Shand v Paul Flynn Real Estate
[2024] QCATA 91
•27 August 2024
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Shand v Paul Flynn Real Estate & Ors [2024] QCATA 91
PARTIES:
JACOB ALEXANDER SHAND (applicant/appellant)
v
PAUL FLYNN REAL ESTATE (first respondent)
AND
RODNEY BRUCE HARRIS
(second respondent)
AND
BARBARA JOYCE LONGFORD
(third respondent)
APPLICATION NO/S:
APL359-22
ORIGINATING APPLICATION NO/S:
MCDT1168/22 (Brisbane)
MATTER TYPE:
Appeals
HEARING DATE:
15 August 2024
DELIVERED ON:
27 August 2024
HEARD AT:
Brisbane
DECISION OF:
A/Senior Member Lember
ORDERS:
1. Leave to appeal the decision made in MCDT1168/22 on 28 November 2022 is granted.
2. Appeal allowed.
3. The decision made in MCDT1168/22 on 28 November 2022 is set aside and substituted for a decision that the application for a minor civil dispute – residential tenancy dispute filed 6 May 2022 is dismissed.
CATCHWORDS:
APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where lessor’s claim for compensation was dismissed due to non-compliance with dispute resolution requirements – where evidence of compliance was filed with the application – where leave to appeal is granted – rehearing of application for compensation at end of tenancy – where no entry condition evidence available – application dismissed for want of evidence
Agents Financial Administration Act 2014 (Qld) s 22
Property Occupations Act 2014 (Qld) s 102
Residential Tenancies and Rooming Accommodation Act 2008 Qld s 83, s 188, s 210, s 362, s 416, s 419, s 420Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 32, s 93, s 100, s143, s 147
Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1
Cachia v Grech [2009] NSWCA 232
Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388
Griffin v Gini [2011] QCATA 325
McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41
APPEARANCES & REPRESENTATION:
Applicant:
By his father, Mr D Shand
First Respondent:
Second Respondent:
Third Respondent:
No appearance
Self-represented
Self-represented
REASONS FOR DECISION
What is this application about?
Mr Shand has applied for leave to appeal,[1] and, if successful, to appeal against a decision of the Tribunal below to dismiss his claim for compensation as lessor upon the ending of the second and third respondents’ tenancy (the decision). Mr Shand became the owner of the tenanted property on 21 January 2022, and the tenancy ended seven days later. A real estate agency conducted by the first respondent, Mr Flynn, managed the property for its prior owners, but not for Mr Shand, and had no role in the sale transaction pursuant to which Mr Shand purchased the property.
[1]Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act), s 143(3).
With leave, Mr Shand was represented in the hearing by his father, Dale Shand, who appeared in person. Mr Harris and Ms Longford also appeared in person. Mr Flynn did not appear and s 93 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act) was applied to proceed his absence.
Leave to appeal
In determining whether to grant leave to appeal, the Appeal Tribunal must be satisfied that, relevantly:
(a)there is a reasonably arguable case of error in the primary decision;[2]
(b)there is a reasonable prospect that the appellant will obtain substantive relief;[3] and
(c)leave is needed to correct a substantial injustice caused by the error;[4] or
(d)there is a question of general importance upon which further argument, and a decision of the Appeal Tribunal, would be to the public advantage.[5]
[2]QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41 (QUYD).
[3]Cachia v Grech [2009] NSWCA 232, 2.
[4]QUYD.
[5]Glenwood Properties Pty Ltd v Delmoss Pty Ltd [1986] 2 Qd R 388, 389; McIver Bulk Liquid Haulage Pty Ltd v Fruehauf Australia Pty Ltd [1989] 2 Qd R 577, 577, 580.
The decision to dismiss was worded as follows:
The Application is dismissed for want of jurisdiction, because s 416 of the Residential Tenancies and Rooming Accommodation Act 2008 has not been complied with.
Section 416 of the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRAA) requires that dispute resolution procedures be completed prior to an application being made to the Tribunal and is typically evidenced by a Notice of Unresolved Dispute (NURD) issued by the Residential Tenancies Authority.
Put simply, Mr Shand says that he had established compliance with s 416 of the RTRAA because he had filed a NURD dated 6 May 2022 at the time he filed his application. Perusing the MCDT1168/22 file proves this to be true: and, for reasons that are not apparent from the file or the hearing transcript, the filed NURD was:
(a)overlooked by the learned Adjudicator, and
(b)not referred to by the parties in the hearing.
An error of fact therefore occurred when the learned Adjudicator found that the NURD was not filed, and did not exist, when in fact it did. It was an error for law for the learned Adjudicator to then make their decision to dismiss on the ground of non-compliance with s 416 without regard to that filed evidence.
The erred dismissal meant that Mr Shand’s claims have never been heard on their merits, which amounts to a substantial injustice to him. In those circumstances, leave is to appeal is granted.
Appeal
Under s 147 of the QCAT Act, an appeal that is decided on a question of mixed law and fact must be decided by way of rehearing, with or without the hearing of additional evidence as decided by the Appeal Tribunal. In deciding the appeal, the Tribunal may:
(a)confirm or amend the decision; or
(b)set aside the decision and substitute its own decision; or
(c)set aside the decision and return the matter to the tribunal or other entity who made the decision for reconsideration.
The decision to dismiss which expressly refers to non-compliance with s 416 was made in error. The appeal is allowed, and the erred decision is set aside. A rehearing of the application in a residential tenancy dispute follows.
The residential tenancy dispute
It is in evidence, and not contentious that:
(a)The second and third respondents (tenants) first entered into a General Tenancy Agreement (GTA) for the property on 8 January 2016 and occupied the property with their family until 28 January 2022.
(b)Logan City Real Estate Pt Ltd as trustee for the Logan City Real Estate Trust trading as Paul Flynn Property Management[6] (Flynn PM) commenced managing the tenants in the property on 1 August 2019 and ceased in that role on 21 January 2022 when Mr Shand settled his purchase of the property. Mr Flynn did not conduct that business in an individual capacity.
[6]Business Name/ASIC extract dated 20 December 2022.
(c)Mr Shand signed a contract to purchase the property from Mr and Ms Palmer on 15 December 2021. Ray White Springfield were the appointed selling agents. A complete copy of the contract was not filed but solicitors’ correspondence suggests that it was not a contract for vacant possession and that the sale was made subject to the tenancy.[7]
[7]Letter by AVA Solicitors to ZTP Legal dated 11 January 2022.
(d)Nonetheless, Mr Shand understood that he would be taking vacant possession of the property upon settlement because the tenants had been a notice to leave the property with a handover date of 10 January 2022.
(e)However, once Mr Shand went unconditional on his purchase, the notice to leave was withdrawn by the then current lessor, such that the tenants did not vacate by the 21 January 2022 settlement date. Mr Shand says he was not consulted about this, and it did not suit him, as his intention was to lease the property to his parents after settlement. As such, the withdrawal of the notice to leave, without his consent was likely a breach of the seller’s contractual obligations to Mr Shand, an issue outside the scope of these proceedings.
(f)Mr Shand engaged a builder to inspect the property. The report by Mr Prestridge dated 19 December 2021 is in evidence and includes photographs of the property with the following observations:
(i) No evidence of major defects was found.
(ii) Some evidence of minor defects was found, described as “normally occurring wear and tear for a dwelling of this age and use as a rental property”[8] described as:
[8]Page 16 of the Report dated 19 December 2021.
A.Moisture damage to ceiling and bulkhead in ensuite.
B.UV damage to toilet cistern in ensuite.
C.Crack in floor at master bedroom doorway.
D.Minor damage to wall sheeting throughout.
E.Crack in hallway ceiling.
F.Door catchers requiring replacement.
G.Moisture damage to base of vanity doors and drawers.
H.Linen cupboards requiring repair because they don’t roll freely.
I.Chips out of the kitchen bench.
(g)Employees of Ray White Springfield revealed statements said to have been made to them by Mr Shand during or after the building inspection took place, that he intended to pursue the tenants’ bond to apply to works needed to rectify the condition of the property. If true, the revelation of these discussions was inappropriate, but they were later retracted and apologised for, and, in any event, nothing turns on it.
(h)The tenants gave a Notice of Intention to Leave on 12 January 2022, with a handover date of 28 January 2022.
(i)Flynn PM declined to manage the property for the seven-day tenancy post-settlement and Mr Shand did not appoint another agent for that period. He did, however, appoint Ms Longford of Longford Property Management to liaise with the tenants for a handover of the property and to conduct an exit condition inspection, which did occur.
(j)Against Mr Shand’s wishes, the tenants’ bond was released to them by the RTA. It is not clear how that occurred, but nothing turns on the issue.
The application for a minor civil dispute – residential tenancy dispute (MCDT1168-22) sought orders that Mr Harris and Ms Longford, and/or Mr Flynn pay:
(a)$385.00 for rent for the period 22 January 2022 to 28 January 2022,
(b)$400.00 for costs to change locks,
(c)$300.00 for exit cleaning,
(d)$65.80 for power and water usage,
(e)$1,500.00 to repair damages, and
(f)$200.00 costs (the filing fee).
Mr Harris and Ms Longford disputed the claims and sought that the application against them be dismissed. Mr Flynn was non-responsive to the claims.
The legislative framework – the RTRAA
At the time of the hearing, the significant residential tenancy reforms that commenced on 1 October 2022 were not in effect. Accordingly, all references to the RTRAA herein are to the prior reprint unless otherwise specified.
Rent
Rent is payable under the terms of the tenancy agreement and otherwise in accordance with s 83 of the RTRAA. The standard terms of most agreements provide for rent to be paid in advance.
Keys and locks
A lessor is required by s 210 of the RTRAA to supply locks to the premises and keys to those locks. Tenants are typically required by the standard terms of their tenancy agreements to return keys when the tenancy ends.
Tenants’ cleaning and repair obligations when a tenancy ends
At the end of the tenancy, tenants 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 excepted.[9]
[9]Clause 37 of the standard term tenancy agreement corresponding to s 188(4) of the RTRAA.
In Griffin v Gini [2011] QCATA 325 Judge Fleur Kingham, then Deputy President said:
In general, the ordinary meaning of the phrase is concerned with the consequences of ordinary, not extraordinary damage (JSM Management Pty Ltd v QBE Insurance (Australia) Ltd [2011] VSC 339, [36]). 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 (Taylor v Webb [1937] 2 KB 283, 302).
Compensation for breach
Claims for compensation arising from a breach of the RTRAA or a tenancy agreement are made under s 419 of the RTRAA. Under s 420, the tribunal may make an order for the payment of money or an order for compensation on an application about a breach.
Where a lessor is claiming compensation due to an act or omission of the tenant, they must take all reasonable steps to mitigate their loss and are not entitled to receive compensation for any loss or expense that could have been avoided by taking the steps.[10]
[10]RTAA, s 362.
Agents’ obligations
The Property Occupations Act 2014 (Qld (POA) and its regulations, and the Agents Financial Administration Act 2014 (Qld) (AFAA) and its regulations regulate the conduct of real estate agents in Queensland.
By s 102 of the POA, a person must not act as a property agent for a person or perform any activity unless properly appointed by a Form 6 Appointment.
By s 22(3) of the AFAA, an agent must pay funds held in trust to “the person entitled to the amount, or someone else in accordance with the person’s written direction”.
Rehearing – the minor civil dispute – residential tenancy claim filed 6 May 2022
Rent
According to a receipt tendered in evidence, the tenants paid rent for the seven-day period to the trust account of Flynn PM on 18 January 2022.
Mr Shand says he has never received these funds. However, he now accepts that Mr Harris and Ms Longford have no obligation to pay the rent again.
In the absence of evidence that the sellers, Mr and Ms Palmer, authorised the payment of funds held by Flynn PM for them, Flynn PM was obliged to pay the funds to Mr and Ms Palmer, its then clients.
Further, without a valid appointment to act on behalf of Mr Shand, it is difficult to see how Flynn PM had any obligation to Mr Shand – in fact Flynn PM was prevented from providing any real estate services to him in the absence of a valid appointment, and, as such, no order can be made against Flynn PM in these proceedings.
The claim against Mr Harris and Ms Longford, and that against Mr Flynn, for one week’s rent is dismissed for those reasons.
Rather, the standard terms of most contracts of sale impose an obligation upon the seller to notify the buyer of any outgoings payable or rent collected that are not discoverable by search (this was not) so that funds can be apportioned as an adjustment to the purchase price at settlement. Conveyancing solicitors engaged to act on behalf of a buyer would usually make necessary inquiries to prepare a ‘settlement statement’ detailing adjustments of the purchase price to reflect pre-paid and unpaid rent and outgoings to be made at settlement. The settlement statement for Mr Shand’s purchase is not in evidence in these proceedings and, in any event, the sellers’ obligations to Mr Shand, and those of his solicitor, fall outside the scope of, and should be considered and pursued by Mr Shand separate to these proceedings.
Keys/Locks
Mr Harris and Ms Longford signed a key register on 8 January 2016 acknowledging receipt of two remote control devices and twelve keys to the doors and windows at the property.
In the hearing, Mr Shand conceded that the photographed keys and remotes were left by the tenants with Mr Shand’s handover agent, Ms Longstaff. Mr Shand explained that the claim for the changed locks in the sum of $400.00 was because Flynn PM did not provide Mr Shand with keys held by their office for the property, separate to those in the tenants’ possession.
As mentioned, Flynn PM could not have held keys for or released keys to Mr Shand without the written authority of the sellers. Their obligations were to their clients alone.
The claim against Mr Harris and Ms Longford, and that against Mr Flynn for key and lock replacement is dismissed for those reasons.
Again, Mr Shand might look to the sellers with respect to their obligation, if any, to make keys available to him, pursuant to their terms of the contract of sale.
Water and utility charges
Mr Shand abandoned this claim at the hearing.
Cleaning
Although Mr Harris and Ms Longford say they spent days cleaning the property prior to vacate, they tendered no evidence of this and there is no question that the property was left unclean at the end of their tenancy, according to the photographic evidence tendered by Mr Shand. The claim for $300.00 towards the owners’ costs to clean is not unreasonable having regard to the cleaning that was required, for instance, to address oil stains to the garage floor, dust/dirt to light fittings, ceiling fans, power points, cornices, window and door tracks.
The difficultly for Mr Shand lies in his inability to prove the condition of the property at the start of the tenancy, bearing in mind that the tenants’ obligation at the end of their tenancy is not to return the property in a clean condition, but, rather, to return it in the condition it was in at the start of the tenancy, fair wear and tear excepted.[11]
[11]RTRAA, s 188.
Through no fault of Mr Shand’s he cannot produce evidence of the condition of the property at the start of the tenancy. On his application, the Tribunal ordered Mr Flynn to produce entry condition reports and photographs, but they say that they never received these documents when they commenced managing the property in 2019.
Mr Harris and Ms Longford say they no longer have their copies. However, they gave evidence that they took possession of the property following an interstate relocation and had no option but to accept the property in an unclean condition and to clean it themselves after taking possession.
Mr Shand challenged this evidence as ‘hearsay’ and noted that the tenants did not produce their copy of the entry condition report from 2016 upon which they say they made a list of the items that required cleaning and repair. The oral evidence of the tenants’ is not ‘hearsay’ but, rather, direct evidence of their recollection of the property condition at the start of the tenancy. That it is uncorroborated is a different matter.
Although the rules of evidence are relaxed in the Tribunal, Mr Shand, as the party seeking compensation for breach, bears the onus of proof, namely, he needs to satisfy the Tribunal that it is more probable than not that the tenants breached s 188. The Tribunal cannot choose between several equally likely possibilities by conjecture alone.[12] The lack of an entry condition report is not fatal if the condition of the property at the start of the tenancy can be established another way, for example, listing photographs, evidence that the property was a new build when the tenancy commenced, or a statement of the then managing agent for the property or the Palmers themselves. However, in the absence of any evidence as to the condition of the property at the start of the tenancy, it is impossible for Mr Shand to establish the tenants’ breach to the requisite standard of proof. The claim for cleaning is dismissed for those reasons.
[12]Bradshaw v McEwans Pty Ltd (1951) 217 ALR 1, 5.
Damages
The Appeal Tribunal accepts that the property required repair at the end of the tenancy. Both the building inspection report of Mr Prestridge speaks to this, as does the further evidence of painter, Mr Toufalli, who, in a statement dated 28 April 2022 observed that:
(a)He inspected the property for the purpose of providing a painting quote at a time when it was vacant.
(b)He was “completely stunned” at the number of screws left in the wall, removing over forty screws and hooks from walls that then had to be patched and sanded in preparation for painting.
(c)In his view, the screws he removed were newer than the period of the tenancy.
(d)He spent an additional day onsite due to the number of repairs that required patching and sanding including screw holes, corners smashed, holes in walls from general wear and tear, and poorly patched repairs.
Again, however, Mr Shand cannot establish the condition of the property at the start of the tenancy to satisfy the Tribunal to the requisite standard that the tenants breached their obligation to return the property in the same condition at the end. For their part, Mr Harris and Ms Longford say that the property was handed to them at the start of the tenancy in a damaged condition, and that the prior lessor refused to undertake any repairs throughout their tenancy.
The property damage claim is further hindered by the evidence of Mr Prestridge who described the damage as “wear and tear expected of a dwelling of its age and use as a rental property” and of Mr Toufalli who also describes “general wear and tear”. The photographs tendered by Mr Shand including those attached to the building inspection evidence many items that would be considered fair wear and tear over a six-year tenancy, which is excluded from the tenants’ obligations under s 188, and other items like water damage that would also be excluded as damage that is not caused by the tenants. Even if entry condition evidence was available, which it is not, Mr Shand has not identified or apportioned his claim for repairs against fair, wear and tear items, items necessitated by water ingress unrelated to the tenants’ actions, and accidental damage caused by the tenants.
In those circumstances Mr Shand has not met the requisite standard of proof required to establish a breach by the tenants of s 188 to ground an award of compensation. The claim for property damage is dismissed for those reasons.
Costs
As the application has been unsuccessful, there is no basis to award costs nor to depart from the usual rule that each party bear their own costs of the proceeding.[13]
[13]QCAT Act, s 100.
Decision
For the reasons given, decision made in MCDT1168/22 on 28 November 2022 is set aside and substituted for a decision that the application for a minor civil dispute – residential tenancy dispute filed 6 May 2022 is dismissed.
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