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LJ Hooker Stafford v Hagan QCATA 161
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
LJ Hooker Stafford v Hagan  QCATA 161
LJ Hooker stafford
MCDT 401/18 (Brisbane)
18 November 2019
On the papers
Leave to appeal is refused. This means that the appeal fails.
APPEAL AND NEW TRIAL – PROCEDURE – QUEENSLAND – WHEN NO APPEAL LIES – where tenants damaged the wooden floor of a house – where it is said the Justices of the Peace applied incorrect principles when assessing the award of compensation to the owners – whether any reasonably arguable grounds of appeal
Residential Tenancies and Rooming Accommodation Act 2008 (Qld), s 362
Stockdale & Leggo v Gordon  QCATA 112
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld)
REASONS FOR DECISION
- LJ Hooker Stafford bring this appeal on behalf of the owners of a house in Wavell Heights which had been tenanted by Douglas and Paula Hagan. The dispute is about the extent to which monies representing the rental bond paid by the tenants should be retained by the owners of the house following the ending of the tenancy.
- The application to the tribunal for the return of the rental bond monies was made by Douglas Hagan alone. The matter came before a tribunal panel comprised of two Justices of the Peace. The Appeal Tribunal has obtained a transcript of the tribunal hearing and so it is possible to see what happened. At the tribunal hearing, Mr Hagan was on the telephone from Canada, and LJ Hooker represented the owners as their agents.
- The parties were in dispute about what damage had been caused by the tenants to the wooden floor in the house during the tenancy, and what compensation should be awarded to the owners. The house had polished wood floors in the lounge and dining room and in the kitchen and hall. The agents alleged that the tenants had damaged two areas of the floor – one area in the kitchen and one in the lounge room. The tenants admitted having caused the damage in the kitchen – by allowing a refrigerator to be dragged along the floor. This had caused a long mark on the floor. The tenants denied having caused any damage to the floor in lounge room. However, photographs submitted to the hearing showed discolouration and scratches near a wall in the lounge room.
- At the time of the hearing the floor had not been repaired, but the panel was provided with quotes for repair obtained by LJ Hooker. They ranged in amount from $1,276 to $3,000. Two of the quotes were for cutting back and recoating, or sanding and finishing, all the wooden floors. One of the quotes was only for a localised repair of the areas alleged to have been damaged by the tenants. There was discussion at the hearing about whether it was necessary in order to repair the damage, for repair work to be done on all the wooden floors or whether a localised repair was sufficient. And there was a discussion about the proportion of the quote that the tenants ought to pay.
- The tenants had offered $191 as compensation for the admitted floor damage to the kitchen. This was roughly 15% of the lowest quote for cutting back and recoating all the wooden floors which was for $1,276 including GST. The tenants said that the offer was on the basis that the area which was damaged was small compared with the total area in the quote.
- The panel agreed that the tenants’ offer was fair, and on that basis, ordered the sum of $2,218 be paid by LJ Hooker to the tenants. The reason why the order was made in this way was that the rental bond of $3,360 which had been held by the Residential Tenancies Authority (‘RTA’) had already been distributed by the RTA as to $751 to the tenants and $2,609 to the owners. Of the $2,609 distributed to the owners, the sum of $200 had been agreed by the tenants as properly deducted for damage to the benchtop, leaving $2,409 in dispute. The panel decided that the owners were entitled to $191 of the $2,409. Hence the order was that the agents on behalf of the owners should repay the tenants the sum of $2,218.
- When giving reasons for this decision, the panel did not expressly state whether they had found that the tenants were responsible only for the damage to the floor in the kitchen as they had admitted, or whether the tenants were also responsible for the damage to the floor in the lounge. However, since the tenants had made it clear that the offer of $191 was for the damage to the floor in the kitchen only, it must have been the panel’s finding that the tenants were responsible only for that admitted damage.
- There is no appeal against that finding, and indeed the submissions suggest that it is now accepted by the owners that the tenants were responsible only for the admitted damage to the kitchen floor. The appeal should therefore be resolved on the basis that the tenants were only responsible for the admitted damage to the kitchen floor as found by the panel.
- In appeals of this sort to the Appeal Tribunal it is for the appellant to show that the tribunal made an error which ought to be corrected on appeal. Such an error might be one of law, or an error of mixed law and fact or a finding of fact which was not open to the tribunal.
- An appeal is not an opportunity to obtain a second opinion about the merits of a particular case or to ask another tribunal panel to review the decision of the original panel.
- Despite this, in its application for leave to appeal or appeal, LJ Hooker give the reasons for the appeal as being:-
We request that the tribunal decision is reviewed and that the original case be dismissed.
- It appears therefore that LJ Hooker are asking the Appeal Tribunal to do something which it cannot do.
- In addition to the above difficulty, LJ Hooker seem to wish to put before the Appeal Tribunal some new photographs showing the damage more clearly than in the photographs which were before the panel which heard the matter. Bearing in mind that appeals should consider whether a panel made an error in deciding the matter on the evidence that was put before it, there are restrictions in allowing such fresh evidence. Usually fresh evidence is only allowed if it is of significance, and could not have been made available for the original hearing. Since LJ Hooker provided photographs of the damage to the floor to the original hearing, it is difficult to ask on appeal that better photographs should be considered instead.
- There is a further difficulty with the fresh evidence and it arises from the Appeal Tribunal’s directions given on 20 February 2019. It was directed that if either party seeks leave to rely on any fresh evidence in this appeal then they must apply for this in a formal manner including serving it on the other side to the appeal and explaining why it was not available to the tribunal below, why it is important and why it should be accepted. The other side to the appeal are then permitted to make submissions about the fresh evidence. No such application was made.
- In the circumstances it would be wrong for me to consider the fresh evidence.
- Submissions in the appeal were made by the owners. They raised a number of issues. Most of these issues are of matters which are not relevant in this appeal, or which refer to things said at the hearing which did not form part of the panel’s reasons for its decision. I need not deal with these matters in this appeal.
- One relevant ground of appeal is that as a matter of principle it was unjust for the tribunal to base its decision on the cheapest of four quotes. Although it is true that this is what the panel did, I do not accept that this is an error of principle. The quote that was relied on was one provided to the tribunal by LJ Hooker and so there was no reason for the panel not to accept it. It is suggested in submissions that, despite the fact that the cheapest quote was submitted by the agent on the owners’ behalf, the tribunal should have allowed the owners to choose a more expensive quote instead. This is the wrong approach because it would offend against the principle that a claimant has a duty to take reasonable steps to mitigate loss or expense arising from a breach of the tenancy agreement, a common law rule restated in section 362 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld). It was certainly open to the tribunal to rely on this quote.
- Another relevant ground of appeal is that the tribunal was wrong to limit the compensation to 15% of the quote. It is said that the tenants had admitted responsibility for the damage and therefore should have to pay for the cost of repair to the whole floor and not just the area which was damaged.
- The suggestion here appears to be that the tribunal should have approached the matter on the basis that wooden floors cannot be patch repaired – so that the whole floor needs to be sanded and polished as one. It can be seen that it was submitted on behalf of the owners during the hearing that this was the case.
- One difficulty with this is that there was no expert evidence to that effect. But even if it is said that the tribunal should have accepted what was said by the agent about this as correct, it would mean that the floor as repaired would then be in a better condition than when the tenancy commenced. That would mean that if the tenants are ordered to pay the whole cost of the repair as the owners are asking, then the owners would be over compensated. So, under the principle of betterment the award should normally be reduced to allow for the element of betterment. The applicable principles were discussed in Stockdale & Leggo v Gordon  QCATA 112 at  to .
- This is effectively how the panel approached the matter. The panel made the point when giving reasons that ‘it’s not our practice to award money to lessors for them to refurb houses at the tenants’ expense’, which would have been the result if the owners received compensation equal to the quote for repairs to all the wooden floors without a discount to allow for betterment.
- As explained in Stockdale, it is not in every case that there should be a discount for betterment. There may be times when an owner has no alternative but to carry out the repairs caused by the tenant’s damage much earlier than would otherwise be the case. In such circumstances, it may not be fair to discount for betterment. Here however, the evidence was that there had been two further tenants in the house since the tenants had left and the repairs to the wooden floor had not been done. And the agent confirmed that the damage to the floor had not inconvenienced the current tenants or ‘impeded the tenancy’. From this, it was clear that the repair work was not urgent.
- The panel’s decision cannot be impugned on the basis suggested in this ground of appeal.
Conclusions in the appeal
- In matters such as this leave to appeal can only be given if there appears to be a reasonably arguable ground of appeal. In this appeal there is no reasonably arguable ground of appeal and so leave to appeal should not be given. This means that the appeal fails.
It is better practice for all tenants to be applicants in such proceedings to ensure that they are bound by the outcome. If they are not joined as applicants they may be joined as respondents, subject to the need for procedural fairness.
As stated by Mr Hagan in evidence and in his email of 14 December 2017 to the agent. It is notable that the agent’s emails in response did not refer to a second area of damage.
Owners’ submissions on appeal that ‘the tenant has admitted to 100% of the damage’ which must be a reference to the admitted damage to the kitchen floor.
Transcript page 1-14, line 16.
The example given in Stockdale is where a tenant damages a rain water downpipe and the owner has no alternative but to repair the downpipe. After the repair, the condition of the downpipe may be better than at the commencement of the tenancy, but it may not be fair to the owner to apply the discount for such betterment.
Transcript page 1-7, line 39.
- Published Case Name:
LJ Hooker Stafford v Hagan
- Shortened Case Name:
LJ Hooker Stafford v Hagan
 QCATA 161
18 Nov 2019