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Gorman v Berrell[2019] QCATA 73

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

Gorman & Anor v Berrell & Anor [2019] QCATA 73

PARTIES:

WILLIAM GORMAN

TONI GORMAN

(applicants/appellants)

 

v

 

ROBERT BERRELL

PATRICIA BERRELL

(respondents)

APPLICATION NO/S:

APL211-18

ORIGINATING APPLICATION NO/S:

MCDT 102/18

MATTER TYPE:

Appeals

DELIVERED ON:

29 May 2019

HEARING DATE:

30 January 2019

HEARD AT:

Brisbane

DECISION OF:

Justice Carmody

ORDERS:

  1. Leave to appeal granted on 30 January 2019.
  2. Appeal dismissed.

CATCHWORDS:

APPEAL – MINOR CIVIL DISPUTE – RESIDENTIAL TENANCY – where the tenants signed a fixed term  residential tenancy agreement – where the tenants were not given vacant possession of the described premises – where the lessors' were living in the granny flat on the premises – where the agent deliberately failed to disclose pre contract – where the tenants refused to move in – where the lessors claimed compensation for loss of rent for break lease and damages – where the tenants counter applied for bond refund, prepaid rent, storage cost and temporary alternative accommodation expenses – where the tribunal found the tenants acted reasonably in cancelling the tenancy because of the non-disclosure – where tenant’s  counter claim allowed and lessors' dismissed – whether appealable error.

Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 13(1)

Residential Tenancy and Rooming Accommodation Act 2008 (Qld) ss 4, 9, 173, 182, 183, 277, 327, 331, 332, 359, 360, 419, 420, 421

APPEARANCES & REPRESENTATION:

Applicant:

J Voss, Blue Moon Property Pty Ltd, for the applicants

Respondents:

Self-represented

REASONS FOR DECISION

  1. [1]
    Leave to appeal was granted on 30 January 2019 to allow the appellants on the question of whether the tribunal orders are within the permissible range of orders open to the tribunal.

The context

  1. [2]
    The appellants own both the house at 34 and adjacent granny flat at 32 Gleneagle Street, Buderim. They claim that the premises are misdescribed as 32 in item 5.1 of the tenancy agreement instead of 34. According to them the lessor obligations in ss 182-183 Residential Tenancy and Rooming Accommodation Act 2008 (RTRA Act) to ensure the tenant has vacant possession only apply to “the premises” they are entitled to occupy under the agreement which in this case was #34 not #32.
  2. [3]
    However, under s 9 RTRA Act “premises” for a residential premises includes the land it occupies and the respondents say that the agent led them to believe that the granny flat was on the same block as the house.  A finding that the respondents were entitled to exclusive enjoyment of the granny flat at #32 for the full term of the agreement was, therefore, open to the tribunal.
  3. [4]
    It is undisputed that before signing the tenancy agreement the respondents were told by the property agents that a “young male relative” living in the granny flat at the inspection date would be moving out before their right to occupy commenced and that no one, including the owners, would be living there after that.
  4. [5]
    The appellants moved into the granny flat before the start date and planned to live there permanently. The agent asserted that privacy considerations precluded disclosure of the landlord’s intended occupation of the granny flat and it was normal industry practice not to specifically exclude self-contained dwellings on the same allotment from residential tenancy agreement. The tribunal rejected that explanation and concluded that the respondents acted reasonably in cancelling the tenancy for pre-agreement non-disclosure.
  5. [6]
    Instead of applying to the tribunal for a termination order under s 277(5)(a) RTRA Act the respondents rented elsewhere without entering into possession on the basis that they “would never have agreed to this and signed the lease” if they had not been misled.
  6. [7]
    The appellants contend that a fixed term tenancy agreement in Queensland ends only if a s 277 RTRA Act event occurs or the tribunal makes an order under Ch 5 Pt 1 RTRA Act.  On this basis the respondents wrongfully repudiated their promise to stay for the minimum specified period and the tribunal findings to the contrary at [45]-[46], [50], [52], [55], [57]-[58] and [62] - [63] are “100% wrong”.

The tenancy principles

  1. [8]
    A fixed term tenancy binds both parties to perform their obligations under the agreement for the stated term. There is no contractual right to terminate for breach of condition or significant term and purporting to do so has been held in a retail context to be wrongful repudiation.[1]
  2. [9]
    Relevantly, however, abandonment is mentioned in s 277(5)(b) as RTRA Act as one of the only effective ways to end a tenancy before the expiry. Leaving early on short notice for see ss 277(4), 327, 331 and 332 RTRA Act for notice requirements when a tenant intends to leave the premises early with or without ground. As a rule, even if they have a valid reason to terminate tenants who simply vacate premises and stop paying the agreed rent risk being ordered by the tribunal to compensate the lessor under ss 419(1), 420(e) and 421 RTRA Act[2] including for all of the rent payable under the agreement up to the earlier of either reletting or stated end date.[3] Also, in this case, cl 7(2)[4] specifically provides for a reletting fee payable to the agent (usually a week’s rent and advertising costs) if the tenant terminates a fixed term tenancy early “…in a way not permitted by the RTRA Act” but this condition is arguably meaningless here considering that s 277(1) RTRA Act controls how any tenancy can be terminated early and abandonment is one of the permitted ways. In fact, is it hard to envisage any means by which a tenant can effectively bring a fixed term tenancy to an end in a way that is not permitted by s 277 RTRA Act.
  3. [10]
    The rights and remedies given to a person under the RTRA Act are in addition to, not in substitution of, any general law equivalents that are not inconsistent with them.[5]
  4. [11]
    At common law contracts are subject to implied conditions of good faith and reasonableness. False pre-contract warranties by the lessor’s agent can vitiate any agreement it induces and entitle the wronged party to treat the agreement as if it never existed.
  5. [12]
    Despite item 6.1 the respondents were within their contractual rights to impliedly elect to rescind the tenancy agreement for the lessor’s repudiation of its conditions. There is no inconsistency with the RTRA Act because the residential tenancy agreement is void. This is in effect what the tribunal decided.
  6. [13]
    Alternatively, the agent had a duty of care not to mislead the respondents by pre-contract misrepresentation about the granny flat and is liable, at the very least, to indemnify the respondents for any liability for abandonment[6] or a breach of cl 7.2. Likewise, it was open to the tribunal to equate and set off the appellants’ breach of the vacant possession obligation against the respondents rent liability. 
  7. [14]
    In any event not all tenant’s breaches that have the practical if not legal effect of terminating a fixed tenancy are automatically compensable under the RTRA Act.[7] There is no presumption in favour of loss of bargain damages as there is at common law and making a s 420 RTRA Act order on a breach claim is a matter of discretion subject to consideration of the s 421 RTRA Act factors and the fair and equitable requirement of s 13(1) QCAT Act.
  8. [15]
    For these reasons the appeal fails and is dismissed accordingly.

Footnotes

[1]  see Broben & Anor v Hatfield [2016] QCAT 341.

[2]  compare Raymond v Doidge [2012] QCAT 163.

[3]  compare ss 359 and 360 RTRA Act for alternative procedures.

[4]  see also s 173 (2)-(3) RTRA Act.

[5]  RTRA Act s 4(1)-(3).

[6] Esso Petroleum Co Ltd v Mandon [1976] QB 801, 820; cf San Sebastian Pty Ltd v Minister for Environment Planning (1986) 162 CLR 340, 358, 366.

[7]  cf s 173(1) RTRA Act.

Close

Editorial Notes

  • Published Case Name:

    William Gorman and Toni Gorman v Robert Berrell and Patricia Berrell

  • Shortened Case Name:

    Gorman v Berrell

  • MNC:

    [2019] QCATA 73

  • Court:

    QCATA

  • Judge(s):

    Carmody J

  • Date:

    29 May 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

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