Liberty Estate Agents Pty Ltd v Osman
[2014] QCATA 218
•1 August 2014
| CITATION: | Liberty Estate Agents Pty Ltd v Osman & Anor [2014] QCATA 218 |
| PARTIES: | Liberty Estate Agents Pty Ltd (Applicant/Appellant) |
| v | |
| Brendan Osman Sarah Walls (Respondents) |
| APPLICATION NUMBER: | APL178-14 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Senior Member Stilgoe, OAM |
| DELIVERED ON: | 1 August 2014 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. Leave to appeal granted. 2. Appeal allowed. 3. The decision of 31 March 2014 is set aside. 4. Brendan Osman and Sarah Walls shall pay Liberty Estate Agents Pty Ltd $1,019.92 within 28 days of today’s date. |
| CATCHWORDS: | APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – where claim for carpet damage – where carpet seven years old – where carpet replaced – where tribunal found no evidence linking condition of carpet with tenancy – whether grounds for leave to appeal – whether lessor entitled to recover full cost of carpet replacement Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 3(b), 147(2) Dearman v Dearman (1908) 7 CLR 549 |
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
Mr Osman and Ms Walls rented a property through Liberty Estate Agents Pty Ltd for about four and a half years. At the end of the tenancy, Liberty filed an application for unpaid water charges and the cost of replacing the carpet. Two Justices of the Peace, sitting in the minor civil disputes jurisdiction of the tribunal, allowed the claim for water charges but dismissed the claim for the replacement of the carpet.
Liberty wants to appeal that decision. It says that the evidence before the learned Justices clearly showed that the carpet was damaged and that the tenants were responsible for the damage. It says that the tribunal, in other cases, has allowed claims for replacing aged carpet but the learned Justices allowed nothing.
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]
[1]QCAT Act s 142(3)(a)(i)).
[2]Pickering v McArthur [2005] QCA 294 at [3] per Keane JA.
The appeal tribunal will not usually disturb findings of fact on appeal if the evidence is capable of supporting the conclusions.[3] An appellate tribunal may interfere if the conclusion is ‘contrary to compelling inferences’ in the case.[4]
[3]Dearman v Dearman (1908) 7 CLR 549 at 561; Fox v Percy (2003) 214 CLR 118 at 125 – 126.
[4]Chambers v Jobling (1986) 7 NSWLR 1 at 10.
The learned Justices accepted that there was damage to the carpet. They did not accept that the tenants should be responsible for the damage.
Liberty filed a copy of its entry condition report, which was signed by the tenants. The entry condition report notes that the carpet in the main bedroom had marks in the “walkin”. It also noted that the carpet had “pulls” in bedroom 2 and the lounge. Otherwise, the carpet was in good condition.
Liberty also filed a copy of the exit condition report. That document notes that the carpet was heavily soiled in all areas.
Liberty provided colour copies of photos to the tribunal. The learned Justices did not find those photos persuasive because none of them were dated[5] and Ms Walls argued that they were take some time after the tenants vacated. That submission cannot be sustained on the evidence before the learned Justices. The exit condition report annexed copies of photographs. Although the exit condition report is dated 15 November 2012, it is clear that Liberty completed it on 15 November 2013[6]. The photographs annexed to the exit condition report, even though black and white and small, show soiled carpet. The smaller, black and white photos show similar scenes to the larger, colour copies. Liberty’s representative, Ms Simpson, told the learned Justices that she took the colour photos on the day the tenants vacated and she simply printed them off in larger format for the tribunal’s convenience[7].
[5]Transcript page 1-22 lines 35 – 37.
[6]Transcript page 1-15 to page 1-17 line 10.
[7]Transcript page 1-15 lines 15 – 18.
The evidence demonstrates that the photos were contemporaneous with the preparation of the exit condition report. The evidence clearly showed that there was deterioration in the carpet which occurred during this tenancy.
The phrase “fair wear and tear” is usefully defined in an earlier decision of the appeals tribunal[8]:
The phrase “wear and tear” has been common in leases and tenancy agreements for centuries. In general, the ordinary meaning of the phrase is concerned with the consequences of ordinary, not extraordinary damage. In the case of ‘wear’, this might mean, for example, fading paint work on internal and external walls caused by sunlight over time; ‘tear’ refers to disrepair caused by a tenant through unintentional action or through the normal incident of a tenant’s occupation. Depending on the specifics of the obligations outlined in a tenancy agreement, this might include the accidental ripping of an aged, worn fly screen. In summary,fair wear and tear, in the context of a residential tenancy, refers to damage or disrepair caused, or resulting from ordinary use.
[8]Griffin v Gini [2011] QCATA 325 at [12].
Fading carpet is “fair wear and tear”. Wear through regular foot traffic is “fair wear and tear”. Multiple stains, dirty carpet and excessive wear through the use of an office chair are not “fair wear and tear”. While the tenants’ assertions that the carpet was cleaned every six months[9] are admirable, it does not negate the general obligation to return the tenancy in good condition. Similarly, the tenants’ actions in having the carpet steam cleaned at the end of the tenancy does not absolve them from responsibility if the carpet is still stained. The evidence before the learned Justices demonstrates that the tenants failed in the basic obligation to return the tenancy with clean carpet. The evidence does not support the learned Justices’ finding that the tenants are not responsible for damage to the carpet. Leave to appeal should be granted and the appeal allowed.
[9]Transcript page 1-17 lines 25 – 28.
As this is an appeal on mixed fact and law, I am required to decide the appeal by way of rehearing[10]. Although I may call for additional evidence, the tribunal’s obligations to provide an economical and quick process[11] do not justify the delay and additional expense involved in calling for fresh evidence.
[10]QCAT Act s 147(2).
[11]QCAT Act s 3(b).
The learned Justices found that the carpet was about seven years old. Ms Wall submitted that the tenants should not be responsible for replacing “new for old”[12]. The appeals tribunal has stated that the proper approach to quantifying betterment is to look at the loss, and then determine whether it is appropriate to reduce the damages by any benefit obtained[13].
[12]Transcript page 1-20, lines 12 – 13.
[13]Cavric Pty Ltd t/a Cavalier Homes Mackay v Cameron [2010] QCATA 90 at [35].
The parties agree that carpet has an effective life of about ten years[14]. The carpet was already seven years old. The lessors have the benefit of new carpet at the tenants’ cost. Conversely, they have been forced to pay for a new carpet approximately three years before they might otherwise have replaced it. Balancing those two considerations, I find that the tenants should pay the lessors 30% of the cost of the replacement carpet, an amount of $760.
[14]Australian Taxation Office depreciation schedule provided by both parties to the appeal.
The fact that the carpet was not immediately replaced does not, in my view, affect the tenants’ liability. The lessor had landlord insurance and claimed the cost of the carpet through the insurance. That was a reasonable step to take.
I am also not persuaded that the fact of insurance relieves the tenants of responsibility. The lessor should be aware that it cannot recover twice for the same loss. If the insurer has paid the lessor, then it will have a right of subrogation over any funds recovered from the tenants and the lessor has an obligation to refund the insurer.
Although Liberty was successful in its application for leave to appeal, it should take care in the way evidence is presented to the tribunal in the future. The learned Justices commented that the exit report, being cut and pasted, did not have the correct date. Ms Simpson referred to a loss assessor’s report[15] but she could not produce it. She produced a quote for the carpet replacement, but not an invoice. The quote covered the whole of the tenancy; if the learned Justices had been minded to allow the costs of certain rooms only, they would have had no evidence on which to make that decision.
[15]Transcript page 1-13 lines 4 – 6.
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