DLR Rentals Pty Ltd t/as Ray White Ipswich Property Management v Jones & Anor [2018] QCATA 172

CITATION: DLR Rentals Pty Ltd t/as Ray White Ipswich Property Management v Jones & Anor [2018] QCATA 172 PARTIES: DLR Rentals Pty Ltd t/as Ray White Ipswich Property Management (Applicant) v Debbie Jones Raymond Jones (Respondents) APPLICATION NUMBER: APL290-17 MATTER TYPE: Appeals HEARING DATE: 1 February 2018 HEARD AT: Brisbane DECISION OF: Member Paratz DELIVERED ON: 10 May 2018 DELIVERED AT: Brisbane ORDERS MADE: 1. Leave to appeal is granted. 2. The Appeal is allowed. 3. The decision of the Tribunal made on 16 August 2017 is set aside. 4. A decision is substituted that the rent payable by the Tenants under the lease from 30 March 2017 to 28 August 2017 is $260.00 per week. 5. Debbie Jones and Raymond Jones are to pay to DLR Rentals Pty Ltd t/as Ray White Ipswich Property Management the total amount of $3,206.79 (being $2,551.43 monies paid as a consequence of the error in the original decision, plus $655.36 being monies due and owing as rent under the periodic tenancy as a consequence of the error in the original decision). -- 1 of 11 -- 2 CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – ADMISSION OF FURTHER EVIDENCE – where new evidence was sought to be relied upon on appeal APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – EXCESSIVE OR INADEQUATE DAMAGES – where an order was made which was significantly in excess of the amount claimed – where the respondent was not given an opportunity to respond to the amount ordered LANDLORD AND TENANT – RESIDENTIAL TENANCIES LEGISLATION – OBLIGATIONS, PROHIBITED MATTERS AND PROTECTION FOR LESSEES – INSPECTION AND REPAIR – where premises partly unfit – where a decrease in rent was sought under a residential tenancy – where the premises were found to be partly unfit to live in Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 137, s 138, s 147 Residential Tenancies and Rooming Accommodation Act 2008 (Qld), s 25, s 94 Bunting v Jeff Jones Real Estate on behalf of Adrian Vos [2015] QCATA 52 Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 Department of Transport and Main Roads v Hollidge & Anor [2014] QCATA 55 APPEARANCES: APPLICANT: Ms D Ramsay, Director RESPONDENT: Ms Jones and Mr Jones REASONS FOR DECISION Debbie Jones and Raymond Jones (‘the tenants’) rented a house at Booval in Queensland. The letting agent was Ray White Ipswich (‘the Agent’). The tenants sought a decrease in rent for a period on the basis that the premises were partly unfit to live in. They filed an Application for a minor civil dispute – residential tenancy dispute in the Registry at Ipswich on 20 June 2017. The application was heard by a JP panel on 16 August 2017 and the following order was made: -- 2 of 11 -- 3 a) The Respondent (Ray White Ipswich) is to apply a credit on the Applicants’ rent account of $2,992.50 being a reduction in rent of $142.50 a week for the tenancy from 30 March 2017 and ending 28 August 2017. b) The Respondent is to apply a reduction of rent $142.50 for any extension or renewal of the tenancy after 29 August 2017 or until the respondent has completed repairs to the plumbing in the bathroom, the walls and mould in the lounge room, mould in the kitchen and fence. The agent filed an Application for leave to appeal or appeal on 14 September 2017. The Grounds of Appeal were as follows: Applicants Debbie and Raymond Jones were seeking only a $25 per week rent reduction from the 30th March 2017 for maintenance items to be repaired or replaced. The decisions passed down were made on the 16th August 2017. Decision 1 was made for a half weeks reduction from the 30th March 2017 to the 28th August 2017 awarding the applicants $2,992.50. Decision 2 was made for a rent reduction of half a week’s rent until the respondent had completed repairs to the plumbing in the bathroom, the walls and mould in the lounge room, mould in the kitchen and fence. When in fact the mould issue was rectified on the 27th April 2017 and the plumbing in the bathroom was rectified on the 27th June 2017. The decision states that these matters still need addressed when in fact they had been rectified prior to attending court. Since the 16th August 2017 the lounge room wall has been water proofed, completed on the 9th September 2017 and the fence repaired on the 14th September 2017. The tribunal was biased towards Debbie and Raymond Jones and erred in the calculation of rent reduction. We are currently waiting for the request for reason lodged on the 17th August 2017. The agent sought the following orders on the Appeal: We agree to the now respondents receiving the requested rent reduction of $25 per week from the 30th March 2017 to the 27th June 2017. This is when all mould and plumbing repairs were rectified. Then from the 28th June to the 14th September 2017 we allow a $15 rent decrease. This is when the fence and lounge room waterproofing were completed. The Appeal was heard in an oral hearing on 1 February 2018. The agent attended in person, and the tenants attended by telephone. The Tribunal at first instance was composed of two Justices of the Peace sitting at Ipswich. The tenants attended by telephone, and were represented by Ms Hanson from the Ipswich Regional Advocacy Service Inc. (‘IRASI’). The agent was represented by its property manager, Ms Ware. -- 3 of 11 -- 4 A transcript of the proceedings has been obtained, and forms part of the Appeal record. It was noted at the start of the hearing that the tenancy agreement ran from 23 February 2017 to 28 August 2017, with a rent of $285.00 per week; and, that there was a bond of $1,140 which was still lodged with the RTA. At the time of the hearing, the tenants were still resident. A Notice to Remedy Breach in Form 11 was issued, listing three issues: blocked drains, unsafe structure of walls, and mould in the kitchen and living room. There also appears to have been a complaint about a fence. The agent’s representative said that she believed that the only item that had been rectified was the blocked drains, but that the tenants may be able to confirm that.1 She thought it was first reported on 30 March, and believed that they were repaired on 24 June. The drain was in a shower over a bath in the only bathroom in the house. The complaint was that it would fill with water when having a shower, and would not drain. The agent’s representative said that it took three months to repair the bath as the initial plumber identified it as a major problem, and a second plumber was then required to repair it.2 The tenants said that they continued to use the shower, but they did not use it as frequently because they had to clean it after each use.3 One of the Justices was concerned that the parties were not familiar with the facts of the matter:4 JP: Let me just say and this is to all parties, everybody, don’t let me know more about what’s on the file… Ms Hanson: Okay JP: …than anybody else. I read this file a couple of hours ago and I’ve got notes, and it sometimes appears that we know more about the file than anybody else and that’s not the case – that’s not how it should be. Everyone should be really prepared and know exactly everything on their file. The tenants said that the issue with the walls was that there was flooding in the lounge room at the time of Cyclone Debbie on 29 March. They said 1 Transcript 1-7, line 6. 2 Transcript 1-10, line 19. 3 Transcript 1-11, line 14. 4 Transcript 1-9, line 9. -- 4 of 11 -- 5 they were unable to use the lounge room as part of their living area since then.5 The agent’s representative said that a builder attended on 7 April to inspect the walls.6 The mould was believed to have resulted from the flooding. The agent’s representative gave evidence that the mould repair was completed on 27 April, which was the date of an invoice from ‘The Mould Men’.7 She said the bottom of the plastering of all the walls was removed, which is where all the actual cracks in the wall were, and that the kitchen was treated at the same time. The agent’s representative said that quotes had been obtained to repair the fence, and had been approved, but the work had not been done.8 The Justices queried the amount of the tenants claim:9 Justice: Okay. Thank you. To the applicant and Ms Hanson, is there anything – you’re seeking $25 a week. Is that right? Ms Jones: Yes, that’s correct. The Justices of the Peace noted in their decision that the tenants were seeking a reduction of $25 per week.10 They found that the premises were partially unfit to live in. They commented:11 So the bathroom and the living room are the - probably one of the two – you know, and with mould in the kitchen, really form the heart of a tenancy or premises. It is up to this tribunal to make an order. The Justices made the following findings:12 We consider that the extent to which the property is partially unfit is 50 per cent. We then look at the rent at $285 per week. The rent between the 30th of March and the 28th of August; that is 152 days. Divide by 7 to get a weekly rate – weekly – the number of weeks, sorry – is 21 weeks. Fifty per cent of 286 is $142.50. Multiply by the number of weeks under the tenancy and it’s $2,992.50. The order is a reduction of – sorry – there is to be a credit on the rent account of the applicant for the amount of $2,992.50, being a reduction in rent of $142.50 per week for 21 weeks, ending with the termination of the tenancy. The credit of $2,992.50 shall be discharged by a payment by the respondent 5 Transcript 1-13, line 8. 6 Transcript 1-14, line 44. 7 Transcript 1-16, line 16. 8 Transcript 1-18, line 27. 9 Transcript 1-18, line 39. 10 Transcript 1-20, line 13. 11 Transcript 1-21, line 43. 12 Transcript 1-22, line 19. -- 5 of 11 -- 6 – sorry – I won’t put that one in. Sorry, that’s not relevant. It’s not relevant. Sorry. The next clause is that reduction of $142.50 per week shall apply for any extension or renewal of the tenancy after the 29th of August ’17 until the respondent has completed repairs to the plumbing in the bathroom, the walls and mould in the lounge room and the fence. The tenants paid the reduced rent as ordered from 16 August 2017 until 4 October 2017. They then paid the full rent of $285.00 per week until 1 November 2017, when they moved out of the property. Submissions of the Agent The agent says that it did have invoices for work that was done on the property at the hearing, but that it was not asked to present them. It says that the mould was rectified in both the kitchen and the lounge by 27 April, and the slow draining of the bath was rectified by 27 June. The agent says that the tenants were granted more than the tenants had asked for, and that it cannot understand how half rental was allowed. The agent disputes that half of the property was unusable and says: a) The bath was usable at all times; b) The areas affected by mould were still usable at all times; c) The lounge room was usable at all times, although there was plasterboard off a part of a wall in the lounge room; d) The kitchen was usable at all times; and e) The fence was just a back fence, and did not affect use of the property, as there were no pets at the property. The agent calculates that if the tenants were ordered to receive the amount they had sought, the award would have been $550.00 (calculated as $25/week x 22 weeks) rather than $2,992.50. The agent proposed that the rent reduction of $25.00 per week which was sought by the tenants should be reduced by $10.00 a week after the plumbing in the bathroom was fixed on 27 June, to $15.00 per week thereafter, if an award was made. Submissions of the tenant Ms Jones and Mr Jones are mother and son. They said that the fence was flaking away, and had asbestos in it. They said that there was mould in the kitchen which they were aware of, but they used the kitchen as the barbeque did not work. They agreed that work was done as to mould on 27 April. -- 6 of 11 -- 7 They said that they claimed a rent reduction of $25.00 per week on the advice of IRASI, but could not remember why that amount was suggested. They recalled being told not to ask for too much or else it would not be approved. Discussion This is an appeal from a decision of the Tribunal in its minor civil dispute jurisdiction, and leave is therefore necessary.13 Leave to appeal will ordinarily only be granted where: a) There is some question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage; or b) There is a reasonably arguable case of error in the primary decision, and there is a reasonable prospect that the applicant would obtain further substantive relief; or c) If leave is necessary to correct a substantial injustice to the applicant, caused by some error. The agent is effectively seeking to introduce fresh evidence as to the dates of repair work as supported by invoices, and as to the state of the premises. The appeals tribunal will only accept fresh evidence if it was not reasonably available at the time the proceeding was heard and determined.14 Ordinarily, an applicant for leave to adduce such evidence must satisfy each of the following tests:15 a) The evidence could not have been obtained with reasonable diligence for use at the trial; b) The evidence, if allowed, would probably have an important impact on the result of the case (although it need not be demonstrated that it would be decisive); and c) The evidence is credible though it need not be incontrovertible. The appeal is on questions of mixed law and fact. Such an appeal is to be decided by way of rehearing, with or without the hearing of additional evidence as decided by the appeal tribunal. On deciding the appeal, the tribunal may confirm or amend the decision, or set aside the decision and substitute its own decision.16 13 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142(3)(a)(i). 14 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 137, s 138. 15 Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404, 408. 16 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 147. -- 7 of 11 -- 8 The case for the agent was not well presented at the hearing at first instance. It is frequently expressed that an application for leave to appeal is not, and should not be, an attempt to shore up the deficiencies of a party’s case at the initial hearing. No clear explanation has been given as to why the evidence of the agent as to invoices for repairs was not presented at the hearing. However, similarly no explanation is given as to why the tenants did not clearly express whether repairs had been effected or not, which they then agreed at the appeal had been effected. The Justices of the Peace came to a conclusion that the rent should be decreased by half. No clear explanation as to the basis upon which they came to that conclusion is evident. The tenants had only sought a decrease of rent in their application of $25.00 per week. They did not particularise how that amount was calculated. A similar situation arose in Department of Transport and Main Roads v Hollidge & Anor,17 where the Appeal Tribunal said: [8] The Department is correct in its assertion that the tenants’ claim for a rent reduction was limited to $400. The learned Justices could not unilaterally decide that the tenants should be given a rent reduction of $1,500 without giving the Department an opportunity to make submissions about that. There was a claim for damages well in excess of $1,500 but those claims were out of time. [9] The claim of $400 is a claim for a reduction of $100 per week for the four weeks between a complaint about the odour of the carpet and the carpet being replaced. The Department says that the learned Justices erred in not acknowledging that it took all reasonable steps to have the carpet replaced. The evidence can support that proposition and the learned Justices erred in not considering that in their decision. [10] A tenant can apply for a reduction in rent if the amenity of standard of the premises decreases substantially. The transcript shows that the odour problem was present from the start of the tenancy. Therefore, there was no reduction in the amenity of the house and the learned Justices should not have given the tenants a rent reduction. The claim that the agent attended at the hearing to answer was a claim for a decrease of $25.00 per week. The agent was not given an opportunity to make submissions on a proposed decrease of half of the rent. In the absence of a clear basis for the allowance of a decrease of half rental, which was greatly in excess of the amount claimed by the tenants, and 17 [2014] QCATA 55. -- 8 of 11 -- 9 in the absence of the agent being given an opportunity to reply to such an allowance, the award must be seen as being an error of law. The award does result in an apparent substantial injustice to the agent, and leave to appeal should therefore be given. Should the agent be allowed to adduce fresh evidence? It was noted in Bunting v Jeff Jones Real Estate on behalf of Adrian Vosas to admission of new evidence that:18 [67] The appeal process is not an opportunity for a party to again present their case. It is the means to correct error by the Tribunal that decided the proceeding. The appeal is to proceed without admitting any new material into evidence. If the agent had presented the evidence it had at the initial hearing, the order for a decrease of half the rent may never have been made, and these further proceedings may never have eventuated. Evidence of invoices for the repairs, and of the state of the premises, was apparently available at the hearing, but was not presented by the agent. I do not consider that the agent should now be allowed to rely on fresh evidence. That evidence should not be admitted, and the appeal must proceed on the basis of the evidence before the Justices of the Peace. There were obvious defects in the property, that arose after the commencement of the tenancy, which would have made the premises partly unfit to live in as found by the Tribunal. There was not satisfactory evidence that the defects had been repaired as at the date of hearing, or would be repaired by the end of the tenancy. The Tribunal has power under s 94 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) to order a decrease in rent if the premises are partly unfit to live in. The agent proposes that $25.00 per week between 30 March 2017 and 27 June 2017, and then $15.00 per week from 28 June 2017 to 14 September 2017, would have been an appropriate decrease. The change to $15.00 during the the fixed term lease however, relies upon the acceptance of the new evidence, which I have disallowed. The agent submitted that the fence and lounge room waterproofing were completed on 14 September 2017, and the full rental of $285.00 per week should have been paid after that. The submissions of the agent as to completion of the work after the hearing date are not new evidence as to the initial hearing, as the work was completed after the date of the hearing, and that evidence could not have 18 [2015] QCATA 52, [67]. -- 9 of 11 -- 10 been available on the hearing. The tenants did not dispute the agent’s submissions as to the completion dates. I therefore accept that all works were completed by 14 September 2017. The time between the date of complaint on 30 March 2017 and the end of the lease on 28 August 2017 is 21 weeks and 5 days (152 days). On the evidence before the initial Tribunal, I am satisfied that the tenants claim for a decrease of $25.00 is made out for the whole of the period of the fixed term lease from 30 March 2017 to 28 August 2017. The rent in the period from 30 March 2017 to 28 August 2017 should have been $260.00 per week, therefore the tenants have underpaid the rent by $117.50 per week in that period, making a total of $2,551.43. The Tribunal further ordered that reduction of rent of $142.50 per week was to apply to any extension or renewal of the tenancy after 29 August 2017, or until the respondent had completed repairs to the plumbing in the bathroom, the walls and mould in the lounge room, mould in the kitchen and fence. The tenants paid the reduced rent of $142.50 per week from 16 August 2017 to 4 October 2017, and then paid the full rent of $285.00 per week until 1 November 2017. The fixed term tenancy would convert to a periodic tenancy at the end of the fixed term ‘on the same terms on which it applied immediately before the end day’19. The terms that applied immediately before the end day of the fixed term would be the terms as varied by the Tribunal’s order. As the rent should only have been decreased by $25 per week until the repairs were completed, the rent under the periodic tenancy should have been $260.00 per week in that period. The lessor has been underpaid by the amount of $117.50 per week for the period from 29 August 2017 until the works were completed on 14 September 2017 (a period of 16 days), making an amount of $ 268.57. The rent should have been paid at the full rent of $285.00 per week from 15 September 2017 to 4 October 2017. The tenant only paid $142.50 in this period, so the rent was underpaid by $142.50 per week in that period (19 days), making an amount of $386.79. The total rent underpaid during the periodic tenancy is $268.57 plus $386.79, making a total of $655.36. 19 S 70(2)(a) Residential Tenancies and Rooming Accommodation Act 2008 -- 10 of 11 -- 11 The lessor’s agent is entitled to recover the rent monies owing under the residential tenancy agreement on behalf of the lessor.20 I grant Leave to Appeal, set aside the decision of the Tribunal, and substitute a decision that the rent payable by the tenants under the lease from 30 March 2017 to 28 August 2017 was $260.00 per week. The agent has paid the tenants the amount of $2,992.50 as ordered. The effect of this decision is that the tenants are required to pay monies paid under the judgment in error as follows: Tenant overpaid by agent 30 March 2017 to 28 August 2017 = $2,551.43 Tenant underpaid rent 29 August to 14 September 2017 = $268.57 Tenant underpaid rent 15 September 2017 to 4 October 2017 = $386.79 Total owing by tenant to agent = $3,206.79 The order of the Appeal Tribunal will therefore be that: (1) Leave to appeal is granted. (2) The Appeal is allowed. (3) The decision of the Tribunal made on 16 August 2017 is set aside. (4) A decision is substituted that the rent payable by Debbie Jones and Raymond Jones under the lease from 30 March 2017 to 28 August 2017 is $260.00 per week. (5) Debbie Jones and Raymond Jones are to pay to DLR Rentals Pty Ltd t/as Ray White Ipswich Property Management the total amount of $3,206.79 (being $2,551.43 monies paid as a consequence of the error in the original decision, plus $655.36 being monies due and owing as rent under the periodic tenancy agreement as a consequence of the error in the original decision). 20 S 25 Residential Tenancies and Rooming Accommodation Act 2008 -- 11 of 11 --