Gold Coast Property Expo v Rhodes
[2022] QCATA 120
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- Unreported Judgment
- Gold Coast Property Expo v Rhodes[2022] QCATA 120
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Gold Coast Property Expo v Rhodes[2022] QCATA 120
Gold Coast Property Expo v Rhodes[2022] QCATA 120
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Gold Coast Property Expo v Rhodes [2022] QCATA 120 |
PARTIES: | Gold Coast Property Expo (appellant) v CHLOE Rhodes steven rhodes (respondents) |
APPLICATION NO/S: | APL327-21 |
ORIGINATING APPLICATION NO/S: | MCDT1320/21 (Southport) |
MATTER TYPE: | Appeals |
DELIVERED ON: | 3 August 2022 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Gordon |
ORDERS: |
|
CATCHWORDS: | APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – GENERALLY – where an applicant claiming compensation in a residential tenancy matter omitted to put the tenants’ exit condition report before the tribunal – where the Adjudicator hearing the application dismissed it without considering it on the merits, on the grounds that the applicant was unnecessarily disadvantaging the respondent or alternatively had failed to provide the tribunal with adequate evidence to decide the application – whether there were grounds to the dismiss the claim – whether the tribunal’s discretion was properly exercised Human Rights Act 2019 (Qld), s 13(1), s 31 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 48, s 143 Residential Tenancies and Rooming Accommodation Act 2008 (Qld), s 66, s 506 Ali v State of Queensland [2019] QCAT 68 House v R (1936) 55 CLR 499 Irvine and Porter v Mermaids Cafe and Bar Pty Ltd and Ingall [2010] QCAT 393 Lai v Robina Realty Pty Ltd & Anor [2019] QCATA 37 Simons & Ors v Dowd Lawyers Pty Ltd [2020] QCAT 348 |
APPEARANCES & REPRESENTATION: | 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
- [1]This is an appeal about whether a tribunal Adjudicator was right to dismiss a residential tenancy compensation claim brought by Gold Coast Property Expo (the agents) against Chloe and Steven Rhodes (the tenants) in a hearing without considering its merits. The Adjudicator dismissed the claim on two alternative grounds: firstly that the agents were acting in a way in the proceedings which was unnecessarily disadvantaging the tenants and secondly that the agents had failed to provide the tribunal with adequate evidence to decide the application.
- [2]What happened was that at the end of their tenancy, the tenants had given the agents their exit condition report in paper form, but had not kept a copy. And the agents, instead of inserting their comments on the tenants’ form, created their own separate exit condition report in electronic form. At the hearing the agents did not include the tenants’ exit condition form in their paperwork presented to the tribunal. The tenants did not do so either, since they had given their only copy to the agents.
- [3]The agents had applied to the tribunal on behalf of the owner for compensation for various repairs, cleaning and replacement of small items said to be missing. The application was accompanied by a large number of documents and photographs in support, comprising some 243 pages, but the tenants’ exit condition report was not included. The separate exit condition report which the agents had completed was however, included.
- [4]In the morning of the day before the hearing the tenants sent to the tribunal, and to the agents, an email response to the claim together with numerous documents and photographs of their own. They disputed the claim on various grounds and also pointed out that their exit condition report was missing in the evidence.
- [5]The agents responded with further submissions dated 26 October 2021 and documents comprising 72 pages, but again the tenants’ exit condition report was not included.
- [6]At the hearing on 26 October 2021, the Adjudicator started to consider the claim on the merits but then discovered that the tenants had provided the agents with an exit condition report but it was not in the papers.[1] The Adjudicator informed the agents that they should have provided the tenants’ exit condition report to the tribunal, whereupon the agents offered to provide it by calling the office to have it sent over.[2] The Adjudicator refused to permit this.
- [7]Having given the agents a good opportunity to submit why this should not happen, the Adjudicator then dismissed the claim on these two alternative bases:[3]
- (a)by failing to include the tenants’ exit condition report in the papers, the agents were acting in a way in the proceedings which was unnecessarily disadvantaging the tenants, and that under section 48 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (the QCAT Act) the application should be dismissed; and
- (b)(if it were wrong to dismiss the claim under section 48), by failing to include the tenants’ exit condition report in the papers, the agents had failed to provide the tribunal with adequate evidence to decide the application.
- (a)
- [8]The Adjudicator also gave reasons why the adjournment to permit the tenants’ exit condition report to be ‘sent over’ was refused. The Adjudicator said that this was because the agents had omitted a ‘most vital piece of evidence’ and this was more than mere oversight.[4]
The grounds of appeal
- [9]Stated briefly, in this appeal it is said that the Adjudicator should not have struck out the claim under section 48, and that this was unfair, that the Adjudicator had failed to consider whether the agents had acted deliberately, and the way the Adjudicator approached the matter meant that the application was not resolved properly on its merits.
- [10]The agents have applied for the Appeal Tribunal to accept ‘fresh’ evidence in this appeal.[5] The evidence which they wish to submit is the further submission dated 26 October 2021 and documents comprising 72 pages, but also the agents now seek to submit the tenants’ exit condition report which was missing from the original paperwork. I will need to consider the application about fresh evidence.
- [11]The tenants have applied for the Appeal Tribunal to dismiss the appeal on the ground that it has been brought out of time. I will need to consider this application first.
- [12]Then, in considering this appeal, it is necessary to explain the statutory process which is aimed at resulting in a single exit condition report signed by both sides at the end of the tenancy, then to consider how important the tenants’ exit condition report was in this particular case, then to consider in what circumstances section 48 of the QCAT Act can be used to strike out or dismiss a claim and whether it was properly used by the Adjudicator in this instance. Then it is necessary to consider whether the Adjudicator was right to dismiss the claim on the basis that the agents had not provided the tenants’ exit condition report in the paperwork. Finally I shall consider any other points made in the appeal and whether there is any value in allowing the agents application to put fresh evidence before the Appeal Tribunal.
Tenants’ application to dismiss the claim
- [13]The time for appealing in this type of matter is provided by section 143(3) of the QCAT Act. The application for leave to appeal, which is the correct way to commence an appeal in this type of matter, should be filed ‘within 28 days after the relevant day’. Whether or not this appeal is out of time turns on what is the correct relevant day and this is governed by section 143(5).
- [14]The tenants say that the relevant day for the purpose of these provisions was 26 October 2021 when the decision was made, because the agents were present at the hearing and so received notice of the decision on that day. On this basis, they submit that the agents had until the end of 23 November 2021 to apply for leave to appeal but that it was filed the following day and so the appeal was out of time and should be dismissed.
- [15]It is a fact however, that in the afternoon of 26 October 2021 the agents asked the tribunal for written reasons for the Adjudicator’s decision. This appears from a note on the file. This request makes all the difference to the time issue, but was not mentioned in the agents submissions about the question of time in their reply and so the tenants are unaware of it.[6] This request means that section 143(5)(c) applies – and the relevant day for the start of the 28 days is not 26 October 2021 but it when the reasons were received, that is on 12 November 2021. On that basis the appeal filed on 24 November 2021 was in time.
- [16]The tenants have submitted in effect that section 143(5)(c) cannot apply because reasons ‘are not required to be given’. Hence it is said that section 143(5)(b) applies instead, and the 28 days starts on 26 October 2021 after all. This is incorrect. The reference to reasons not being required to be given in section 143(5)(b) is a reference to those occasions when the tribunal is not required to comply with a request for written reasons.[7] These occasions are listed in section 122(4) and refer to certain procedural matters and the making of ordinary directions. Section 121(4) requires reasons to be given orally or in writing for all final decisions like the one made by the Adjudicator on 26 October 2021.
- [17]It follows that the application for leave to appeal was filed in time and the tenants’ application to have it dismissed as being out of time, is refused.
The statutory process to produce the exit condition report
- [18]The statutory process governing the exit condition report is set out in section 66 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRAA), and is restated in the standard terms of a residential tenancy agreement. It is aimed at producing a single condition report completed by both sides at the end of the tenancy. The process is triggered by the tenants completing a condition report on the approved form, signing it, and as soon as practicable after the agreement ends giving it to the lessor or the lessor’s agent. This did happen.
- [19]Then the lessor or lessor’s agent must, within 3 business days after receiving a copy of the report, sign it and show the parts of the report the lessor or agent disagree with and then give the completed document to the tenant. This did not happen. Instead, the agents prepared their own exit condition report in electronic form.
- [20]There is no statutory penalty for failure to carry out the exit condition report process. This is unlike the process for the entry condition report where there is a statutory penalty.[8] This probably reflects the fact that an entry condition report usually has a much greater probative value than an exit condition report.
- [21]The statutory process for the exit condition report has four advantages.
- [22]Firstly, it requires the tenant to go through each of the items listed and mark them as ‘clean, working, or undamaged’ as appropriate or to comment if this is not the case. It therefore prompts the tenant to inspect the items on departure rather than simply leaving without giving any attention to the condition of the premises.
- [23]Secondly, it requires the lessor or the lessor’s agent to consider the tenant’s entries and to state whether there is any dispute. This means that any matters in dispute should be apparent from the document.
- [24]Thirdly the notes to the form encourage the parties to discuss the items in dispute and to agree or add comments. Hence it helps to promote agreement between the parties and save the resources of the Residential Tenancies Authority in conciliation or the resources of the tribunal when resolving disputes.
- [25]Finally, the process results in a single document showing what is in dispute and this is useful should the matter go to RTA conciliation or resolution in the tribunal.
- [26]Section 506 of the RTRAA makes certain provisions about the evidentiary value of a condition report. These apply both to entry condition reports and exit condition reports. The section provides that a condition report signed by the tenant is evidence of the condition of stated premises and its inclusions except where the tenant has marked it to show disagreement. This therefore operates to bind a tenant in the first instance to the tenant’s entries in a condition report. It also binds the tenant in the first instance to the lessor’s entries with which the tenant has not expressed disagreement – this would however, normally only apply to an entry condition report which the lessor completes first.
- [27]There is no similar statutory provision under which the lessor is bound in the same way, but in practice a lessor or lessor’s agent who does not dispute a tenant’s comment in an exit condition report that a particular item is ‘clean, working and undamaged’ would have difficulty in a tribunal hearing if this were to be contested.
How important was the tenants’ exit condition report in this particular case?
- [28]
- [29]This was not a case where the tenants’ photographs of the premises at the time of departure had been attached to the exit condition report but were not before the tribunal because the agents had not included them. The tenants had submitted their photographs to the tribunal separately.
- [30]So it was only the tenants comments against the items in the exit condition report form which were not before the tribunal. Were these comments important to enable the tribunal to determine the matter?
- [31]The tenants did not need the comments as an aide memoire. They had exited the properly only two months before the hearing and as can be seen from their written submissions provided to the tribunal, they were well able to recall the condition of the premises.
- [32]The tenants did not need the comments to recall their position on the agents claims – they were disputing all the claims and as can be seen from their written submissions they were able to present their contentions on all the claims without the comments.
- [33]Indeed, the tenants heavily relied on the condition of the premises at the start of the tenancy – so the important document for them was the entry condition report, which was before the tribunal.
- [34]It might be said that a tenant’s exit condition report might support a tenant’s position in a hearing because the same thing is being said twice – once in the report and once in the hearing. But the probative value of such a prior consistent statement would necessarily be very limited.
- [35]Since the tenants could simply give evidence at the hearing about particular matters, and did not need to have their exit condition report in order to do this, it is very difficult to say the tenants’ exit condition report was important for the tenants.
- [36]Looking at this from the agents’ standpoint, if the tenants had admitted in their comments a particular matter of uncleanliness or repair which was not fair wear and tear when exiting the premises then this would assist the agents to prove that particular matter. But if the agents chose not to put such admission before the tribunal then it would simply make it more difficult for the agents to prove that particular matter.
- [37]Although it would assist the tribunal to be aware of any such admissions, there is nothing in the transcript or in any of the submissions before the tribunal or on appeal suggesting that there were any such admissions in the tenants’ exit condition report.
- [38]In the circumstances, I find myself differing from the Adjudicator’s statement in the reasons that the tenants’ exit condition report was a ‘most vital piece of evidence’. Instead I regard it as a contemporaneous document which in the circumstances of this particular case had little relevance.
Strike out or dismissal under section 48
- [39]In order to understand the Adjudicator’s reliance on section 48 to dismiss the claim, it is necessary to set out that section in full:
48 Dismissing, striking out or deciding if party causing disadvantage
- (1)This section applies if the tribunal considers a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including by—
- (a)not complying with a tribunal order or direction without reasonable excuse; or
- (b)not complying with this Act, an enabling Act or the rules; or
- (c)asking for an adjournment as a result of conduct mentioned in paragraph (a) or (b); or
- (d)causing an adjournment; or
- (e)attempting to deceive another party or the tribunal; or
- (f)vexatiously conducting the proceeding; or
- (g)failing to attend conciliation, mediation or the hearing of the proceeding without reasonable excuse.
- (2)The tribunal may—
- (a)if the party causing the disadvantage is the applicant for the proceeding, order the proceeding be dismissed or struck out; or
- (b)if the party causing the disadvantage is not the applicant for the proceeding—
- (i)make its final decision in the proceeding in the applicant’s favour; or
- (ii)order that the party causing the disadvantage be removed from the proceeding; or
- (c)make an order under section 102, against the party causing the disadvantage, to compensate another party for any reasonable costs incurred unnecessarily.
Note— See section 108 for the tribunal’s power to order that the costs be paid before it continues with the proceeding.
- (3)In acting under subsection (2), the tribunal must have regard to the following—
- (a)the extent to which the party causing the disadvantage is familiar with the tribunal’s practices and procedures;
- (b)the capacity of the party causing the disadvantage to understand, and act on, the tribunal’s orders and directions;
- (c)whether the party causing the disadvantage is acting deliberately.
- (4)The tribunal may act under subsection (2) on the application of a party to the proceeding or on the tribunal’s own initiative.
- (5)The tribunal’s power to act under subsection (2) is exercisable only by—
- (a)the tribunal as constituted for the proceeding; or
- (b)if the tribunal has not been constituted for the proceeding—a legally qualified member or an adjudicator.
- [40]The use of the word ‘including’ in subsection (1) shows that the list of things in subsection (2) are examples of things that a party might do to cause unnecessary disadvantage to another party.[10] And the use of the present tense in subsection (1) and the nature of the list of examples in subsection (2) show that the offending thing is something done during the course of proceedings. Hence, it was right for the Adjudicator not to rely on section 48 as providing some sort of civil penalty for the agents’ failure to comply with the statutory process under section 66 of the RTRAA to create a single exit condition report (because that happened before the proceedings were commenced).
- [41]The tribunal can only strike out or dismiss a claim under section 48 when it is properly found that a party is unnecessarily disadvantaging another party. This means that even if it is found that a party is acting in a way described in one of the examples in subsection (1), it does not automatically follow that the party is unnecessarily disadvantaging another party. For example, one of the examples is ‘causing an adjournment’. It could easily be however, that all parties agree that there should be an adjournment, in which case there would be no disadvantage to another party and no power to strike out or dismiss under section 48 because of the adjournment.
- [42]It is also clear that consideration of the matters in subsection (3) is obligatory as shown by the use of the word ‘must’ in that subsection.
- [43]If it is properly found that an applicant is unnecessarily disadvantaging another party then the tribunal would have a discretion whether or not to strike out the application under section 48. A strike out or dismissal does not automatically follow.
- [44]In this appeal I take into account that it is not enough if I consider that if I had been in the position of the tribunal below I would have taken a different course. Instead, to allow the appeal against the dismissal under section 48 it must appear that some error has been made in exercising the discretion.[11]
- [45]My difficulty in this appeal is understanding exactly how the agents’ failure to include the tenants’ exit condition report in the papers was unnecessarily disadvantaging the tenants. The Adjudicator did not explain this in the reasons or during discussions with the parties, and it is by no means obvious.
- [46]From the discussion above about the tenants’ exit condition report it can be seen that its omission from the paperwork provided to the tribunal would have had little or no effect on the merits of the tenants’ defence to the claims or the tenants’ ability to present that defence.
- [47]When exercising the discretion to strike out or dismiss under section 48 the tribunal would be mindful of the fact that such an order without hearing the claim on its merits has been described as ‘a very serious matter’ and drastic.[12] Such considerations have greater importance now under section 31 of the Human Rights Act 2019 (Qld) under which a party to a civil proceeding has the right to have the proceeding decided by a competent, independent and impartial court or tribunal after a fair and public hearing.[13]
- [48]This means that if the tribunal is contemplating striking out or dismissing a claim under section 48 it will need to be clear why that power is being exercised. In this appeal such disadvantage to the tenants cannot be identified. In the circumstances, it cannot be said that the powers of strike out or dismissal under section 48 of the QCAT Act arose, or if they did arise that in the circumstances it cannot be said that it was a proper exercise of the discretion to dismiss the claim.
The alternative ground of the dismissal of the claim
- [49]In the alternative the Adjudicator decided that by failing to include the tenants’ exit condition report in the papers, the agents had failed to provide the tribunal with adequate evidence to decide the application. On that basis the Adjudicator dismissed the application without considering it on the merits. The explanation for this appears from the Adjudicator’s comment that a ‘most vital piece of evidence’ was missing.
- [50]It is unclear whether the Adjudicator was saying:
- (a)the tenants’ exit condition report was an essential element in the agents’ claim and its absence meant that the agents claim could not succeed; or
- (b)the tenants’ exit condition report was an essential element in the tenants’ defence to the agents claim, the agents had a duty to provide it to the tribunal, and their failure to do so meant that their claim could not succeed.
- (a)
- [51]If (a), as stated in the discussion above I do not agree that the tenants’ exit condition report was an essential element in the agents’ claim. As was explained by Dr J R Forbes in Lai v Robina Realty Pty Ltd & Anor [2019] QCATA 37,[14] section 66 of the RTRAA is designed to ease and expedite the proof of claims. Non-compliance with section 66 does not disqualify a claim, and proof by other means is permissible. This meant it would be for the agents to prove the claims in the usual way.
- [52]If (b), as stated in the discussion above it cannot be said in this particular case that the missing exit condition report was an essential element in the tenants’ defence to the claim.
- [53]In any case, it would be wrong to say that real estate agents are obliged to ensure that all relevant evidence is before the tribunal, including evidence contrary to their case which might be relied on by a tenant.
- [54]It could be that prior to legislative changes in 2014, there was such an obligation. There is a statutory code of conduct for real estate agents and one provision was then in place which obliged them to act honestly, fairly and professionally in the conduct of a real estate agency practice and to treat tenants honestly and fairly.[15] But in 2014, with the stated intention to simplify and reduce red tape, this particular provision and several others were removed.[16] This does not mean that real estate agents are not bound by any such general ethical code with respect to residential tenancies – this may be applied through their professional bodies or by their own organisations. It just means there is no such general statutory requirement anymore. There are numerous provisions in the RTRAA and in the Residential Tenancies and Rooming Accommodation Regulation 2009 (Qld) concerning residential tenancies which must also be complied with by real estate agents but of relevance to this appeal, there is nothing requiring a real estate agent to ensure that all relevant information and documents are provided to the tribunal in a residential tenancy dispute.
- [55]Lawyers have a ‘paramount duty’ to the tribunal and to the administration of justice when presenting cases,[17] but this does not apply to real estate agents.
- [56]This means that in residential tenancy matters, real estate agents come to the tribunal as any other party does. A respondent to an administrative review has a particular obligation to help the tribunal to make its decision on the review,[18] but the only obligation of a party to a residential tenancies matter is to act quickly in any dealing relevant to the proceeding.[19] A party would have to comply with a direction to disclose all relevant documents, but such a direction was not made in this case. The relevant practice direction covering residential tenancy proceedings only requires parties to file the documents on which they rely – it does not require a party to file all relevant documents.[20]
- [57]Having regard to the above discussion, whilst the agents’ failure to provide the tenants exit condition report to the tribunal was irksome, it cannot be said that a most vital piece of evidence was missing. Also, it is difficult to criticise the agents for not including it in the paperwork. Hence it must be wrong in principle to have dismissed the claim on that basis.
Other point made on appeal
- [58]It is said that the agents’ offer to fetch the tenants’ exit condition report from the office should have been accepted. In this respect I note that it was open to the Adjudicator to make a direction that the agents produce the tenants’ exit condition report.[21] It appears from the transcript that the agents could have arranged for the document to be sent over while the hearing continued. This would have enabled the matter to be heard with all the evidence that the Adjudicator required.
- [59]This ground also seems to be a strong one but since I am allowing the appeal on other grounds there is no need formally to reach a conclusion about this ground of appeal.
The agents’ application to put fresh evidence before the Appeal Tribunal
- [60]The fresh evidence comprises the tenants exit condition report, and the submissions prepared by the agents in reply with documents attached intended for the original hearing. Since I am allowing the appeal, but as can be seen below I am not able to decide the substantial matter (the agents claim for compensation) there is no value in considering the fresh evidence. I shall refuse this application.
Conclusion
- [61]I grant leave to appeal and allow the appeal. Since this is an appeal on a question of law only and no findings of fact have been made by the tribunal below on the merits of the application for compensation, I have no alternative but to set aside the Adjudicator’s decision to dismiss the application and to return the application to the tribunal for reconsideration. I am directing that Gold Coast Property Expo file in the tribunal the additional material which they wished to put before the Appeal Tribunal. The reason for this is that when a matter is remitted for reconsideration the tribunal does not usually receive any part of the Appeal Tribunal file, which is kept separate.
Footnotes
[1] Transcript 1-12 line 39.
[2] Transcript 1-14 line 37.
[3] Transcript 1-21.
[4] Transcript 1-21 line 31.
[5] Application filed on 10 January 2022.
[6] Submissions in an email of 8 February 2022.
[7] I should point out that a request for written reasons can be satisfied by the provision of a recording of oral reasons: section 123.
[8] By section 65 of the RTRAA, failure of either the lessor or tenant to comply with the process to create an entry condition report is an offence punishable with a maximum penalty of 20 penalty units.
[9] That is to say, how useful it was to prove or disprove a relevant matter in the dispute in question.
[10] This also appears from the explanatory memorandum of the QCAT Bill: Ali v State of Queensland [2019] QCAT 68, [45].
[11] House v R (1936) 55 CLR 499.
[12] Senior Member Endicott in Irvine and Porter v Mermaids Cafe and Bar Pty Ltd and Ingall [2010] QCAT 393, [21] cited by Judicial Member Hon Peter Lyons QC in Simons & Ors v Dowd Lawyers Pty Ltd [2020] QCAT 348, [62]. Also, Ali v State of Queensland [2019] QCAT 68, [63].
[13] A right which could be limited where it is demonstrably justified in a free and democratic society based on human dignity, equality and freedom: section 13(1).
[14] [14].
[15] Property Agents and Motor Dealers (Real Estate Agency Practice Code of Conduct) Regulation 2001 (Qld), regulation 7.
[16] The intention appears in the explanatory note on introduction of the Property Occupations Bill 2013, and explanatory note to the Property Occupations Regulation 2014 (Qld), page 3.
[17] Barristers Rule 2011, rule 12(b), and Australian Solicitors Conduct Rules, rule 3.1.
[18] Section 21 of the QCAT Act.
[19] Section 45 of the QCAT Act.
[20] QCAT Practice Direction No. 2 of 2022, paragraphs 25 to 27.
[21] Section 62(3) of the QCAT Act.