Apple Oz Pty Ltd v Rossi & Anor [2020] QCATA 3

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Apple Oz Pty Ltd v Rossi & Anor [2020] QCATA 3 PARTIES: APPLE OZ PTY LTD (appellant) v LUANA CARINA FERREYRAS ROSSI (first respondent) MARCUS RODRIGO ROMERO BRIGHTMORE (second respondent) APPLICATION NO/S: APL146-19 ORIGINATING APPLICATION NO/S: MCDT525-19 (Southport) MATTER TYPE: Appeals DELIVERED ON: 10 January 2020 HEARING DATE: 10 December 2019 HEARD AT: Brisbane DECISION OF: Member Howe ORDERS: Application for leave to appeal granted. Appeal dismissed. Each party bear their own costs of the appeal. CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – where application for leave to appeal – where the respondent tenants entered into a continuation of their existing tenancy before the current period expired – where shortly after and before the current period expired they decided to leave – where a special condition in the tenancy agreement provided that if the residential tenancy agreement was breached by the tenants the agent was entitled to charge the tenants a letting fee equal to one week’s rent plus GST– where the matter was heard by Justices of the Peace and the agent’s claim for one week’s rent plus GST was refused – where the lessor was not charged any reletting or break lease fee by the agent Residential Tenancies and Rooming Accommodation Act 2008 (Qld), s 173, s 238, s 239(1), s 419 Pickering v McArthur [2005] QCA 294 -- 1 of 6 -- 2 APPEARANCES & REPRESENTATION: Applicant: Self-represented by X Qi Respondents: Self-represented REASONS FOR DECISION [1] The respondents were tenants of a property at Varsity Lakes for more than seven years. They entered into residential tenancy agreements in respect of that rental property every six months. [2] The penultimate residential tenancy agreement they entered into commenced on 15 August 2018 and ended on 14 February 2019 (‘the old lease’). [3] On 8 January 2019 they signed a new six-month residential tenancy agreement in respect of the rental property set to commence on 15 February 2019 and end on 14 August 2019 (‘the new lease’). Shortly after signing the new lease and before the end of the old lease they had a job offer for work in the Northern Territory which they accepted. [4] They approached the lessor’s agent, Ms Qi, who prepared a form 13 Notice of Intention to Leave for them to give to her. There were different copies of the form 13 filed at the hearing, one giving the date of vacating as 18 February 2019 and the other, 20 February 2019, but ultimately that had no bearing on the issues for determination. In the notice of intention to leave however Ms Qi stated a break lease fee of one week’s rent plus GST would have to be paid by the tenants. [5] The respondents found another person prepared to take over the tenancy. Ms Qi said that would not suffice. A new tenancy agreement would be required and the respondents would have to pay a break lease fee because they were breaking the new lease. [6] A new tenancy agreement with the incoming tenant found by the respondents was signed on 8 February 2019. The new lease commenced on 20 February 2019 with an end date of 19 August 2019 (‘the third-party lease’). [7] The respondents vacated the premises on 19 February 2019 and paid rent to that date. The new tenant entered on 20 February 2019 pursuant to the third-party lease. [8] The respondents refused to pay the break lease fee. Ms Qi commenced proceedings in the tribunal seeking to recover a break lease fee of $456.50 (inclusive of GST) plus the tribunal filing fee of $67.70 and also an amount of $264 described as a ‘Tribunal fee’ which she said was her costs of preparing for and appearing at hearing. [9] The matter was heard before Justices of the Peace on 14 May 2019. The Justices of the Peace dismissed Ms Qi’s application. Ms Qi wants to appeal that decision. -- 2 of 6 -- 3 [10] 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 [11] 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 There may be other relevant considerations, but these are the primary ones. [12] Ms Qi was not clear in her application for leave to appeal what her grounds of appeal were. That is not unusual in the tribunal with parties representing themselves. At the hearing of the application for leave to appeal she narrowed her principal complaint to the following – that the tribunal erred in refusing her claim for a break lease fee in circumstances where there was a contractual entitlement to claim the fee set out in the special conditions to the new lease. [13] She also maintained at the hearing of the application for leave to appeal that if she was successful in respect of her claim to the break lease fee she should also have been entitled to the filing fee for the minor civil dispute application and her costs of appearing at the hearing before the Justices of the Peace. She also sought her filing fee for the application for leave to appeal or appeal. [14] In both the old lease and the new lease the following special condition was set out: If the lease is broken for any reason, the resident manager has the right to charged (sic) the following costs 1 Letting fee equal to one week’s rent plus GST 2 Rent will be payable until a new tenant moves into the premises or the original lease expires. The reasons for decision [15] The Justices of the Peace dismissed Ms Qi’s claim on the basis that the respondent tenants gave notice to Ms Qi that they were not taking up the new lease and they paid all rent due under the old lease to the end of that lease. As such they found the old lease was not breached and therefore a break lease fee did not apply. [16] The Justices of the Peace were correct in finding that there was no breach of the old lease. It went full term. However the claim by the agent for a break lease fee was made pursuant to the new lease, not the old lease. The Justices of the Peace noted that during the hearing,3 but failed to turn their minds to it in giving their reasons for decision. [17] Rather the Justices of the Peace said that ‘as to the new lease’, the lessor had suffered no loss because the new lease provided the lessor with a rent $35 a week higher than that being paid by the respondents. [18] But the claim for a break lease fee is a claim referrable to the costs usually charged by an agent to the lessor to find and sign up replacement tenants consequent on a 1 QCAT Act, s 142(3)(a)(i). 2 Pickering v McArthur [2005] QCA 294, [3]. 3 T1-14 L 43 to T1-15 L7. -- 3 of 6 -- 4 defaulting tenant breaching a fixed term tenancy by leaving early. Those costs are then sought to be recovered by the lessor from the defaulting tenant. [19] The Justices of the Peace did not consider the claim to a break lease fee under the special conditions of the new lease. Further they mistakenly thought the claim to the break lease fee was associated with the old lease. The clause about a break lease fee was to be found in both the old lease and the new lease. [20] Accordingly the Justices of the Peace have fallen into error, an error of fact and law. [21] Ms Qi is entitled to leave to appeal in such circumstances. [22] In respect of the other items of her claim dismissed by the Justices of the Peace, I discern no error. There are no costs allowed in minor civil dispute proceedings – residential tenancy other than the filing fee.4 Ms Qi’s claim for costs of her appearance before the Justices of the Peace could not be awarded to her regardless of the success or otherwise of her claim to a break lease fee. [23] As to her claim for the filing fee, an award of costs, even if limited to the filing fee for a minor civil dispute application, is discretionary and the usual order is that each party bear their own costs.5 It was within the discretion of the Justices of the Peace not to award the filing fee to her.6 There is no error made by the Justices of the Peace about that to be corrected. Appeal [24] Given the error below was an error of both fact and law I turn to decide the appeal by way of rehearing. [25] Initially the claim to a break lease fee appears unexceptional. However, when consideration is given to the special condition in the tenancy agreement, it becomes clear that there is an issue as to whether in fact the claim by Ms Qi is for a break lease fee as that claim is usually understood in residential tenancy matters in the tribunal. [26] Where an agent acts for the lessor, a break lease fee is, broadly speaking, the equivalent amount a real estate agent charges the lessor to advertise to find a new tenant to enter into a new residential tenancy agreement with the lessor. The money paid by the lessor to the agent is then recovered from the defaulting tenant as a break lease fee. It is commonly one week’s rent (under the breached tenancy). [27] However Ms Qi did not charge the lessor anything for finding new tenants to take over from the respondents and preparing a fresh tenancy agreement or preparing a new entry condition report. That was made reasonably clear by Ms Qi in the hearing before the Justices of the Peace7 and certainly confirmed by her at the hearing of the application for leave to appeal. 4 Queensland Civil and Administrative Tribunal Rules 2009 (Qld) (‘QCAT Rules’), r 83(b). 5 QCAT Act, s 100. 6 House v The King (1936) 55 CLR 499, 504-505. 7 T1-4 L3-21. -- 4 of 6 -- 5 [28] The claim for one week’s rent plus GST sought directly by Ms Qi from the respondent tenants was a claim personal to Ms Qi, not the lessor. As such it breached s 173 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (‘RTRAA’): 173 Certain terms about penalties and other payments void (1) A term of an agreement is void to the extent it provides that, if the tenant breaches the agreement or this or another Act, the tenant is liable to pay— (a) all or a part of the rent remaining payable under the agreement; or (b) increased rent; or (c) an amount as a penalty; or (d) an amount as liquidated damages. (2) Despite subsection (1), a term of a fixed term agreement is not void to the extent it provides that, if the tenant terminates the agreement other than in a way permitted under this Act, the tenant is liable to pay the reasonable costs incurred by the lessor in reletting the premises. (3) Subsection (2) applies to a term only if the only reference in the term to the amount payable by the tenant is a reference to the reasonable costs incurred by the lessor in reletting the premises. (4) A lessor or lessor’s agent must not require a tenant to enter into an agreement containing a term that is void under subsection (1). Maximum penalty for subsection (4)—20 penalty units. [29] The claim by her to the equivalent of one week’s rent was not a cost incurred by the lessor in reletting the premises permitted under s 173(2). There was no cost to the lessor in reletting the premises. [30] Further, s 419 RTRAA provides: 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. [31] I conclude the claim to the so-called break lease fee under the new lease was a claim by the agent pursuing a personal claim against the respondents. It was not a claim brought by her acting as agent for the lessor seeking to recover the reasonable costs charged the lessor by the agent reletting the premises. -- 5 of 6 -- 6 [32] Indeed Ms Qi prepared an invoice addressed to the tenants dated 18 March 2019 charging them what she described as a break lease fee of one weeks rent plus GST, but describing it as her involvement over 12 hours preparing forms, performing a reference check, performing a final cleaning check (twice) and settling new tenants in. [33] I note the following exchange occurred at the hearing before the Justices of the Peace: Hardin JP: Okay. So what’s your claim of $465.50 is – apart from the filing fee, is for your expenses that you’re charging for the preparation of the documents for the new lease and for the finishing of the lease, that it had run its time. Ms Qi: Yes. Hardin JP: is that right? Ms Qi: Yes. Hardin JP: Now, I find that strange, but I would like your explanation, because effectively, you were employed by the owner of the property, and those are expenses that would be between you and the owner, not between you and the tenant. Ms Qi: Yes, and – but, you know, if the tenants, they move out by the end of the agreement, fixed termed (sic), and if I have found a new tenant, by agreement, me and the owners, the owner have to pay, but if the tenant, they move out before their, you know, agreement ending and they have to pay because I find, you know, new tenants moved in.8 [34] The evidence given by Ms Qi to the Justices of the Peace about this was confusing. But certainly on the hearing of the application for leave to appeal she was clear that she never charged the lessor anything at all associated with the end of the old lease, finding new tenants, or preparing the third party lease or completing an entry condition report with the new tenants. The claim brought in the tribunal was a claim personal to her, not a claim by the lessor against the respondent tenants and pursued by her as agent for the lessor. [35] As such, the claim must fail. It falls outside the permissible bounds of s 173 and the application brought before the Justices of the Peace as a minor civil dispute – residential tenancy was outside the scope of claims permitted under s 419. A real estate agent is permitted to be named as a party in residential tenancy disputes but only to represent the lessor.9 It is the lessor’s claims that the agent pursues against a tenant in residential tenancy disputes in the tribunal, not the agent’s. [36] Ms Qi’s appeal fails. The appeal is dismissed. Each party should bear their own costs of the appeal. 8 Transcript 1-4 Lines 3-21. 9 RTRAA, s 206(3). -- 6 of 6 --