LJ Hooker Robina v O'Neill[2024] QCATA 80

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   On 22 March 2022 the appellants and the respondents entered into a tenancy agreement for a prestige residential property, on a canal, at Mermaid Waters on the Gold Coast. The tenancy was for a period of 12 months terminating on 23 March 2023. The rent was $1,350/wk with a rental bond of $5,400.00.
2. [2]
   When the respondents moved into the tenancy, there were water damage issues with the ceilings in the spare room, laundry and garage. There was some discussion about this and the respondents were assured that they would be repaired by the owner. Further issues arose when the dishwasher broke down and its replacement protruded out from the bench and could not be safely pushed all the way back for fear of causing flooding from the pipes behind it. Other  issues included: electrical faults with certain lights tripping out when turned on; the ceilings not getting repaired; a large hole in the runway to the jetty pontoon and carpet tearing on the runway causing a trip hazard.
3. [3]
   The respondents sent a Notice to Remedy Breach to the applicants requiring the above matters to be remedied by 19 August 2022. The applicants contend that some of the complaints were attended to, but not necessarily by the due date.
4. [4]
   A second Notice to Remedy Breach was issued by the respondents on 20 October which incorporated a number of the complaints in the first notice. The Notice required all the alleged breaches to be remedied by 27 October 2022.
5. [5]
   Although the applicants had been trying to attend to some of the complaints during this period, including temporary repairs to the jetty, this did not satisfy the respondents. They contended the applicant failed to remedy the breaches and elected to terminate the tenancy by issuing a notice of intention to leave on 27 November 2022. They vacated the premises on 5 December 2022.
6. [6]
   Then, the day after the expiration of the notice to remedy, the respondents commenced a proceeding in the minor civil disputes jurisdiction of the Tribunal claiming compensation pursuant to s 420(1)(e) of the Residential Tenancies and Rooming Accommodation Act 2008 (‘RTRA Act”’). The claim, at face value, was an ambit claim seeking a ‘rent refund’ based on a percentage of rent paid:

   1. Ceiling issues - $14,753
   2. Jetty issues - $4,435
   3. Electricity issues - $925
7. [7]
   The application filed was in Form 2 being an application for minor civil dispute – residential tenancy matter. It was, obviously, not an urgent application within s 415 of the RTRA Act. The distinction is critical as it goes to the jurisdiction of the Tribunal to consider the application. I shall return to this issue.
8. [8]
   On 9 January 2023 the applicants filed a counter-claim for the costs of reletting the premises ($1,485.00), loss of rent ($2,507.07), water consumption charges ($206.17) and cleaning to remove animal odour ($240.00).
9. [9]
   After hearing the evidence and submissions from both parties in respect of their various claims, the learned adjudicator reserved his decision. On 14 February 2023 he delivered written reasons and ordered that the rental bond held by the Residential Tenancy Authority be paid as follows:

   1. To the tenants/respondents - $4,953.83; and
   2. To the lessor/applicants - $446.17
10. [10]
    There was a further order that the lessor/applicants pay compensation to the tenants/respondents the sum of $3,785.50.
11. [11]
    In coming to the decision the learned adjudicator made findings of fact concerning  the complaints in the notices to remedy breach. He found the respondents, were justified in their complaints about the ceilings which were water damaged, unsightly and despite being told they would be repaired within weeks of moving in, they were not. He rejected the notion that the condition of the ceilings was cosmetic.^[1] He also rejected the submission that the damage was caused by the respondents’ misuse of the ducted air conditioner in operating the air conditioner at low temperatures causing condensation. It was not until late in the tenancy that steps were taken to address this issue. Given that the respondents were paying substantial rent for a prestige property, it seems, their complaints were justified.
12. [12]
    Similarly, the hole in the jetty runway made it unsafe to access the pontoon and therefore it was unsafe, and unusable, from about July 2022 until 18 November 2022 when repairs were undertaken. There was no dispute about the condition of the jetty, just excuses about the delay in getting the issue addressed.
13. [13]
    In respect of these two major issues, doing the best he could, he allowed a modest percentage of rental by way of compensation. For the ceilings 5% of rent paid and the jetty, 10% of rent paid. There was also a modest amount for defective lighting over a short period of 24 days, $230.80.
14. [14]
    On 17 February 2023 the applicants filed an application for leave to appeal or appeal. The grounds of appeal essentially challenge the findings of fact made by the learned adjudicator. Firstly, that in respect of the ceilings the findings were unreasonable because of the tenants misuse of the air conditioning system. Also, they delayed repairers access to the property to effectively address the problems. Secondly, in respect of the jetty, there was a failure to take into account the unavailability of tradespeople to carry out repairs. Additionally, there was a denial of access. Finally, despite being offered an opportunity to break the lease at the end of September 2022, the tenants failed to take up this opportunity. It is difficult to see how there is any substance in this last point.
15. [15]
    Orders sought in the appeal reflect those sought at first instance before the learned adjudicator. That is for the break lease expenses and outstanding rent, despite the property being relet a week after the respondents vacated the premises. The applicants also sought for the claim for compensation be dismissed. In essence the applicants are re-arguing the case that was put before the adjudicator.
16. [16]
    As this is an appeal brought under s 142(3)(a)(i) of the Queensland Civil and Administrative Tribunal Act 2009 (‘QCAT Act’) in respect of a decision in a proceeding for minor civil dispute, an appeal may be made only if the party has obtained leave of the Tribunal. Leave to appeal (or permission) will usually only be granted where there is a reasonable argument the decision was attended by error, or that an appeal is necessary to correct the substantial injustice caused by the error.^[2] Further in Rintoul v State of Queensland & Ors [2018] QCA 20 at [10] the Court of Appeal reiterated the general principles:

The principles governing a grant of leave to appeal are well-established. In short, an applicant for leave to appeal must show:

1. the appeal is necessary to correct a substantial injustice;

2. there is a reasonable argument that there is an error to be corrected.

There must be reasonable prospects of success to warrant a grant of leave. Therefore, in deciding whether to grant leave to appeal the Court usually makes some preliminary assessment of the prospects of the proposed appeal.

17. [17]
    In the usual way the Tribunal made directions for the filing of submissions in support of the appeal by the applicants. Submissions were filed on 27 March 2023 but those submissions were in support of an application filed by the applicants to stay the primary decision. Included with the submissions is a bundle of documents the applicants relied on in the primary hearing and is included in the minor civil dispute’s file.
18. [18]
    The applicants then seek to rely on additional evidence obtained subsequent to the decision below. That evidence is described as follows:

LJ Hooker and Jacqueline Simone Milne (the applicants) contacted trades who carried out works including dealings with tenants during the tenancy and copies of evidence attached.

19. [19]
    In summary, the additional evidence is sought to be relied upon because:

    1. the applicants considered the original evidence provided to the Tribunal about the break lease was sufficient and they now want to supplement that evidence;
    2. additional evidence to confirm the trade’s account of dealing with the tenants to have repairs and maintenance attended [to]; and
    3. the additional evidence supports the contention of delays in having the jetty repaired due to limited availability of materials due to the pandemic and floods. Also, the tenants’ complaints about an electrical fault are not supported by independent onsite testing.
20. [20]
    It is evident that this additional evidence was always available to the applicants to present at the hearing.  There is nothing in the submission which would justify its admission consistent with the general principles for leading fresh evidence in an appeal which are well established.^[3] Fresh evidence will only be accepted if the evidence was not reasonably available at the time the original proceeding was heard and determined. Ordinarily an applicant for leave to adduce such evidence must satisfy each of the following tests:

    1. the evidence could not have been obtained with reasonable diligence for use at the trial;
    2. the evidence, if allowed, would probably have an important impact on the result of the case (although it need not be demonstrated that it would be decisive); and
    3. that the evidence is credible though it need not be incontrovertible.
21. [21]
    Specific examples of the additional evidence include statements from Scott Campbell and Ian Lucas. Mr Campbell records his contact with the respondents when he visited the premises in July 2022 and discussed repairs to the water stained ceiling, both in the house and the garage. When he sought to access the property to undertake repairs he says that he was refused entry because the garage ceiling was not included in the quote. Clearly, this evidence was available to the applicants at the time of the hearing.
22. [22]
    The statement from Mr Lucas relates to the jetty. He confirms his attendance at the property, provision of the quote and the timing of the repair works that were carried out. Similarly, this evidence was available to the applicants at the time of the hearing.
23. [23]
    The additional evidence does not satisfy the criteria referred to above and therefore the application to admit fresh/additional evidence is refused.
24. [24]
    The balance of the submission filed on 27 March 2023 in support of the stay, accepting it is also relied upon for the purposes of the appeal as well, is really just a reiteration of the case put to the learned adjudicator at first instance and does not identify any error of law or injustice.
25. [25]
    Despite that last conclusion, there is a more fundamental jurisdictional difficulty with the respondents’ application that was filed on 28 November 2022. That application sought compensation under s 420 of the RTRA Act. As I have already concluded above, the application was not an urgent application that fell within s 415 of the RTRA Act. Therefore, s 416 applied to the application.
26. [26]
    Section 416 requires the tenant to make a dispute resolution request with the Residential Tenancy Authority and engage in a conciliation process:

1. The lessor or tenant under a residential tenancy agreement… may apply under this Act to a tribunal about an issue only if the applicant has first made a dispute resolution request about the issue and—

1. the conciliation process has ended without a conciliated resolution having been reached, because—

1. the authority refuses to provide a conciliation service about the issue; or

2. a party refuses to participate, or continue to participate, in the conciliation process; or

3. the parties participate in the conciliation process but do not reach an agreement on resolving the dispute.

27. [27]
    The Tribunal’s jurisdiction or power to make decisions about residential tenancy matters derives from the enabling Act being the RTRA Act. Therefore, the Tribunal must follow the procedures prescribed by the enabling Act when deciding disputes between lessors and tenants. The then President of the Tribunal, Justice Alan Wilson, thoroughly considered this question in Big4 Brisbane Northside Caravan Village v Schliebs [2012] QCAT 277 (‘Big4’):

... it is compelling that the RTRAA is intended to be prescriptive and all- embracing in governing the procedure for determination of disputes arising under residential tenancies. It is, as discussed earlier, an enabling Act and its provisions and procedures will, if different from those to be applied by the Tribunal under the QCAT Act, prevail.

28. [28]
    In that case the learned adjudicator, at first instance, considered treating the application as a minor civil dispute rather than a residential tenancy matter, to avoid the jurisdictional bar where the conciliation process had not been undertaken. Although the President expressed an understanding of why consideration was given to this proposed approach, to save the parties the cost and inconvenience of having to start fresh proceedings after a conciliation. This was in line with s 3 of the of the QCAT Act (the objects), he said that the Tribunal was constrained by the strict requirements of s 416 of the RTRA Act.
29. [29]
    Big4 has been consistently followed in the Tribunal since 2012. As recently as 2023, Judicial Member Forrest, in Penfold v Balvius^[4] applied it in circumstances where the original minor civil dispute proceeding was conducted as though the claim was a minor civil dispute, as opposed to a residential tenancy matter. Having considered the above statement in Big4, he went on to say:

So, the application should have been commenced by a Form 2 rather than a Form 3, but there is an even more fatal error, that really cannot be simply procedurally waived through as being a matter of “form” and not “substance”. Unless the application is an “urgent application” that is defined in section 415 of the RTRAA (and this application was not within that definition), pursuant to section 416 of the RTRAA, a tenant cannot apply to the Tribunal about an issue unless they have first sought conciliation through the Residential Tenancy Authority (“the RTA”) by making a dispute resolution request about the issue in the approved form (under the RTRAA) and either the conciliation process has ended without agreement reached, or a compromise was reached but this has not been adhered to. Unless this is done, the Tribunal has no jurisdiction over the matter.

30. [30]
    Even though the learned adjudicator here did adjourn the application after the first hearing day to permit the applicants to apply for a conciliation in respect of the counter-claim, which they did, this did not cure the fundamental flaw with the original application filed on 28 November 2022. When the matter first came on for hearing on 14 December 2022, the application should have been dismissed for want of jurisdiction. Such a course would have been consistent with what was said in Big4 and what occurred in Penfold where the Judicial Member said:

Accordingly, I am satisfied that the learned Magistrate sitting as a Tribunal member at first instance erred in determining that the Tribunal had jurisdiction and should have simply dismissed the application for want of jurisdiction and given the parties a little guidance as to where and how the matter should have been correctly commenced.

31. [31]
    This point has not been taken by the applicants, either in the grounds for appeal in the application, or in the brief written submission referred to in support of the stay application. The general rule is that stated in Compass Marinas Australia Pty Ltd v State of Queensland^[5] where the Court of Appeal said:

A party ordinarily should not be permitted to raise new points on appeal if, had the points been raised at trial, they might possibly have been met by additional evidence at the trial or the opponent might have conducted its case differently. (references omitted).

32. [32]
    Here, the question of jurisdiction does not involve any determination of fact, the case could not be conducted differently. There is no evidence, either in the file or the transcript, that the claim for compensation was referred to conciliation, indeed the timing of the filing of the application on 27 November 2022 itself demonstrates there simply was no time for the conciliation process before the proceeding was commenced. Therefore, in the circumstances of this case, the fact that the point was not taken by the applicants in this appeal is of no particular consequence.
33. [33]
    In respect of the counter-claim the only ground of appeal that may be relevant to the learned adjudicators decision is the reference to the fact that the tenants were offered the opportunity to break the lease in September of 2022. An order is sought that the respondents pay the lost rent and break lease fee totalling $3,992.07. However the submission filed on 27 March 2023 does not address how the learned adjudicator fell into error.
34. [34]
    The reasons set out in some detail the basis for rejecting this claim. The learned adjudicator was satisfied that the respondents validly terminated the lease by the notice of intention to leave when the applicants failed to remedy the breach in the notice of 20 October 2022. He said at [47]

The applicants [respondents], in accordance with section 302(1) of the Act, gave to the respondent a notice of intention to leave on the ground the respondent had failed to comply, within the allowed remedy period, with a notice to remedy breach given by the applicants to the respondent. The ground is that specified in s 302(1) of the RTRA Act. The notice was given on 27 November 2022 with a handover day 5 December 2022. The applicants handed over vacant possession of the premises on the day specified.

35. [35]
    The learned adjudicator found the applicants failed to dispute the notice to leave under s 424 of the RTRA Act and as a consequence, found a valid termination on the basis the applicants were in breach of the lease. The applicants have put nothing forward by way of evidence or submission to demonstrate that this conclusion was not open on the evidence before the Tribunal. It is evident from the transcript and the manner in which the hearing was conducted, the conclusions reached which included findings of fact as to the nature of the breaches, were not only open on the evidence they were compelling.
36. [36]
    No basis has been established which would warrant a grant of leave to appeal on the counter-claim. As for the compensation, although the application must be dismissed I would make similar comments about the learned adjudicator’s conclusions and assessment of damages. Had jurisdictional question been satisfied, I would have refused leave in respect of this aspect of the appeal.
37. [37]
    However, leave to appeal must be granted because of an error of law going to the jurisdiction of the Tribunal to hear the primary application.
38. [38]
    I therefore propose to make the following orders:

1. Order 2 of the decision of the Tribunal dated 14 February 2023 is set aside.

2. The application filed in the Tribunal on 28 November 2022 is dismissed.

3. Leave to appeal in respect of the counter-claim filed 9 January 2023 is refused.