Peter & Anor v Tyson

[2015] QCATA 9

CITATION: Peter & Anor v Tyson [2015] QCATA 9

PARTIES:	Jonathon Peter Josephine Prowse (Applicants/Appellants)
v
Robyn Tyson Harcourts Airlie Beach (Respondents)

APPLICATION NUMBER: APL462-14

MATTER TYPE: Appeals

HEARING DATE: On the papers

HEARD AT: Brisbane

DECISION OF: Senior Member Stilgoe OAM

DELIVERED ON: 19 January 2015

DELIVERED AT: Brisbane

ORDERS MADE:

1.    Leave to appeal granted.

2.    Appeal allowed.

3.    The decision of 15 August 2014 is set aside.

4.    Robyn Tyson and/or Harcourts Airlie Beach shall pay Jonathon Peter and Josephine Prowse $6,801.40 by 9 February 2015.

5.    If Robyn Tyson has complied with the decision dated 15 August 2014, she shall pay Jonathon Peter and Josephine Prowse the balance of $6,140 by 9 February 2015.

CATCHWORDS:

APPEAL – LEAVE TO APPEAL – MINOR CIVIL DISPUTE – PROPERTY AGENT – where agent failed to secure 12 month tenancy agreement contrary to owners’ instructions – where tribunal found a breach of agreement – where owners claimed 13 weeks’ loss of rent – where tribunal ordered 1 week’s loss of rent – whether grounds for leave to appeal

Dearman v Dearman (1908) 7 CLR 549
Fox v Percy (2003) 214 CLR 118
Pickering v McArthur [2005] QCA 294
Chambers v Jobling (1986) 7 NSWLR 1

APPEARANCES and REPRESENTATION (if any):

This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act).

REASONS FOR DECISION

1. Mr Peters and Ms Prowse own a property at Cannonvale. They appointed Ms Tyson of Harcourts Airlie Beach to manage the property pursuant to a Form 20a Appointment of Agent.

2. Harcourts secured a tenant on a 12 month lease at $540 per week. The tenancy agreement, which expired on 12 June 2013, named only one tenant.

3. At some stage, the owners became aware that there was more than one tenant in the property. They instructed Harcourts to increase the rent by $20 per week and to note all the tenants on the tenancy agreement. Harcourts arranged the changes but the tenants signed an amended lease which expired in March 2013, three months’ earlier than the original tenancy agreement.

4. The tenants left in March 2013. The owners had trouble finding new tenants. They filed a claim for three months’ rent. A Magistrate, sitting in the minor civil disputes jurisdiction of the tribunal, ordered Ms Tyson pay the owners just one week’s rent.

5. Mr Peter and Ms Prowse want to appeal that decision. They submit that, once the learned Magistrate found that Harcourts breached the agency contract, he could not reduce the claim simply because he thought an order of 13 weeks’ compensation was ‘unfair’.

6. Because this is an appeal from a decision of the tribunal in its minor civil disputes jurisdiction, leave is necessary.[1] Leave to appeal will usually be granted where there is a reasonable argument that the decision is attended by error, and an appeal is necessary to correct a substantial injustice to the applicant caused by that error.[2]

   [1]QCAT Act s 142(3)(a)(i).

   [2]Pickering v McArthur [2005] QCA 294 at [3].

7. The evidence can support, and Harcourts does not seriously dispute[3], the learned Magistrate’s finding that Harcourts breached its obligation to the owners.

   [3]Transcript page 1-7, line 36 to page 1-8, line 18.

8. There is also no dispute that the property was vacant for at least 13 weeks. The tenants left on 7 March 2013[4] and, as at 1 July 2013, the tenancy was still vacant[5]. Unless there is evidence that the owners failed to mitigate their loss, they are entitled to damages for that period. The learned Magistrate erred in reducing the damages simply on the basis that the amount was “unfair”. Leave to appeal should be granted and the appeal allowed.

   [4]Transcript page 1-21, line 18.

   [5]Transcript page 1-27, lines 34 – 35.

9. I can find no evidence that the owners failed to mitigate their loss. They left management of the tenancy with Harcourts after 7 March 2013. That was a reasonable thing to do, as it was as much in Harcourts’ interests as in the owners’ interests to minimise the loss. They changed agents on 1 July 2013, when Harcourts did not produce a new tenant, and had early success. In the circumstances, the owners’ action were reasonable and I can find no reason to discount their claim for damages.

10. In her submissions in this application, Ms Tyson submits that she should not be accountable for a lessor’s loss of income, which is a commercial risk, nor can she control the behaviour of the tenant. She believes that the shortfall in rent should be dealt with under the then Property Agents and Motor Dealers Act (Qld) 2000.

11. I agree that investors accept commercial risks when then rent property to tenants. If the loss of rent occurred through no fault of Harcourts then, I agree, Harcourts should not be liable to the owners. But the learned Magistrate found that Harcourts breached its obligations to the owners, and I have no reason to disturb that finding.

12. I also agree that property managers cannot “hold a gun” to the heads of tenants to compel compliance with the tenancy agreement. Property managers are, however, engaged to manage tenancies. It is implicit in the learned Magistrate’s findings that he was not convinced Harcourts performed this task properly.

13. Finally, the Property Agents and Motor Dealers Act deals with many issues. If an agent breaches the Act, there are penalty provisions. If there is a loss, the Claims Fund may respond to, and pay, that loss to a consumer. The Claim Fund, however, is directed to loss through fraud, stealing or misappropriation or malfeasance. It does not respond to claims for negligence or breach of contract.

1. The owners have established their claim for loss of rent over a 13 week period (less management fees). There is no evidence to suggest they failed to mitigate their loss. There is no reason why they are not entitled to the full amount of their claim. The decision of 15 August 2014 is set aside. Instead, I order Ms Tyson and/or Harcourts Airlie Beach pay the owners $6,801.40. If Ms Tyson has complied with the decision dated 15 August 2014, she shall pay the owners the balance of $6,140.