Carta v Tilley (No 2) [2019] QDC 235

DISTRICT COURT OF QUEENSLAND CITATION: Carta v Tilley (No 2) [2019] QDC 235 PARTIES: PAUL CARTA (plaintiff) v CHRISTOPHER TILLEY (first defendant) and CLARE LEONIE TILLEY (second defendant) FILE NO/S: BD3878/19; M0055820/17 DIVISION: PROCEEDING: Civil Trial ORIGINATING COURT: Magistrates Court at Brisbane DELIVERED ON: 29 November 2019 DELIVERED AT: Brisbane HEARING DATE: 4 November 2019 JUDGE: McGill SC DCJ ORDER: Plaintiff’s claim dismissed. On counterclaim, judgment that the plaintiff pay the defendants $2,690.04, including $650.04 by way of interest. CATCHWORDS: LANDLORD AND TENANT – Tenant’s obligations – whether particular damage responsibility of tenant – whether some rent payments made – bond recoverable. Residential Tenancies and Rooming Accommodation Act 2008 s 188. COUNSEL: S K Long for the plaintiff C Upton for the defendants SOLICITORS: Celtic Law for the plaintiff GTC Lawyers for the defendants [1] The defendants were, prior to 14 April 2014, tenants of the plaintiff in a flat in Vulture Street, South Brisbane. By this action the plaintiff claims $7,300.00 unpaid rent from the defendants. The defendants dispute that this is owing, and alleged by -- 1 of 8 -- 2 counterclaim that there has actually been an over-payment of rent, which they claim, and that the plaintiff has failed to refund a rental bond of $1,400.00 paid to the plaintiff in cash at the start of the tenancy. The plaintiff alleges that he was entitled to forfeit the bond, or at least most of it, to cover the cost of repairs to the front door of the unit after it was damaged by the police breaking in during the tenancy. [2] The proceeding started in the Magistrates Court at Brisbane, and came to this court in the circumstances outlined in my earlier judgment, dealing with an appeal against an order that the proceeding be transferred to QCAT.1 After I allowed that appeal, I was concerned that, if the matter was simply returned to the Magistrates Court, the parties would be put to further delay while the matter worked its way through the system again, and, with the consent of the parties, transferred the matter to the District Court under the Civil Proceedings Act 2011 s 26(1) and listed it for hearing before myself on 4 November. As a consequence, it became the last civil trial that I conducted before my retirement from this court. [3] It is common ground that the defendants rented a flat at Vulture Street from the plaintiff in 2007, having previously rented other premises he owned next door. The rent was $350 per week, and never changed. There was a bond held by the plaintiff of $1,400. Initially payments were made in cash, but from June 2011 were made by direct deposit to the plaintiff’s bank account, until the defendants left the premises on 14 April 2014. At the time they left, the defendants were behind in their rent. The plaintiff’s case [4] The plaintiff said that the defendants did not regularly pay the full amount of rent as required; it was paid in different amounts, and at times they got behind and caught up: p 5. In 2011 he moved all his tenants onto payment by direct deposit. He maintained a rental ledger for all tenants,2 and produced a copy of the rental ledger for the defendants, from 3 October 2007: Exhibit 1. The document recorded the date of payment, the period in respect of which the rent was paid, how much money was received, and how it was paid: p 6. He said that the entry in the ledger would generally be made on the weekend after he had received the money, for all his tenants. According to Exhibit 1, the last rent payment was made on 16 December 2013, which covered the period expiring on 19 November 2013. This was followed by five periods of four weeks and one period of six days in respect of which rent had not been paid, which at a rate of $350.00 per week comes to $7,300.00. [5] The plaintiff denied that any payments had been made which had not been recorded by him in the ledger: p 17. He said that if rent was not paid he would first speak to the tenants concerned, and if necessary would follow-up with some type of correspondence. He produced as an example of this a letter he sent to the defendants in late June 2011, which showed an amount of $3,430.00 unpaid; Exhibit 2. This however included an amount of $390.00 apparently underpaid in respect of the previous tenancy. The extract from the ledger which was incorporated into the letter showed two amounts of rent said to be unpaid each $1,520.00 for one month. [6] The plaintiff said that when the defendants were not paying rent before they moved out, they made various promises about how money would come in to enable them to fund the rent: p 7. When they moved out they left a car behind which they were 1 [2019] QDC 186. 2 He managed 6 retail properties: p 10. -- 2 of 8 -- 3 supposed to transfer to the plaintiff in satisfaction of the outstanding rent, but that did not happen. Eventually he asked the defendants to remove the car, because another tenant wanted to use the garage. The first defendant on that occasion spoke about having a purchaser for the car, and if he sold it he would pay the unpaid rent, but no payment was received. He did not receive any payments from the defendants after they moved out: p 8, p 22. The amount of unpaid rent was $7,300.00. [7] The plaintiff claimed that most of the bond had been taken up by the cost of replacing the front door after police had come to the unit when the second defendant had locked herself in the unit and had threatened to commit suicide.3 He was away at the time, otherwise he had a master key and could have opened the door. Police forced open the door, damaging it, as a result of which he had to replace it. He produced a copy of an invoice for $1,168.00, the amount he charged to replace the door: p 9. [8] The plaintiff did not produce a written Tenancy Agreement. He said that he thought there had been one, but he had misplaced his copy of it: p 9. He admitted that he did not pay the bond into the relevant government authority to which such bonds are to be paid,4 and did not issue receipts for payments of rent that he received in cash.5 The defendants’ case [9] The first defendant said there was only ever an oral tenancy agreement: p 28. The bond consisted of a $600 bond from the previous property rented from the plaintiff, together with a further payment of $800.00. The rent was initially paid fortnightly then changed to monthly, in an envelope either given to the plaintiff in person, or slid under his door if he was not available: p 29. He said that the change to payment by direct deposit to the bank was at his initiative, because he was concerned about not receiving receipts. He said that, apart from the payments recorded in the rent ledger, he also made payments in cash for the months of March and April of 2011, which were not recorded in that way. [10] In support of this proposition, he produced a copy of a bank statement which revealed that withdrawals had been made in sums sufficient together to make a monthly payment of rent, though a single withdrawal of that amount was more than the daily transaction limit on his account. There were two months where there were matching withdrawals, though in one case the two withdrawals were made on the same day, one in the form of a transfer to his wife’s account, from which he said that amount was then withdrawn in cash, thereby getting around the daily cash withdrawal limit. He said that in the period from 9 February to June 2011 he did not receive any correspondence by letter or text from the plaintiff: p 31. On about 28 June 2011, when he received Exhibit 2, he said he contacted the plaintiff by telephone to say that the plaintiff had missed two payments on the ledger, and the plaintiff replied that he would have to check his records and would get back to him, but he never did: p 31. The plaintiff denied that this occurred. The first defendant said he never received another rental ledger until in the course of disclosure for this proceeding: p 32. [11] The first defendant lost his job in December 2013, and spoke to the plaintiff about an inability to pay rent, but was allowed to stay there for a time. He informed the plaintiff regularly about his lack of progress of obtaining alternative employment. After the 3 Plaintiff p 8; Exhibit 4. He claimed this meant the bond was forfeited: p 18. 4 Residential Tenancies Act 1994 s 59. 5 Ibid s 50(1); plaintiff p 10. -- 3 of 8 -- 4 incident when the police came to the flat he spoke to the plaintiff, who told him that he had a spare door that he could put on to replace the one that had been damaged, and that everything would be fine: p 32. The defendant understood that that was what happened. He had never received an invoice like Exhibit 6 prior to the proceeding. [12] The first defendant said that before they moved out he spoke to the plaintiff and offered to make weekly payments off the unpaid rent, or pay him a lump sum: p 33. The plaintiff had replied that he wanted the full amount, and asked the first defendant to leave his vehicle as security for the amount owed, to which the defendant agreed: p 34. At that stage the first defendant calculated there was 14 weeks rent owing and unpaid. He asked the plaintiff about the bond, and the plaintiff replied that they would talk about that when the rent had been paid up to date. [13] The first defendant said that on 31 May 2014, having secured a personal loan, he went to the bank and withdrew some cash from which he put $2,500.00 in an envelope and he and his wife then went and spoke to the plaintiff, and handed him the envelope with the money: p 34. The first defendant produced a bank statement, showing the withdrawal of an amount of $2,677.00, though the date recorded in the statement was 2 June 2014. He said that he withdrew the cash on 31 May: p 35. Subsequently there was an exchange of text messages about getting access to the car to help sell it, and the car was returned to the first defendant, but in the event it was not sold and not returned to the plaintiff. [14] The first defendant said that in January 2015 he had finally saved up $2,400.00 which was the balance of the amount he had worked out was payable to the plaintiff, and had that amount available in cash: p 37. He tried to telephone the plaintiff, but did not reach him, then drove to where the plaintiff was living and pressed the buzzer on the door, but did not get an answer. He said that he put a letter, stating that this was the balance of the money owing to the plaintiff and asking the plaintiff to contact him if there was any difficulty, in the envelope with the money, and left it in the plaintiff’s locked letter box: p 37. Subsequently he did not hear anything further from the plaintiff until the commencement of this proceeding. [15] The second defendant also gave evidence and said that two payments in cash had been made to the plaintiff, in March and April 2011, by way of cash in an envelope with the defendant’s name on it put under the plaintiff’s door: p 47. She was not able to recall whether she or her husband had actually taken the money upstairs and put it under the door: p 48. She said that in January 2014 police attended where they were living while she was there, because someone had apparently made a claim that there was a suicide attempt, but there was not: p 48. Her account was not entirely clear but it appears that an ambulance came first, and she knew that paramedics were there, and told them that she was fine and they did not need to come in, but the police then broke the door down: p 50. She denied that she had actually threatened to commit suicide, or invited the police to break down the door: p 51. She said that when the defendants left the premises they left their car as security for unpaid rent, and that in May 2014 they went back to the premises and paid $2,500.00 to the plaintiff in cash in an envelope, and took the car: p 49. Analysis [16] The main issue is one of credibility, since the defendants allege that there were four payments to the plaintiff in cash which the plaintiff denies having received. The -- 4 of 8 -- 5 defendants did not receive receipts for those payments, but they also did not receive receipts for many other payments in cash which the plaintiff does not dispute were made. In late June 2011 the plaintiff sent a letter to the defendants asserting that two months’ rent was unpaid: Exhibit 2. If the failure to pay occurred in March and April, it seems surprising that it took so long to send this letter. There was also this curious feature, that the plaintiff said that he listed part of the copy of the rental ledger that he had, showing all the payments that had been made, in the letter: p 6. There are however some inconsistencies between the two lists; the letter has as the first column of dates, “start of payment week” whereas the document said to be the rental ledger, Exhibit 1, has a previous column, “date paid”. The numbers are the same, except that in Exhibit 1 where two months’ rent was paid together in advance these are shown as separate entries with the same date in the “date paid” column6 whereas in Exhibit 2 they are shown as a single entry in respect of two months rather than one. [17] There is also the consideration that the plaintiff said that the defendants were always behind with their rent: p 6. Yet on its face Exhibit 1 shows that, from the first entry until 19 February 2011, the whole of the period when the payments were recorded as being made in cash, each of the payments (initially fortnightly but then monthly) was shown as made on the first day of the period for which the payment related, except for two months where the rent was paid two months’ in advance. According to Exhibit 1, from March 2008 to July 2012, rent payments were made very regularly, in the full monthly amount, except for the two occasions when two months’ rent was paid in advance, and the payments for the months of March, April and May 2011. If the two payments alleged by the defendants were made in cash in March and April 2011, the only irregularity would be that the May payment was not made until 2 June 2011, when the first direct deposit payment was made. Thereafter, until the middle of the year, payments were made in the full monthly amount quite regularly. If the plaintiff’s evidence is correct it means that a very regular pattern of making the full monthly payment was interrupted in this period by two payments which were omitted completely, but he then took until late June to get around to writing about it. [18] There is also the consideration that the defendants did not react to the letter by making any attempt to catch up; they just kept making regular monthly payments in the same amount, and there is no evidence of any follow-up to the letter Exhibit 2. That is more consistent with the defendants’ version, that after receipt of the letter he pointed out that two of the cash payments had been missed. There is also the consideration that the defendants are able to point to withdrawals from a bank account which match amounts of $1,520 in cash in early February 2011, mid-March 2011 and mid-April 2011: Exhibit 8. Interestingly, there was no payment to the plaintiff recorded in Exhibit 1 on about 4 February; the January rent payment is shown as having been made on 19 January, and the next payment on 19 February. [19] It is not possible to tell from the bank statement Exhibit 8 whether there was a further set of withdrawals about 19 February, because that part of the statement was not put in evidence. Nevertheless, there were ATM withdrawals totalling $1,520 on 15 and 16 March 2011, which would be consistent with a payment at about the usual time for rent payments being made, as alleged by the defendants. In addition, on 17 April there were three transactions, two ATM withdrawals totalling $1,000, and an internet transfer from the first defendant’s account to the second defendant’s account, from where the first defendant said he was able to withdraw the cash using the second 6 Two payments dated 20 January 2009 and two payments dated 21 May 2010. -- 5 of 8 -- 6 defendant’s card. The bank records do not show that this money, after being obtained in cash, was used by the defendants to pay the plaintiff, but they are a contemporaneous document which is consistent with the proposition that the defendants did make such payments. They also suggest that the dates in the “date paid” column in Exhibit 1 are not necessarily reliable. [20] The plaintiff put in evidence a number of text messages between the parties in 2013 and 2014. On 31 October 2013 there was a text from the plaintiff to the first defendant asking when the rent would catch up as “it’s now a long way behind”: Exhibit 3. According to Exhibit 1, at that stage the previous payment was made on 20 September 2013, and the one before that on 15 July, so on any view of the matter there were at least two months’ rent owing. On 31 October the defendant replied “15 of this month I will pay three months” and added an explanation for the delay. The text cannot refer to payment on 15 October, and must mean 15 November, by which time three months’ rent would have been due, for September, October and November 2013. It was submitted that this showed that the defendant was admitting that there were two months’ rent from 2011 still owing, but it seems to me that when one compares the text with the payments recorded for 2013 in Exhibit 1, it is actually inconsistent with that proposition. [21] In the event payment was not made in that amount on 15 November, only a little over one month’s rent, and the plaintiff followed the matter up with a text the following day, which produced a further excuse. He replied in a text which included the statement “I’ve allowed you to go this far because you’ve been a good tenant for some time”, which is perhaps a curious thing for him to say if there was two months’ rent outstanding for over two years. There were a number of text messages on 30 May and 31 May, but these were arranging the meeting which the plaintiff accepts took place on 31 May. Thereafter there were further texts chasing up rent, which are not really helpful either way because by this time in June 2014 there was admittedly some rent owing, and thereafter all the texts are from the plaintiff. [22] There are some aspects of the defendants’ evidence which gives me some concern. The first is that the two more recent payments in dispute were made in cash rather than by direct deposit as earlier payments had been for a couple of years. It seems a little strange that the defendants would revert to making cash payments to someone who did not issue receipts, where they were no longer tenants and the relationship was, on any view of things, not as good as it previously had been.7 There is also the consideration that the bank statement for the joint account which shows a withdrawal in cash of $2,677, records that withdrawal being made on 2 June 2014, after the sum of $2,500 was supposedly paid in cash to the plaintiff on 31 May 2014.8 The first defendant’s explanation, that the withdrawal was on a Saturday (p 35) but not recorded by the bank until the Monday, seems odd, but may be right. There are no entries on that statement with a Saturday date. The statement does at least demonstrate that at the time of the meeting on 31 May the defendants had funds which could have been used to pay $2,500 to the plaintiff. [23] Another matter that concerns me is the idea of leaving a quantity of cash in an envelope in a letterbox, even a locked letterbox. That strikes me as an odd thing to 7 He said this was because he did not then have the plaintiff’s bank details: p 39. But he could have asked for them: p 40. 8 The difference in amounts is no doubt explained by the fact that the amount withdrawn was virtually all the money then in the account. -- 6 of 8 -- 7 do, when the defendants had been pressed for payment of the outstanding rent, but if it occurred, it would amount to payment to the plaintiff.9 The second defendant’s evidence, that she was not aware that the police were outside until after they broke the door down, also strikes me as strange; police are generally quite vocal about identifying themselves in such a situation, and it would be surprising if the police did not identify themselves loudly before taking the step of breaking the door. However, the second defendant was not challenged on her evidence in cross-examination. [24] Other factors are that the plaintiff had failed to comply with his obligation under the applicable legislation to ensure that the tenancy agreement was in writing, and to issue receipts for cash payments, something else he was required to do. These do not in themselves demonstrate that he is not telling the truth, but they do reflect on this character. There is also the consideration that the invoice dated 31 January 2014 which the defendant said was a copy of one given to the defendants in January 2014 in relation to the repair of the door,10 Exhibit 6, was on the letterhead of a company which did not come into existence until July 2015: p 19. I do not find his explanation for this discrepancy, that he was using the letterhead before the paperwork was finalised, plausible; it does not take long to register a company. [25] On the whole, it appears to me that the documentary evidence, and particularly the defendants’ bank statements, support the proposition that cash payments were made by the defendants to the plaintiff in March and April 2011 in the amount of the rent, as does the fact that it took some months before the plaintiff chased up the payments supposedly not made, and thereafter did nothing further to pursue the matter until recently. On the whole I am not prepared to accept that Exhibit 1 is in all respects reliable, and I accept that those two payments were in fact made as alleged by the defendants. Having reached that point, it seems to me that I should also accept the defendants’ evidence that the other two more recent payments were made, and reject the plaintiff’s denials. This is essentially on the basis that, having accepted that the earlier payments were made, it is appropriate to conclude that the plaintiff is not a reliable witness, and that the defendants are more reliable. [26] It follows that the plaintiff’s claim fails. When the defendants moved out, there was $4,260 owing as unpaid rent, but they subsequently paid $2,400 and $2,500. That part of the defendants’ counterclaim which alleges an overpayment of $640 is made out. The defendants are entitled to recover that amount. Bond [27] With regard to the rental bond, there is no dispute about what happened: the police broke down the door, thereby damaging it. The issue then becomes one of whether the plaintiff or the defendants are responsible for repairing this damage. The position at common law is that tenants are responsible for damage to the demised premises caused deliberately or negligently by them, their family or guests.11 This is part of the duty at common law to use the rented premises in a tenant-like manner. That would not cover the situation here, since the police were not guests of the defendants; technically they may have been trespassers, unless there was some provision in the Police Powers and Responsibilities Act 2000 which authorised entry in such circumstances. There was no evidence that the second defendant had invited them in, 9 A letter box is a place held out for the receipt of written communications. 10 Plaintiff p 19 line 25: “I’m certain I did.” 11 Woodfall Landlord and Tenant, 27 th ed 1968, Vol 1, p 664 at para 1505. -- 7 of 8 -- 8 and indeed her evidence is that she told people that she was all right and to go away, in effect told them not to come in. In my opinion therefore, the position at common law is that the tenants were not liable to repair the door after the damage by the police. [28] I accept the defendant’s evidence that the tenancy agreement was oral, and it was not shown that there were any relevant oral terms as to repairs. The other relevant consideration is the obligations imposed on the parties by statute. At the time the tenancy commenced, the applicable Act was the Residential Tenancies Act 1994, but subsequently the Residential Tenancies and Rooming Accommodation Act 2008 commenced, and remained in force at the relevant time. The 2008 Act provided that if the existing agreement for tenancy continued after the commencement of the 2008 Act, the provisions of that Act applied to the existing agreement: s 543. So the 2008 Act is the source of the applicable statutory obligations. [29] The tenancy agreement was a residential tenancy agreement under that Act, even though it was oral, and the Act applied to it. Section 188 sets out the tenant’s obligations, which relevantly include in subsection (3): “The tenant must not maliciously damage, or allow someone else to maliciously damage, the premises or inclusions.” What occurred here did not come within that, since the police were not acting maliciously, and whatever they did was something that was not in any sense allowed by the defendants. Accordingly there was no obligation imposed by s 188 on the defendants to repair the door. It is true that, by subsection (4), the tenant is obliged to leave the premises, as far as possible, in the same condition they were in at the start of the tenancy, fair wear and tear excepted, but by the end of the tenancy the door had been repaired, and there was no evidence the defendants were in breach of this obligation. This is because the plaintiff had repaired the door, in satisfaction of the obligation imposed on him by s 185(3)(b) of the 2008 Act, to “maintain the premises and inclusions in good repair.” The effect of this provision is that it was the plaintiff’s obligation to repair the door,12 so he is not entitled to charge for it, and cannot forfeit the bond on this basis. No other basis was relied on by the plaintiff, and it follows that the bond is refundable and the defendants are also entitled to recover the $1,400. [30] As a result therefore the plaintiff’s claim against the defendants is dismissed. On the counterclaim, the defendants are entitled to judgment that the plaintiff pay them $2,040. There is a claim for interest by statute in the counterclaim. The plaintiff may be entitled to retain the bond until the defendant made the last rental payment, but thereafter the full amount of the bond, and the overpayment of rent, became due and payable by the plaintiff to the defendant. Accordingly the defendants’ cause of action arose at that time and prima facie the defendants are entitled to interest by statute in accordance with the practice direction from that date until the date of judgment. That amount according to the court calculator comes to $650.04. There will therefore be judgment that the plaintiff pay the defendants $2,690.04 including $650.04 by way of interest. I assume costs will follow the event, but will invite submissions in relation to costs when judgment is delivered. 12 At one point under cross-examination the plaintiff expressed disbelief that he had to repair the door for free, asking rhetorically “Does that make sense to anyone?” p 19 line 35. Evidently, it makes sense to the legislature of Queensland. -- 8 of 8 --