Fankhauser v Mission Beach Property Management - [2017] QCATA 65

CITATION:

Fankhauser & Anor v Mission Beach Property Management [2017] QCATA 65

PARTIES:	Matthew Fankhauser Laura Fankhauser (Applicants/Appellants)
v
Mission Beach Property Management (Respondent)
APPLICATION NUMBER:		APL197-16

MATTER TYPE:

Appeals

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Justice Carmody

DELIVERED ON:

26 May 2017

DELIVERED AT:

Brisbane

ORDERS MADE:

IT IS THE DECISION OF THE APPEAL TRIBUNAL THAT:

1. Leave to appeal is granted.

2. The appeal is allowed to the extent that the compensation order is varied by adjusting the quantum of compensation $1,800 to $500.

3. The appellant/applicant (Fankhauser) is to pay the respondent (Mission Beach Property Management) $608.70.

4. Otherwise, the decision is confirmed.

CATCHWORDS:

APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – where landlords agent applies for compensation for accidental damage to an eight year old carpet in residential premises – where former tenants admit breach – where carpet irreparable and lessor proposes to reinstate it by replacement – principles for measuring loss of depreciated fixtures in rented premises and betterment deduction claim

Queensland Civil and Administrative Tribunal Act 2009 (Qld), ss 13, 32, 38, 100, 102

Residential Tenancies and Rooming Accommodation Act 2008 (Qld), ss 362, 421

Badham v Williams [1968] NZLR 728
Bellgrove v Eldridge (1954) 90 CLR 613
Hanson v Newman [1934] Ch. 298
Harbutt's “Plasticine” Ltd v Wayne Tank & Pump Co Ltd [1970] 1 QB 447
Hoad v Scone Motors Pty Ltd [1977] 1 NSWLR 88
Hyder Consulting (Australia) Pty Ltd v Wilh Wilhelmsen Agency Pty Ltd & Anor [2001] NSWCA 313
Jones v Herxeimer [1950] 2 K.B.106
Joyner v Weeks [1891] 2 QB 31

Lukin v Godsall (1795) Peake Add. Cas. 15

One Door Property Pty Ltd v Hawthorne [2015] QCATA 58
Ruxley Electronics & Construction Pty Ltd v Forsyth Laddingford Enclosures Ltd [1995] 3 WLR 118
Strang v Gray [1952] 55 WALR 9
Tabcorp Holdings Ltd v Bowen Investments Pty Ltd (2009) 236 CLR 272

The Gazelle (1844) 2 W.Rob.(Adm.) 279
Yates v Dunster (1855) 11 Ex. 15

APPEARANCES and REPRESENTATION:

This matter was heard and determined on the papers without the attendance of either party in accordance with s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REASONS FOR DECISION

This is an application for leave to appeal the quantum of a compensation award against the applicant tenants for permanently staining a carpet in leased residential premises.
The respondent claim the estimated replacement cost ($2,500) less betterment ($700). The applicants concede that the damage exceeds fair wear and tear and admit liability limited to $300 or about 20 per cent of their new for old quote of $1,529.
Since reinstatement (old for old) is clearly not feasible here and meeting the full cost of a new replacement carpet would be an inequitable solution, the tribunal capped the respondent’s compensation liability at two-thirds (2/3rds) of the replacement cost on account of so called betterment.
The applicants contend the award is excessive for a depreciated carpet that only cost the…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2017] QCATA 65
Decision Date: 26 May 2017

CaseChat Overview and Summary

In the matter of Fankhauser v Mission Beach Property Management, the appeal tribunal considered the application by the agent of the landlord for compensation for the accidental damage to an eight-year-old carpet in a residential property. The former tenants admitted to causing the damage, and the landlord proposed to replace the carpet as it was beyond repair. The tribunal's role was to determine the appropriate compensation and to address the principles governing the loss of depreciated fixtures in rented properties, as well as the claim for betterment.

The legal issues before the tribunal encompassed the assessment of the extent of the damage, the calculation of the appropriate compensation, and the application of the betterment principle. This principle prevents a tenant from profiting from improvements made to a rented property. The tribunal had to evaluate the depreciation of the carpet over its eight-year lifespan and decide whether the proposed replacement cost was justified, considering the betterment principle.

The tribunal ruled that the compensation order should be reduced from $1,800 to $500, reflecting the depreciation of the carpet over time. The tribunal concluded that the proposed replacement cost was excessive and did not account for the betterment principle, which restricts the compensation to the diminished value of the fixture rather than its full replacement cost. The tribunal allowed the appeal, adjusted the compensation amount, and ordered the appellant to pay the respondent the adjusted compensation amount. This decision confirmed the tribunal's authority to balance the principles of compensation and betterment in minor civil disputes.

Orders

Orders of the court

IT IS THE DECISION OF THE APPEAL TRIBUNAL THAT:

1. Leave to appeal is granted.

2. The appeal is allowed to the extent that the compensation order is varied by adjusting the quantum of compensation $1,800 to $500.

3. The appellant/applicant (Fankhauser) is to pay the respondent (Mission Beach Property Management) $608.70.

4. Otherwise, the decision is confirmed.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

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