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- Unreported Judgment
Vision Real Estate Qld Pty Ltd v Eagle QCATA 63
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Vision Real Estate Qld Pty Ltd v Eagle & Anor  QCATA 63
VISION REAL ESTATE QLD PTY LTD
ORIGINATING APPLICATION NO/S:
10 May 2019
On the papers
APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – RESIDENTIAL TENANCY – where tenants left the rented premises before the end of the fixed term – where the lessor claimed compensation for break lease losses – where tribunal refused to award compensation for reasonable reletting expenses – whether leave to appeal should be granted – whether appeal should be allowed.
Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 13, 32
Residential Tenancies and Rooming Accommodation Act 2008 (Qld) ss 4, 83, 85, 163, 164, 165, 173, 277, 312, 319, 321, 322, 327, 331, 332, 357, 362, 420
Progressive Mailing House Pty Ltd v Tabali Pty Ltd (1985) 157 CLR 17
This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).
REASONS FOR DECISION
- Leave is granted limited to the question of whether tenants are liable for break lease losses where they make it clear that they are unwilling or unable to stay until the end of a fixed term tenancy by returning the keys of the premises and vacating on short notice.
- The property agent contends that the lease was binding at least until reletting and the tenants are liable for the lessor’s relatable losses because they terminated the tenancy in a way not permitted by the agreement or the Residential Tenancy and Rooming Accommodation Act 2008 (Qld) (RTRA Act).
The terms and conditions
- The RTRA Act and general terms of the tenancy relevantly provide:
- cl 3 – each named tenant is liable to perform all the tenants obligations including payment of the stated rent ss 83, 85 RTRA Act meeting outgoings and service charges, ss 163-165 RTRA Act
- cl 7(2) – tenants terminating fixed term agreement early in a way not permitted under the Act must pay the reasonable costs incurred by the lessor in reletting the premises
- cl 36 – the tenancy agreement only ends if (a) the tenant and lessor agree in writing (c) the tenant gives notice of intention to leave to the lessor and hands over vacant possession on or after the handover day or (d) the tenant abandons the premises
- cl 38 – the tenant must return the keys for the premises at the end of the tenancy
- For a breach before the end of the tenancy special term 48 entitles the lessor to:
- rent and service charges until the lessor relets the premises or the end specified date of the tenancy whichever is the earlier, and
- reasonable costs (including advertising costs) of reletting ss 173(2) and 420 RTRA Act.
- The tenants left the premises 11 days into the six (6) month fixed term ending 9 May 2018 without leaving a forwarding address. Domestic violence is the suspected as the reason but there is no evidence to support such a finding. A new tenancy commenced 5 January 2018.
- The RTA refunded the $800 security bond or a month’s rent to the agent on behalf of the lessor. The tribunal rejected the claim for an extra $1,091.00 for loss of rent ($400) and reasonable reletting expenses (including $214.50 “dust over” and $476.50 for maintenance) on the ground that the parties’ tenancy obligations had been discharged by “mutual consent”.
- A fixed term lease is a promise by the tenants to stay and pay rent for the full term. Tenants are not liable for vacating early where the premises are unliveable or they are forced to by the mortgagee. A domestic violence victim can apply for a termination order, without notice, under either ss 312 or 321 or s 322 RTRA Act. Otherwise, the parties can be legally released from their respective obligations under the agreement only by ending the tenancy in a way mentioned in s 277 RTRA Act including :
- (2)... by written agreement of the lessor and tenant.
- (4)... if the tenant—
- (a)gives a notice of intention to leave the premises to the lessor; and
- (b)hands over vacant possession of the premises on or after the handover day.
1 See section 327 for requirements for the notice.
2 See sections 331 and 332 for requirements about the handover day.
- (a)... a tribunal makes an order terminating the agreement; or
- (b)... the tenant abandons the premises.
1 See chapter 5, part 1, division 6 for the making of termination orders by the tribunal.
2 See chapter 5, part 1, division 8 for alternative procedures the lessor needs to follow in the case of abandonment of the premises.
- Notably, neither acquiescence nor re-entry are listed as a permissible means of effectively ending a fixed term tenancy early but abandonment by the tenant is.
- The lessor can terminate an agreement for abandonment on 7 days’ notice or apply for a tribunal order under s 357 RTRA Act.
- Subject to mitigation in s 362 RTRA Act and the considerations in s 321 RTRA Act QCAT has the discretion to order payment of rent arrears and lost rent until reletting under either s 420 RTRA Act or the more specific provisions of s 357 RTRA Act.
- While not every breach or termination event gives rise to a right to compensation for future rent even under special condition 48 the RTRA Act discretion will usually favour it where, as here, the expectation loss to the reletting date was caused by the tenant’s renunciation of all their essential obligations under the agreement.
- Alternatively, under the general law preserved by s 4 RTRA Act may elect to accept the tenant’s act of abandonment as repudiation or elect to rescind for anticipatory breach of the conditions of the tenancy and apply for loss of bargain damages for breach of contract under s 13(2)(a) QCAT Act.
The fair and equitable solution
- The tribunal’s dismissal order was made on the basis of the lessor’s inferred consent to the termination and, presumably, implied waiver of the tenant’s abandonment breach. Consent is a state of mind denoting volition and choice. The tribunal did not inquire into this issue in any depth. Nor did it explain why the lessor’s conduct in the circumstances was logically more consistent with assent than the alternative explanation of accepting the fait accompli.
- On my analysis of the tribunal facts this tenancy was ended early by the tenants in a way permitted by both the tenancy and the RTRA Act viz., abandonment (see special condition 48 and s 277(5)(b) RTRA Act). The tenants were liable for mitigated reletting costs as well as lost rent and service charges until the new tenancy started. In deciding to the contrary the tribunal applied the wrong law and, therefore, the dismissal order cannot be considered a “fair and equitable” one for resolving the matter of dispute between the parties as s 13 QCAT Act requires.
- In my opinion, an order for payment of the amount claimed for lost rent and other expenses to reletting accords with the uncontested facts as well as the objects and requirements of the QCAT Act.
- The appeal is therefore allowed, the tribunal order is set aside and a payment order substituted.
- Published Case Name:
Vision Real Estate Qld Pty Ltd v Jennifer Eagle and Ian Jones
- Shortened Case Name:
Vision Real Estate Qld Pty Ltd v Eagle
 QCATA 63
10 May 2019