Vessi v Howells
[2013] QCAT 674
•28 November 2013
| CITATION: | Vessi v Howells [2013] QCAT 674 |
| PARTIES: | Megan Vessi (Applicant) |
| v | |
| Sharlene Howells (Respondent) |
| APPLICATION NUMBER: | MCDT2120/13 |
| MATTER TYPE: | Residential tenancy matters |
| HEARING DATE: | 15 November 2013 |
| HEARD AT: | Brisbane |
| DECISION OF: | A Hartnett, Justice of the Peace J Hawkins, Justice of the Peace |
| DELIVERED ON: | 28 November 2013 |
| DELIVERED AT: | Brisbane |
| ORDERS MADE: | 1. The respondent pay to the applicant the amount of $414 within 21 days. |
| CATCHWORDS: | RESIDENTIAL TENANCIES – BREACH OF AGREEMENT – COMPENSATION – LOSS OF AMENITY – where applicant alleged respondent had breached agreement – where evidence of applicant suggested she also claimed rent reduction for substantial loss of amenity – whether to proceed as an application for breach or an application for a reduction in rent RESIDENTIAL TENANCIES – REDUCTION IN RENT – COMMENCING APPLICATION – TIME LIMITS – Residential Tenancies Act 2008 s 419 – where applicant filed application for breach of agreement outside of six month time limit – Residential Tenancies Act 2008 s 94 – whether a time limit applies to application for decrease in rent for substantial loss of amenity Residential Tenancies and Rooming Accommodation Act 2008 ss 52, 94, 419, 420 Harcourts Proactive Results Pty Ltd [2012] QCATA 55 |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | The applicant Megan Vessi appeared in person |
| RESPONDENT: | Iain Allison appeared by telephone for the respondent Sharlene Howell |
REASONS FOR DECISION
A Hartnett, Justice of the Peace
Ms Megan Vessi (the applicant) entered into a tenancy agreement with a real estate agent who, at the time, acted as agent for the property owner. The rental period was from 17 April 2012 to 16 April 2013. The weekly rent was $440. The applicant’s share was $138. The applicant appeared at the Tribunal in person. Mr Iain Allison appeared on behalf of Ms Sharlene Howell (the respondent) by phone. Mr Allison is the property owner.
Why Ms Vessi chose to commence these proceedings against Ms Howell rather than against Mr Allison appears to be based on the fact that Ms Howell had assumed some managerial responsibility for the property after the real estate agent discontinued acting for Mr Allison. I am satisfied that Ms Howell and Mr Allison intended to respond to the application together. Even if I were not satisfied of this, Ms Howell did not plead to the Tribunal that she was not the proper party to the proceedings. Mr Allison, who would have been the proper party in any event, appeared before the Tribunal. Much of the documentation supplied in respect of Ms Howell’s written submissions is co-signed by both Ms Howell and Ms Allison. I see no difficulty in proceeding on the matter today.
Application
Ms Vessi led evidence that sometime in the last week of January 2013 the bedroom, which she occupied, suffered water damage. Ms Vessi submitted that the water damage had caused the growth of mould in the bedroom.
Ms Vessi submitted both in the hearing and via affidavit that a number of consequences flowed from the water damage and resultant mould including:
· a pervasive dampness to the room;
· damage to a bed base and mattress;
· damage to clothing
· damage to a chest of drawers; and
· the inability for her to continue to use the room as sleeping quarters.
Ms Vessi provided photographs of the bed and chest of drawers. The photographs are of limited usefulness other than proving the existence of the bed and chest of drawers that she claims were ultimately damaged. I do not take them into account.
Ms Vessi provided oral evidence that the water damage was caused by water ingress as a result of a building defect. She stated that she first noticed the water ingress in the last few days of January 2013. Mould materialised on 3 February 2013. On 4 February 2013 Ms Vessi contacted Ms Howell to advise her of the issues with the property.
Mr Allison provided oral evidence that some time in early March 2013 builders came to ascertain the cause of the building defect and protect against further water ingress. He further advised that builders had to be recalled once again in late April 2013 to inspect the building a second time after the March 2013 repair work failed to correct the problem.
Ms Vessi served a notice to remedy breach on 7 March 2013. She vacated the premises no later than 3 April 2013. She seeks an order from the Tribunal that Ms Howell pay to her $606.90 being $550 for ‘compensation’ and $56.90 as costs of filing her application in the Tribunal. Ms Vessi had originally quantified amounts for loss of her bed and chest of drawers in her affidavit but these were abandoned in the application that she filed. She confirmed this during the hearing. As a result I make no findings in respect of the property damage.
Documents filed by Ms Howell seem to suggest that on 8 February 2013 Ms Howell inspected the premises and found moisture build up. Ms Howell makes some additional allegations of breaches of the residential tenancy agreement which are not relevant to this application and I do not take these into account. I’m satisfied based on the evidence of both Ms Vessi and Ms Howell that the water ingress occurred in the premises and that as a result of this mould materialised in Ms Vessi’s bedroom. I am further satisfied that because of the water ingress and the mould Ms Vessi was unable to use her bedroom as sleeping quarters.
Ms Vessi claims compensation in the amount of $550. This amount was made up of $414 which is a portion of the rent. She also claims an extra $100 for what she calls ‘stress’ and ‘inconvenience’. These amounts total $514 but Ms Vessi did not explain why this did not correctly add up $550. I will deal with the $100 later.
Ms Vessi submitted to the Tribunal that she had arrived at a figure of $414 for compensation by taking her portion of the rent of $138, multiplying it by 50% and then multiplying this figure ($69) by six weeks. Six weeks is the amount of time she stated that the room had been affected. I questioned Ms Vessi if the period had in fact been longer as the timeline suggested. She stated that she was only claiming six weeks. I am satisfied that Ms Vessi was aware that, if she were successful in the Tribunal, she would abandon any amounts to which she would otherwise have entitled over the six week period.
During the hearing I asked Ms Vessi to identify the grounds on which she pursued her application. She stated that she had received some advice in relation to this matter. Firstly, she referred to the figure as an amount sought due to a breach of the residential tenancy agreement. Secondly, she submitted that the water ingress and resultant mould had made the premises unfit for use as sleeping quarters. In furtherance of this second ground, she claimed that the figure she calculated was an amount that represented the loss of amenity of the premises. These grounds are confirmed by Part C of Ms Vessi’s application.
There was much overlap between these two grounds during the hearing. However, it is the case that an application for compensation couched in terms of a breach of a residential tenancy agreement and an application for a reduction in rent payable under a residential tenancy agreement for a substantial loss of amenity may be treated differently by the Residential Tenancies and Rooming Accommodation Act 2008 (RTRA Act).
Application to the Tribunal for breach of a residential tenancy agreement
Ms Vessi stated that there had been a breach of the residential agreement because her bedroom had become unfit for use as sleeping quarters. I assume that the obligation which Ms Vessi submits had been contravened is s 185(3)(a) of the RTRA Act. That section provides that a lessor ‘must maintain the premises in a way that the premises remain fit for the tenant to live in’. This duty imposed on the lessor is incorporated as a term of each residential tenancy agreement: s 52 of the RTRA Act. Consequently, the application is capable of being dealt with under s 419 of the RTRA Act. Under s 420 the Tribunal may make an order for compensation.
The applicability of ss 419 and 420
I find that it is not necessary to ultimately conclude whether or not the residential tenancy agreement has been breached. This is because Ms Vessi filed her application under s 419 outside of the prescribed time period. Section 419(3) provides that:
[t]he application [for a breach of a residential tenancy agreement] must be made within 6 months after the lessor or tenant, or provider or resident, becomes aware of the breach. (emphasis added)
During the hearing I put this six month time limit to Ms Vessi. She stated that the water ingress and mould issue continued for so long that she judged the breach to have occurred over a number of months. I assume that she offered this statement in support of having the six month time limit construed from the latest practicable date. But s 419(3) is not concerned with the date of the occurrence of the breach nor the breach’s duration. Once an applicant under s 419 becomes aware of the existence of a breach, the six month time limit for filing commences automatically.
The time in which Ms Vessi had to file the application in the Tribunal commenced at the inception of Ms Vessi’s awareness that the lessor (Mr Allison) had failed to discharge his obligation in keeping the property in a liveable condition. Ms Vessi had determined that this was the case on 4 February 2013 when she contacted Ms Howell to fix the cause the water ingress and resultant mould.
Ms Vessi filed her application in the Tribunal on 30 August 2013. The Tribunal therefore can come to no conclusion other than that she failed to file her application within the six month time limit prescribed by s 419(3). Though it may seem inflexible, it is well settled that the Tribunal has no discretion to extend this time frame: Caruana v Harcourts Proactive Results Pty Ltd [2012] QCATA 55 at [13]-[14]. No matter the merit of Ms Vessi’s claims under s 419, her claim cannot overcome the time bar thrown up by s 419(3). Ms Vessi’s claim for breach of the residential tenancy agreement must therefore fail.
Application to the Tribunal under s 94
As stated above, Ms Vessi also based the figure of $414 she was seeking in the Tribunal by reference to how much she believed her amenity in the premises had decreased. As I have already stated above, I am satisfied that Ms Vessi lost the use of her bedroom as sleeping quarters due to water ingress and resultant mould.
If a tenant makes an application to the Tribunal under s 419, calculating the extent and duration of a loss of amenity of residential premises may be a useful way of quantifying compensation under that section. However, tenants also have a discrete cause of action in the Tribunal under s 94 in certain circumstances. There is some overlap between s 419 and s 94. The two sections, however, are fundamentally different. Section 419 is only activated when one party breaches the residential tenancy agreement. It may be enforced by the tenant against the lessor or vice versa. Section 94 applies only to reduce rent payable under a residential tenancy agreement if one of the matters under sub-s (1) or (2) are made out.
Does Ms Vessi pursue her application under s 419 or s 94?
At the hearing it became unclear whether or not Ms Vessi had perhaps based her claim in reliance on s 94 rather than in reliance on s 419. The method of calculation of the order sought as well as the submission that there had been a breach of the residential tenancy agreement seemed to suggest that the claim could enliven the application of either section. In Campbell v Donker [2013] QCATA 6 (Campbell) Senior Member Mr Richard Oliver acknowledged that there was some overlap between s 419 and s 94. The learned Senior Member stated at [29]:
I see no reason why an applicant could not make an application under both sections at the same time. A rent reduction under s 94(3) and compensation for breach under s 419 over the period of time the amenity or standard has been reduced, provided the lessor has been given notice of the breach.
Ms Vessi mentions a ‘compensation claim’ under s 94 in Part C of her application. She does not mention compensation under s 419 but she complains about a ‘breach of the residential tenancy agreement’ governed by s 419. She quantified the amount she sought the Tribunal to order in her favour by reference to a reduction in rent calculated over a specified period which is a method employable under both s 419 and s 94. These indicia demonstrate to me that Ms Vessi intended to reply on both s 419 and s 94 in respect of her application. I will now turn to the question of the application of s 94.
Does s 94 apply to the present matter?
I am satisfied s 94 applies to the present matter. Section 94 reads as follows
94 Rent decreases
(1)This section applies if the premises—
(a)are destroyed, or made completely or partly unfit to live in, in a way that does not result from a breach of the agreement; or
(b)no longer may be used lawfully as a residence; or
(c)are appropriated or acquired compulsorily by an authority.
(2)This section also applies if—
(a)services, facilities or goods to be provided to the tenant under the agreement are no longer available or are withdrawn other than because the tenant failed to meet the tenant's obligations under the agreement; or
(b)the amenity or standard of the premises decreases substantially other than because of malicious damage caused by the tenant.
(3)The rent payable under the agreement decreases accordingly or, if an order for a decrease in the rent is made by a Tribunal, to the extent stated in the order.
(4)A Tribunal may make an order for a rent decrease only if—
(a)the tenant applies to the Tribunal for the order; and
(b)if this section applies because of subsection (1)—the premises are partly unfit to live in.
As a result of my having found that Ms Vessi lost the use of her sleeping quarters, I am satisfied that this was a substantial decrease in the amenity of the premises within the meaning of sub-s (2)(b). There is no evidence that the decrease occurred as the result of a malicious act of Ms Vessi.
Can an order be made under s 94?
The Tribunal has no power under s 94 to order compensation: Campbell at [29]. All that s 94 authorises is a rent decrease for a period of time if the section applies by virtue of sub-s (1) or (2). I do not, however, consider that Ms Vessi’s categorisation of the $414 as ‘compensation’ was meant as a term of art. The amount should properly be categorised as a rental decrease
Section 94 does not prescribe a time limit within which an applicant is required to bring an application relying on this section. Does that mean that Ms Vessi has an unlimited time within which to bring an application? The answer to that question, in my view, must be no.
The Tribunal has considered the applicable time limit for s 94 in its minor civil disputes jurisdiction before. In Grace and Ors v Metrocity Realty and Ors [2012] QCAT 663 (Grace) Adjudicator Mr Jeremy Gordon concluded that a six year time limit applied to applications to the Tribunal under s 94. In explaining the distinction between applications for compensation under s 419 and rent reduction claims under s 94 the learned Adjudicator stated at [56]:
The fact that the two regimes are separate also appears from the juridical basis for the reduction in rent. [Section 94] is an abatement, which effectively interferes and adjusts the contractual arrangements between the parties, by statutory intervention. This is a completely different concept from compensation awarded under section 420.
The right of the lessor to receive rent from a tenant is rooted in the residential tenancy agreement. Such an agreement is a legally enforceable contract. As the learned Adjudicator outlined, the operation of s 94 intervenes into this contract and alters the rental obligations of the tenant. I can see that the learned Adjudicator has arrived at the conclusion that, because of this, the Limitation of Actions Act 1974 (the LA Act) must apply. Section 10(1)(d) of that Act provides that there is a six year time limit for ‘an action to recover a sum recoverable by virtue of any enactment, other than a penalty or forfeiture or sum by way of a penalty or forfeiture’. The section is headed ‘[a]ctions of contract and tort and certain other actions’. The decrease in rent is recoverable by a tenant only pursuant to s 94. The rental decrease is not a penalty or forfeiture.
This six year limit under s 94 seems an extraordinarily long time limit given the six month time limit imposed by s 419. Senior Member Richard Oliver explained the rationale for the time limit under s 419 in Campbell at [28]:
This [six month time limit] of course makes good sense and it is to ensure that a tenant cannot continue to stay in the premises knowing the lessor is in breach and then at some time in the future, even after the premises are vacated, then bring a claim for compensation.
I cannot understand why a time limit was not specifically imposed on s 94 in the RTRA Act. If the learned adjudicator in Grace is correct to say that the applicable time limit for applications under s 94 is six years this exposes lessors to a lengthy period of potential liability for past activity. On the one hand a tenant can make a claim for a breach of a residential tenancy agreement but has only six months under s 419 to bring the application to the Tribunal for compensation. On the other hand, if that same breach causes a substantial decrease in amenity or standard of the premises, the tenant is permitted to ‘sit and wait’ for many years before instituting an application under s 94.
The Queensland Court of Appeal in Underwood v Queensland Department of Communities (State of Queensland) [2012] QCA 158 held that the power reposed in the Tribunal to make a rent reduction is a discretionary one. Muir JA, with whom Dalton J agreed, noted at [30] that ‘it may be unjust for an order to be made where an application has been made late…’. But when, then, is an application ‘made late’ such that the Tribunal may exercise its discretion to refuse an application for reason that it would be unjust to do so?
If s 10(1)(d) of the LA Act does apply to applications under s 94 then the tenant must at least have the benefit of the entire limitation period within which to bring the application. Though I have said that a six year time limit seems like a remarkably long period of time for an application of this type I find the decision of the learned Adjudicator in Grace highly persuasive. It appears as though the appeals division of the Tribunal has not considered the applicable time limit under s 94 before. Consequently, I feel confined to proceed under the six year time limit. The application has been brought within six years.
As I stated above the time which Ms Vessi claimed to have suffered the loss of amenity was stated by her to be six weeks. Ms Vessi arrived at the amount for the decrease in rent based on calculating 50% of her rent contribution. This is, in my view, a fair assessment of her loss. The rent that she paid was representative of her exclusive use of a single bedroom plus all of the common areas of the house. The loss of her sleeping quarters was a substantial decrease in the use of the premises. Ms Vessi stated that the decrease in amenity occurred from 4 February 2013 to 3 April 2013 (just over nine weeks). Ms Vessi claims only $414 being for six weeks. Ms Vessi’s claim for this $414 must succeed.
I will say, only for completeness, that this amount is not an award of compensation but is an amount representing a reduction in rent. The fact that it is ordered to be paid as a lump sum does not give it the character of compensation. Such a lump sum order is consistent with the Tribunal’s practice in its minor civil disputes jurisdiction for applications under s 94 (for example, see: Wechsel v Andrew (No 3) [2011] QCATA 106).
The additional $100 and the $56.90 filing fee
I will now briefly turn to the matters of the additional $100 and the $56.90 sought by Ms Vessi.
The $100 for inconvenience
Ms Vessi claims an additional $100 above the $414 claimed for the rent reduction. I asked Ms Vessi a number of times to explain how she arrived at this $100 amount. She appeared to have some difficulty in doing so but ultimately she categorised it as an amount compensating her for ‘inconvenience’ and ‘stress’.
The Tribunal is authorised to exercise its minor civil disputes jurisdiction only if the dispute over which it is presiding is a minor civil dispute. A minor civil dispute is defined in schedule 3 of the Queensland Civil and Administrative Tribunal Act 2009. A minor civil dispute includes a ‘tenancy matter’. A ‘tenancy matter’ is defined in that same schedule to mean ‘a matter in relation to which a person may, under the [RTRA Act], apply to the Tribunal for a decision’.
The RTRA Act does not give the Tribunal any jurisdiction to make an order for inconvenience or suffering. The inconvenience, if it can be so categorised, of having to attend at the Tribunal to seek an order is an ordinary incident of accessing justice. No amount of money is payable to compensate for that. The claim for $100 is outside the Tribunal’s jurisdiction and must fail.
The $56.90 filing fee
Ms Vessi claims the filing fee of $56.90 in relation to this application. The law generally categorises an amount such as this as a ‘cost’. Section 100 of the Queensland Civil and Administrative Tribunal Act 2009 provides that as a general rule ‘each party to a proceeding must bear the party's own costs for the proceeding’. Section 102(1) provides a limited discretion for the Tribunal to award costs if the Tribunal considers that it is in the interests of justice to do so. It provides factors the Tribunal must consider in determining whether to award costs. For minor civil disputes that are residential tenancy matters, costs are limited to the amount of the filing fee: s 102(2) QCAT Act and r 83 Queensland Civil and Administrative Tribunal Rules 2009.
I will not go any further down this line of inquiry other than to say that this matter was a standard dispute between a lessor and a tenant. The parties conducted themselves appropriately in the hearing. The dispute was not overly complex. I can identify nothing from the dispute that suggests to me that it would be in the interests of justice to award the filing fee against Ms Howell. The claim for the $56.90 the filing fee must fail.
Order
For the reasons I have given above I order that the respondent Ms Howell pay to the applicant Ms Vessi $414 within 21 days.
J Hawkins, Justice of the Peace
I have read the draft reasons for decision of Mr Hartnett. I agree with his reasons and the order he proposes.
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