Park v Saechun - [2025] QCATA 118

QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL

CITATION:

Park v Saechun [2025] QCATA 118

PARTIES:

SONG TAE PARK

(applicant/appellant)

v

MANEE SAECHUN

(RESPONDENT)

APPLICATION NO/S:

APL159-24

ORIGINATING APPLICATION NO/S:

MCDO105-24

MATTER TYPE:

Appeals

DELIVERED ON:

11 November 2025

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member Richard Oliver

ORDERS:

1.     Leave to appeal is granted.

2.     The appeal is allowed.

3.     Order 1 of the decision of the Tribunal dated 9 May 2024

(a)     That the applicant pay the respondent $16,479.50 is set aside, and instead it is ordered that;

(b)     The applicant must pay the respondent the sum of $4,129.50.

CATCHWORDS:

APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – RESIDENTIAL TENANCY– RESTITUTION AND UNJUST ENRICHMENT – UNLAWFUL USE OF PREMISES – PERFORMANCE – BREACH – ASSESSMENT OF DAMAGES – where applicant let the lower level of a two storey house to the respondent – where parties entered into a residential tenancy agreement – where applicant permitted the respondent to build a separate room in the lower level of the tenancy to conduct a massage business – where letting of the lower level for occupancy not permitted by the building classification – where legal impediment to occupancy – where tenancy agreement frustrated – where applicant terminated the tenancy agreement – where applicant ordered to refund all rent, cost of building the new room and bond – whether payment of rent unjust enrichment in the hands of the tenant – whether error of law – whether findings of fact open on the evidence

Building Act1975 (Qld), s 114

Queensland Civil and Administrative Tribunal Act2009 (Qld), s 142(3)(a)(i)

Residential Tenancies and Rooming Accommodation Act2008 (Qld), s 181

Allen v Queensland Building and Construction Commission [2023] QCATA 66

Equuscorp Pty Ltd v Haxton (2012) 246 CLR 498
Mann v Paterson Constructions Pty Ltd [2019] HCA 32
Robinson Helicopter Company Inc v McDermott [2016] HCA 22

Terera & Anor v Clifford [2017] QCA 181

APPEARANCES & REPRESENTATION:

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act2009 (Qld)

REASONS FOR DECISION

This appeal arises from a tenancy dispute between the applicant as the lessor’s agent[1] of rental premises at Southport, and the respondent tenant. On 16 July 2023 the applicant and the respondent entered into a General Tenancy Agreement for the tenant to occupy the lower level (downstairs) of a two storey house from 22 July 2023 for 12 months. The initial rental was supposed to be $500/wk, but was increased to $650/wk when the applicant agreed that the tenant could conduct a massage business from the rental premises.
[1]The actual owner of the property was the applicant’s son.
To facilitate the running of the massage business the tenant, with the permission of the applicant, carried out structural improvements by building a separate room for massage treatment in the lower level. This also included plastering and painting of the walls. The respondent spent $2,450.00 on these improvements.
After occupying the lower level for 19 weeks, the tenant decided to move out to other premises. The reason being that she wanted to register her business but was told by Mr Park not to do that or he (or his son) would get into trouble if the Council came to inspect the premises. This statement is supported by a Notice to Show Cause issued by the Gold Coast City Council on 10 April 2024 and obtained by the respondent and submitted in evidence at the hearing. The Notice records that the house was not classified as a duel occupancy dwelling. The Notice informed the owner that after a physical inspection and review of records that, under the Building Code of Australia the classification of the building was only approved as a class 1a building. By using it as a second occupancy it was a class 2 building and no change of classification by the Council had been given. The Notice went onto refer to s 114 of the Building Act 1975 (Qld) which provided that:
No occupation or use of particular buildings without certificate of classification
(1) This section applies if—
(a)the building the subject of a building development approval is not—
(i)a single detached class 1a building; or
(ii)a class 10 building or structure; and
(b)a certificate of occupancy has not been given for the building.
(2) A person must not occupy or use the building unless the person has a reasonable excuse.
As it transpired the respondent’s occupancy of the lower level, particularly operating a business from there, was unlawful which is consistent with what she was told by the applicant about registering the business. She vacated the premises on or about 1 December 2023. She did not remove the room but did clean and reinstate the rental area to as it was at the time of the commencement of the tenancy. She had also paid two weeks rent in advance at that time. There were text discussions about a break-lease fee but did not pay any money to the applicant for breaking the tenancy agreement.
After the respondent vacated the premises, on 5 February 2024 the applicant commenced a proceeding in the minor civil disputes (residential tenancy) jurisdiction claiming a break lease fee, outstanding rent, and repairs in the sum of $2,200.00.
In response the respondent filed a separate minor civil dispute – counter application claiming:
(a)A refund of all rent paid of $12,35.00;
(b)A refund of additional rent paid in advance of $1,300.00;
(c)Cost of the improvements of $2,450.00, and;
(d)The bond of $2,600.00.
At the hearing of both applications there was no dispute that the occupancy of the lower level as a separate residence, in the absence of a certificate of classification, was unlawful. The adjudicator relied upon s 181 of the Residential Tenancies and Rooming Accommodation Act2008 (Qld) (“RTRA”) to decide that the applicant had breached the tenancy agreement. That section provides that:
(1) The lessor must ensure there is no legal impediment to occupation of the premises by the tenant as a residence for the term of the tenancy.
(2) Subsection (1) applies only to legal impediments the lessor knew about, or ought reasonably to have known about, when entering into the agreement.
The adjudicator made a finding of fact that the applicant knew, or ought to have known, about the legal impediment at the time of letting the lower level to the applicant. On the basis of a finding that the unlawful occupancy was a legal impediment, the adjudicator ordered that the applicant repay to the respondent all of the rent, cost of improvements and the bond sum of $16,100.00 plus the filing fee of $379.50. Also that the Residential Tenancy Authority pay the bond of $2,600.00 to the respondent. The applicant’s claim was dismissed.
On 6 June 2024 the applicant filed an application for leave to appeal or appeal. Because this is an appeal from a decision in the minor civil disputes jurisdiction leave to appeal is required under s 142(3)(a)(i) of the Queensland Civil and Administrative Tribunal Act2009 (Qld) is necessary. Leave to appeal (or permission) will usually only be granted where there is a reasonable argument the decision was attended by error, or that an appeal is necessary to correct any substantial injustice caused by the error.[2] It is not a rehearing of the proceeding below.
[2]Terera & Anor v Clifford [2017] QCA 181.
As Judicial Member McGill SC said in Allen v Queensland Building and Construction Commission:[3]
As a general proposition, when leave to appeal to the Appeal Tribunal is required, it will be granted only where there is a reasonable argument that the decision was attended by error and an appeal is necessary to correct a substantial injustice caused by that error, or where the appeal raises a question of general importance upon which further argument and a decision of the Appeal Tribunal would be to the public advantage. An Appeal Tribunal would not usually disturb findings of fact on appeal if the evidence is capable of supporting the finding, and it is not contrary to compelling interferences. If leave to appeal is granted, the appeal is by way of rehearing so far as it is against a decision on a question of fact, or of mixed fact and law: the QCAT Act s 147. Otherwise it is an appeal which will only correct an error of law: the QCAT Act s 146.
[3][2023] QCATA 66, [2].
The grounds of appeal are not specific in identifying the errors in the original decision. Given that many appellants in minor civil disputes are self-represented, considerable latitude is given in determining if there is a basis to interfere with the primary decision. It is not necessarily confined to the application itself but also other submissions or contentions relied upon by a party. Here the essence of the complaint is that the adjudicator failed to make findings in favour of the applicant. This included:
(a)The respondent did not have permission to make the improvement/massage room;
(b)She was aware of the reduced ceiling height;
(c)She utilised the room for her massage business;
(d)She failed to remove the room/improvement and it is now not useful to the applicant;
(e)The respondent illegally created the improvement.
Irrespective of the grounds of appeal which I will address below, this application raises questions of law about the basis upon which the adjudicator formulated and allowed the damages claimed in the respondent’s application. He proceeded on the basis that the tenancy agreement was an illegal contract, because of the unlawful use of the lower level of the house.
As for the grounds of appeal the adjudicator made specific findings of fact which address each of the grounds. In his reasons he found:
(a)Because of firstly, the applicant’s comments about registering the business; and secondly, the Notice to Show Cause issued by the Gold Coast City Council, the applicant knew that there was an impediment to renting the lower level as a separate tenancy. Alternatively, as agent for his son who, it seems, owned the property, he ought to have known of the legal impediment.
(b)The applicant permitted the respondent to make the improvements by the building in of a new room. He accepted in his evidence he knew that the applicant wanted to operate the massage business in the tenancy and charged the rent accordingly. He also knew that after the applicant and the respondent could not find suitable curtaining material either at Bunnings or Spotlight to isolate the massage area, she would build the room at her own costs. This is also supported by the fact that he did the painting for the new room, and was paid for it by the respondent.[4]
(c)The rent was increased from the advertised rent of $500/wk to $650/wk because the applicant wanted to operate the business.
(d)When the respondent left the tenancy, he did not want the premises reinstated to the original state. Despite what the applicant says, after the respondent left he advertised the downstairs area as a two-bedroom tenancy. This is supported by text messages.
(e)The applicant has been unjustly enriched by the improvements.
[4]Transcript page 24 line 10.
These findings of fact were clearly open on the evidence, much of it put on by the applicant. No basis has been established by the applicant that there is any error in the adjudicator’s findings. As the High Court said in Robinson Helicopter Company Inc v McDermott [2016] HCA 22 at [43]:
… a court of appeal should not interfere with a judge’s findings of fact unless they are demonstrated to be wrong by ‘incontrovertible facts or uncontested testimony’, or they are ‘glaringly improbable’ or ‘contrary to compelling inferences’.
On the grounds of appeal articulated in the application, leave to appeal would be refused. However, there is another more fundamental problem with the decision below and that is the consequences of the finding that the occupation of the lower level was unlawful.
The reason the respondent terminated the tenancy agreement was not because of what was contained in the Notice to Show Cause, but the information coming from the applicant that she could not register the business, or a business name, because she could not lawfully carry on the business. This evidence supports the inference that the applicant knew or ought to have known of the illegality of renting the lower level as a separate residence. The inference is reinforced by the content of the Notice to Show Cause.
The adjudicator was correct in concluding that this was a legal impediment under s 181 of the RTRA, but the impediment only became apparent to the respondent after about the 19 week period. Given this impediment, the tenancy agreement was frustrated, and voidable at the option of the tenant, because clearly it was unlawful for the respondent to occupy the lower level pursuant to it, and as it turned out, to carry on the business for which she was paying an increased rent.
That being the case the adjudicator was obliged to then consider what remedy was available to the respondent when she wanted to vacate the premises. Similarly, given the awareness of the applicant that the lower level could not be occupied legally, what remedy, if any, was available to the applicant when the respondent terminated or “broke the agreement”.
The adjudicator did not provide any reasons or principle of law to award the damages sought by the respondent in her application other than to refer s 181 of the RTRA. He said:
I am satisfied that Ms Saechun would not have taken the lease and therefore would not have done the improvement or renovation adding the massage room, if she had known that the property could not be used for separate occupation and that she did not know that when she entered into the lease.[5]
[5]Transcript page 25 line 40.
That is no doubt a correct statement and having regard to the evidence presented at the hearing, in particular the fact the respondent wanted to register the business, I agree with it. However the s 181 impediment, although always there, did not have any bearing on the tenancy arrangement until November 2023. Until that time, the state of affairs between the parties permitted the respondent to construct the improvements, carry on her massage business and live in the tenancy. Irrespective of the classification of the building for the purposes of occupation, the respondent received what she bargained for.
Because of the illegality of letting the lower section contrary to s 114 of the Building Act 1975 (Qld) what in effect the respondent seeks is a claim in restitution of the rent received by the applicant for the unlawful conduct. Put another way, she says the applicant was unjustly enriched and she wants her money back.
Clearly, because of the legal impediment, the tenancy agreement is unenforceable by the applicant. However that does not mean the respondent is entitled to restitution on the basis for the illegality insofar as it relates to the rent. In Equuscorp Pty Ltd v Haxton[6] (“Equuscorp”) the High Court provided some general guidance as to when a claim in restitution might be made when parties enter into a contract, the performance of which is unlawful:
The outcome of a restitutionary claim for benefits received under a contract which is unenforceable for illegality, will depend upon whether it would be unjust for the recipient of a benefit under the contract to retain that benefit. There is no-one-size-fits-all answer to the question of recoverability. The central policy considerations at stake…is the coherence of the law. In that context it will be relevant that the statutory purpose is protective of a class of persons from whom the claimant seeks recovery.
[6](2012) 246 CLR 498, [34]; also Mann v Paterson Constructions Pty Ltd [2019] HCA 32.
Here, the statute does not address a particular class of persons but it provides a general prohibition on the use or premises that is inconsistent with the appropriate building classification. The respondent did not have specific knowledge of the classification or the requirements of the Council when she terminated the tenancy agreement, but she did know from the invoice for the work carried out to build the new room that the ceiling of the room was not of legal height for habitation. It is noted on the invoice. Furthermore, she did not seek to terminate the agreement because of any known unlawful use or illegality, other than the applicant’s response to registering the business. The specific unlawful use because of the classification only became known to her after the commencement of her minor civil dispute proceeding.
Although the termination of the tenancy agreement by the respondent was lawful given the legal impediment, she was not entitled to a refund of the rent paid. That is because, adopting what was said in Equuscorp it would not be unjust for the “recipient of a benefit [the applicant] under the contract to retain that benefit”. However it would be unjust for her to receive both the rent and the benefit of the use of the lower level rent free which is the effect of the adjudicator’s order.
As for the costs the respondent incurred because of the improvements that is a different matter. The applicant now has the benefit of that extra room pursuant to an oral agreement reached between the parties, in circumstances where the applicant knew it was unlawful to let the lower level as a separate residence. There is no doubt he has taken advantage of the improvement because he advertised the lower level as a two bedroom tenancy. This does fall within what might be regarded as unjust enrichment. He knew of and approved its construction. Obviously he also knew the respondent paid for it to be built, and even paid him to paint it. Because of the unlawful use the respondent can never get the benefit of her expense on building the room.
The respondent’s claim for restitution is based on the applicant’s unjust enrichment in circumstances where s 181 of the RTRA applied, and gave right to the respondent to end the tenancy agreement. Even though she was not aware of the Notice to Show Cause, she was aware that she could not register her business because of some “illegality”.
Applying the same statement above from Equuscorp with respect to the improvement, it would be unjust for the applicant to retain that benefit as a consequence of the legal impediment under s 181 of the RTRA for which he was responsible.
As for the bond, given that the application of s 181 of the RTRA, clearly the respondent was entitled to the bond held by the Residential Tenancy Authority.
Conclusion
Although the applicant has not demonstrated a basis of a grant of leave to appeal by reference to the grounds of appeal, leave must be granted because of the error of law in ordering that the respondent be refunded all of the rent paid during her occupation of the premises. She remains entitled to the extra two weeks rent paid, $1,300.00; cost of the new room, $1,800.00; painting, $650.00 and the refund of the bond. As the bond has been paid out to the respondent I do not propose to vary order 2.
The legal impediment gave the respondent a right to elect to terminate the tenancy agreement but did not entitle the respondent to claim for a refund of rent paid. I propose to set aside the order of the Tribunal that the applicant pay the respondent $16,479.50. Instead I propose to order the applicant pay the respondent the amount claimed, less the rent of $12,350. To be clear the applicant’s only entitlement pursuant to her claim is $4,129.50 which includes the filing fee of $379.50. I do not know if money has been paid by the applicant, if it has it will be up the applicant to recover any money paid to the respondent in excess of $4,129.50.

I therefor propose to grant leave to appeal, allow the appeal and set aside the order of the adjudicator and make the following order:
(a)That paragraph 1 of the order of the Tribunal dated 9 May 2024 is set aside.
(b)The applicant pay the respondent the sum of $4,129.50.