Baboa v Sierocki and Anor [2012] QCAT 83

CITATION: Baboa v Sierocki and Anor [2012] QCAT 83 PARTIES: Peter Baboa (Applicant) Oxenford Realty Pty Ltd (Agent) v Mr Jarrod Sierocki (First Respondent) Mrs Vedrana Sierocki (Second Respondent) APPLICATION NUMBER: MCDT1138-11 MATTER TYPE: Residential tenancy matters HEARING DATE: 23 January 2012 HEARD AT: Southport DECISION OF: Christine Trueman, Adjudicator DELIVERED ON: 2 March 2012 DELIVERED AT: Southport ORDERS MADE: [1] THAT the claim for compensation is dismissed. [2] THAT in relation to the Counter Claim filed by the Respondents the Applicant must pay to them the sum of $627.00 for reimbursement of the break lease fee within 14 days. [3] THAT there be no order as to costs CATCHWORDS: Minor Civil Dispute – Residential Tenancy – Where application about an Agreement to Extend Date of Fixed-Term Tenancy – signed before the end date of current fixed- term Tenancy Agreement – Whether Agreement to Extend is valid – Whether lease is fixed term or periodic – Whether tenants liable for break lease fees and rent until a new tenant is found – Tenants cross- claim reimbursement of break lease fee, legal costs and interest against Applicant Queensland Civil and Administrative -- 1 of 7 -- 2 Tribunal Act 2009, s 102 Residential Tenancies and Rooming Accommodation Act 2008, s 70 APPEARANCES and REPRESENTATION (if any): APPLICANT: Mrs Juliette Geraghty as Agent for the Applicant Owner RESPONDENT: Mr Jarrod Sierocki Mrs Vedrana Sierocki REASONS FOR DECISION Introduction [1] The Applicant property owner was represented by their Agent Mrs Juliette Geraghty (Mrs Geraghty”) at the hearing. Their claim was filed on 21 December 2011 seeking orders that the Respondent tenants Mr Jarrod Sierocki and Mrs Vedrana Sierocki (“Mr and Mrs Sierocki”) pay the sum of $5,462.34 being for rental arrears, filing fees and carpet cleaning and stain removal. At the hearing Mrs Geraghty provided a further summary of the claim and it had increased to a claim for $8,882.34. Mr and Mrs Sierocki filed a Response and counter claimi against the lessor for the sum of $9776.00 for legal fees, barrister costs, and for the tenant‟s time spent in court and for preparing their case. [2] Mrs Geraghty contends that the dispute relates to a break lease situation and a dispute relating to the bond. The claim is for compensation for the break lease and for rental arrears that accumulated after the tenants moved out and while trying to locate and move a new tenant into the property. The Facts [3] Mr and Mrs Sierocki entered into a fixed term lease agreement for the property located at 32 Leander Circuit in Oxenford in Queensland which ended on 4/2/2011. They allege that the lease became periodic after 4/2/2011 when on or around April 2011 they decided that they would like to rent the property for another 12 months for a fixed term while they were building their new property in New South Wales. [4] Mr and Mrs Sierocki stated they contacted Mrs Geraghty and told her of their intentions and that she sent them a document in the mail to sign. They said it was purported to be an extension of lease document. The tenants signed the Agreement to extend end date – fixed term tenancy on 16 May 2011 which was more than three months after their fixed term lease expired. -- 2 of 7 -- 3 [5] Mr Sierocki states that after he signed the agreement he contacted Mrs Geraghty requesting that they send a “real Tenancy Agreement or new Lease”, he said they never received a lease despite their “many attempts phone calls and visits to the offices” to arrange it. [6] The tenancy continued until it is alleged that on or around 22 September 2011 Mr and Mrs Sierocki entered into an oral agreement with the property manager, Mrs Geraghty, to break their lease. Mr and Mrs Sierocki stated that they told Mrs Geraghty that there was an attempted break-in to the property while they were away and that Mrs Sierocki no longer felt safe at the property and they wanted to move. [7] Mr Sierocki stated that he discussed with Mrs Geraghty whether there was an actual lease in place and that Mrs Geraghty could not locate a lease “on their system”. He said that discussions diverted to the document purporting to be an agreement to extend end date of fixed term tenancy. Mr Sierocki stated that Mrs Geraghty told him that the agreement was void due to the fact that they had used the wrong form. [8] Mr Sierocki stated that Mrs Geraghty stated that she understood the reasons for them leaving the property and that it was agreed that Mr and Mrs Sierocki would give two weeks notice to leave. Mr Sierocki said it was agreed that it would give the agency two weeks to find another tenant. [9] Mr Sierocki stated that the two weeks notice was given in a letter delivered to the agency on 3 October 2011. He claims that both he and Mrs Geraghty were in agreement that the tenancy would be terminated with the two weeks notice and based on the fact that he had applied for a property at Kings Court on Sovereign Island and that Mrs Geraghty had given a “glowing reference” to Island Realty about Mr and Mrs Sierocki as their “best tenants ..always paid on time”. [10] Mr and Mrs Sierocki allege that the next day, Mrs Geraghty entered the premises without notice and placed a “For Rent” sign on the picket which it is alleged prevented access to the property. [11] Mrs Geraghty claims that the tenants are liable for the rent that has accumulated on the property from the date they vacated and when the rent was paid up, until the time a new tenant was found. Mrs Geraghty claims that the tenants are subject to a fixed term tenancy that does not end until 16 May 2012 on the same and terms and conditions of the previous lease and weekly rent at $570.00 per week. The tenants vacated on 17 October 2011 and rent was paid up at that time to 16/10/2011. Mrs Geraghty is claiming rent from 16/10/2011 to 1/2/2012 when the new tenants moved into the property. [12] Mr Sierocki said he sent an emailii dated 17/10/2011 to Mrs Geraghty relating to the full bond refund. He said she emailed him back agreeing to release the full bond sum of $2,280.00 to him. In fact the bond has been -- 3 of 7 -- 4 returned to the tenants in this case. Mrs Geraghty said the bond was refunded to the tenants in error. [13] Mrs Geraghty stated that she emailed Mr Sierocki when she realised it was a break lease situation advising him that he was required to pay a break lease fee and liability for rent until new tenants were found. She said Mr Sierocki paid the break lease fee. A receiptiii dated 10/10/2011 was provided to the tribunal as evidence of such payment. The receipt indicates a break down of costs; for rent the sum of $196.71 and a payment of $627.00 noted as “other”. It was agreed by the parties that the “other” was a break lease fee of the $570 weekly rent plus GST of $57.00. Mr Sierocki agrees he paid the break lease fee but states that he did so because Mrs Geraghty told him to and that he owed it. He said he now realises he was not required to do so a he did not break a fixed term lease but gave the requisite notice under a periodic lease and therefore the break lease fee should be returned to him. [14] Mr Sierocki provided a copy of a letteriv dated 28/10/2011 he sent to the Residential Tenancies Authority while trying to settle the matter. He said the letter sets out the facts and circumstances surrounding the dispute. He stated that the letter supports his contentions that he was advised and told by Mrs Geraghty that he was entitled to receive his bond back in full and since he had continued to chase her for the return of the bond she had not replied to seven messages left for her or replied to any of his correspondences relating to the withholding of the bond money. Mr Sierocki stated that after mediation at the RTA the bond money was released to he and his wife in full as the agent or lessor had not claim to any of the bond funds. The Terms of the Residential Tenancy Agreement [15] This issue in this dispute turns purely on whether the tenants were subject to a fixed term or periodic lease. Once that issue is determined the issue of the amount of notice required to be given and obligations under a break lease situation and liability for ongoing rents will be obvious. [16] Section 70 of the Residential Tenancies and Rooming Accommodation Act 2008 (“the Act”) relates to Tenancy agreements and provides that: Continuation of fixed term agreements (1) This section applies to an agreement if: (a) it creates a residential tenancy for a fixed term; and (b) none of the following notices is given, or agreements or applications made before the day the term ends (the end day): (i) a notice to leave; (ii) a notice of intention to leave; (iii) an abandonment termination notice; -- 4 of 7 -- 5 (iv) a notice, agreement or application relating to the death of a sole tenant under section 277(7); (v) a written agreement between the lessor and tenant to end the agreement. (2) After the end day, the agreement continues to apply: (a) on the same terms on which it applied immediately before the end day (other than any term about the agreement's term); and (b) on the basis the tenant is holding over under a periodic agreement. (3) This section does not stop the lessor and tenant under an agreement that creates a residential tenancy for a fixed term from entering into another agreement with each other for a tenancy of the premises starting at the end of the fixed term. (4) This section does not apply to an agreement if the tenancy is a short tenancy (moveable dwelling). [17] In this case the parties did not enter into and sign the Agreement to Extend End date of a Fixed Term Tenancy until after the fixed term tenancy had expired. I find that the fixed term tenancy ended on 4/2/2011 and the agreement to extend was not signed until 17/5/2011. In all the circumstances the tenants were subject to a periodic lease from 4/2/2011 and upon their request to sign a new 12 month fixed term agreement a new General Tenancy Agreement should have been provided to them. The tenants requested that a Lease be provided to them but it was not. The agent did not prepare a new General Tenancy Agreement and forward it to the tenants. The agent prepared an agreement to extend the end date. That is not one of the ways described in the Act to give effect to a new fixed term tenancy. None of the items listed and referred to in section 70 of the Act has occurred. The signing of an Agreement to Extend end date for a fixed term tenancy does not defeat the requirement of section 70 of the Act. Not-withstanding the tenant‟s actions of agreeing and paying the break lease fee does not of itself equate to the fact that a fixed term tenancy exists. [18] I therefore find that there was not a fixed term Tenancy Agreement in place and that the tenants were subject to a periodic lease agreement. As the tenants were subject to a periodic lease they gave the requisite two weeks notice to vacate the property. [19] As the tenants were on a periodic lease, and gave the requisite notice, they are not required to pay rent relating to the property until a new tenant was located. I accept that the agents took some time to find a new tenant and that the property was vacant for some three months but I find that the tenants are not responsible for any rental during that time. I find that Mr and Mrs Sierocki are not liable for the sum of $8,882.34 for rent in relation to the property they left on 17/10/2011. I find that they have paid all their rent up until the date they vacated the property and that the rental bond held with the RTA was correctly returned to them. Tenants’ Counterclaim for Refund and Costs -- 5 of 7 -- 6 [20] Mr and Mrs Sierocki filed a Response and Counter application seeking reimbursement of legal costs, costs for time attending and preparing the hearing and interest in the sum of $9,776.00. The also claimed that as they lawfully terminated a periodic lease agreement with the requisite 14 days notice and that they paid all their rent up to date that they should not have paid a break lease fee. In their submissionsv they sought orders that “the document purported to be a lease be declared void” and “that the Agent pay the amount of $673.00 for the break fee” to them. [21] In considering Mr and Mrs Sierocki‟s application for costs I refer to section 102 of the Queensland Civil and Administrative Act 2009. That section states: 102 Costs against party in interests of justice (1) The tribunal may make an order requiring a party to a proceeding to pay all or a stated part of the costs of another party to the proceeding if the tribunal considers the interests of justice require it to make the order. (2) However, the only costs the tribunal may award under subsection (1) against a party to a proceeding for a minor civil dispute are the costs stated in the rules as costs that may be awarded for minor civil disputes under this section. (3) In deciding whether to award costs under subsection (1) or (2) the tribunal may have regard to the following: (a) whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g); (b) the nature and complexity of the dispute the subject of the proceeding; (c) the relative strengths of the claims made by each of the parties to the proceeding; (d) for a proceeding for the review of a reviewable decision: (i) whether the applicant was afforded natural justice by the decision-maker for the decision; and (ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits; (e) the financial circumstances of the parties to the proceeding; (f) anything else the tribunal considers relevant. [22] Mr Sierocki did not produce any evidence to the tribunal that he had incurred legal costs or barrister‟s fees for preparing his defence and counter application. When pressed for such evidence he conceded that he could probably „negotiate‟ the costs and payments. [23] Mrs Geraghty opposed any order for costs being made against the lessor. [24] This tribunal does not reimburse parties for their costs of lost wages or income in attending at a hearing. That part of Mr and Mrs Sierocki‟s claim is dismissed. In this tribunal it is not usual that orders for costs are made -- 6 of 7 -- 7 against parties unless evidence is clear and unequivocal that it would be in the interests of justice to do so. [25] I have considered all of the evidence and the facts and circumstances of this case and find that an order for costs against any of the parties would not be appropriate, necessary nor in the interests of justice. I find that there should be no order as to costs and that each party bear their own costs of the claim and counter claim. [26] I find that Mr and Mrs Sierocki are entitled to be reimbursed the break lease fee that they paid on 10/10/2011 for the finding that I have made is that a fixed term tenancy did not exist and therefore a break lease fee was not required to be paid by the tenants. [27] Having considered all of the evidence of the parties and content of their exhibits I am satisfied that the orders I should make to give effect to the decision I have reached for the reasons I have given are as follows. Orders [1] THAT the claim for compensation is dismissed. [2] THAT in relation to the Counter Claim filed by the Respondents the Applicant must pay to them the sum of $627.00 for reimbursement of the break lease fee within 14 days. [3] THAT there be no order as to costs i Exhibit 2. ii Exhibit 3. iii Exhibit 4. iv Exhibit 5. v Exhibit 2. -- 7 of 7 --