Barnet & Anor v Zenbar (Aust) Pty Ltd [2011] QCAT 314

CITATION: Barnet and Anor v Zenbar (Aust) Pty Ltd [2011] QCAT 314 PARTIES: Racheal Barnet Nicholas Vlotman v Zenbar (Aust) Pty Ltd APPLICATION NUMBER: MCDT92-11 MATTER TYPE: Residential tenancy matters HEARING DATE: 9 February 2011 HEARD AT: Brisbane DECISION OF: Tammy Williams, Adjudicator DELIVERED ON: 5 July 2011 DELIVERED AT: Brisbane ORDERS MADE: 1. The termination of the General Tenancy Agreement between the parties, effective from 19 January 2011; 2. The applicants pay the respondent the sum of $822.71 in full by 2 August 2011, being: a. Ten days rent for the period 10 January 2011 to 19 January 2011 in the amount of $735.71 [less the $500 currently withheld by the respondent, therefore making the total amount owing $235.71]; b. A break lease fee of one week’s rent (including GST) being $566.50; and c. The cost of $20.50 for filing the counter-claim. CATCHWORDS: Whether rental property in liveable condition – cockroaches – date of formation of residential tenancy agreement – date of right to occupancy – whether a valid residential tenancy agreement – where agreement party oral and partly in writing – whether lease agreement terminated – whether amount paid is a holding deposit Residential Tenancies and Rooming Accommodation Act 2008, ss 12(3)(b), 159(1), -- 1 of 7 -- 2 185(2), 277(1) Fine v Geier [2003] QSC 073 Gray v Queensland Housing Commission [2004] QSC 276 REASONS FOR DECISION Introduction [1] Ms Barnet and Mr Vlotman filed an application with the Queensland Civil and Administrative Tribunal (QCAT), naming Zenbar (Aust) Pty Ltd as the respondent. The applicants sought a refund of a partial holding deposit paid to the respondent in the amount of $500.00 and $20.50 for the cost of filing the claim. [2] Zenbar (Aust) Pty Ltd filed a counter-claim seeking: Rent from the commencement of the signed General Tenancy Agreement of 6 January 2011 to 19 January 2011 in the amount of $1,930.00 [less the $500.00 currently held in the respondent‟s trust account]; A break lease fee of one week‟s rent (including GST) being $566.50; and The cost of $20.50 for filing the counter-claim. [3] The Tribunal held a hearing at the Queensland Civil and Administrative Tribunal‟s hearing rooms in Brisbane. Both parties gave evidence and provided the Tribunal with documentary evidence. The Tribunal reserved its decision so it could carefully consider the evidence and submissions of both parties in light of the provisions in the Residential Tenancies and Rooming Accommodation Act 2008 (the Act). Relevant Legislation [4] The Tribunal has jurisdiction to hear and decide this matter pursuant to sections 11 and 12 of the Queensland Civil and Administrative Tribunal Act 2009 (the „QCAT Act‟). This was a claim by the applicant against the respondents for relief under the Residential Tenancies and Rooming Accommodation Act 2008 for a residential agreement over the property located at the address identified in the claim. Relevant Facts [5] The applicants entered into a written tenancy agreement on 6 January 2011 for a fixed term of six (6) months, from that date. [6] After signing the lease and paying bond the applicants claim they discovered the property was in a non-liveable state. “There were bugs in the fridge and cupboards. Cockroaches and their eggs or faeces were under the beds and in the air conditioning unit…” -- 2 of 7 -- 3 “One door was off its hinge and the main bedroom had holes in the wall which were strategically hidden by pillows. The bed head was also loose.” [7] Although the Tribunal notes these specific concerns were not recorded by the applicants on the Entry Condition report. The applicants claim the report was left incomplete and not signed because they were dissatisfied with the property‟s condition. [8] Later that afternoon the applicants expressed their concern to Ms Robbins, the property manager. Mr Vlotman‟s evidence was that the respondent‟s agent “agreed the property was not in a liveable condition”. [9] At hearing Ms Robbins disagreed with this evidence. Although she admitted to knowing about the pest problem and had made arrangements for the property to be fumigated the following day, she strongly denies the assertion that the property was in a non-liveable condition. [10] Because repairs and fumigation of the premises had been arranged for 7 January 2011, Ms Robbins offered free accommodation in another apartment to appease the applicants. The offer was ultimately rejected by Mr Vlotman as he intended to take his partner, Ms Barnet to the Sunshine Coast during this period. [11] Ms Robbins further agreed to refund the bond and withhold $500 in the respondent‟s trust account. The respondent claims it was for rent, whereas the applicants argue it was a holding deposit. The Tribunal notes the monies were receipted as such; although the respondent maintains this was done in error. [12] The parties also discussed changing the commencement date of the tenancy from 6 January to 10 January 2011. Ms Robbins sought to amend the first page of the General Tenancy Agreement, however Mr Vlotman declined with a promise he would return at a later date or time. [13] On 7 January 2011 the applicants advised via email they did not wish to continue with the tenancy due to the poor condition of the unit. [14] The applicants sought the return of their deposit on the basis they exercised their option not to enter into a tenancy agreement, within the allowable period permitted by sections 159 and 161 of the Residential Tenancies and Rooming Accommodation Act 2008. [15] Alternatively the respondent argued the applicants signed a General Tenancy Agreement for a fixed term and are bound by its terms. Zenbar (Aust) Pty Ltd sought compensation arising from the loss it suffered as a result of the applicants‟ failure to meet their obligations under the agreement, namely: Breaching the lease through the failure to pay rent; and Failing to provide the lessor with the requisite notice. -- 3 of 7 -- 4 [16] The respondent also claims it took reasonable steps to mitigate any unnecessary loss suffered, by securing a new tenancy for the premises on 19 January 2011. Decision of the Tribunal Commencement of the Lease Agreement [17] Section 12(1) of the Act defines a residential tenancy agreement as an agreement under which a person gives someone else a right to occupy residential premises as a residence. [18] When a residential tenancy agreement is formed and when a tenant is given a right to occupy the premises are two distinct matters which may give rise to different dates, depending on the circumstances. The date of formation [19] The parties signed and formed the agreement on the 6 January 2011. Evidence before the Tribunal indicates a prima facie valid contract was entered into; therefore binding the parties to its terms and conditions. The date from which the right of occupancy commences [20] Initially the General Tenancy Agreement provided for the right of occupancy or the start of the tenancy to commence on 6 January 2011 for a fixed period of 6 months until 5 July 2011. [21] If the Tribunal were to accept Mr Vlotman‟s evidence, at best, the conversation between he and Ms Robbins on the afternoon of 6 January 2011 was an oral agreement to change the date in which the applicants would commence their right of occupancy (from 6 January to 10 January 2011). [22] It is irrelevant the amendment to the lease agreement was never reduced to writing, as the terms of a residential tenancy agreement can be partly in writing and partly oral pursuant to section 12(3)(b) of the Act. [23] Therefore the applicants‟ liability for the payment of rent commences on the 10 January 2011, being the date right of occupancy arises. Was the lease agreement valid? [24] The applicants argue the lease agreement formed on 6 January 2011 is void on the basis the “property was not in a liveable condition” at the start of the tenancy. [25] Section 185(2) of the Residential Tenancies and Rooming Accommodation Act 2008 provides inter alia at the start of a tenancy the lessor must ensure: (a) The premises and inclusions are clean; (b) The premises are fit for the tenant to live in; and -- 4 of 7 -- 5 (c) The premises and inclusions are in good repair. [26] Whether premises are „fit for the tenant to live in‟ is determined by imposing a standard of reasonableness test. In Fine v Geier [2003] QSC 073, Wilson J held: “Questions of fitness for habitation and repair are to be judge against a standard of reasonableness having regard to the age, character and locality of the residential premises and to the effect of a default on the state or condition of the premises as a whole: Bond v Weeks [1991] 1 Qd R 134 at page 138 (where the Court of Appeal discussed provisions to similar effect in earlier legislation).” [27] In Gray v Queensland Housing Commission [2004] QSC 276, Chesterman J cited the authors of Woodfall, Landlord & Tenant 28th ed., at paragraphs 1- 1477: “…[N]ot every defect… will condemn a house as unfit. It is to be deemed to be unfit for human habitation if and only if it is so far defective … that it is not reasonably suitable for occupation in that condition…” [28] Without the benefit of photographs and an incomplete Entry Condition report (which bears little weight), the Tribunal relies on the documentary evidence tendered by the respondent to determine the fitness of the property for habitation. As such, the necessary repairs to the property appear minor in nature; evidenced by the itemised invoice supplied by Results Maintenance, totalling $138.64 and taking less than one day to complete. [29] The Tribunal also relies on the pest treatment report prepared by State Pest Management as evidence of the severity of the infestation and whether it rendered the property not fit for human habitation. The service record noted a “major infestation of cockroaches. May require re-treatment in six weeks (sic).” [30] Yet although the contractor could have recommended a range of post- treatment precautions to the lessor including vacating the premises, remove pets, cover fish tanks/ponds; in this instance, the sole recommendation was to “wash crockery etc.” [31] From this evidence the Tribunal finds the condition of the property reasonably of a standard fit for habitation. Was the lease agreement terminated? [32] Section 277(1) of the Residential Tenancies and Rooming Accommodation Act 2008 limits the circumstances in which a tenancy agreement can lawfully terminate, including: The lessor and tenant agree in writing (s 277(2)); The lessor gives a notice to leave the premises to the tenant and the tenant hands over vacant possession of the premises to the lessor -- 5 of 7 -- 6 on or after the handover day (s 277(3)); The tenant gives a notice of intention to leave the premises to the lessor and hands over vacant possession of the premises to the lessor on or after the handover day (s 277(4)); The tenant abandons the premises (s 277(5)(b); or The tribunal makes an order terminating the agreement (s 277(5)(a). [33] There is no evidence of any of the condition precedents required by section 277 of the Act occurring, thus causing the termination of the tenancy agreement. Specifically no formal notices, namely a Notice of Intention to Leave, Notice of Abandonment or Notice to Leave, were issued by either party. Nor was there an agreement in writing to terminate the lease between the parties. [34] Therefore the Tribunal finds the lease remained on foot despite: (i) The conversation between Mr Vlotman and Ms Robbins on 6 January 2011; and (ii) The refund of the bond (minus the $500 withheld by the respondent, which is the subject of this claim). [35] Consequently the applicants remain subject to the terms and conditions of the agreement, including the payment of rent until the date of formal termination and costs for prematurely ending the lease agreement. Is the $500 held in the respondent’s trust account a holding deposit? [36] Pursuant to section 159(1) of the Residential Tenancies and Rooming Accommodation Act 2008 a person may require a prospective tenant to pay, or accept from a prospective tenant, a holding deposit for a tenancy of premises. [37] Although receipted as a partial holding deposit, the Tribunal is of the view it cannot be such and the provisions in the Act which relate to holding deposits do not apply, because the applicants are not prospective tenants. [38] The ordinary meaning of „prospective‟, as defined by Collins Concise English Dictionary is: “looking towards the future; expected or likely.” [39] By entering into the lease on 6 January 2011, the applicants were given a right to occupy a residential tenancy agreement and are therefore tenants as defined by section 13 of the Act. Conclusion [40] In consideration of the matters mentioned above, the Queensland Civil and Administrative Tribunal is not satisfied Ms Barnet and Mr Vlotman have established the grounds of their claim. For the reasons discussed herein, the Tribunal dismisses the applicants‟ claim for the release of the $500 currently withheld by the respondent. [41] The Tribunal finds in favour of the respondent for the following matters: -- 6 of 7 -- 7 Ten days rent for the period 10 January 2011 to 19 January 2011 in the amount of $735.71 [less the $500 currently withheld by the respondent, therefore making the total amount owing $235.71]; A break lease fee of one week‟s rent (including GST) being $566.50; and The cost of $20.50 for filing the counter-claim. -- 7 of 7 --