QCAT Update: Compensation claims

In the recent decision of Ku & Anor v East & East (No 2) [2024] QCATA 49 the QCAT Appeals Tribunal (the Appeals Tribunal) considered the operation of a number of sections in the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (the RTRA Act) relevant to claims for compensation and the procedures to be followed under the RTRA Act.

Background

The Respondents were tenants of a property owned by the First Appellant. Throughout the entirety of the tenancy, the property was not maintained in good repair. However, it was not until towards the end of the tenancy that the tenants filed an application in the Tribunal seeking compensation in the amount of $6,000, an order for the return of the rental bond in the amount of $3,000, and relief from payment of water invoices in the amount of $850.

In their initial application, the tenants sought to rely on section 191 of the RTRA Act, which provides that:

(1)       This section applies if, on an application made to a tribunal by the tenant for an order under this section, the tribunal is satisfied—

(a)      the lessor has failed to comply with the lessor’s maintenance obligation under section 185(3) or 186(4); and

(b)      the failure results in the health or safety of persons being endangered; and

(c)      the failure is reasonably capable of being remedied.

(2)       The tribunal may order the lessor to remedy the failure within the time decided by the tribunal.

The initial application was heard by the Tribunal six days before the tenancy ended and the Tribunal ordered that:

1. The lessor pay the tenants $20,700 in compensation; and

2. The tenants were relieved of their obligation to conduct a “bond clean”.

No order was made by the Tribunal in relation to the rental bond or the water invoices.

The lessor sought leave to appeal the Tribunal’s decision in circumstances where the tenants were awarded “more than twice the compensation claimed without giving reasons”.[1]

Appeal

In considering whether there was a possible error in the primary decision, the Appeals Tribunal referred to sections 414A to 417 of the RTRA Act, which provide for how “urgent”, and “non-urgent” applications are to be managed.

While an application pursuant to section 191 is an “urgent” application as set out in section 415 of the RTRA Act, applications under sections 94 (rent reduction), 419 and 420 (compensation) or 429 (general tenancy disputes), are not and are therefore considered “non-urgent” applications.

The Appeals Tribunal referred to the dispute resolution process set out in section 416 of the RTRA Act, noting that it must be completed, not simply commenced, before a non-urgent application is filed in the Tribunal.

During the initial hearing, the Adjudicator specifically asked whether the parties had participated in dispute resolution processes with the Residential Tenancies Authority (RTA). Despite advising the Adjudicator that they had not participated in the dispute resolution process, the Adjudicator proceeded to order compensation be paid to the tenants.

The Appeals Tribunal held that the Tribunal was precluded from considering any application or making any decision under sections 94, 420 or 429 of the RTRA Act as “it simply did not have jurisdiction to do so unless the RTA dispute resolution process was completed”.[2]

The Appeals Tribunal found that the initial decision went well beyond the Tribunal’s jurisdiction, which is an error of law.

The Appeals Tribunal then turned to the transcript of the initial hearing and the Adjudicator’s calculation of compensation based upon rent reduction in accordance with section 94 of the RTRA Act, which was calculated for a period of 454 days ($17,025). The Appeals Tribunal identified two issues with this approach by the Adjudicator.

Firstly, the Appeals Tribunal referred to section 419 of the RTRA Act stating that an application for compensation for breach of a tenancy agreement must be made within 6 months of the tenant “becoming aware of the breach”. The Appeals Tribunal noted that “an award of compensation for breach for 454 days risks going well beyond the Tribunal’s reach for such claims.”[3]

Secondly, the Appeals Tribunal referred to section 94 of the RTRA Act and noted that while orders for rent decreases are not subject to a specific timeframe, they must be prospective from the date of the RTA dispute resolution request,[4] and not retrospective, even if a decrease in future rent may be assessed by reference to past loss of amenity.[5]

The Appeals Tribunal held that:

“The calculation of a rent reduction of $17,025 could only be set-off against rent payable from the date of the dispute resolution request to the end of the six days remaining in the tenancy. Without a dispute resolution request and the completion of dispute resolution processes, the order could not have been made at all.”[6]

Accordingly, the Appeals Tribunal held that the orders made by the Adjudicator were made without jurisdiction and allowed the appeal. The decision of the Adjudicator was set aside and the matter was returned to the Tribunal to be reheard before a differently constituted Tribunal.

Conclusion

This appeal decision is a timely reminder for property managers to ensure that they are familiar with the RTRA Act, in particular the provisions that may lead to “urgent” and “non-urgent” applications to the Tribunal and the relevant procedures to be followed.

Whilst all parties involved in residential tenancy disputes before the Tribunal must represent themselves (some exceptions apply), they are, of course, always able to seek legal advice in regard to all aspects of a dispute.  If property managers have any concerns about a residential tenancy dispute, including compliance with the RTRA Act and any other relevant legislation, it is strongly recommended that they seek legal advice.

Read another property management article: The residential tenancy lease renewal process.

Or browse our suite of property management articles.