Negus t/a Run Property v Newell
[2011] QCATA 120
•26 May 2011
| CITATION: | Negus t/a Run Property v Newell [2011] QCATA 120 |
| PARTIES: | Damien Negus trading as Run Property (Applicant/Appellant) |
| v | |
| Antony Newell (Respondent) |
| APPLICATION NUMBER: | APL162-10 |
| MATTER TYPE: | Appeals |
| HEARING DATE: | On the papers |
| HEARD AT: | Brisbane |
| DECISION OF: | Richard Oliver, Senior Member |
| DELIVERED ON: | 26 May 2011 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | That leave to appeal is granted. 1. The decision of the Tribunal made on 16 July 2010 is set aside. 2. The respondent pay to the applicant $1,522.00 by 30 June 2011. 3. |
| CATCHWORDS: | Minor civil dispute – where tenant gave notice to leave without first issuing a notice to remedy breach – where notice to leave invalid Queensland Civil and Administrative Tribunal Act 2009, ss 142(3), 146(b) QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41 Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388 |
APPEARANCES and REPRESENTATION (if any):
This matter was heard on the papers, pursuant to section 32 of the Queensland Civil and Administrative Tribunal Act 2009 (QCAT Act).
REASONS FOR DECISION
Mr Newell was a tenant in a rental property managed by the applicant at Unit 14, 81 Musgrove Road, Red Hill. Mr Newell signed a general tenancy agreement on 12 March 2010. The tenancy period was from 12 March 2010 to 17 January 2011.
On 7 April 2010 Mr Newell delivered to the property agent a Notice of Intention to Leave in form 13 stating that he intended to give up vacant possession at midnight on 21 April 2010. The grounds for giving the notice was that there was excessive noise from neighbouring units, the security door was being left open continuously and there were health issues because of mould “on the bedroom roof”.
It is accepted by the property agent that there were verbal complaints about these issues prior to the issuing of the notice. However he says he dealt with these complaints by contacting tenants.
The Residential Tenancy Agreement made specific provisions about the costs that might apply if the tenancy agreement is ended before the end of the term. It states:
(1) This clause applies if –
(a) This agreement is a fixed term agreement; and
(b) The tenant terminates it before the term ends in a way not permitted under the Act
(2) The tenant must pay the reasonable costs incurred by the lessor in reletting the premises
Note: for when the tenant may terminate early under the Act, see clause 36 and the information statement.
Pursuant to section 362, the lessor has a general duty to mitigate (avoid or reduce) the costs associated with a break lease.
On Mr Newell vacating the premises, Mr Negus filed an application in the Tribunal to recover the costs associated with the “break lease”. That included rent from 30 April 2010 to 10 June 2010 in the sum of $1,410 together with a break lease letting fee of $258.50, advertising $22.00, a dishonour fee of $30.80 and the Tribunal application filing fee.
Mr Negus gave evidence as to the steps taken by the applicant to relet the property and, on a perusal of the transcript those steps seemed to be reasonable and in proper discharge of the lessor’s duties to mitigate. The amount claim for loss of rent therefore seems reasonable. As to the break lease letting fee that seems to be an arbritary sum charged by the lessor’s agent not specified in the general tenancy agreement.
In any event, when the matter came on for hearing before the learned Member he was not satisfied that the lessor’s agent had given Mr Newell sufficient notice of the costs he might incur by ending the tenancy early. That seems to be decisive to his consideration. The notice he was referred to, is a standard letter that is sent by Mr Negus to tenants simply setting out what costs or damages they would be liable for if they breach the residential tenancy agreement. There can be hardly any surprise to a tenant that on a fixed term tenancy agreement unless the premises are relet the tenant would be liable for the rent for the remainder of the term unless of course they had good reason to vacate the premises and follow the procedures set out in the Residential Tenancies and Rooming Accommodation Act 2008 (“the RTRA Act”).
After the application for compensation was dismissed Mr Negus applied to file an application for leave to appeal or appeal. Leave is necessary because this is a an appeal from a minor civil dispute decision.[1] Further, leave will only be granted if there is an error on the part of the primary decision maker, or there is a reasonable prospect that the applicant will obtain substantive relief. It may also be necessary to correct a substantial injustice through some error on the part of the original decision maker.
[1] QCAT Act, section 142(3).
The lessor’s agent argues that for Mr Negus to validly terminate the agreement on the grounds contended for that is, those set out in his Form 13 he must first issue to the agent a Notice to Remedy breach. The RTRA Act does make a provision for a Notice to Leave without grounds however that is not the case here as Mr Newell clearly relied on the complaints, referred to above and set out in the Form 13.
What the lessor’s agent complains of is that Mr Newell did not first give a Notice to Remedy Breach[2] as he is required to do if this was to be the basis of his intention to leave. If Notice to Remedy breach is not remedied the tenant is then entitled to deliver a Notice of Intention to Leave for unremedied breach.[3]
[2] RTRA Act, section 301.
[3] RTRA Act, section 302.
The Residential Tenancy Agreement is a contract between the parties whereby the tenant agrees to take exclusive occupation of the premises for the stated fixed term. The contract provides that the tenant must pay rent for the fixed term at the stipulated rate. The RTRA Act comes in to play to assist both lessor’s and tenants where there is non performance by one of the parties obligations under the Residential Tenancy Agreement. However, if the RTRA Act is to be relied on, the procedures specifically set out in the Act must be followed for relief to be granted.
On reviewing the transcript of evidence, it seems that the learned Member did fall into error in two respects. Firstly, he accepted that the Notice of Intention to Leave was sufficient for the purposes of bringing the residential tenancy agreement to an end without the tenant first issuing a Notice to Remedy Breach. Secondly, he relied upon the lessor’s agents failure to produce, at the hearing, the letter which informs the tenant of the “reasonable costs” that might be incurred by bringing the tenancy to an end early. The tenant disputed receiving such a letter.
It is irrelevant whether the tenant received such a letter or not to the application of the provisions of the RTRA Act. Clause 7 of the residential tenancy agreement clearly spells out what losses the tenant will be liable for if the agreement is terminated early. Furthermore, Mr Negus points out that this information is on the Residential Tenancies Authority website. Be that as it may, common sense suggests that if Mr Newell is contractually obliged to pay rent for the full term, any breach of that agreement would expose him to damages by way of loss rental until the premises are relet or to the end of the term. The failure of the agent to produce this document, is not, and could not be critical to the outcome, although it seems the tenant did get a copy of it at the relevant time.
The question whether or not leave to appeal should be granted is usually addressed according to established principles: Is there a reasonably arguable case of error in the primary decision?[4] Is there a reasonable prospect that the applicant will obtain substantive relief?[5] Is leave necessary to correct a substantial injustice to the applicant caused by some error?[6] Is there a question of general importance upon which further argument, and a decision of the appellate court or tribunal, would be to the public advantage?[7]
[4] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41.
[5] Cachia v Grech [2009] NSWCA 232 at [13].
[6] QUYD Pty Ltd v Marvass Pty Ltd (supra).
[7]Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, at 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577 at 578, 580.
As there has been error of law in the application of the RTRA Act to these particular circumstances, leave to appeal must be allowed.
The property agent, having led credible evidence to establish that it did take reasonable steps to mitigate the loss and despite that, the property remained untenanted until 10 June 2010 there is no reason why the tenant should not pay for this loss.
There is no evidence as to the reasonableness or otherwise of the break lease letting fee and presumably the new tenants would have paid the letting fee in any event. The advertising claim seems reasonable but there is no evidence about the dishonour fee. In the circumstances the Tribunal proposes to substitute it’s own decision.[8]
[8] QCAT Act, section 146(b).
The appeal should be allowed and an order be made that Mr Newell pay to the applicant $1,522.00 including the filing fee of $90. That sum is to be paid by 30 June 2010.
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