Compass Housing Services Co (Queensland) Ltd v Foy [2015] QCATA 50

CITATION: Compass Housing Services Co (Queensland) Ltd v Foy [2015] QCATA 50 PARTIES: Compass Housing Services Co (Queensland) Ltd (Applicant/Appellant) v Mark Anthony Foy (Respondent) APPLICATION NUMBER: APL001-15 MATTER TYPE: Appeals HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Senior Member Stilgoe OAM DELIVERED ON: 21 April 2015 DELIVERED AT: Brisbane ORDERS MADE: 1. Leave to appeal granted. 2. Appeal allowed. 3. The decision of 11 December 2014 is set aside and the following order is substituted: Mark Anthony Foy shall pay Compass Housing Services Co (Queensland) Ltd $1,109.00. CATCHWORDS: APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – RESIDENTIAL TENANCY – where rent outstanding – where three months’ rent owed because of lessor’s failure to mitigate – where lessor provided social housing – where tribunal reduced claim for rent – whether grounds for leave to appeal Residential Tenancies and Rooming Accommodation Act 2008 (Qld) ss 362, 421 Dearman v Dearman (1908) 7 CLR 549 Fox v Percy (2003) 214 CLR 118 Pickering v McArthur [2005] QCA 294 Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 -- 1 of 4 -- 2 Chambers v Jobling (1986) 7 NSWLR 1 APPEARANCES and REPRESENTATION (if any): 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] Compass Housing Services Co (Queensland) Ltd provides social housing. Mark Foy rented a unit from Compass through 4Walls Ltd. When he left the unit, Mr Foy owed three months’ rent. Compass applied for an order that Mr Foy pay the rent owing, plus some small amounts for cleaning. Two Justices of the Peace, sitting in the minor civil disputes jurisdiction, reduced Compass’ claim for rent from $1,879.20 to $655.20. [2] Compass wants to appeal that decision. Because this is an appeal from a decision of the tribunal in its minor civil disputes jurisdiction, leave is necessary.1 Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.2 [3] The tribunal reduced Compass’ claim for rent because it found that Compass had not mitigated its loss by terminating the tenancy and finding another tenant. Compass argued that it had tried to mitigate its loss but it had no evidence of those attempts at the hearing. It has filed material in the appeal tribunal that goes to that issue of mitigation. [4] The appeals tribunal will only accept fresh evidence if it was not reasonably available at the time the proceeding was heard and determined. Ordinarily, an applicant for leave to adduce such evidence must satisfy three tests. Could the parties have obtained the evidence with reasonable diligence for use at the trial? If allowed, would the evidence probably have an important impact on the result of the case? Is the evidence credible?3 [5] The issue of mitigation was a surprise to Compass. Although the information was available before the hearing, Compass did not anticipate that it would be required. The tribunal urges all lessors to take the entire tenancy file to a tribunal hearing but, in this isolated case, I understand why Compass did not do so. The evidence submitted is copies of file notes. The author of the file notes has not sworn an affidavit but Mr Foy’s submissions on appeal tend to support the truth of the file notes. The evidence may have an important impact on the result of the case. I propose to allow it. [6] The Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (Act) does impose a duty to mitigate loss or expense4. It reinforces that 1 QCAT Act s 142(3)(a)(i). 2 Pickering v McArthur [2005] QCA 294 at [3]. 3 Clarke v Japan Machines (Australia) Pty Ltd [1984] 1 Qd R 404 at 408. 4 Section 362. -- 2 of 4 -- 3 obligation in s 421 of the Act, which states that, when making an order in favour of a lessor, the tribunal must consider the rent required to be paid but not paid. Section 421(1)(d) states specifically that the tribunal must consider whether the lessor has met its duty to mitigate loss or expense. [7] Mr Foy admitted that he owed the rent and he should have paid it.5 Both Compass and Mr Foy were trying to keep the tenancy agreement in place.6 Mr Foy admitted that 4Wall ‘went the extra mile and look after me’7. The tribunal told Mr Foy he should have paid the rent and he told the tribunal he didn’t pay the rent because he was lazy.8 [8] It would be an odd interpretation of the Act to impose a duty to mitigate, by Compass terminating Mr Foy’s tenancy, when the parties were trying to maintain the tenancy. It would be an even stranger result in light of the fact that Compass was providing social housing; Mr Foy, on parole, was in need of that assistance; and he was living in the unit. In those circumstances, terminating the tenancy would not be a proper exercise of Compass’ obligation to mitigate its loss. Once Mr Foy ended the tenancy then, I agree, Compass was required to mitigate its loss by finding another tenant. [9] In any event, the fresh evidence does show that Compass tried to mitigate its loss. It entered into repayment arrangements with Mr Foy in an attempt to recover the unpaid rent but maintain the tenancy. Mr Foy admitted as much at the hearing.9 [10] The tribunal erred by stating that Compass’ duty to mitigate required it to terminate the tenancy. The Act was designed to achieve a balance between the rights of lessors and the rights of tenants. While both tenants and lessors sometimes feel that the balance is tipped against them, the tribunal should be slow to interpret the Act in a way that exacerbates the imbalance. Interpreting the duty to mitigate in a way that required a social housing lessor to terminate a tenancy rather than continue to work with the tenant would not maintain the balance. [11] Leave to appeal should be granted and the appeal allowed. The rent payable was $1,754.20.10 The tribunal allowed $15 for cleaning and the filing fee of $105, so the total claim was $1,864.20. The tribunal correctly deducted the bond of $665.20. The total payable should have been $1,109.00 [12] In his response to the application for leave to appeal, Mr Foy has claimed for items he lost from the unit. He says that he left the unit locked but, when he returned after a routine inspection by Compass, the unit was unlocked and items were missing. 5 Transcript page 1-17, lines 20 – 25; page 1-24, line 34. 6 See transcript page 1-15, lines 3 – 11. 7 Transcript page 1-17, line 26. 8 Transcript page 1-17, line 42 to page 1-18, line 1. 9 Transcript page 1-17, lines 25 – 34. 10 Transcript page 1-14, lines 28 – 31. -- 3 of 4 -- 4 [13] Mr Foy could have claimed these items at the hearing but he did not. He told the tribunal that the unit was not maintained.11 The tribunal heard that Compass conducted inspections every three months12 but Mr Foy made no mention of his loss through the inspections at that time or at any time during the hearing. The evidence before the tribunal does not support Mr Foy’s claim. It is now too late to bring a fresh claim.13 Mr Foy’s claim cannot affect the outcome of this application for leave to appeal. [14] Mr Foy has also asked for a repayment plan. That is a matter that can be agreed between the parties or, failing agreement, ordered by the Magistrates Court. [15] The decision of 11 December 2014 is set aside and the following order is substituted: Mark Anthony Foy shall pay Compass Housing Services Co (Queensland) Ltd $1,109.00. 11 Transcript page 1-17, lines 5 – 21. 12 Transcript page 1-19, lines 11 – 14. 13 Section 419(3) requires a claim to be made within 6 months of a breach. -- 4 of 4 --