but neither the disputed signature nor that of the attesting witness is dated and no specific finding was made about when the document was “executed”.
9. [9]
   The respondent served a Form 12 (notice to leave without grounds) on the applicant on 5 June 2017 giving her to 26 July 2017, just short of 8 weeks, to vacate.
10. [10]
    He applied to the tribunal for a termination order when the applicant was still in occupation on 28 July 2017.
11. [11]
    A tenancy ends if the lessor gives notice to leave and the tenant hands over vacant possession on the handover day.^[3] A notice can be issued at any time before the end of the term.^[4]The relevant handover day is prescribed by s 329 RTRAA.
12. [12]
    A lessor’s notice given to a tenant to leave rented premises without ground is valid for a periodic agreement if the stated handover date is not earlier than 2 months after the notice is given and for fixed term the later of the day the term ends or 2 months after a notice is given.^[5]
13. [13]
    In either case notice to leave is not ineffective merely because the handover date is earlier than the last day of the term of the tenancy.^[6]
14. [14]
    The tribunal may (not must) order termination for a tenant’s failure to leave without ground if it is satisfied it is appropriate to do so in all the circumstances even if the notice to leave is defective.^[7]
15. [15]
    The tribunal implicitly decided that termination of the tenancy was appropriate for the reason that it was only periodic and the short notice sufficient and issued a warrant of possession with effect from 2 October 2017 because the GTA was “null and void as it hasn’t been signed by both the tenants”.^[8]
16. [16]
    According to the tribunal: “when … any legal document … in two names … requiring signatures, all persons must sign it to make (it) a legally binding document”^[9] and because the GTA was executed improperly the applicant was “in there on a periodic tenancy – just week to week”.^[10]
17. [17]
    The appeal tribunal granted a stay of the decision on 5 October 2017 pending the outcome of this application.

Formation issues

18. [18]
    The applicant claims that the tribunal’s reason for vitiating the GTA is contrary to both decided cases^[11] and ss 12, 61 and 64 RTRAA.
19. [19]
    She submits that their mutual intention to be legally bound by the written terms of the GTA is evident from their signatures.^[12]  Her brother’s is not required for validity. Any inconsistencies with the lease being signed after the start date and the respondent’s signature being undated are, she says, immaterial to the enforceability of the agreement.
20. [20]
    The respondent admits that the tribunal erred in declaring the GTA ineffective for the reason cited but asserts that the agreement is still invalid on a different ground – there was no actual “meeting of the minds”.

Termination issues

21. [21]
    The applicant’s ancillary case is that the tribunal was wrong to order termination for failure to leave when a notice being issued prior to the end of the fixed term tenancy agreement is not a curable defect under s 349.
22. [22]
    Strict compliance with RTRAA notice requirements is generally necessary before the tribunal’s jurisdiction and discretion to make a termination order are enlivened.^[13]
23. [23]
    The handover date in the notice to leave is listed as 26 July 2017. However, the prescribed handover date for a periodic lease (as the respondent contends for) was 5 August 2017.^[14]
24. [24]
    To be valid, notice to leave without grounds for a 3 year GTA (as the tenancy is characterised by the applicant) should have been given no earlier than 1 February 2019 with an exit date of 1 April 2019.^[15]
25. [25]
    The respondent argues the termination order was reasonable in all of the circumstances of the case^[16] and the technically short notice in the Form 12 can be overlooked especially in light of the further 7 weeks the tribunal allowed the applicant to vacate before the warrant of possession could be activated. 
26. [26]
    If leave is refused or the appeal dismissed, the respondent requests that the applicant pay compensation for the cost of his alternative rental accommodation for the holding over period.

The merits of the application

27. [27]
    The appeal tribunal accepts that the termination order cannot be supported on the stated basis. The absence of one tenant’s signature does not, as a matter of law, make the GTA invalid as between the signatories.^[17] In acting on the mistaken understanding that it did the tribunal made an application error which, in turn, led it into making the order terminating what it deemed to be a week to week tenancy instead of conducting a hearing into the real question of whether a fixed term tenancy existed.
28. [28]
    Neither party had a fair hearing according to the substantial merits of their respective cases because of a misconception of the law on that issue.
29. [29]
    Accordingly, the tribunal constructively failed to exercise its minor civil disputes jurisdiction and mandatory function to make “…orders that it considers fair and equitable to the parties to the proceeding in order to (legally) resolve the dispute”.^[18]
30. [30]
    Leave to appeal on a question of law should, therefore, be granted and the appeal allowed and the termination order set aside.^[19]

What now?

31. [31]
    As formation facts are in contest the termination discretion may have to be exercised depending on what evidence based findings are made. The production of an executed GTA document is prima facie but not necessarily sufficient proof of the genuineness of the respondent’s signature which depends on credibility and circumstantial inferences. The sufficiency of the notice was also left unresolved.
32. [32]
    It is appropriate in the circumstances for the appeal tribunal to return the matter to the tribunal for reconsideration according to the law as stated in these reasons and relevant findings of fact as to the GTA’s authenticity and effect after a hearing including on the additional evidence presented to the appeal tribunal.