Bourke v Kenjad Rentals [2019] QCATA 81

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Bourke v Kenjad Rentals [2019] QCATA 81 PARTIES: ANDREA BOURKE (applicant/appellant) v KENJAD RENTALS (respondent) APPLICATION NO/S: APL194-18 ORIGINATING APPLICATION NO/S: MCDT 274/18 MATTER TYPE: Appeals DELIVERED ON: 3 June 2019 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Justice Carmody ORDERS: 1. Leave to appeal granted. 2. Appeal dismissed. CATCHWORDS: APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – RESIDENTIAL TENANCIES – COMPENSATION – where the applicant’s statutory compensation application for performance breaches against the lessor had timed out because it was made more than 6 months after she became aware of them – where the applicant requested a partial rent refund for the alleged loss of amenity from failure to perform repair and maintain obligation – whether a viable alternative claim in the circumstances – whether dismissal is fair and equitable order – where leave granted but the appeal dismissed. Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 28, 32 Residential Tenancies and Rooming Accommodation Act 2008 (Qld) ss 12, 94, 419, 420, 429 Limitation of Actions Act 1974, (Qld) s 10(1) Campbell v Donker [2013] QCATA 6 Hurst v Payatt [2017] QCATA 101 Masinello v Parker & Anor (No 2) [2013] QCATA 325 SAS Trustee Corporation v Miles [2018] HCA 55 -- 1 of 5 -- 2 Sztal v Minister for Immigration and Border Protection (2017) 347 ALR 405 Vessi v Howells [2013] QCAT 674 Wechsel v Andrew (No 3) [2011] QCATA 106 APPEARANCES: This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). REASONS FOR DECISION [1] The leave question is whether the tribunal’s decision to dismiss the applicant’s “partial rent refund” of $8060 (calculated at $310 rent reduction for 26 weeks) as a timed-out breach-based compensation claim is vitiated by its failure to consider rent relief as an alternative. [2] The proposed ground is arguable and important enough to justify a grant of leave to appeal. The context [3] The appellant claimed there had been a breach of the lessor’s repair and maintenance obligations under the terms of a residential tenancy agreement and applied to the tribunal for an order about it. [4] While such an application can be made during or after the end of the term of the tenancy by virtue of s 419(4)(a) Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRA Act) s 419(3) RTRA Act mandates that it must be made within six (6) months after the applicant becomes aware of the alleged breach. The orders the tribunal may (not must) make on an application about a tenancy breach are referred to in s 420 RTRA. [5] The tribunal also has an inexact auxiliary power to make any order it considers appropriate to resolve a general dispute between the lessor and tenant about “an agreement”. It is not clear whether this provision is limited or merely includes agreements outside the description of a “residential tenancy agreement” in s 12 RTRA Act or whether monetary compensation is one of the range of orders the tribunal may consider to be “appropriate” for resolving the dispute. [6] More relevantly, however, there is a discretion under s 94(3) RTRA Act to make an order for rent decrease if the tenant applies for one where the liveability, amenity or standard of the premises has declined substantially (other than for malicious acts of the tenant) or where service facilities or goods to be provided under the agreement are no longer available or withdrawn. Rent reduction orders relieve against the practical unfairness of the common law rule that except for urgent repairs tenants who, without the authority of a tribunal order, withhold rent to offset the cost of the landlord’s breach contravene their own tenancy responsibilities. -- 2 of 5 -- 3 [7] Of these only claims framed under s 419(2) have time constraints but there is no reason in principle why in appropriate cases they cannot be joined with claims for a future rent reduction under s 94(3) RTRA Act or to resolve disputes about a tenancy agreement under s 429 RTRA Act. [8] The Form 2 the appellant filed cites ss 419, 420 and 429 – but notably, not s 94(3) RTRA Act – and was admittedly filed more than 9 months after she knew about the relevant breaches.1 [9] The tribunal characterised and dismissed the application as a statute barred compensation claim. [10] The appellant now contends, in effect, that she was not really pursuing compensation for a claimed breach of the agreement under ss 419 RTRA Act and 420 RTRA Act or seeking an order under s 429 RTRA Act but making a tacit rent reduction case for amenity loss under s 94(3) RTRA Act which should have been considered on its merits. If this is true the tribunal has not discharged its adjudicative function properly. [11] The respondent initially disclaimed any liability to the applicant because it did not have any agreement with her. However, it is named in item 1 of the unsigned tenancy agreement (Form 18a) as lessor and all the breach notices. It fully participated in the tribunal hearing represented by the owner without objection. Also, in these proceedings it made detailed written submissions opposing leave on the basis that the tribunal made the only legally correct decision on the facts and the appellant did not apply to the tribunal for a rent abatement order as s 94(4)(a) requires.2 The scope of s 94 RTRA Act [12] The submission that a valid rent reduction claim must be brought during the tenancy was rejected in Masinello v Parker & Anor (No 2)3even though there is no equivalent to s 419(4)(a) RTRA Act in s 94 RTRA Act. [13] On this reasoning rental payments already made are recoverable under s 94(3) RTRA Act for a lessor’s breach that substantially reduces the standard or amenity of the premises up to six (6) years after the lease has finished.4 The appellant also relies on Vessi v Howells5 and Wechsel v Andrew (No 3)6 as authorities for the same proposition. [14] The alternative interpretation favoured in Campbell v Donker7 (a mould case) and Hurst v Payatt8 (a broken dishwasher) is that s 94(3) RTRA Act is clearly intended to enable the tribunal to temporarily release the tenant from the contractual obligation to pay the agreed rent until the lost amenity or standard of the premises is fully restored and not as a means of reimbursing the rent paid by the tenant when the lessor was in breach of maintenance and repair obligations. 1 T1-18:10, 1-20:25. 2 RTRA Act s 94 (4)(a). 3 [2013] QCATA 325. 4 Limitation of Actions Act 1974, (Qld) s 10(1). 5 [2013] QCAT 674. 6 [2011] QCATA 106 7 [2013] QCATA 6. 8 [2017] QCATA 101. -- 3 of 5 -- 4 [15] The modern approach to working out which of two (or more) rival constructions of a statute should be preferred was recently summarised by Kiefel CJ, Nettle and Gordon JJ in Sztal v Minister for Immigration and Border Protection:9 The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if it’s ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected. [16] In my opinion, consideration of the statutory text, purpose and context of the RTRA Act lead to the conclusion that: - both the tribunal’s jurisdiction to hear and decide minor civil disputes and its discretion to make a rent decrease order is conditioned on the tenant making a specific application to invoke them; - the monetary compensatory regime in s 420 RTRA Act provides a legal remedy for non-performance or breach of tenancy obligations regardless of enjoyment loss; - rent relief, by contrast, is not compensatory in nature. It focusses on fairness not fault and derives from the restitutionary theory of unjust enrichment and the equitable doctrine of abatement not the law of compensation; - rent reduction is intended to be prospective and temporary; - the rent payable by the tenant under the terms of the tenancy agreement is lowered by a stated amount to reflect the substantially diminished value of the amenity or standard of the premises pending reinstatement as a matter of fairness; - the tenant must apply for a rent decease during the tenancy because although it is not time limited the right to apply logically lapses with the obligation to pay rent. Failure to complain and prolonged delay weigh against a grant; - the tribunal has no discretion to award rent refunds for lessor breaches after the tenancy has ended - whether statute barred or not - even where a pro tanto rebate during the term of the agreement may have been justified. The obvious practical reason for this is that when the tenancy has already ended the rent account is closed and a rent decrease crediting the tenant’s ledger with stated sums until the services etcetera or premises are reinstated or to the end of the term of the agreement obviously cannot meaningfully be made; - retrospective lump sum compensation orders are contrary to the purpose of s 94(3) RTRA Act and the text of s 419(2) RTRA Act even in cases where a lessor’s unremedied breach causes a substantial decrease in amenity or standard of the premises; 9 (2017) 347 ALR 405 at [14]. See also SAS Trustee Corporation v Miles [2018] HCA 55 at (20). -- 4 of 5 -- 5 - on the preferred construction the rent relief discretion in s 94(3) RTRA Act does not arise at all where the tenant’s application (however expressed) is really for an order about a breach under s 419(2) RTRA Act or to resolve a general dispute about a tenancy related agreement under s 429(1) RTRA Act; - failure to apply for an order under s 419(2) RTRA Act within six (6) months is deemed to waive or forgive past lessor breaches; - a s 94(4) RTRA Act application, therefore, is not a valid alternative to a s 419(2) RTRA Act claim for breach-based compensation or as an appropriate order to resolve a s 429 RTRA Act general tenancy dispute; - alternatively, s 419(3) RTRA Act applies to prevent the tribunal from making a rent reduction order for breach relatable s 94(2) RTRA Act events and precludes amendment of an application to add a claim for s 94(3) RTRA Act relief more than six (6) months after the tenant became aware of the underlying breach. [17] The requirement in s 28 QCAT Act that the tribunal must act according to the substantial merits of the case with as little formality and technicality as is consistent with proper considerations strongly suggests that alternative remedies not claimed in the application should generally be considered as long as there is no unfairness to any party in doing so.10 [18] However, the application the appellant made to the tribunal was for an order under s 419(2) RTRA Act about a claimed breach or for an appropriate order under s 429 RTRA Act to resolve a general dispute about the tenancy agreement. She did not apply for rental decrease order under s 94(3) RTRA Act as required and even if she meant to do so for the reasons given such a claim is misconceived. A statute barred s 419(2) RTRA Act claim cannot be resurrected in the guise of a s 94(3) RTRA Act claim. [19] The tribunal made the only permissible order available on the facts. [20] The appeal is dismissed accordingly. 10 See, for example, s 94(4)(a) RTRA Act. -- 5 of 5 --