Archer Investments Pty Ltd v Dwan and Anor [2016] QMC 20

MAGISTRATES COURTS OF QUEENSLAND CITATION: Archer Investments Pty Ltd v Dwan and Anor [2016] QMC 20 PARTIES: Archer Investments Pty Ltd (Applicant) v Gregory Paul Dwan and Karen Natasha Dwan (Respondents) FILE NO/S: WAR0062/15 DIVISION: Magistrates Courts PROCEEDING: QCAT Hearing ORIGINATING COURT: Warwick Magistrates Court DELIVERED ON: 7 October 2016 DELIVERED AT: Warwick HEARING DATE: 30 September 2016 MAGISTRATE: A Thacker ORDER: 1. The name of the applicant be amended to Julie Archer. 2. The residential tenant’s agreement the subject of these proceedings ended on 19th March 2016. 3. The applicant pay to the respondents sum $6865.00 within 30 days. The applicant's application and the respondents' counter- claim are otherwise dismissed. CATCHWORDS: COUNSEL: Mr Somers for the applicant SOLICITORS: Mr Krahenbring, Wonderley & Hall for the respondents -- 1 of 12 -- 2 Background [2] This is a dispute about residential tenancy of property owned by the respondents situated at 92 Warfields Road, Allora ("the property"). The tenants were Chris and Julie Archer. There has also been a dispute about aspects of a rental purchase agreement associated and which failed but that is not the subject of the application before this Tribunal. The law [3] The Residential Tenancies and Rooming Accommodation Act 2008 (referred to as "the RTRAA") manages all tenancy agreements in Queensland in conjunction with the Queensland Civil and Administrative Tribunal Act (referred to as "QCAT") where disputes arise between the landlord and the tenant. [4] Neither party was legally represented until recently. I take that into account in understanding and considering how each party attempted to use the RTRAA and the usual forms to progress procedures under the Act. I also apply this to the parties' failure to utilise and / or comply with the RTRAA. A degree of leniency ought to be provided to the parties on that account. [5] As the matter arises out of a tenancy agreement this tribunal has jurisdiction to hear and determine the dispute: per section 12 (1) and (4) (f) QCAT. [6] The emphasis in QCAT requires this Tribunal to "act quickly, and with as little formality and technicality as is consistent with a fair and proper consideration of the issues before it"1 and the "jurisdiction is plainly intended under QCAT to offer speedy justice in claims involving, in comparative terms against Court hierarchy, the smallest sums about which citizens are in dispute".2 [7] In this case, I make particular mention of the following aspects of QCAT: Section 13 states that the tribunal must make orders that it considers "fair and equitable" to the parties to the proceeding in order to resolve the dispute but may, if the tribunal considers it appropriate, make an order dismissing the application. Section 28 sets out the procedures for conduct of hearings including that the tribunal must act fairly and according to the substantial merits of the case; is not bound by the rules of evidence; may inform itself in any way it considers appropriate; and must act with as little formality and technicality and with as much speed as the requirements of the law permit. [8] The hearing was conducted on 30 September 2016 and by then both parties had engaged legal representatives who by leave appeared to conduct the hearing. The applicant's case was put through the evidence of Julie Archer. Each of the respondents gave evidence. Both parties produced documentary evidence. [9] The onus of proof is upon the applicant to establish its claim against the respondent and the standard of that proof is on the balance of probabilities, that is, which version of the evidence I find more probable. 1 QCAT Act ss 3, 4 and 28, Kilpatrick v Tighnabruaich Properties Pty Ltd [2011] QCATA 208 at [8] 2 Garland and Anor v Butler McDermott Lawyers (2011] QCATA 151 per Justice Alan Wilson, President at (13] -- 2 of 12 -- 3 The application [10] The applicant has been represented by Julie Archer and she is the sole director of the applicant company. However, a person best known as "Chris" was also closely involved. At all times, including up to and during the hearing there has been no clarity about the true identity of Chris who has been variously identified as Chris, Chris Archer, Chris Smith and also Chris Rogers (who is more likely Julie Archer's son). For the purposes of these proceedings he is called hereafter Chris. Julie Archer in her evidence was at best coy about providing any clarity about him. [11] While the application names the applicant Archer Investments International Pty Ltd, the hearing has made it plain that the parties in dispute involve only Chris and Julie Archer and the respondents. Chris did not appear at the hearing. There has been no dispute that Chris and Julie Archer were the tenants residing at the property for the duration of the residential tenancy agreement. [12] For the reasons that will later be provided in more detail I find Archer Investments International Pty Ltd did not enter any tenancy agreement with the respondents. It follows that Archer Investments International Pty Ltd strictly has no standing to bring the application made and the application could be dismissed. In the circumstances, the respondents’ counter claim could likewise be dismissed. I find it would be out of all proportion and contrary to the intention of QCAT to be so strict in this already overblown dispute. Furthermore, pursuant to section 64 QCAT the tribunal may, at any time in a proceeding, make an order requiring that a relevant document be amended. In my view, this power should be used to enable this dispute to be finalised without further delay. Accordingly, I proceed on the basis that the applicant is Julie Archer. [13] I ORDER the name of the applicant be amended to Julie Archer. The application [14] The initial application filed on 8 December 2015 sought the following orders:  That there is a tenancy agreement in place despite the fact that although the respondents have not signed the tenancy agreement it was prepared and supplied by them to the applicant who signed it; and the respondents have accepted payment of the amount transferred to them on 1 October 2015 representing a total equal to 12 weeks rent and 4 weeks rental bond.  That the respondents cease their objectionable behaviour, so the applicant can enjoy quiet enjoyment of the property.  That the amount paid as bond be forwarded to the RTA, or in lieu thereof an Order that this amount be regarded as a further 4 weeks rent.  That the amount of $1225.85 for “emergency repairs" be reimbursed to the Applicant (s 220 RTA);  That there be an urgent “reduction" from $690 to $450 per week, because the applicant no longer has “full use" of the proper ty, only the accommodation only. (In this regard the Applicant refers to the -- 3 of 12 -- 4 advertisement of the property for $450/week, and the optional 40 acres to rent). [15] On 7 January 2016 the applicant filed a further document seeking to amend the original a pplication, in particular the orders now sought. This includes: 1. refund of (2) weeks rent of $690 (total $1380) from 19/12/15 to 3/1/16 when the applicant did not have full use of the amenities due to the breach by the landlord/respondents in removing the water pumps; 2. reimbursement of $1750 costs paid by the applicant in having to purchase water as a result of the breach; 3. refund of the amount paid by the tenant as "rental bond" of $2760.00 and being held by the respondent/landlords (s 60 RTA). [16] In 2016 further material was received by the tribunal from Julie Archer under cover of letters dated 4 January, 6 January, 16 February, and 13 June and then on 2 September points of claim were filed which are noted as settled by Mr Somers of Counsel. He appeared for the applicant at the hearing. The respondents’ response [17] The respondents' response is contained in a document titled Respondents' Defence filed 13 September 2016 which is noted as being filed by Wonderley & Hall Solicitors on behalf of the respondents. Mr Krahenbring from that firm appeared on behalf of the respondents. Relevant provisions of the RTRAA [18] The applicant seeks orders relying upon sections 60, 191, 220, 201, and 297 of the RTRAA. However, section 297 is not applicable as it applies to an application for termination by a lessor for a tenant's objectionable behaviour only. [19] Also Section 201 RTRAA is not applicable as this section deals only with the tribunal's power to change rules of entry to premises. [20] Where there has been a breach of a residential tenancy agreement, section 420 RTRAA sets out the only orders that the tribunal may make. Given the tenants have some time ago now, moved out of the property the applicable orders are only - (b) an order for the payment of money; or (e) an order for compensation. The residential tenancy agreement [21] The parties have acted on the basis there was a residential tenancy agreement. I must first determine what that residential tenancy agreement was. The task is made the more difficult because no written agreement was signed between the parties. The parties have also thwarted the operation of the RTRAA to protect their interests and manage their duties and obligations. However, that does not mean there was no legally recognisable residential tenancy agreement between them. [22] In this regard I consider relevant parts of the RTRAA. Section 12(1) provides that a residential tenancy agreement is an agreement under which a person gives to someone else a right to occupy residential premises as a residence; and also -- 4 of 12 -- 5 subsection (3) which provides that subsection (1) also applies whether the agreement is - (a) wholly in writing, wholly oral or wholly implied; or (b) partly in a form mentioned in paragraph (a) and partly in one or both of the other forms. [23] I find that during July and August 2015 communication and negotiation occurred between Chris and Karen Dwan towards lease and eventual purchase of the property from the respondents by Chris and Julie Archer. In terms of the tenancy agreement as early as August the respondents arranged to have vacate possession available when on 15 August the respondents received an email from Chris setting out the terms of a "rent to buy" proposal. Terms that were included in the residential tenancy agreement handed to Chris on 5 September are the same as those in the email sent by the respondents to Chris at 9:23am on 17 August 2015. There is no evidence that Chris or the applicant made any objection to those terms either before or on 5 September. [24] Further, agreement had been reached that handover would occur on 2nd September. That arrangement was changed at the last minute by Julie Archer due to illness of Chris. The change proposed was to Saturday 5th September when Chris attended the property and took control of the keys as well as the residential tenancy agreement prepared by the respondents, from Greg Dwan, and made his apology for the non-attendance of Julie Archer. [25] Further, he stated to Greg Dwan that he would move in his possessions the following weekend. [26] There is no contest that on 5 September 2015 Chris took the written tenancy agreement prepared by the respondents. There is no other evidence he took it complaining that the document was incorrect but only to obtain Julie Archer's and his signatures. I accept the evidence of Greg Dwan that Chris took the keys and the tenancy agreement and said to Gregory Dwan that he and Julie would sign the tenancy agreement and return it in "Monday's post". On Karen Dwan's evidence and supported by text messages she sent to Chris he made numerous promises to Karen Dwan to return the signed tenancy agreement on a number of occasions and did not keep his promises. I have no contradictory evidence on this point and accept the evidence of Karen Dwan. [27] After 5 September 2015 there is no evidence documenting any further communications between the parties regarding any delay to the commencement of the tenancy. There is no evidence that Julie Archer or Chris made any attempt to re-negotiate the commencement date with the respondents. Communications, initiated by Karen Dwan were all about obtaining return of the residential tenancy agreement handed over on 5 September executed. [28] No monies for rent were paid for some time. Although Julie Archer gave evidence that she and Chris moved into the property on 5 October, it was not until 12 October 2015 the respondents received into their bank account payments of $8,315.00 and $2,760.00 and $690.00 with the remitter being a third party unknown to the respondents. The payments were made without any contact to the respondents about the payments from Chris or Julie Archer. -- 5 of 12 -- 6 [29] On 12 September 2015 the respondents, without forewarning or discussion, received a letter and a tenancy agreement in different terms to the one Greg Dwan had handed to Chris on 5 September. It was different in a number of respects and the respondents did not accept it and so does not affect the residential tenancy agreement that was by then in place. [30] There is no clear evidence of precisely when occupation of the property occurred. As well as Chris' statement to Gregory Dwan on 5 September, there is some evidence to suggest that Julie Archer and Chris actually moved into the property on or about late September when they started delivering possessions to the property and or early October 2015. This period was troubled for them as Chris was hospitalised for a period. Occupation therefore is not a good indicator of when the tenancy commenced. [31] On 19 March 20161 Julie Archer and Chris vacated the property. This action roughly equates with the negotiated term of six months. In the absence of any other firm evidence of when the tenancy agreement ended this is the date to be used. [32] Consequently, I find lease of the property commenced on 5 September 2015 and in the terms indicated by the written but unsigned residential tenancy agreement handed to Chris that day, namely for 6 months with rent $690.00 per week and bond of $2760.00 (equating to one month's rent ). Ending Residential Tenancy Agreements [33] Section 277 RTRAA provides: 1. A residential tenancy agreement ends only in a way mentioned in this section. 2. A residential tenancy agreement ends by written agreement of the lessor and tenant. 3. A residential tenancy agreement ends if - (a) the lessor gives a notice to leave the premises to the tenant; and (b) the tenant hands over vacant possession of the premises on or after the handover day. (c) A residential tenancy agreement ends if the tenant - (i) gives a notice of intention to leave the premises to the lessor; and (ii) hands over vacant possession of the premises on or after the handover day. 4. A residential tenancy agreement ends- (a) if a tribunal makes an order terminating the agreement; or (b) if the tenant abandons the premises. [34] On 18 November 2015 and again on 1 December 2015 the respondents issued a Notice to Leave (Form 12). In this case, the respondents did not follow up and -- 6 of 12 -- 7 make an application to the tribunal to have the tenancy agreement terminated pursuant to section 277. Therefore, the tenancy agreement continued. [35] I ORDER the residential tenants agreement the subject of these proceedings ended on 19 March 2016. The claims for money and compensation between the parties [36] To determine the claims for money and compensation between the parties I must first determine the credibility of the respective witnesses and which version of the claims I accept. I have carefully considered and noted the demeanour of and the manner in which each witness gave their evidence. [37] Julie Archer's evidence showed she acted in concert and relied heavily on Chris for dealing with the respondents for the most part. Her actions also show she was very evasive about matters that were not to her favour e.g. She made very little attempt to follow the proper procedures to have water and electricity problems advised to the respondents. In her evidence to the tribunal she simply explained these situations as a need for immediate rectification. This even included damaging the roller door to the garage without advising the landlord or attempting to rectify the damage. Julie Archer showed by her evidence-in-chief that she made arrangements regarding the property to suit herself and without proper regard for the rights of the respondents or the requirements of the RTRAA. Most of her evidence was not about facts. Rather, her evidence was based heavily upon her opinion about what she believed ought to have occurred in her relationship with the respondents. On the whole I found Julie Archer to be an unreliable witness to the facts. Of course her evidence was also limited by the fact she was not present for important interactions that occurred between Chris and the respondents and about which she could not give evidence. [38] Where Julie Archer's evidence differed from that given by the respondents' I prefer their evidence. The respondents were each forthright and credible. Regarding the evidence of what occurred between Chris and Gregory Dwan, even where it was against Gregory Dwan's interest e.g. He acknowledged his mistake regarding the incident that resulted in him being charged with assault. Where evidence might have been given by Chris, and I only have the evidence of Gregory Dwan, I accept Gregory Dwan's evidence. [39] I reject each of the claims made by Julie Archer as contrary to the evidence given by the respondents and disingenuous. In particular, I find as follows. Re: The PIC and the horse on the property [40] Julie Archer made cursory attempt at best to obtain the authorisation to enable the property to be used for cattle to be purchased. This has been a complaint taken very late in the relationship between the parties. I prefer the evidence of Karen Dwan that the PIC was not transferrable. I find on the whole of the evidence produced the applicant's claim for damages alleging the respondents' failed to provide the PIC number is not made out. [41] I find the applicant's claim for damages for failing to provide full and unrestricted use of the property is not made out as agreement was reached between Chris and -- 7 of 12 -- 8 Gregory Dwan about the horse left on the property. I accept Gregory Dwan's evidence the horse was too old and in too poor condition to be moved and it was agreed between the men the horse would remain at the property. [42] The applicant's claim for rental rebate claiming denial of the tenants' use of portion of the property due to these matters is therefore refused. Re: The driveway [43] I find the applicant's claim for "rectification" work to the driveway was actually an agreement reached between Chris and Gregory Dwan regarding the driveway being made into an all-weather road. I find that there was no special condition related to this matter contained in the 5th September tenancy agreement. The discussions about work towards an all-weather road were part of the purchase agreement negotiations. In any event, the work was thwarted by the tenants themselves when they padlocked the front gates preventing access to the property for the work to commence. Consequently, there is no claim the tenants can pursue here. Re: The plumbing x "emergency repair" [44] Julie Archer complains that the plumbing failed in October 2015. On her own evidence in the witness box she made only cursory attempt to communicate with Karen Dwan about the problem. She instructed a plumber to fix the problem and paid him direct before he proceeded with the job. She made no further attempt to rationalise the question of payment with Karen Dwan until much later when their relationship had completely deteriorated. Karen Dwan gave evidence which I accept that the respondents only became aware of the issue with the plumbing when contacted by the plumber in November. These actions and non-actions are evidence that Julie Archer alone is responsible for the claimed plumbing costs. This claim is refused. Re: The removal of four water pumps and costs related to water supply [45] I accept Gregory Dwan's explanation that he did so to have them serviced as per the annual arrangement for this to be done. Further, there was other water on the property that could have been accessed by the tenants if there had been co-operation between the parties. Gregory Dwan made a reasonable and credible explanation as to how the water should have been properly managed. The removal of the pumps occurred at a time when the relationship between the parties had grown hostile and non-co-operative on both sides. The tenants were persistent in their water cartage arrangements without reference to either the respondents or RTRAA proceedings to address the impasse. Furthermore, there is no evidence to show the tenants took any steps to mitigate their loss as they are required to do. The applicant's claim for rental rebate for removing the water pumps is refused. Re: The disabled bore water [46] There is no evidence the respondents disabled the bore or the supply of water from the bore. The best evidence Julie Archer could proffer was that she -- 8 of 12 -- 9 believed it to be disabled by the respondents in an effort to get her to vacate the property. This claim is not made out. Re: Removal of gas bottles from the property [47] There is no evidence in the tenancy agreement by writing or oral agreement by Julie Archer that the respondents were under an obligation to provide or continue to provide gas bottles to the property for the use of the tenants. I accept the explanation given by Gregory Dwan, that as a gesture of goodwill, only some gas bottles were left on the property at the commencement of the tenancy. The applicant's claim for rental rebate for removal of the gas bottles is refused. Re: Costs of water supply [48] The actions of the tenants outlaying monies was by their own choice of lifestyle and the respondents had no obligation to make provision for the tenants as claimed by Julie Archer. Furthermore, the tenants had a duty to mitigate any loss they suffered at the property. They did not do so. It was unreasonable of Julie Archer to persist with water cartage and generator use at such high costs for such extended period without attempting a resolution of the problems: see Pialba Commercial Gardens Pty Ltd v Braxco Pty Ltd & others ( 2011) QCA 148 per Muir J at paragraphs 97-98. I do not therefore order any sum be awarded for these claims. Re: Costs of electricity supply [49] I find there is no evidence to support Julie Archer’s allegation that the respondents were responsible for vandalising the electricity supply to the property. Furthermore, it appears from Gregory Dwan's explanation that the power supply fault was fixed by a licensed electrician at a cost of only $186.09 upon request by him after the tenants had vacated the property. I repeat the tenants had a duty to mitigate any loss they suffered at the property. They did not do so. I do not therefore order any sum be awarded for the cost of the generator or fuel for the generator claims. Re: Bond money [50] Section 116 of the RTA imposes a duty on the lessor to pay the rental bond to the Residential Tenancy Authority within (10 days) of receipt, and penalty for failure to do so is provided. Although the tenant paid the respondents the rental bond, the respondents did not complied with the section. [51] I note the contents of the applicant's email to the respondents dated 15/1/15 where the applicant states that "the further payment of $2760 as a bond payment to be held by you until termination of the lease." That may well have been the intention of the parties, but the legislative provisions are clear, unless the amount paid is not in fact a "rental bond". I note the dispute resolution request (Form 16) (dated 23/11/15) being lodged with the RTA stating that the dispute was about the "failure to lodge the bond with the RTA", that process did not bring any success for the applicant. [52] Section 111(1)(b) RTRAA states that a rental bond is an amount which is "(b) intended to be available for the financial protection of the lessor against the tenant -- 9 of 12 -- 10 breaching the agreement." Further, I note section 111(3) RTRAA in deciding when an amount paid is in fact a "rental bond". [53] On 19 March 2016 Julie Archer and Chris vacated the property. This made the total period of their tenancy 28 weeks. The respondents accept they received $11,730.00 on account of rent and bond (equating to 17 weeks' rent). It follows, there is rental arrears of $7,590.00. [54] On all of the material before me, including that the tenancy is now at an end, I am satisfied that the amount of $2760 paid by the tenant as a "rental bond" be considered rent already paid under the tenancy agreement. Re: Disruption of quiet enjoyment [55] Counsel for the applicant placed the applicant's claim on the basis of disruption to quiet enjoyment. Quiet enjoyment is a standard term of every residential tenancy agreement by virtue of section 183 RTRAA and clause 19 in the standard terms. These are applicable to oral and implied agreements. Quiet enjoyment should be considered in this dispute. Whether there has been a breach of the quiet enjoyment term is a question to be determined on the facts of each case. I am cognisant of the intention of the RTRAA to ensure that its provisions are followed to manage residential tenancy agreements to avoid unmanageable dispute between parties to a residential tenancy agreement. Also, once a tenancy has commenced the repair obligation on lessors does not arise until the lessor has notice of the need for repair. Lessors cannot act against tenants merely because the tenants are annoying or difficult to deal with. [56] In this case from mid-November 2015 the parties each attempted to use the RTRAA but inappropriately and to force the other party to act according to their wishes. None of the parties was legally compliant with the RTRAA and the relationship between the parties became absolutely dysfunctional and ugly. Also by this time rent was owing again. Greg Dwan was not easily contactable due to his employment inter-state. Karen Dwan and Julie Archer were hostile to each other. On the one hand Julie Archer was peremptory, cursory and mainly indirect in her notices to Karen Dwan about repairs required. On the other hand, Karen Dwan went overseas for an extended period without putting adequate contact arrangements in place. This meant she did not see at least one email sent to her by Julie Archer. On the whole, I recognise the difficulties were also exacerbated by the negotiations for purchase of the property by the tenants so that there was confusion (to say the least) between what was or should have been an obligation or duty under the residential tenancy agreement and what was a matter for the purchase contract. Ultimately, the parties did not agree to a purchase contract. [57] I have set out these matters to demonstrate that I have weighed up and balanced the difficulties caused by both sides of this dispute. I consider that to act fairly and according to the substantial merits of the case the applicant's claim for disruption of quiet enjoyment has to a degree been made out by the applicant. I will seek to include a measure of compensation to the applicant in this regard. For the calculation of the amount of compensation see the final calculation paragraph at the end of the judgement. -- 10 of 12 -- 11 The respondents' counter-claim [58] In relation to the counter-claims by the respondents I find as follows. [59] I find that by January 2016 at the latest the respondents and Julie Archer were each at fault in managing the tenancy. Because of the failure to properly manage the tenancy and the interpolation of the contract for purchase negotiation, I do not make an order related to removal of the structure or the works undertaken by Bradfield Building counter-claimed at $3,620.00. [60] On her own evidence Julie Archer damaged the roller door by cutting the counter weight wires controlling the lifting mechanism. She also admitted to damaging the bottom of the roller door. I Order the roller door replacement as counter- claimed in the sum of $2,430.00. [61] Julie Archer also gave evidence that she has essentially refused to pay rent because she has made other outlays in an effort to remain at the property in the face of infrastructure failures. [62] I accept that given the relationship between the parties by March 2016 when the tenants finally vacated there would have been a need to clean the property ready for the next tenant and there would also have been a need to replace the locks in the counter claim sum of $440.00. Conclusions [63] In consequence of all the matters I have set out in this judgment I make Orders in favour of the respondents as follows. [64] I ORDER that the applicant pay to the respondents: (a) Rent arrears of $7,590.00 are reduced by 50% due to disruption to the tenants' quiet enjoyment of the property $3,795.00 (b) Roller door replacement $2,430.00 (c) Lock replacement $ 440.00 (d) Cleaning x a nominal sum $ 200.00 ________ TOTAL: $6,865.00 to be paid within 30 days. Re: Legal Costs [65] The QCAT jurisdiction does not normally make legal costs Orders. In the circumstances where each party has been at fault by their failure to comply with the RTRAA. I decline to make costs orders in these proceedings against either party. -- 11 of 12 -- 12 I ORDER – 1. The name of the applicant be amended to Julie Archer. 2. The residential tenant’s agreement the subject of these proceedings ended on 19th March 2016. 3. The applicant pay to the respondents sum $6865.00 within 30 days. The applicant's application and the respondents' counter-claim are otherwise dismissed. -- 12 of 12 --