I am using a one simple queue list where i have restricted my sisters laptop via the DHCP static IP for target address, No traffic shows up on the Queue and when shes browsing/downloading.
However
When i go to Torch in the simple queue list and go to my ether1-gateway then press start it works but if i close down the session then it stop limiting her and gives her a full up and download speed.

RB750r2 mipsbe using v6.33.1

[admin@GW1] /queue simple> print

Flags: X - disabled, I - invalid, D - dynamic
0 name="queue1" target=192.168.88.15/32 parent=none packet-marks="" priority=8/8 queue=default-small/defa
max-limit=1M/4M burst-limit=0/0 burst-threshold=0/0 burst-time=0s/0s

Correct me if im doing something wrong

Most likely you have enabled FastTrack. That is whole point of it - avoid queues and firewall rules.

http://forum.mikrotik.com/viewtopic.php?t=96302

Disable firewall fasttrack rule, reboot router and now it should work.