Capital & Harvest Pty Ltd v Bae & Anor [2023] QCATA 94

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Capital & Harvest Pty Ltd v Bae & Anor [2023] QCATA 94 PARTIES: CAPITAL & HARVEST PTY LTD (applicant/appellant) v SEONG-SAN BAE (first respondent) And CHARLOTTE MAREE WHITEHOUSE (second respondent) APPLICATION NO/S: APL097-23 ORIGINATING APPLICATION NO/S: MCDT 2496/22 (Brisbane) MATTER TYPE: Appeals DELIVERED ON: 10 July 2023 HEARD AT: Brisbane DECISION OF: Member Lember ORDERS: IT IS THE DECISION OF THE APPEAL TRIBNAL THAT: Leave to appeal granted. Appeal allowed. The decision of 9 March 2023 is set aside. The proceedings are remitted to the minor civil dispute jurisdiction for rehearing. CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where application in a residential tenancy dispute was filed within seven days of notice of unresolved dispute – where tribunal erred in calculating dates due to a public holiday – where application dismissed – whether seven-day limit for bringing an application to claim the bond goes to jurisdiction Acts Interpretation Act 1954 (Qld) s 14A, s 38 Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 12, s 32 -- 1 of 9 -- 2 Residential Tenancies and Rooming Accomodation Act 2008 (Qld) s 5, s 136B, s 136C, s 136D, s 137, s 188, s 397, s 417, s 419, s 420, s 429 Cachia v Grech [2009] NSWCA 232 Define Property Agents v Sanderson [2021] QCATA 129 Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 Khromeenkova v PRD Robina Nationwide [2021] QCATA 35 McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41 Smolcic v Ray White Rockhampton [2021] QCATA 136 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 What is this application about? [1] On 4 October 2022 the applicants filed an application in a residential tenancy dispute (MCDT 2496/22) against their former tenants seeking orders that the respondents pay the applicants the sum of $6,744.70 as compensation for damages arising from the condition in which the applicants say the respondents vacated the tenancy when it ended.1 [2] At the time of the application, and when the matter was heard by the Tribunal on 9 March 2023, the Residential Tenancies Authority (RTA) held a bond for the tenancy in the sum of $2,240 which the applicants proposed be paid to them towards the claim amount. [3] For their part, the respondent tenants brought a counter-application filed 18 January 2023 denying any breach that would give rise to a compensation claim and seeking the return of their bond. [4] The parties had completed dispute resolution procedures before the RTA and filed a Notice of Unresolved Dispute (NURD) dated 23 September 2022 evidencing the fact. [5] On 9 March 2023 the Tribunal dismissed the application and the counter-application as both having been made out-of-time: namely, that neither were filed within seven (7) days of the parties receiving the NURD, pursuant to section 136B of the Residential Tenancies and Rooming Accomodation Act 2008 (Qld) (RTRAA).2 1 Section 188 of the Residential Tenancies and Rooming Accomodation Act 2008 (Qld) (RTRAA). 2 The audio of the Tribunal’s oral reasons for the decision has been reviewed by the Appeal Tribunal. -- 2 of 9 -- 3 [6] Capital & Harvest Pty Ltd want to appeal the decision, but to do so, leave is first required.3 They raise the following as their grounds of appeal: (a) That the application for a minor civil dispute – residential tenancy dispute (MCD) was dismissed on the grounds that it was not filed within seven days of the parties receiving their Notice of Unresolved Dispute (NURD) from the Residential Tenancies Authority (RTA), pursuant to section 136B of the Residential Tenancies and Rooming Accomodation Act 2008 (Qld) (RTRAA); (b) That due to the Queen’s Birthday public holiday on 3 October 2022, the application was filed within seven days of the parties receiving the NURD; and (c) That the decision to dismiss the appliction was therefore made in error. [7] Upon reviewing the application for leave to appeal or appeal and the MCDT file on 26 April 2023 I made directions inviting submissions from the parties based upon the following observations: (a) The NURD is dated 23 September 2022. (b) The application for a minor civil dispute – residential tenancy dispute was filed on 4 October 2022. (c) The application sought orders for compensation for breach of the tenancy agreement in the sum of $6,744.70 plus the filing fee, $2,240 of which was to be taken from the bond held by the RTA. (d) The claim was therefore on the bond, under section 136B of the RTRAA, but also for compensation for breach under sections 419 and 420 of the RTRAA. (e) An error of law appears to have been made in dismissing the application and the counter-application in circumstances where: (i) The time limit for filing a section 136B claim is seven days after the NURD is given.4 (ii) Section 38 of the Acts Interpretation Act 1954 (Qld) (AIA) provides that a period that begins on a given day, act or event, is calculated by excluding the day of the act or event. In this case, 23 September 2022, the day the NURD was given, is excluded from a reckoning of time under section 136B of the RTRAA. (iii) Section 38 of the AIA also provides that if the last day of a period falls on an excluded day (a day that is not a business day), then the last day is taken to fall on the next day that is not an excluded day. (iv) Therefore, the seven day time limit under section 136B commenced on Saturday 24 September 2022, and ended on Tuesday 4 October 2022 (Monday 3 October 2022 being the Queen’s Birthday public holiday and therefore an ‘excluded day’). 3 Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 143(3). 4 Section 136B(3), RTRAA. -- 3 of 9 -- 4 (v) The application was filed within time under section 136B. (vi) Even if it was not, the time limit for filing a section 419 claim is within six months of becoming aware of the breach that gives rise to the claim. However, making the dispute resolution request amounts to the making of the application.5 Given the breaches are alleged to have occurred in August 2022 and the NURD was dated September 2022, the compensation claim was well within time and should have been heard. [8] I proposed in those circumstances, in the interests of justice and to save time and costs to the parties, that the Appeal Tribunal deal with the matter on the papers, by granting leave to appeal, allowing the appeal, setting the order made 9 March 2023 aside, and by remitting the matter back to the minor civil dispute jurisdiction to be reheard. [9] In reply the parties made the following brief submissions: (a) The applicants agree to the proposed course of action and want the appeal allowed. (b) The respondent tenants object to the “decision to appeal the tribunal directions”. The grounds of their objection are expressed to be the refusal of the applicant to negotiate the compensation amount following the 9 March 2023 hearing. [10] The matter is now with the Appeal Tribunal to determine on the papers and my decision and the reasons for it follow. Tenancy disputes over bonds and other money under the RTRAA [11] The contract between the parties that gives rise to their rights and obligations is the General Tenancy Agreement (GTA), which relevantly provides in standard term 13(3) that “the bond is intended to be available to financially protect the lessor if the tenant breaches this agreement”. [12] Contractually therefore, the lessor is not entitled to receive or to keep the bond if breach is not established (or conceded by the tenant consenting to its release). [13] RTA dispute resolution processes do not establish breach/liability under the tenancy agreement or the RTRAA. They simply provide process for a claim on the bond by either party to be negotiated and resolves, failing which there is a short window of time to claim the bond, after which it will be released by the RTA: (a) Under sections 136B(1)-(3) of the RTRAA, an ‘interested person’ has seven days from when they are given written notice of the ending of the conciliation process (presumably, upon being given the NURD) to apply to the tribunal for an order about the payment of the bond. (b) Section 136C allows the RTA to grant an extension of up to 3 days (if satisfied there is a ‘sufficient reason’ to do so) provided the interested person applies for the extension within the seven-day claim period. (c) Section 136D(2) provides that if ‘under section 136B’ an interested person applies for an order about the payment of the rental bond, the tribunal may make any order about the payment of the bond it considers appropriate, having regard 5 Section 417, RTRAA. -- 4 of 9 -- 5 to various matters. These include the “lessor’s and tenant’s compliance with this Act or the Agreement” (s136D(2)(a)(ii)). (d) Section 137 provides that if the tribunal makes an order about payment of a rental bond, and if the RTA are given a copy of the order, the RTA must pay the bond in accordance with the order. [14] The bond is a form of security, akin to a mortgage, which makes the RTA akin to the Titles Office. Just as the act of the Titles Office releasing a mortgage is not a determination of the rights and obligations of the parties under the loan agreement between them, the act of the RTA releasing a bond is not determinative of money disputes between lessor and tenant under a tenancy agreement. This is consistent with comments in Smolcic v Ray White Rockhampton [2021] QCATA 136 by Judicial Member McGill SC who said that: [11] The rental bond is a form of security paid by the tenant to guard against a failure by the tenant to pay rent, or otherwise to perform the tenants’ obligations in respect of the tenancy. … [12] Subject to any proper claim by the lessor, the bond remains what it has always been: the property of the tenant. Under the Act it has been paid to the RTA, as a sort of statutory trustee, but it simply provides a form of security, to the amount of the bond, for any legitimate claim brought by the lessor. Subject to any such claim, it remains the property of the tenant, and the tenant is entitled to the return of it. [15] Section 419 of the RTRAA relevantly provides that (emphasis added): 419 Applications about breach of agreements (1) This section applies if any of the following claim there has been a breach of a term of a residential tenancy agreement or a rooming accommodation agreement— (a) a lessor or tenant under the residential tenancy agreement; (b) a provider or resident under the rooming accommodation agreement. (2) The lessor or tenant, or provider or resident, may apply to a tribunal for an order about the breach. (3) The application must be made within 6 months after the lessor or tenant, or provider or resident, becomes aware of the breach. (4) For a residential tenancy, the application may be made— (a) during the term, or after the end, of the agreement; and (b) whether or not an application for termination, or a termination order, has been made about the agreement; and (c) whether or not a rental bond for the agreement is held by the authority when the application is made. [16] On an application about a breach (section 419), the tribunal can, pursuant to section 420 make orders about the breach including (relevantly): (a) an order restraining any action in breach of the agreement; (b) an order for the payment of money; -- 5 of 9 -- 6 (c) an order requiring an action in performance of the agreement; … (e) an order for compensation. [17] Section 429 is a “catch all” provision (Khromeenkova v PRD Robina Nationwide [2021] QCATA 35 at [43]) and provides that: If there is a dispute between the lessor and tenant, or provider and resident, about an agreement, either party may apply to a tribunal for an order, and the tribunal may make any order it considers appropriate, to resolve the dispute. [18] At the time of hearing a non-urgent tenancy dispute in the tribunal, one of four circumstances will apply with respect to the bond: (a) The bond has been paid out by the RTA with the written consent of both parties. (b) The bond has been claimed by the tenant and released to them because the lessor did not make a claim on it in time for the RTA to retain it – there is no longer a “bond” to make an order over and the lessor’s claim is instead for the payment or money or compensation under sections 419/420 or 429; or (c) The bond has been claimed by the lessor and released to them because the tenant did not act quickly enough to dispute it, in which case it has been paid as a credit to the tenant’s rental ledger - there is no longer a “bond” to make an order about but the tenant might still require the lessor to establish the breach, and seek an order for the payment of money under sections 419/420 or 429; or (d) The bond was claimed, but disputed, although not in time, but for some reason the RTA nonetheless held it, with the effect that there is a bond intact for the hearing – the bond is money and an order can be made about it sections 419/420 or 429, however, it is the property of the tenant unless and until the lessor establishes a breach. Such an order when made must be processed by the RTA (section 137). [19] I am of the view that sections 136B-D govern RTA functions and do not go to the jurisdiction of the tribunal with respect to rental bonds. If I am wrong about that, and if sections 136B-D purport to impose a seven-day jurisdictional time limit, then such a time limit is inconsistent with the six month time limit for applications about breach in section 419 and with section 429 (which has no express time limit save for any application of section 38(4) of the AIA which, if no time is provided or allowed for doing anything, requires the thing to be done “as soon as possible”). As the statutory provisions are in conflict the function of the tribunal becomes to construe the intention of the legislature through the words used in the Act and to determine which is the leading provision and which is subordinate. [20] In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 381-2 McHugh, Gummow, Kirby and Hayne JJ said that: [w]here conflict appears to arise from the language of provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court “to determine which is the leading provision and which the subordinate provision, and which must give way to the other”. Only by determining the hierarchy of -- 6 of 9 -- 7 the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme. [21] Section 14A(1) of the Acts Interpretation Act 1954 (Qld) provides, “in the interpretation of a provision of an Act, the interpretation that will best achieve the purpose of the Act is to be preferred to any other interpretation”. [22] The objects of the RTRAA are set out in section 5 as being to “state the rights and obligations of tenants, lessors and agents for residential tenancies” achieved by: (a) regulating the making, content, operation and ending of residential tenancy agreements and rooming accommodation agreements; and (b) providing for the resolution of disputes about residential tenancy agreements and rooming accommodation agreements; and (c) providing for the authority to receive, hold and pay rental bonds. [23] Regulating bonds is secondary to resolving disputes, but regardless, the RTRAA is consumer/protective legislation (see Define Property Agents v Sanderson [2021] QCATA 129). Specific provisions about the RTA and bonds are subordinate to the general rights to bring a tenancy dispute to the tribunal and to seek orders under sections 419/420 and 429. Ruling such applications out of time applying section 136B would, in my view, mean a lessor could forever retain a taken bond they are not contractually entitled to because a displaced tenant did not bring tribunal proceedings within seven days, vastly inconsistent with the consumer protection flavour of the legislation. Application for leave to appeal [24] In determining whether to grant leave, the Appeal Tribunal must be satisfied that: (a) there is a reasonably arguable case of error in the primary decision;6 (b) there is a reasonable prospect that the appellant will obtain substantive relief;7 (c) leave is needed to correct a substantial injustice caused by some error;8 or (d) there is a question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage.9 Error in the primary decision [25] There is a clear case of error in the primary decision of the Tribunal in several respects: The application (a) For the reasons given at [7] above, due to the failure to consider the Queen’s Birthday public holiday in factoring time, the Tribunal erred in dismissing the application the application in a residential tenancy dispute, that included a claim 6 QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41. 7 Cachia v Grech [2009] NSWCA 232, 2. 8 QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41. 9 Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, 577, 580. -- 7 of 9 -- 8 on the bond, because it had not been filed within seven days of the NURD. It was in fact filed on the seventh day. (b) Had the application been filed “out of time” under section 136B, the evidence before the Tribunal was that the parties had complied with dispute resolution procedures and the bond was still held by the RTA. The Tribunal had jurisdiction to consider the agent’s claim (including the bond) pursuant to sections 419/420 and the RTA would be obliged by section 137 to act on any such order made. The counter-application (c) Section 12 of the QCAT Act permits persons who may apply to the tribunal for a decision under the RTRAA to bring an application in the minor civil dispute jurisdiction. (d) The application for a minor civil dispute - residential tenancy dispute filed 4 October 2022 brought the tenancy dispute before the Tribunal in the form of the lessor’s compensation claim. (e) The relief sought by the respondents in the counter-application was simply the return to them of their bond. (f) I am not convinced a counter-application was necessary in those circumstances because it merely objected to the relief sought by the applicant and did not give rise to a new or separate claim. To put it another way, it is for the applicant to establish an entitlement to the bond – if it fails to do so the bond must be returned to the tenant as the default outcome of the lessor’s unsuccessful application. (g) To refuse the relief sought by the tenants on the basis that they had filed their counter-application more than seven days after the NURD was issued was therefore a flawed decision because: (i) The respondents did not need to file the counter-claim for the bond where the applicant had already filed its claim on the bond as the managing agent for the tenancy; and (ii) The respondents did not need to file a counter-application at all to obtain the relief they sought. If the agent’s application was not successful (if the agent did not establish breach) the appropriate order to have made was for the payment of the bond held to the tenant. Substantial injustice on account of the error [26] Neither the application nor the counter-application have been considered on their merits and the Appeal Tribunal understands the bond is still currently held by the RTA. [27] The erred dismissal of both applications has led to substantial injustice to both parties as the claims relating to this tenancy remain unheard on the merits and the bond has not been dealt with. Appeal [28] I am satisfied that there has been an error of law on the part of the Tribunal below in dismissing the application and the counter-application on 9 March 2023 for want of jurisdiction. -- 8 of 9 -- 9 [29] As the Tribunal wrongfully denied the parties the opportunity to be heard and the dispute is not resolved, leave to appeal is granted, the appeal is allowed, the original decision of 9 March 2023 is set aside, and the claim is returned to the minor civil dispute jurisdiction to be reheard. -- 9 of 9 --