Novais v Raine and Horne Wynnum Manly
[2018] QCATA 57
•26 April 2018
CITATION: | Novais v Raine & Horne Wynnum Manly & Anor [2018] QCATA 57 |
PARTIES: | Ricardo Jorge Novais |
| v | |
| Raine & Horne Wynnum Manly (Second respondent) | |
APPLICATION NUMBER: | APL001-17 |
MATTER TYPE: | Appeals |
HEARING DATE: | 31 July 2017 |
HEARD AT: | Brisbane |
DECISION OF: | Member Allen |
DELIVERED ON: | 26 April 2018 |
DELIVERED AT: | Brisbane |
ORDERS MADE: | 1. Leave to appeal is refused. |
CATCHWORDS: | APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142 Residential Tenancies and Rooming Accommodation Act 2008 (Qld), s 65, s 66, |
APPEARANCES: | |
APPLICANT: | Ricardo Jorge Novais |
RESPONDENT: | Jody Ashton appeared for Raine & Horne Wynnum Manly |
REPRESENTATIVES: | |
APPLICANT: | Ricardo Jorge Novais represented by Mr Kim, solicitor of Sung Do Lawyers |
REASONS FOR DECISION
Introduction
Mr Novais is the owner of a property at Manly West for which Raine & Horne was the letting agent and Mr Chiang was the representative of the tenant of the property. The tenant during the first lease period from 23 September 2013 to 22 September 2014 was Top Level Trading Co Ltd. When a new lease was entered for the period 23 September 2014 to 22 March 2015 the tenant was listed as Top Level Pty Ltd.
The tenant vacated the premises at the end of the second lease. While an exit inspection occurred and emails passed between the agent, Raine & Horne, Mr Novais and Mr Chiang, there was no exit condition report. The last inspection report was prepared on 22 December 2014. An email was sent by Raine & Horne to Mr Chiang dated 27 March 2015 setting out all of the matters, which needed to be dealt with before the property, could be re-let.
There was a series of emails between Raine & Horne and Mrs Novais, which concluded on or around 16 July 2015 resulting in some refunds to Mr Novais for cleaning expenses.
Following this, demands were received firstly by Mr Chiang on 31 August 2015 for the payment of damages in the amount of $40,000. A similar demand was made on Raine & Horne on 25 September 2015.
A separate demand was sent to Raine & Horne on 29 September 2015 for an amount of $16,482 in respect of damage to doors and panels
On 18 May 2016, a residential tenancy dispute was filed by Mr Novais listing Raine & Horne and Mr Chiang as respondents. The claim was said to be for abandonment of property under s 359 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (‘RTA Act’) in the amount of $25,000.00 and listed were the following amounts:
(1)Carpet cleaning $7,572
(2)Window repairs $3,640
(3)Repairs $10,888.00
(4)Painting $4,950.00
(5)Kitchen repairs $2,050.00
Total$29,092.00
The reasons for seeking the orders were that the second tenancy ended on break lease terms on 22 March 2015 and that it appears that the tenant, after afflicting significant damages to the applicant’s property, abandoned the premises in the middle of the second term. Furthermore, the tenant’s whereabouts remained unknown until relatively recently.
The Tribunal determined that the application was to be transferred to the Minor Civil Dispute other list and made directions for the filing and giving of material on 26 May 2016.
The application was heard by a learned adjudicator and it was dismissed in its entirety.
Leave to appeal generally
Mr Novais has filed an application for leave to appeal and appeal in respect of the learned adjudicator’s decision. The grounds of appeal raise questions of law and fact. As this is an appeal from a minor civil dispute leave to appeal is required.[1]
[1]Queensland Civil and Administrative Tribunal Act 2009 (Qld), s142(3).
Leave to appeal will only be granted where there is some question of general importance upon which, further argument, and a decision of the Appeal Tribunal, would be in the public interest; or, there is a reasonably arguable case of error in the primary decision and a reasonable prospect that the applicant would obtain further substantive relief. Another question sometimes asked is whether leave is necessary to correct a substantial injustice to the applicant, caused by some error.
The causes of action against the two respondents are different and they were dealt with separately in the learned adjudicator’s reasons. It is therefore convenient to deal with them separately here.
Leave to appeal - Mr Chiang
The learned adjudicator made the following findings in relation to Mr Chiang:
a)The first general tenancy agreement nominated Top Level Trading Co Ltd as tenant. Whether that company was registered or not at the time was never made clear. It does seem clear, however, that Mr Chiang entered into that agreement on behalf of that company. The second general tenancy agreement nominated Top Level Pty Ltd as tenant. At the time that company was deregistered, but once again it seems clear that Mr Chiang entered into that agreement on behalf of that deregistered company;[2]
b) How it came to be that the second tenancy nominated Top Level Pty Ltd as tenant was not made clear. There was no evidence to support the contention that Mr Chiang had been deceitful, rather only an assumption that his conducted must have been tainted given the deregistered status of Top Level Pty Ltd. Nor can it be concluded based on the limited evidence that Mr Chiang becomes personally liable as if he were the tenant named in the second tenancy agreement;[3]
c) It was asserted that the premises were abandoned. That is not the case. Notification of the tenants intention to leave was given on 16 March 2015. The tenancy was due to expire of 22 march 2015. Vacate took place at the latest on 23 March 2015. The tenant should have given two weeks notice. Only one weeks notice was given. In any event, there was no rental arrears component listed in the claim;[4]
d) Demands was first made on Mr Chiang in respect of damage to the premises on 31 August 2015;[5]
e) There was no evidence of any conciliation being attempted or conducted with the RTA consequent upon vacate or since; not even any evidence that the damage asserted to have been inflicted was not suitable for RTA conciliation. Nor was there any compelling evidence that Mr Chiang ought to be made personally responsible for alleged damage said to have been incurred during the course of the tenancy and only raised some five months after the vacate took place, and only after the owners have moved back in;[6]
f) Nor is it the case that Mr Chiang has any case to answer. He cannot be imputed as a tenant personally because of lack of registration of a corporate entity he signed a general tenancy agreement for;[7] and
g) Added to that apparent lack of conciliation or attempted conciliation or any reference to the RTA for conciliation places the application well out of time for the institution of a proceeding for damages to the premises during the course of the tenancy.[8]
[2]Statement of reasons, [16].
[3]Statement of reasons, [20].
[4]Statement of reasons, [25].
[5]Statement of reasons, [25].
[6]Statement of reasons, [27].
[7]Statement of reasons, [29].
[8]Statement of reasons, [30].
The following grounds of appeal are raised in regard to Mr Chiang:
a)A simple body corporate search would have shown that the company was deregistered and therefore non-existent legal entity at the time of the tenancy. As a result, the tenancy agreement was signed between Raine & Horne and a non-existent company. However, four days earlier, the application was received from an individual, who was purportedly the party who wished to enter the contract and then signed the tenancy agreement. Mr Chiang was the actual party to the tenancy agreement and therefore liable to any damages to the premises throughout the period of the tenancy;[9]
b)The learned adjudicator found there was insufficient evidence adduced to support the fact that 20 persons or more occupied the Premises at one time. This was in breach of the express terms of the tenancy agreement. Mr Novais has obtained statements from two neighbours attesting to the fact that this was the case and that this was a source of nuisance in the neighbourhood. These statements vary in their estimates of the number of people occupying the premises as between 12 and 16 at any one time;
c)Contrary to the conclusion that there was no rent in arrears or abandonment of the premises at the end of the tenancy, part of the rent payment had to be claimed from the bond amount; and
d)In response to the decision that Mr Novais’ delay in raising concerns of the damage (five months after the tenant vacated) deprives it of any legal recourse or basis for compensation, it is our understanding that there is no legal authority depriving Mr Novais of recourse to action on this basis.
[9]Appeal book pages 257, 258.
Mr Kim made further submissions in regard to the errors of law and fact in regard to the learned adjudicator’s decision. Relevantly, that the learned adjudicator concluded that there was ‘apparent lack of conciliation or attempted conciliation’ even though Mr Novais had submitted that several attempts had been made to peaceably resolve the issue with Mr Chiang without recourse to litigation. A letter of demand was sent to Mr Chiang on 31 August 2015.
Discussion
I accept that the learned adjudicator may have erred in finding that Mr Chiang could not be imputed as the tenant where there is a lack of registration of a corporate entity and he signed a general tenancy agreement on behalf of the unregistered company. The previous tenancy agreement had been in the name of Top Level Trading Co Ltd and there was evidence that Mr Chiang was connected with that company in the original application.[10] The application shows that Mr Chiang is employed by Top Level Trading Co Ltd.
[10]Appeal Book pages 44 to 48
There was also an Employment Confirmation Request which was filled with the original application but not made part of the appeal book. This document is from Top Level Trading Co Ltd and makes it clear that Mr Chiang is employed as a sales engineer with the Top Level Trading Co Ltd, his tasks are renting a house for the company for accommodating VIP guests in the future, and he will be managing the house on behalf of the company.
One of the questions, then, to be decided in terms of the grant of leave to appeal, is whether Mr Novais would obtain further substantive relief as a result of that error. The learned member raised the issues of a lack of conciliation and that the application was well out of time for institution of a proceeding for damages.
Unfortunately, the reasons for the decision do not set out the statutory basis for the findings of the learned adjudicator. Mr Kim has submitted that the demand letter sent to Mr Chiang satisfies the requirement for conciliation and that he was not aware of any legal authority depriving Mr Novais of recourse due to delay.
Section 398 of the RTA Act defines a ‘conciliation process’ as a process of conciliation under which the parties are helped and encouraged to achieve a resolution of their dispute. A lessor or tenant may make a request (a dispute resolution request) to the authority asking it to try to resolve a tenancy dispute in accordance with s 402 of the RTA Act.
The lessor or tenant under a residential tenancy agreement may apply under the RTA Act to a tribunal about an issue only if the applicant has first made a dispute resolution request about the issue in accordance with s 416 of the RTA Act. That section does not apply to urgent applications, which are defined in s 415 of the RTA Act. An application for compensation for abandonment under s 359 of the RTA Act is an urgent application. That section did not apply in this case, as there was no abandonment of the premises as found by the learned adjudicator, which has not been questioned on appeal.
The application in regards to Mr Chiang would have been an application under s 419 of the RTA Act for breach of the agreement. In this case, the breach would have been under clause 37 of the tenancy agreement, that is, the tenant must leave the premises as far as possible, in the same condition they were in at the start of the tenancy, fair wear and tear accepted, under s 188(4) of the RTA Act. An application under s 419 is not an urgent application, and therefore, Mr Novais was required to make a dispute resolution request, and there is no evidence that this occurred.
Although an application can be made after the end of the agreement in accordance with s 419(4)(a) of the RTA Act, in accordance with s 419(3) of the RTA Act the application must be made within 6 months after the lessor becomes aware of the breach. In this case, the tenancy ended on 23 march 2015 and there is evidence that a letter of demand was sent to Mr Chiang on 31 August 2015, so as at that date Mr Novais must have been aware of the breach. I note that a further demand was sent to Raine & Horne on 29 September 2015.
Even if the date of 29 September 2015 is used as the date from when to calculate when the application should have been made, then the application should have been made 6 months after that date which would have been 29 March 2016. The application in this case was made on 18 May 2016.[11]
[11]Appeal Book, page 1.
The learned adjudicator was then correct to say that there had been no conciliation and the application was well out of time. It is not necessary to discuss the other grounds of appeal as the failure to comply with the requirements of the RTA Act is fatal to any claim against Mr Chiang.
The learned adjudicator may have made an error as to whether a claim for breach of the tenancy could have been made against Mr Chiang. The fact that there had not been compliance with the requirement for conciliation and the application was out of time against him means that there is not a reasonable prospect that Mr Novais would obtain further substantive relief. Nor is there a need to correct any substantial error and the questions at issue here are not of general importance requiring further argument.
For these reasons, leave to appeal is refused in regard to Mr Chiang.
Leave to Appeal - Raine & Horne
The learned adjudicator made the following findings in regard to Raine & Horne:
a)The first general tenancy agreement nominated Top Level Trading Co Ltd as tenant. Whether that company was registered or not at the time was never made clear. It does seem clear, however, that Mr Chiang entered into that agreement on behalf of that company. The second general tenancy agreement nominated Top Level Pty Ltd as tenant. At the time that company was deregistered, but, once again, it seems clear that Mr Chiang entered into that agreement on behalf of that deregistered company. It was asserted that that failure to carry out an ASIC search at the time was unprofessional;[12]
b)Raine & Horne was given authority to manage the rental of the premises. That was as far as it went. Obligations imposed on Raine & Horne were about management of the property and did not contemplate a verification exercise as to the efficacy of registration of a corporate entity. Reference checks in respect of Mr Chiang were conducted at the outset. The Tribunal is satisfied that sufficient enquiries were made regarding the initial tenant Top Level Trading Co Ltd and Mr Chiang;[13]
c)How it came to be that the second tenancy nominated Top Level Pty Ltd as tenant was not made clear;[14]
d)As far as the assertion that at least 20 persons occupied the premises, there was no evidence placed before the Tribunal as to how that number was calculated. At best, it seems referrable to the observation of double bunks within the premises at the time of Mrs Novais’ inspection with Ms Ashton on 1 February 2014. What is clear is that Mrs Novais, according to her affidavit, took Ms Ashton’s advice regarding retention of the incumbent tenant, despite the number of occupiers exceeding that stated in the first tenancy agreement. Her decision to do so was based on Ms Ashton’s advice of supply of rental properties exceeding demand at the time. Mrs Novais acquiesced in the continuity of the tenancy at the time fully aware of the excessive number of persons residing in the premises, there was no evidence Ms Ashton’s advice was misleading or self-serving;[15]
e)As far as routine inspections during the course of the tenancy are concerned, the Tribunal is satisfied that a number of routine inspections did take place during the course of the tenancy;[16]
f)At the least, routine inspections took place on 1 February 2014, 25 February 2014, and 18 December 2014. Whilst Raine & Horne’s attention to the premises may not have been stellar, it was adequate enough. Routine inspections are in the nature of checks over a period of time to discern whether there is any obvious breach of an ongoing tenancy agreement e.g. anything that could be construed as obvious damage and not fair wear and tear. Routine inspections, because they take place whilst the premises are lived in, furnished and subject to day to day conditions would not, and mostly do not, identify the sorts of issues that might become apparent once a premises is vacant e.g. marks on walls behind pictures and indentations or scratches on polished floors under furniture or rugs. The Tribunal accepts that as at 18 December 2014, some three months prior to vacation, the condition of the premises was assessed visually as overwhelmingly satisfactory.[17]
g)It was asserted that some of the bond money was returned to Mr Chiang and that such was a breach of the Agent’s code of conduct. Some of the bond was utilised by Raine & Horne for, it appears, rent, cleaning and gardening before any portion was returned to Mr Chiang. Expenditure of the bond on these sorts of post-tenancy issues is normal enough. That would be within the usual purview of an agent’s authority to manage. How that constituted a failure to act honestly, fairly and professionally was not evident. If Raine & Horne returned a portion of the bond, or allowed a portion of the bond to be returned to Mr Chiang before all post-tenancy issues were identified and attended to, that no doubt would have been a mistake on Raine & Horne’s part, but only to the extent of the portion of the bond so disposed.[18]
h)It is trite to say that not all tenancy arrangements end on a happy note. The Tribunal is satisfied that here the agent Raine & Horne’s management of the premises was adequate during the course of the tenancies and that post-tenancy issues were, as they were discernible at the time, attended to in a timely manner shortly after vacation. If there were other issues that the agent failed to identify at the time that led to a portion of the bond being refunded, that was never quantified. Rather, what happened was a major claim for massive damages has erupted some five months later. In those circumstances, the Tribunal finds the agent Raine & Horne has no case to answer.[19]
[12]Reasons for decision, [18].
[13]Reasons for decision, para [19].
[14]Reasons for decision, para [20].
[15]Reasons for decision, para [21].
[16]Reasons for decision, para [22].
[17]Reasons for decision, para [23].
[18]Reasons for decision, para [24].
[19]Reasons for decision, para [28].
The grounds of appeal against the decision in respect of Raine & Horne are as follows:
a)In response to the decision that Raine & Horne had made ‘sufficient enquiries’ at the commencement of the tenancy in respect of the prospective tenant, Top Level Trading Co Ltd, we contend that legislation and case law will show that statutory duties of real estate agents extend to verification of prospective tenants. This includes in regards to performing company searches, in regards to prospective corporate tenants;
b)The adjudicator found there was insufficient evidence adduced by Mr Novais to support the fact that 20 persons or more occupied the premises at one time. This was in breach of the express terms of the tenancy agreement. Witness statements have been obtained from neighbours attesting to the fact this was the case;
c)The decision turned on the supposed acquiescence of Ms Novais to the continuity of the tenancy in reliance of Ms Ashton and Raine & Horne’s representative advice of the state of the rental market at the time of discovery that excessive persons were residing at the premises. And, that there was nothing misleading about this advice. Ms Novais did not acquiesce to accepting the brunt of costs associated with the damage done to the premises as a result of persons, not listed on the tenancy agreement, living at the premises. The advice was misleading as Raine & Horne’s duty involves overseeing the best interests of the landlord and the property for the reasons set out;
d)The number of routine inspections that took place during the course of the tenancy by Raine & Horne was found to be satisfactory. However, the RTA Act specifically requires that an entry condition report and exit condition report need to be undertaken. None of these duties were undertaken by Raine & Horne;
e)The key basis for the learned adjudicator’s finding was that on 18 December 2014, ‘some three months prior to vacating of the premises’, Raine & Horne had claimed the premises were in an overall satisfactory condition. The inference is both biased and illogical. An inspection three months prior to the end of the tenancy cannot be representational of the state of the premises at the very end of the tenancy. It cannot justify an omission to undertake an exit condition report. Nor can it be relied upon as evidence to prove that because the premises was in good condition three months before the end of the tenancy that it therefore must be left undamaged three months later;
f)Contrary to the conclusion that there was no rent in arrears or abandonment of the premises at the end of the tenancy, part of the rent payment had to be claimed from the bond amount; and
g)In response to the decision that Mr Novais’ delay in raising concerns of the damage (five months after the tenant vacated) deprives it of any legal recourse or basis for compensation, it is our understanding that there is no legal authority depriving Mr Novais of recourse to action on this basis.
Mr Kim in his submissions further elucidated the errors of fact and law relevantly as follows:
Error of law
a)Failing to outline the objections of the objector;
b)Failing to decide the case without referring to the relevant legislations such as Corporations Act 2001 (the tenant’s failure to undertake any due diligence;
c)Failing to properly apply the Property Agents and Motor Dealers Act 2000 (Qld) and the Regulations, in particular, the issues relating to the importance of the agent’s duty to conduct routine inspection and completing exit condition reports;
d)Failure to properly apply the case law submitted in respect of the issue of ‘wear and tear’;[20] and
e)Failing to apply other legal principles.
Errors of fact
f)Failing to take into account the facts constituting breach of tenancy Agreement. This goes to the breach of the maximum of 4 residents where the evidence was that there were 20 residents. That Mr Novais was the lessor and Raine & Horne should have checked with him. Raine & Horne did not amend the Tenancy Agreement to reflect this change. The Tribunal member in failing to deem this as negligent on the part of Raine & Horne committed an error of law.
g)Overlooked the negligence of Raine & Horne in not ensuring that the prospective tenant was a properly constituted company. This relates to failure of Raine & Horne to provide executed entry and exit reports.
h)Overlooked the failure of Raine & Horne to discharge its contractual obligations to carry out quarterly inspections of the property in the relevant period.
i)Failure to take into account the seriousness of damages that were done to the property by the respondent and the photos that were submitted to the Tribunal, and the Tribunal’s failure to consider those photos and tax invoices rendered.
[20]Griffin v Gini 2011 QCATA 325.
Discussion
I agree with Mr Kim’s submissions in regards to verification of tenants. I consider that where a company is proposed as a tenant that it should be part of the duties of the agent to ensure that the company is registered. Which, as mentioned by Mr Kim, entails a simple ASIC search to determine registration and ascertaining who the directors of the company are so that it can be determined who is able to sign any tenancy agreement on behalf of the company. This is no different to verifying the identity of an individual proposed tenant by obtaining a copy of their drivers licence or passport. Legal relations are being created between the landlord and tenant and clearly, the landlord needs to be assured that the entity they are contracting with is legally able to perform the obligations set out in the tenancy agreement.
Raine & Horne submitted that the tenant had been disclosed to the owner and, at the original hearing, they stated they had completed all of the usual tenant checks which did not include a company search.
I consider that the learned adjudicator was in error when he found that the obligations on Raine & Horne did not contemplate a verification exercise as to the efficacy of the registration of a corporate entity.
In regards to entry and exit reports it is submitted in the appeal that it was Raine & Horne’s duty to perform these duties. In accordance with clause 5 of the standard terms of the general tenancy agreement and s 65 of the RTA Act the lessor or the lessor’s agents are required to prepare and sign and give to the tenant an entry condition report. Section 65 of the RTA Act provides a maximum penalty of 20 units if this requirement is not complied with. I note that clause 5 of the standard terms of the general tenancy agreement states a well completed condition report can be very important to help the parties if there is a dispute about the condition of the premises when the tenancy started.[21]
[21]Appeal book, page 32.
Clause 40 of the standard terms of the general tenancy agreement and
s 66 of the RTA Act make it clear that it is for the tenant to prepare an exit condition report.
An unsigned entry condition report was provided with the application but not included with the appeal book. An email from Ms Donovan, of Raine & Horne, to Mr Chiang dated 27 March 2017 states that we have conducted an exit report at the property and sets out issues to be attended to enable the property to be brought up to re-letting standard.[22] The learned adjudicator did note these matters in his reasons,[23] but made no formal findings about whether the duties in regard to the entry and exit condition were performed.
[22]Appeal book, page 262.
[23]Reasons for decision, [14].
It was submitted by Mr Kim at the initial hearing that Raine & Horne failed to provide an executed entry report, and that it failed to discharge its duties pursuant to section 8 of the Code. While there was an unsigned entry report, the tenancy agreement and the RTA Act requires that the tenant be provided with a signed entry report and there was no evidence to confirm this occurred.
The agent conducted an exit inspection and advised the tenant of the areas of concern but was not under a duty to provide the exit report
The learned adjudicator therefore should have found that Raine & Horne had not complied with the requirement in regards to the entry report, and thus deprived Mr Novais of evidence as to the condition of the premises at the time of the commencement of the tenancy. This was an error on the part of the learned adjudicator. The learned adjudicator could also have found that Raine & Horne had not been required to provide the exit report as that was clearly a responsibility of the tenant. This would have clarified the situation as to the duty of Raine & Horne, and should have been set out in the reasons.
Mr Kim has submitted further statements of evidence in support of the contention that 20 or more persons occupied the premises. The learned adjudicator as noted above had found that there was insufficient evidence in that regard. The Tribunal has discretion to accept additional evidence when deciding an appeal on questions of mixed law and fact.[24] I will assume for the purposes of considering leave to appeal that the Tribunal would accept this further evidence. It is by way of statements from neighbours residing at adjoining properties to the premises.[25]
[24]QCAT Act s 147(2).
[25]Appeal book, pages 154 and 155.
One of the statements says the number of tenants at any one time would be at least 12 or more. The other statement estimates the number of tenants was between 12 – 16 at one time. This is clearly in breach of the tenancy agreement at item 15 which lists the number of persons allowed to reside at the premises as 4.[26] Clause 23 of the standard terms of the general tenancy agreement state that no more than the number of persons stated in this agreement for item 15 may reside at the premises.[27] So, therefore, there is some evidence that greater than four persons have resided at the premises in breach of the tenancy agreement.
[26]Appeal book, page 31.
[27]Appeal book, page 34.
It was asserted in Mr Kim’s submission at the initial hearing that Raine & Horne had knowledge of the breach in regard to the number of tenants and failed to make it known to Mr Novais. Mrs Novais’ affidavit though makes it clear that she became aware of the number of tenants during an inspection of the premises in February 2014,[28] and that she convinced her husband not to evict the tenants on advice from the agent that: ‘I think it is in your best interest to be nice to them. The rental market is not great at the moment. It will be difficult to find a new tenant.’
[28]Appeal book, page 259.
This is reflected in the learned adjudicator’s reasons for decision as mentioned above. While there may not have been sufficient evidence as to the exact number of tenants, the learned adjudicator stated that ‘Mrs Novais acquiesced in the continuity of the tenancy at the time fully aware of the excessive number of persons residing in the premises.’ So the learned adjudicator did acknowledge that the number of tenants was in excess of that allowed under the tenancy agreement.
The learned adjudicator also found that there was no evidence that Ms Ashton’s advice was misleading or self-serving. It is submitted in the grounds of appeal that the advice was misleading for various reasons none of which were raised in the original application. The learned adjudicator cannot be in error because a certain point was not raised at the initial hearing, and there is therefore no error in regard to this finding.
Mr Kim has raised in the appeal the issue about the fact that the second tenancy agreement showed that there were 4 tenants while Raine & Horne knew that there were 20 tenants and that this shows negligence on the part of Raine & Horne, as the tenancy agreement should have reflected the number of tenants. Also, that instructions should have been obtained from Mr Novais as he was the lessor. These matters were not raised either in written submissions or orally at the original hearing and therefore cannot be a ground for error on the part of the learned adjudicator.
I note that the issues about conciliation and the application being out of time do not apply to Raine & Horne as the application in regard to Raine & Horne is not one under the RTA Act.
The last ground of appeal is the failure to apply the case law in regard to fair wear and tear as set out in the case of Griffin v Gini, and the failure to consider the photos and tax invoices in regard to the damage which were submitted on behalf of Mr Novais. These matters were canvassed in the original submissions by both parties, and photos and invoices were included with the application.[29] There were also oral submissions made about the damage at the hearing.[30]
[29]Appeal Book, pp. 186-231.
[30]Transcript, pages 1-35, 1-45.
The learned adjudicator did not canvas the damages in his reasons in terms of whether or not they constituted fair wear and tear. He was satisfied that Raine & Horne’s management of the property was adequate and found that they had no case to answer. Which meant that he did not consider that he was required to look at the quantum of the claim as he found that Raine & Horne were not in breach.
Having regard to my consideration of whether or not Raine & Horne were in breach of their duties it is clear that there has been some breaches. They should have properly identified the tenant and they should have ensured that a signed entry condition report was provided to the tenant. This would mean that Raine & Horne may have some liability in respect of their breaches of duties owed to Mr Novais.
Does this mean that there is an error which would require leave to appeal to be granted? Leave should be granted if these errors would result in Mr Novais obtaining substantial relief or to correct substantial injustice.
The submissions made on behalf of Mr Novais are that because Raine & Horne was in breach of its duties towards Mr Novais, Raine & Horne must be liable for the damage caused to the premises. This is only an assertion and it would require proof that the actions of Raine & Horne have resulted in the damage being caused or have resulted in Mr Novais not being able to obtain relief otherwise.
Raine & Horne has clearly not caused the damage itself and can only be liable in regards to any damage to the premises if by its default Mr Novais has not been able to obtain relief against the tenant, Mr Chiang.
Mr Novais had, by his application of 18 May 2016, sought to claim compensation against Mr Chiang on the basis that he was the true tenant and liable for the damages. I found that the learned adjudicator was probably in error in regard to whether or not Mr Chiang was the tenant but because there had not been any conciliation process and the application was out of time as required by the RTA Act leave to appeal was refused.
While Raine & Horne may have been in breach of its duties the reason why relief was not available against the tenant was because the statutory process required to bring an application against the tenant was not complied with. The breaches of Raine & Horne have not caused the damage or resulted in Mr Novais not being able to make a claim in respect of the damage.
While there are errors in the learned adjudicator’s decision there is no prospect of Mr Novais obtaining further substantive relief, nor a substantial injustice being corrected. It is not the breaches by Raine & Horne which result in Mr Novais not being able to obtain his damages from them. They did not cause the damage originally and those breaches did not result in the failure of the claim against Mr Chiang. The claim against Mr Chiang failed; it did not comply with the RTA Act, and it was not the breaches by Raine & Horne which resulted in any failure of that claim.
Leave to appeal is refused in respect of Raine & Horne.
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