Eleven Property v Zheng[2025] QCATA 65

REASONS FOR DECISION

1. [1]
   The respondent tenant, Ms Zheng, leased a residential unit in a unit complex from Mr Green, the lessor, through the applicant/appellant real estate agents.
2. [2]
   The tenancy was from 18 July 2023 to 18 July 2024. The rent was $595 per week.
3. [3]
   On 10 August 2023 Ms Zheng noticed a water leak in her kitchen. It did not stop and she contacted the respondent and the lessor and informed them of the leak the following day, a Friday.
4. [4]
   A plumber could not attend until the following Monday, but did attend over the next couple of days. When she returned home on 14 August 2023 she could see holes made in a bulkhead made by the plumber investigating the source of the water leaks.
5. [5]
   On 16 August 2023 the agents advised the leak had been found and they were investigating who was responsible for repairs.
6. [6]
   Ms Zheng still had a water leak however. She had to use a bucket to collect water and empty it twice a day.
7. [7]
   She informed the agents. The leaking was worse by the following Friday flooding the kitchen cupboard and timber floor. She worried about water entering power outlets on the wall. Ms Zheng called the lessor again and requested an emergency plumber to attend. He came that night but could not stop the leak.
8. [8]
   On 21 August the source of the leak was discovered to be in the unit above.
9. [9]
   There was still water leaking into Ms Zheng’s unit on 23 August 2023.
10. [10]
    The agents advised the matter had been escalated to the body corporate.
11. [11]
    On 24 August 2023 the agents advised the leak above had been stopped and a builder would attend to quote on repair works in Ms Zheng’s unit on 25 August 2023.
12. [12]
    On 12 September 2023 a builder conducted an inspection and provided a report.
13. [13]
    On 13 September 2023 the agents advised Ms Zheng that repairs were necessary and during the repairs the unit would be uninhabitable. The agent offered another unit for the duration of the repairs but she did not accept it because it only had one bedroom and there were two people in her unit (permitted under the tenancy agreement) and a dog (also permitted).
14. [14]
    The agents said the tenancy may have to end. Ms Zheng did not agree. She could not afford other premises.
15. [15]
    On 21 September 2023 an insurance loss adjuster advised repairs to the unit could not proceed until the unit was vacant.
16. [16]
    The agents advised the builder wanted to start work. Ms Zheng refused to go to alternate accommodation. She said the builder could do work in the kitchen. She and the other occupant would stay in their bedrooms. The agents said the concern was safety. The cabinets might fall down, the kitchen area would be cleared out and the flooring taken up and replaced. The insurance would not cover the tenants during the renovation.
17. [17]
    On 22 September 2023 the agents advised they would issue the notice to leave but if Ms Zheng decided to return after the repairs “it is yours”. Ms Zheng was instructed to box up all her possessions in case the flooring in the bedrooms had to be replaced.
18. [18]
    Ms Zheng advised she had somewhere to stay for six weeks and asked for confirmation that the repairs would be finished by then, but the agents said the builder could not guarantee that.
19. [19]
    The agents issued a Form 12 Notice to Leave that day on the dual bases of non-livability and significant repairs and renovations required.  The vacating date given in the notice was 23 November 2023.
20. [20]
    Ms Zheng was also communicating directly with the owner at the time by SMS. He advised her they were giving eight weeks’ notice but if she found a short term let “before then, the lease does not need to end”.
21. [21]
    The agents advised Ms Zheng the builder would start work on 9 October 2023.
22. [22]
    Ms Zheng and her flat mate moved out of the  unit on 7 October 2023, boxing up all their possessions and storing them in the bedroom, leaving their furniture remaining in position however.
23. [23]
    On 1 November Ms Zheng was advised the builder would not finish the work until after Christmas. The agents suggested terminating the tenancy. Ms Zheng did not agree. She returned to the unit on 2 November 2023 and saw the demolition work had been done but not the repairs.
24. [24]
    Ms Zheng found other accommodation and signed a new lease commencing 20 November 2023 through to 19 November 2024 at a rent of $680 per week.
25. [25]
    Ms Zheng suggested a “mutual termination” on 9 November 2023. The agents advised her she would have to clean the bedrooms and bathrooms after she removed her possessions from the unit.
26. [26]
    She accessed the unit with the permission of the agents on Sunday 19 November 2023 to remove her possessions and handed over the keys the following day.
27. [27]
    On 22 November the agents inspected the unit and authorised the return of Ms Zheng’s bond.
28. [28]
    Ms Zheng commenced minor civil dispute – residential tenancy proceedings in the Tribunal claiming $7,218.64 for various costs associated with leaving the old unit and the increased cost of the new rent, dog kennelling expenses, the difference between the new bond and the old, transport to work from a greater distance and sundry other claims against the old lessor.
29. [29]
    The matter was heard by an Adjudicator on 7 August 2024, and the Adjudicator handed down his decision on 4 November 2024, ordering the lessor to pay Ms Zheng compensation of $6,640.
30. [30]
    The lessor, through the agents, has applied for leave to appeal that decision.
31. [31]
    Given this is an appeal from a decision made in the Tribunal’s minor civil dispute jurisdiction, leave to appeal must first be obtained before any appeal proceeds.^[1] 
32. [32]
    Leave to appeal will usually only be granted where an appeal is necessary to correct a substantial injustice to the appellant and where there is a reasonable argument that there is an error to be corrected.^[2] 

Grounds of appeal

33. [33]
    The grounds of appeal are broad brush and as best made out are as follows:

    1. The Adjudicator failed to take into account the moratorium on rent granted Ms Zheng when awarding compensation to her;
    2. The compensation award in favour of Ms Zheng included compensation for her sub-tenant who was not a party to the residential tenancy agreement;
    3. The compensation awards for dog kennelling and the sub-tenant’s return airfare to China were excessive and lacked any reasonable evidential basis.

The Adjudicator’s reasons for decision

34. [34]
    The Adjudicator heard the matter on 7 August 2024. He reserved his decision and handed down his reasons for decision on 4 November 2024.
35. [35]
    In his reasons the Adjudicator noted that the claim was one under s 420(1)(e) of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (‘the Act’) which grants the Tribunal power to make an order for compensation where an application concerning breach of a residential tenancy agreement is made to the Tribunal.
36. [36]
    The Adjudicator noted that under s 419, if there has been a breach of a term of the residential tenancy agreement, a lessor or tenant may apply to the Tribunal for an order about the breach.
37. [37]
    By s 420 of the Act, if there is an application made about breach of a residential tenancy agreement, the orders the Tribunal may make includes an award for compensation.
38. [38]
    The Adjudicator noted the tenant’s application had been made within the requisite time. The Adjudicator noted the water leak on 11 August 2023 started a series of events which ultimately resulted in the tenant having to seek first temporary’ then alternate accommodation’ whilst extensive repairs were conducted. He finished:

I find no fault with the actions of the agent or lessor or tenant. This is one of those unfortunate situations where it’s no fault attributed to either party. That being said, the application by the tenant for compensation is valid in so far as the claim has been brought within the relevant time period, which means that it’s within my power to make an order.

39. [39]
    That an application by a tenant under s 420 is brought within the time prescribed is not a sufficient basis of itself however for an award for compensation. Prior to that, what is necessary is for the applicant for compensation to establish there has been a breach of the residential tenancy agreement. A breach of the agreement means a failure to comply with a party’s obligations under the agreement. Here however, the Adjudicator found neither party to be at fault and therefore neither in breach of the residential tenancy agreement.
40. [40]
    Given the Adjudicator awarded compensation to the tenant without identifying any breach on the part of the lessor, the Adjudicator fell into error, an error of law.
41. [41]
    In so far as the Adjudicator also awarded Ms Zheng compensation based on claimed loss of the person merely entitled to occupy the tenanted property with her, but who was never a tenant and therefore not party to the residential tenancy agreement, that constituted an error of mixed law and fact on the part of the Adjudicator.
42. [42]
    Given those errors, leave to appeal must be given.
43. [43]
    Given there has been an error of mixed law and fact, by s 147 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (‘QCAT Act’) the appeal must be decided by way of rehearing.

The appeal

44. [44]
    At the hearing before the Adjudicator the agents relied on termination of the tenancy on the basis of non-livability. The agents had issued Ms Zheng with a notice to leave pursuant to both s 284(1), non-livability, and s 290D, significant repair or renovation necessary.
45. [45]
    The notice to leave was issued on 22 September 2022, handover date 23 November 2023, a period of eight weeks.
46. [46]
    By Schedule 1 of the Act the minimum notice period for notice to leave for non-livability was the day the notice was given. For significant repair or renovation necessary, the period was two months after the notice was given but not before the end of the fixed term. Given the fixed term extended until 18 July 2024, the notice to leave was ineffective and Ms Zheng could not be forced to leave by order of the Tribunal on that basis if an application for termination had been made, which was not the case.
47. [47]
    Was the notice to leave for non-livability effective?
48. [48]
    Section 284 provides:

3. Notice to leave if agreement frustrated

3. (1)
   The lessor may give a notice to leave the premises to the tenant because the premises—

3. (a)
   have been destroyed, or made completely or partly unfit to live in, other than because of a breach of the agreement; or

3. (b)
   no longer may be used lawfully as a residence; or

3. (c)
   have been appropriated or acquired compulsorily by an authority.

3. (2)
   A notice to leave under this section must be given within 1 month after the happening of the event mentioned in subsection (1).

3. (3)
   A notice to leave under subsection (1)(a) or (b) is called a notice to leave for non-livability.

3. (4)
   A notice to leave under subsection (1)(c) is called a notice to leave for compulsory acquisition.

49. [49]
    There are a number of issues to be addressed. Was the unit completely or partly unfit to live in?^[3] Was the notice to leave given within one month after the happening of the event which destroyed or made the property completely or partly unfit to live in? Was the property completely or partly unfit to live in because of a breach of the agreement?
50. [50]
    I accept the finding of the Adjudicator that neither party caused the water leak problem. That is not a matter in issue between the parties. It was neither party’s fault.
51. [51]
    Was notice to leave given within one month after the happening of the event making the premises partly unfit to live in?
52. [52]
    Section 284(2) states a notice to leave under the section must be given within one month after the happening of the “event” mentioned in subsection (1). The word event is not defined in the Act. According to the Macquarie Online Dictionary, the ordinarily understood meaning of the word event is:

anything that happens or is regarded as happening; an occurrence, especially one of some importance

53. [53]
    Occurrence is in turn defined in the Macquarie Online Dictionary as:

the action or fact of occurring

54. [54]
    Neither definition is particularly helpful.
55. [55]
    I might pause to note and make mention of the availability of a notice of intention to leave on the same grounds to the tenant as well. If a residential property becomes unliveable, either party is entitled to terminate the tenancy on the grounds of non-livability. The tenant’s power to do that is to be found in s 305 of the Act:

3. 305
   Notice of intention to leave if agreement frustrated

3. (1)
   The tenant may give a notice of intention to leave the premises to the lessor because the premises—

3. (a)
   have been destroyed, or made completely or partially unfit to live in, other than because of a breach of the agreement; or

3. (b)
   no longer may be used lawfully as a residence; or

3. (c)
   have been appropriated or acquired compulsorily by an authority.

3. (2)
   A notice of intention to leave under this section must be given within 1 month after the happening of the event mentioned in subsection (1).

3. (3)
   A notice of intention to leave under subsection (1)(a) or (b) is called a notice of intention to leave for non-livability.

3. (4)
   A notice of intention to leave under subsection (1)(c) is called a notice of intention to leave for compulsory acquisition.

56. [56]
    Either could have terminated the tenancy. There was no fault attributable to either lessor or tenant with respect to the water leak problem and the consequent damage. Hence the error in allowing compensation against the lessor without explaining why that was appropriate, but the failure of the tenant to exercise her right to terminate not drawing similar opprobrium.
57. [57]
    Returning to consider the word “event”, it should of course be considered in context.  The handover period of the tenancy (the time to vacate) after notice is given (either notice to leave given by the lessor – or notice of intention to leave given by the tenant) is short, the day of the notice.
58. [58]
    That suggests the meaning to be given to “event” in both s 284 and 305 is not some transitory period of time, but a defining point in time occurrence. A point in time where the fact or facts of non-liveability are clear and reasonably supported by evidence.
59. [59]
    Here, I determine, no one of the gradual defects noted in the kitchen constituted a point in time event rendering the premises partly unfit to live in until the inspection by the builder and the builder’s inspection report was presented to hand. The inspection  report of the builder is dated 12 September 2023. That constituted the event triggering the entitlement to issue a notice to leave because the premises were known to be partly or wholly unfit for habitation within the meaning of s 284 of the Act.
60. [60]
    Emails suggest both the lessor and the agents were apprised of the builder’s findings by 15 September 2023. Accordingly the lessor (through the agents) had one month to issue the notice to leave for non-livability from that time. The notice to leave given to Ms Zheng on 22 September 2023 was therefore issued within time.
61. [61]
    The handover date on the Form 12 notice to leave was two months, not the day of issue of the Form 12. That was obviously done in an attempt to accommodate Ms Zheng’s desire to return to the unit after rectification work was finished and the lessor’s interest in retaining her as a good tenant. I do not see the extended handover date as rendering the notice to leave for non-livability invalid however. The requirements for a notice to leave are set out in s 326 of the Act, and by s 326(3) the handover day stated in the notice to leave must simply not be before the end of the minimum notice period for the relevant ground of notice.
62. [62]
    Ms Zheng and the permitted occupant moved themselves out from the unit on 7 October 2023. It is not entirely clear but they removed their possessions and cleaned the unit by 21 November 2023. The agents inspected the unit on 22 November 2023.
63. [63]
    Section 277(b) states one of the five ways a tenancy agreement ends:

the lessor gives the tenant a notice to leave under section 326 and the tenant hands over vacant possession of the premises on or after the handover day for the notice;

64. [64]
    Though the Act is prescriptive with respect to time limits,^[4] s 277(b) (and s 277(c)) cannot be intended to impose a prescriptive time requirement by using the expression “on or after the handover date”. A notice to leave under s 326 covers a broad range of circumstances of termination of a residential tenancy.
65. [65]
    What is surely necessary is that on the date of handover stated in the Form 12 Notice to Leave, or immediately after, the residential property is vacant and the keys made available to the lessor.
66. [66]
    Handover may be delayed for a short time after the handover date. I mention immediately after because too much delay may result in the lessor applying to the Tribunal for a termination order. The lessor has two weeks to make that application after the handover date passes.^[5]
67. [67]
    Here, as at the date of handover stated in the notice to leave, that is 23 November 2023, the lessor was given vacant possession of the unit. The tenancy agreement between the parties therefore ended on the date of handover, 23 November 2023.
68. [68]
    There was no breach of the tenancy agreement by either party leading up to termination. The tenancy agreement terminated on the basis of frustration of the tenancy agreement as provided for by s 284(1)(b).
69. [69]
    The appeal is allowed.

Disposition

70. [70]
    The appellant agents challenge only four items of the award of compensation: dog boarding costs of $2,100; short stay accommodation costs of $1,500; and housemate accommodation costs and flight expenses to China of $1,450. That totals $5,050.
71. [71]
    None of those items of compensation are recoverable from the lessor.
72. [72]
    The appellants do not challenge the amounts awarded for relocation expenses $600; internet costs of $120; additional travel expenses during the short stay accommodation $270; cleaning costs of $100; and additional transportation expenses and accommodation expenses $500, which totals $1,590.
73. [73]
    The award made by the Adjudicator in favour of Ms Zheng was $6,640.
74. [74]
    The order of the Adjudicator was stayed pending determination of this appeal save an amount of $1,480 was ordered to be paid Ms Zheng by 6 January 2025.
75. [75]
    That means the balance payable to Ms Zheng is $110.

Order

76. [76]
    Leave to appeal is granted.
77. [77]
    The appeal is allowed.
78. [78]
    The Order of the Adjudicator made 4 November 2024 is set aside and in lieu the appellant agents must pay to the respondent Ms Zheng the balance amount of $110 if the appellant agents have already paid the amount of $1,480 to Ms Zheng.
79. [79]
    If the earlier payment has not been made then the appellant agents pay to Ms Zheng the amount of $1,590.