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  • Unreported Judgment

Donut World v Escan Pty Ltd

 

[2019] QCAT 365

 

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

 

CITATION:

M and JE Cassidy Pty Ltd t/as Donut World v Escan Pty Limited and Anor [2019] QCAT 365

PARTIES:

m and JE cassidy pty ltD trading as donut world

 

(applicant)

 

v

 

escan pty limited

 

(first respondent)

 

pialba place management pty ltd as trustee for the pialba place unit trust

 

(second respondent)

APPLICATION NO/S:

RSL173-18

MATTER TYPE:

Retail shop leases matter

DELIVERED ON:

25 November 2019

HEARING DATE:

On the papers

HEARD AT:

Brisbane

DECISION OF:

Member McDonnell, Presiding

Member Norling

Member McBryde

ORDERS:

The application is dismissed.

CATCHWORDS:

LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – OTHER MATTERS – determination of current market rent – whether valuer failed to comply with s 29 of the Retail Shop Leases Act 1994 (Qld) – whether the valuer failed to comply with s 31 of the Retail Shop Leases Act 1994 (Qld) – whether valuer failed to take into account submissions – whether valuer failed to give detailed reasons for his determination – whether valuer relied upon false data

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 32

Retail Shop Leases Act 1994 (Qld), s 5A, s 29, s 31, s 83, s 103

Annandale Pharmacies (NQ) Pty Ltd trading as Chemmart Annandale v The Angliss Estate (Annandale) Pty Ltd

Brisbane Comedy Pty Ltd t/as Albion Comedy Club and Restaurant v Malisano & Ors [2015] QCAT 340

Family and Kids Care Foundation Inc v Bilby Lay Enterprises Pty Limited [2005] RSLT 7

Kumari v Goa [2008] RSLT 18

S.H.I.F.T. Whitsunday Pty Ltd v McLean Cooke Pty Ltd [2012] QCAT 38

Silver Jewellery Shop and Piercing Planet v Telado Pty Ltd & G&J Drivas Pty Ltd [2013] QCAT 561

REPRESENTATION:

 

Applicant:

Self-represented

First Respondent:

Self-represented

Second Respondent:

Mills Oakley

APPEARANCES:

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

REASONS FOR DECISION

Introduction

  1. [1]
    M and JE Cassidy Pty Ltd trading as Donut World (‘Cassidy’) operates a retail food outlet from premises in Pialba Place, Pialba (‘the Centre’). It entered a lease with Escan Pty Ltd (‘Escan’) for a term of three years, commencing on 1 November 2015 and terminating on 31 October 2018 (‘the Lease’). The Lease contained an option to renew the Lease for a period of three years from 1 November 2018 until 31 October 2021. The option was exercised on 28 August 2018.
  2. [2]
    Pialba Place Management Pty Ltd as trustee for the Pialba Place Unit Trust (‘Pialba Place’) acquired the centre on 8 February 2019, becoming Cassidy’s landlord from that date and joined as a party to the proceedings on 11 March 2019.
  3. [3]
    Pursuant to the terms of the Lease the rent to be paid on and from 1 November 2017 was to be the current market rent as agreed between the lessee and the lessor and failing agreement as specified by a specialist retail valuer (‘SRV’) in accordance with the provisions of Part 6, Division 4 of the Retail Shop Leases Act 1994 (Qld) and the procedure set out in clauses 4.1-4.5 of the Lease.
  4. [4]
    The parties failed to reach agreement on the market rent. In accordance with the terms of the Lease a SRV was appointed to undertake a determination of the current market rent.
  5. [5]
    On 13 December 2017 the SRV wrote to the parties confirming his appointment and encouraging Cassidy and Escan to each provide him with a submission in support of the view of the current market rent. A submission date[1] was not set by the SRV. On about 17 January 2018 Escan provided submissions. Cassidy provided the SRV with the Lease, the Fitout Contribution Deed and the Incentive Deed on 20 December 2017 and with submissions on 8 and 9 February 2018. On 14 February 2018 the SRV inspected the premises and the centre and met with representatives of Cassidy and Escan. The SRV invited the parties to provide replies in writing by 23 February 2018. Escan provided its reply on 15 February 2018. Cassidy provided its reply on 23 February 2018. On 1 April 2018 the SRV issued his determination of current market rent as at 1 November 2017 being $43,000 per annum (GST exclusive) (‘the Determination’).

Issues for determination, jurisdiction and the law

  1. [6]
    Cassidy says that the Determination does not comply with the requirements of the Retail Shop Leases Act 1994 (Qld) (‘RSL Act’) and so seeks orders that the Determination be set aside and a further determination of the current market rent in compliance with s 29 of the RSL Act be undertaken by another valuer. Cassidy contends that the SRV:
    1. (a)
      Ignored evidence provided in the submissions;
    2. (b)
      Failed to provide detailed reasons for matters taken into consideration;
    3. (c)
      Based his assessment on false data resulting in a lack of clarity or totally voiding calculations, reasoning and conclusions and thus voiding his market determination.
  2. [7]
    It was common ground that the subject site is a retail shop, and that the Lease is a retail shop lease within the terms of the RSL Act.[2]
  3. [8]
    The Tribunal has jurisdiction to hear a retail tenancy dispute about ‘the procedure for the determination of rent payable under a retail shop lease, but not the actual amount of the rent’.[3] A retail tenancy dispute is defined as ‘any dispute under or about a retail shop lease, or about the use or occupation of a leased shop under a retail shop lease, regardless of when the lease was entered into.’[4] The Tribunal may make the orders it considers just to resolve the dispute and if it finds that the determination did not comply with the requirements of s 29 of the RSL Act, it may order that the determination be set aside and a further determination in compliance with the section be made.[5]
  4. [9]
    Sections 29 and 31 of the RSL Act provide:

29 Matters to be considered by specialist retail valuers

  1. (1)
    In making a determination of the current market rent, the specialist retail valuer—
    1. must determine the rent—
      1. on the basis of the rent that would be reasonably expected to be paid for the retail shop if it were unoccupied and offered for leasing for the same or substantially similar use for which the shop may be used under the lease; and
      2. on the basis of gross rent less lessor’s outgoings payable by the lessee under the lease; and
      3. on an effective rent basis; and
    2. must not have regard to the value of the goodwill of the lessee’s business or the lessee’s fixtures and fittings in the retail shop; and
    3. must have regard to—
  1. (i)
    the terms and conditions of the lease
  2. (ii)
    submissions and responses from the lessor and lessee about the market rent of the shop; and
  3. (iii)
    the other matters prescribed by regulation.
  1. (2)
    In this section –

effective rent basis, for the determination of rent under a retail shop lease, means determining the rent on the basis of taking into account all associated advantages and disadvantages under arrangements made between the lessor and the lessee that reflect net consideration from the lessee to the lessor under the lease and associated arrangements.

31 Requirements of determination

  1. (1)
    The specialist retail valuer’s determination of the current market rent must-
    1. be in writing; and
    2. identify the location of the leased shop; and
    3. State the matters taken into consideration in making the determination; and
    4. State detailed reasons for the determination.
  2. (2)
    The determination must also state—
  1. (a)
    whether the current market rent includes GST; and
  2. (b)
    if the rent includes GST, the GST amount.
  1. [10]
    It is not an easy task to impeach a valuation in the present circumstances. In S.H.I.F.T. Whitsunday Pty Ltd v McLean Cooke Pty Ltd,[6] the Tribunal observed:

[9] The applicant is asking the Tribunal effectively to set aside the valuation provided by a Specialist Retail Valuer appointed under the Act. Generally, if a specialist valuer gives a valuation honestly and in good faith, the parties are bound by it even if a mistake is made. If there is a fundamental mistake, for example, if the expert reviews the wrong lease or the wrong property the valuation would not be in accordance with the lease (see for example Jones v Jones [1971] 1 WLR 840). But if the reviewer carries out the instructions in the lease, although these may be approached in different ways, there is no recourse (Jones v Sherwood Computer Services plc v Merost Pty Ltd (1988) 14 NSWLR 300 at 303 per Giles J). The purpose of the appointment of an expert is that there is special virtue in a simple, expressed valuation. The rationale behind this is that it is a matter of expert opinion and most difficult to prove that opinion is wrong.

[10] To what extent might the valuation have to be erroneous before it can be called into question? The Tribunal is of the view that the expert had to depart from the instructions given in a material respect and the departure would have to materially affect the ultimate result. The Tribunal does not accept that the mere attribution of too much or too little weight to matters might vitiate the opinion.

[11] Sheahan J in Mayne Nickless Ltd v Solomon [1980] Qd R 171 [at 178] in dictum, stated that he doubted whether speaking or non-speaking valuations made by a valuer chosen by the parties was impeachable for error or mistake and that if the mistake could be demonstrated by the party adversely affected, that party might have a remedy in damages against the valuer but nothing else.

[12] Duncan in his book Commercial Leases in Australia Third edition on page 105 suggests the better view is that the operation of the rent review clause is subject to an implication that the expert should be seen to give due and proper weight to all relevant considerations which might thereupon the valuation. This goes to relevance.

[13] The onus is clearly on the Applicant to provide evidence to impeach the valuation. The two areas that have been chosen are: the inclusion of the cleaning outgoings in the calculation of market rental by Mr Sheehan; and the decision by Mr Sheehan to only make a nominal allowance in relation to rental for the use of licensed areas by the Respondent.

  1. [11]
    The applicant bears the onus of proof.

The evidence

  1. [12]
    The Tribunal was provided with a substantial volume of material by the parties for the purposes of its consideration.
  2. [13]
    Cassidy provided:
    1. (a)
      The Notice of Dispute dated 25 June 2018 with annexures A-I comprising the Lease, the Incentive Deed, the Fitout Contribution Deed, Lessee’s Submission, Reply to Lessor’ submission, the Determination, Lessee’s Report on the SRV’s Market Rent Determination, Permitted Use and History of Dispute;
    2. (b)
      The Statement of Michael Cassidy dated 20 November 2018 with numerous attachments;
    3. (c)
      The Amended Statement of Michael Cassidy dated 1 March 2019 with numerous attachments, including a detailed submission regarding why the Determination should be set aside; and
    4. (d)
      A reply dated 14 June 2019, to Pialba Place’s submissions.
  3. [14]
    The detailed submission referred to in paragraph 13(b) above was the reference document relied upon by the Tribunal as particularising Cassidy’s issues.
  4. [15]
    Escan provided:
    1. (a)
      A written Response to the Notice of Dispute dated 23 October 2018, with Schedules 1-13 comprising the Lease, Escan’s assessment of market rent dated 30 October 2017, Cassidy’s letter of rejection of Escan’s assessment dated 31 October 2017, Escan’s letter dated 30 November advising they would shortly advise of the names of three Specialist Retail Valuers for Cassidy’s consideration, a letter dated 4 December 2017 from Escan to Cassidy proposing a list of SRVs, Cassidy’s response dated 5 December 2017, Cassidy’s further response dated 7 December 2017, the SRV’s engagement letter dated 13 December 2017, Escan’s submissions to the SRV dated 16 January 2018, Cassidy’s submissions to the SRV, Escan’s submissions dated 15 February 2018 in response to Cassidy’s submissions, Cassidy’s response to Escan’s submissions including letter from a valuer for Cassidy, the Determination dated 1 April 2018; and
    2. (b)
      The affidavit of Ray Caruana sworn 8 January 2019, with exhibits.
  5. [16]
    Pialba Place provided written submissions dated 14 May 2019.

Ignored evidence provided in the submissions issue

  1. [17]
    The SRV is required to have regard to the submissions by the parties. He is not required to accept all the evidence in those submissions. In fact, to do so would cause the SRV to err in his duties. The SRV included an extensive review of the original submissions and the replies by Cassidy and Escan in his Determination. In the Tribunal’s view the SRV had regard to the submissions. The SRV was required to specify the matters he took into consideration in making the Determination, but not in our opinion to give reasons for rejecting or accepting each individual submission. In any event the SRV gave reasons for adopting, discarding or adjusting that evidence in accordance with his expert opinion. The Tribunal is satisfied that the SRV considered the submissions in arriving at his Determination.
  2. [18]
    Some of the issues covered under the topic ‘Failure to provide adequate reasons’ also fall within this section as the allegation is sometimes that no detailed reasons have been given for the SRV’s failure to rely on a submission. Such issues are dealt with below.

Failed to provide detailed reasons for matters taken into consideration issue

  1. [19]
    The SRV is required to provide detailed reasons for his determination,[7] not for every fact or element considered in arriving at that determination. Having considered the Determination the Tribunal is satisfied that the SRV has provided adequate reasons for his Determination, weighing the evidence, accepting, discarding or adjusting it in accordance with professional judgement.
  2. [20]
    The Tribunal deals with the individual allegations of non-compliance below.
  3. [21]
    In respect of paragraphs 12.6-12.12 of the Determination, Cassidy alleges the SRV failed to provide adequate evidence and detailed reasons to support his treatment of the incentives offered by the Centre in relation to the premises.
  4. [22]
    It is apparent from the Determination that the SRV is aware of the incentives. He expresses the view that Cassidy’s treatment of the incentives ‘reflect[s] incentive adjustments to the extreme’[8]. Having reviewed the parties’ submissions to the SRV and the Tribunal and the Determination, the Tribunal considers that the SRV has succinctly addressed the issue of incentives and considers adequate detail is provided.
  5. [23]
    Cassidy is critical of the SRV, by reference to paragraphs 12.1 and 12.13 of the Determination, for failing to justify his decision to look at sites outside the Centre to determine the current market rent.
  6. [24]
    The Tribunal considers these to be quite simple statements. The SRV discussed why he considered sites outside the centre and the Tribunal is of the view that no further detail is required.
  7. [25]
    Cassidy is critical of the SRV for failing to specify why he formed the view that the Esplanade and Main Street sites the parties referred him to are inferior to the Centre, by reference to paragraphs 12.15-12.18 of the Determination. The SRV states that, in his view, the tenancies considered in that location are inferior as they ‘are only secondary strip locations for retail, with each street having widely scattered retail occupation, interspersed by non-retail mixed uses’.[9] The Tribunal considers that the SRV has provided adequate reasons for his finding.
  8. [26]
    By reference to paragraphs 12.19 and 12.20 of the Determination, Cassidy is critical of the SRV for failing to give reasons regarding his treatment of the preliminary commercial terms Cassidy received in relation to shop 6 Bay Plaza and failing to consider the subsequent refinement of that offer by the leasing agent for Bay Plaza. Cassidy told the Tribunal that the offer was refined verbally by a reduction in the rent payable from $45,000 to $40,000 and an increase in the fitout contribution from $45,000 to $90,000 plus a rent-free period.[10] Mr Cassidy said that he informed the SRV of this refined offer at the inspection. This offer was a key consideration in the SRV’s Determination.
  9. [27]
    Clearly the SRV was aware of the details of the original offer. He undertook a detailed analysis of it. He specifically recognised that it was an initial offer and due to this and the softness in the market, he exercised his professional judgment to make adjustments to the original offer for the purpose of his analysis. He provided the details of his analysis of the written offer. The Tribunal is satisfied that SRV’s consideration and treatment of the written offer is adequately detailed.
  10. [28]
    Cassidy’s Reply dated 23 February 2018, provided to the SRV following the inspection, refers to a later telephone offer of ‘about $40,000’ but makes no reference to an increase in fitout contribution or the offer of a rent-free period.[11] There is no evidence that the SRV was provided with written submissions of the details of the revised offer other than the reduced rent. Mr Cassidy’s evidence is that he informed the SRV of the revised offer verbally at the site inspection.
  11. [29]
    The Determination does not refer to the revised verbal offer or the reduced rent component of that offer. If the SRV was informed of the revised offer it is not apparent that he took it into account. It is not evident that the SRV has taken the verbal offer of reduced rent into consideration.
  12. [30]
    There are documents before the Tribunal that refer to the revised verbal offer for shop 6 comprising the reduced rent, increased incentive and rent-free period. They are Mr Cassidy’s amended statement to the Tribunal dated 1 March 2019 and the ‘Lessee’s report on Valuers Market Rent Determination’[12] prepared by Cassidy in response to the Determination. However it is not apparent on the material before the Tribunal that the valuer was informed of the revised offer.
  13. [31]
    The revised offer to Cassidy was verbal and it is alleged that Mr Cassidy passed on this verbal offer orally to the SRV. The weight afforded a verbal offer is quite different to that given to a written offer. In the Tribunal’s view, if the SRV had been aware of the revised offer he would have given it limited weight mindful that it was a verbal offer, not written. Further, the reduced rent component of the revised offer was verbal. While the SRV does not refer to it, in the Tribunal’s view this information should be afforded limited weight.
  14. [32]
    The SRV made his Determination on the basis of the written offer which he adjusted downwards according to his professional judgment. In the Tribunal’s view the Determination does not fail for this reason.
  15. [33]
    Cassidy is critical of the SRV for failing to give detailed reasons for his failure to adopt Cassidy’s treatment of interest on borrowed money and the seating area in his analysis of the shop 6 Bay Plaza offer, by reference to paragraphs 12.28-12.31 of the Determination. The SRV recognised the availability of the seating, noting it was not part of the demised area but said that he took its existence for use by shop 6 into account. He stated he disagrees with Cassidy’s treatment of both items, considering that it is not in accordance with accepted market practice. The SRV gave reasons for his treatment of both matters. Thus, the Tribunal finds against Cassidy on this allegation.
  16. [34]
    The SVR considered shop 6 Bay Plaza inferior to the subject site and stated his reasons for this opinion in paragraph 12.32 of the Determination. Cassidy is critical of the SRV for providing inadequate reasons and questions whether each element of inferiority referred to by the SRV in fact results in lower rent being achieved. Cassidy, in the submissions to the SVR addressing this matter, expressed the view that Bay Plaza is a superior location[13] The Tribunal finds that the SRV set out in detail his reasons for considering shop 6 inferior and exercised his professional judgement in undertaking this exercise. He undertook a balancing exercise as to the effect of these matters as evidenced by the phrase ‘overall superiority’[14] when referring to the Premises. He exercised his professional opinion, concluding that the superiority of the Premises justified a higher rent than shop 6. It is not necessary, in the Tribunal’s view, for the SRV to provide detailed reasons for each reason as is sought by Cassidy.
  17. [35]
    Cassidy said the SRV failed to provide adequate reasons supporting his claim in paragraph 12.33, when analysing the shop 6 offer, that there is softness in the local retail market and that this softness would equate to an offer from the owners of Bay Plaza in relation to shop 6 of $600/m2. As to the state of the local market, the SRV observed that both Cassidy and Escan acknowledged that the opening of the Stockland expansion swamped the local competition.[15] The SRV considered the offer and the market before stating in his opinion the effective gross rental ‘of at least down to $600/m2 as an upper amount could be achieved’.[16] In the Tribunal’s opinion adequate reasons are provided. The SRV was aware of vacancies in the Centre, having been provided with a plan of the centre indicating the vacant premises. He was informed by Cassidy of vacancies in the Centre and delays in filing vacancies.
  18. [36]
    Cassidy claimed the SRV goes beyond his area of expertise when he claims that ‘it is highly unlikely that Charter Hall would be sufficiently desperate to agree to any rate below $500/m2[17] in that by this statement the SRV claims to understand Charter Hall’s emotional state. This is not what the SRV does. The SRV arrives at his opinion of the lower limit of the likely rent for shop 6 having considered a number of factors including the trading at Bay Plaza and the rentals achieved in the nearby strip retail.
  19. [37]
    The SRV states that the likely rental range he arrives at for shop 6 is free of the ‘shrouds of undisclosed incentive agreements’.[18] Cassidy questioned whether the SRV established this. The SRV has analysed the data and formed an expert opinion. Cassidy disclosed no incentives so in the Tribunal’s opinion it is fair for the SRV to make this statement.
  20. [38]
    In relation to paragraphs 12.36-12.37 of the Determination, Cassidy said detailed reasons are not provided for the SRV’s adoption of a figure of $100/m2 higher for the Premises, than for shop 6. The Tribunal is of the view that the SRV provided adequate reasons for his opinions and then exercised his professional judgement as was appropriate.
  21. [39]
    In relation to paragraphs 12.38-12.39 of the Determination, Cassidy claimed the SRV failed to provide detailed reasons for arriving at his opinion of the appropriate effective gross rental range and the annual effective gross current market rent for the premises. The Tribunal disagrees. The SRV has set out in some detail the information upon which he relied and analysed the data as required and this process of enquiry and analysis informed his professional opinion, which he expresses in these paragraphs. In the Tribunal’s view adequate reasons to support this are provided by the SRV.
  22. [40]
    As to paragraphs 12.40-12.42 of the Determination, Cassidy said that detailed reasons are not provided and that the SRV failed to address ‘the more relevant known facts’ of the 2015 rent negotiations. These paragraphs are concluding paragraphs in which the SRV mentions some of the factors which influenced the broad range. The Tribunal is satisfied that adequate reasons are given.
  23. [41]
    Cassidy is critical of the SRV for disregarding Cassidy’s submissions in relation to goodwill and business considerations at paragraph 8.133 of the Determination. The RSL Act requires the SRV to disregard goodwill.[19] The SRV disregarded goodwill as required.
  24. [42]
    Cassidy is critical of the SRV in relation to paragraph 10.37 of the Determination, for not addressing his valuer’s letter in detail, not explaining which parts of it he considered and which parts he did not consider, and for not detailing his reasons for the means by which he weighed the valuer’s report. The SRV observed that Cassidy covered, and often expanded upon, the matters addressed by the valuer so he chose not to duplicate his earlier responses to the same matters. The SRV states that he reviewed the valuer’s letter in full, considered its overall content and took the matters it raised into account as part of his determination.[20] The Tribunal is satisfied that the SRV has adequately addressed the matters raised in the valuer’s letter.

Based his assessment on false data resulting in a lack of clarity or totally voiding calculations, reasoning and conclusions and thus voiding his market determination issue

  1. [43]
    In relation to paragraph 12.23 of the Determination, Cassidy alleges that the SRV misdescribed the layout of Bay Plaza Shopping Centre. The Tribunal is satisfied that the SRV understood the layout of this centre having had the benefit of access to a layout plan of the centre and undertaken a site inspection.
  2. [44]
    Cassidy alleges that paragraph 12.38 of the Determination, in which the SRV indicates his opinion of the justifiable likely effective gross rental range for shop 6, is based on false data and assumptions. He does not indicate what this false data or assumption is. The Tribunal is of the view that the valuer clearly steps through the means by which he arrived at his figures and does not rely upon false data or assumptions.
  3. [45]
    Cassidy alleges that the parameters relied upon by the SRV in his statements at paragraphs 12.41 and 12.42 are based on false data and assumptions. The Tribunal is satisfied that the SRV undertakes his Determination in an orthodox manner relying upon data which he tests as required, his own informed knowledge of the market and his professional judgement.
  1. [46]
    Other issues
  1. [47]
    Cassidy raises in his 1 March 2019 statement some broad allegations concerning the SRV’s failures including:
    1. (a)
      Bias;
    2. (b)
      Cherry picking evidence;
    3. (c)
      Excluding relevant known facts;
    4. (d)
      Failure to indicate how conflicting evidence was weighed;
    5. (e)
      A lack of evidence to support some of the SRV’s findings;
    6. (f)
      Failure to show why he relied upon the Shop 6 offer; and
    7. (g)
      The treatment of the incentive and shop fitout contribution for the premises.
  2. [48]
    The Tribunal reviewed the submissions to the SRV, the evidence before the Tribunal, these allegations and the Determination and formed the view that the SRV has fairly considered the submissions made to him and states what he has disregarded, giving reasons.[21]
  3. [49]
    In relation to the allegation of bias Cassidy said that the SRV and Escan knew each other and that the SRV corrected Cassidy on numerous occasions at the on-site meeting but did not correct Escan. That the SRV and Escan knew other does not mean that there was bias. Nor can bias be reasonably apprehended from that fact. Correcting a party more than the other does not mean that there was bias on the part of the SRV. Such behaviour could equally be explained by the SRV simply not agreeing to some of the propositions posed by one party. There is no evidence before the Tribunal to support an allegation of actual or apprehended bias. In the view of the Tribunal the SRV has prepared a transparent determination consistent with accepted industry practice and is satisfied that there is no evidence of bias.
  4. [50]
    The SRV provided details for his decision to rely upon the shop 6 offer, adjusted in accordance with his expert opinion. As previously observed the SRV disagreed with Cassidy’s analysis of the incentives for the premises. The Tribunal finds against Cassidy in respect of each of these issues.
  5. [51]
    In Attachment G to Cassidy’s Notice of Dispute, he expresses concern that the Determination was not provided within one month after the final reply submissions were provided to the SRV and that no explanation was given for this delay. The SRV indicated in his email to Cassidy and Escan dated 26 March 2018 that he had expected to have his report issued by that date and that it was well advanced but he had been ‘ambushed by a number of unforeseen critical matters’[22] requiring his attention. He advised them that he aimed to have his report out to the parties by the end of the week. 30 March 2018 was Easter Friday and the report is dated 1 April 2018, being Easter Sunday. The SRV provided an explanation for the dely. There is no material before the Tribunal to indicate that either party objected to this delay at the time. Nor is there any suggestion by Cassidy that there was a change in the factors underpinning the Determination in the time between when the Determination was due and when it was provided. In the Tribunal’s view the short delay, which was accepted by the parties, does not invalidate the Determination.
  6. [52]
    Cassidy referred the Tribunal to a number of cases for the purposes of its consideration.
  1. [53]
    From the decision in Kumari v Goa [2008] RSLT 18 Cassidy drew the Tribunal’s attention to the questions of comparative data, full and accurate data and detailed reasons. In that matter the Tribunal, referring to Fairdale Pty Ltd v Commonwealth Bank Officers Superannuation Corp Pty Ltd & Adval J Dodds [91/2001], observed that questions of comparative data must be approached with due caution as ‘the process is generally one of professional judgment and experience’. It drew a distinction between this and the importance of ensuring that reliance was placed on full and accurate data and observed that detailed reasons must be given for the determination.
  2. [54]
    The Tribunal is satisfied that the SRV has relied upon full and accurate data, exercising his professional opinion in the use of comparative data and provided detailed reasons for his determination.
  3. [55]
    In Silver Jewellery Shop and Piercing Planet v Telado Pty Ltd & G&J Drivas Pty Ltd [2013] QCAT 561 the Tribunal was critical of the valuer for failing to set out with any degree of particularity the matters taken into account by the valuer, considering comparable evidence without setting out what it was, referring only cursorily to the parties’ submissions and not indicating how he has taken any particular matters into account. Thus, that Tribunal found that the valuer had failed to satisfy the requirements of s 31 RSL Act.
  4. [56]
    The Tribunal finds that the SRV set out the matters which he took into account, identified the comparable evidence which he considered, considered the submissions in detail and identified how he took matters in the submissions into account. It is perhaps relevant to note at this point that the Determination spanned some 42 pages.
  5. [57]
    Mr Cassidy drew the Tribunal’s attention to the requirement for the valuer to state the matters taken into consideration and to provide detailed reasons, and the Tribunal’s finding that the valuer failed to consider a licence arrangement from the decision in Brisbane Comedy Pty Ltd t/as Albion Comedy Club and Restaurant v Malisano & Ors [2015] QCAT 340.
  6. [58]
    The Tribunal has made findings about the reasons provided by the SRV, his explanation of the matters taken into consideration and his treatment of the seating available at shop 6.
  7. [59]
    Cassidy refers to Annandale Pharmacies (NQ) Pty Ltd trading as Chemmart Annandale v The Angliss Estate (Annandale) Pty Ltd [2017] QCAT 429 for authority that the valuer must make clear the adjustments made in undertaking his analysis and that detailed reasons are provided for his determination. The Tribunal is satisfied that the SRV met the requirements of s 31 of the RSL Act in preparing the Determination.
  8. [60]
    In Family and Kids Care Foundation Inc v Bilby Lay Enterprises Pty Limited [2005] RSLT 7 Cassidy referred to that Tribunal’s finding that the valuer had not followed the requirements of the Act, instead basing his determination on the capacity of the retailer to afford rent. The Tribunal in that instance found that to be an improper basis upon which to base a valuation given the requirements of the Act. Cassidy has not explained how the circumstances in Family and Kids Care Foundation apply to the circumstances in this case and we find that the SRV has adopted an appropriate basis for his Determination.

Position of the Respondents

  1. [61]
    The Respondents claimed that all of Cassidy’s claims should fail based upon facts and law, and that the Determination should stand. The Tribunal’s findings on this have been set out above in respect of Cassidy’s claims.

Conclusion

  1. [62]
    The Tribunal considered whether the requirements of ss 29 and 31 RSL Act had been met in the Determination. The SRV determined the rent assuming the premises were unoccupied and used for the same or a substantially similar use[23], on the basis of gross rent less lessor’s outgoings[24] and on an effective rent basis having made allowances for incentives.[25] There is nothing in the SRV’s rationale that suggests he has fallen into the trap of taking goodwill or the lessee’s fixtures and fittings into consideration. He is aware of the requirement that he not have regard to those matters.[26] In undertaking the Determination the SRV had regard to the terms and conditions of the Lease and the submissions and responses from the lessor and the lessee about the market rent of the shop.[27] There are no other matters prescribed by regulation.
  1. [63]
    The valuation is in writing, identifies the location of the leased shop,[28] states the matters taken into consideration in making the determination and states detailed reasons for the determination.[29] He states that the current market rent excludes GST.[30]
  2. [64]
    Accordingly, the Tribunal is satisfied that the SRV has satisfied the requirements of s 29 and s 31 of the RSL Act in determining the current market rent.
  1. [65]
    The Tribunal is satisfied that the SRV has prepared his Determination in accordance with the Act. The Tribunal is satisfied that the SRV has set out the basis of his valuation. The Tribunal is not satisfied that the applicant has produced the evidence necessary to impeach or invalidate the Determination.
  2. [66]
    The Tribunal is of the view that the contentions of the Applicant are unsustainable. In particular, it is relevant to note that the SRV has provided detailed reasons for his Determination, in contrast to Cassidy claiming that he needed to provide detailed reasons for each of his detailed reasons. Accordingly, the application is dismissed.

Footnotes

[1]  RSL Act, s 28A(2).

[2]  RSL Act, s 5A.

[3]  RSL Act, s 103(2)(a).

[4]  RSL Act, Schedule Dictionary.

[5]  RSL Act, s 83.

[6]  [2012] QCAT 38, [9]-[13].

[7]  RSL Act, s 31(1)(d).

[8]  The Determination, paragraph 12.12.

[9]  The Determination, paragraph 12.18.

[10]  Amended Statement Cassidy 1 March 2019, p 18, paragraph 63 and Attachment G to Notice of Dispute pp 8, 11.

[11]  Cassidy’s 1 March 2019 Amended Statement, p 198.

[12]  Annexure G to Notice of Dispute.

[13]  Lessee Submission, p 10, Annexure D to Notice of Dispute,

[14] The Determination, paragraph 12.37.

[15]  The Determination, paragraph 12.7.

[16]  The Determination, paragraph 12.33.

[17]  The Determination, paragraph 12.34.

[18]  The Determination, paragraph 12.35.

[19]  RSL Act, s 29(1)(b).

[20]  The Determination, paragraph 10.38.

[21]  See, for example, the Determination, paragraphs 8.133 and 8.173-8.174.

[22]  Cassidy’s statement dated 1 March 2018, p 209.

[23]  The Determination, paragraph 6.0, p 37-40.

[24]  The Determination, paragraph 12.42.

[25]  The Determination, paragraph 12.42.

[26]  The Determination, paragraph 6.0.

[27]  The Determination, p 10-37.

[28]  The Determination, p 5-8.

[29]  The Determination, p 37-41.

[30]  The Determination, p 42.

Close

Editorial Notes

  • Published Case Name:

    M and JE Cassidy Pty Ltd trading as Donut World v Escan Pty Ltd and Pialba Place Management Pty Ltd as Trustee for the Pialba Place Unit Trust

  • Shortened Case Name:

    Donut World v Escan Pty Ltd

  • MNC:

    [2019] QCAT 365

  • Court:

    QCAT

  • Judge(s):

    Member McDonnell, Member Norling, Member McBryde

  • Date:

    25 Nov 2019

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.
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