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- Unreported Judgment
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
Jaason v Band  QCAT 117
Alfred Adolf band
Retail shop leases matter
14 April 2020
On the papers
Member Paratz AM
Alfred Adolf Band is to pay to Anthony-Ashley Jaason the amount of Four Thousand Eight Hundred Dollars ($4,800.00).
LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – OTHER MATTERS – where the parties had discussions as to entering into a retail shop lease – where no lease was entered into – where a deposit was paid – whether the deposit was refundable – where a non-refundable deposit was held to be key money – where the receipt of key money was prohibited and was recoverable as a debt
Queensland Civil and Administrative Tribunal Act 2009 (Qld), Schedule 3
Retail Shop Leases Act 1994 (Qld), s 102
Hall v Freeman  QCATA 159
REASONS FOR DECISION
- Mr Alfred Adolf Band (‘the owner’) is the owner of premises situated at 106 Deshon Street, Woolloongabba, in Brisbane.
- Mr Anthony-Ashley Jaason (‘the tenant’) intended to operate a business known as ‘The Deshon Street Tea Gardens’ from the premises.
- The tenant filed a Notice of Dispute in the Tribunal on 9 March 2017. The remedy that the tenant was seeking was set out as follows:
That the Landlord repays $4,800 of $5,000 Deposit made to him for the Lease that never materialised.
- The owner filed a Response and/or counter-application on 6 July 2017. The owner said in the response that the agreement was not just for the lease of the premises, but also for the purchase of the owner’s takeaway snack bar business on the premises, and that the payment made by the tenant to the owner of $5,000 was to buy the business from him.
- The owner further said that the tenant prepared the documents, including a ‘deposit receipt document’ and a draft lease which he took to his solicitor, who said that the lease was not in the correct form, and that the Retail Shop Leases Act had to be followed.
- No formal lease agreement in accordance with the Retail Shop Leases Act 1994 (Qld) (‘the Act’) was ever entered into between the owner and the tenant.
History of the matter
- Since the commencement of the proceedings in the Tribunal, this matter has had a long and chequered history, marked by non-attendance by each of the owner and the tenant at various times at Directions Hearings, failure to file material by each of them in accordance with Directions given by the Tribunal, and requests for extension of time by the tenant.
- By directions given on 6 June 2017, the application was listed for a Compulsory Conference on 21 August 2017. By directions given on 3 August 2017 Mr Band was granted leave to attend the Compulsory Conference on 21 August 2017 by telephone.
- The tenant filed an application on 15 August 2017 seeking an adjournment of the Compulsory Conference set for 21 August 2017 due to the death of a close family member on 21 July 2017 and to the grieving process.
- By directions given on 15 August 2017, the Compulsory Conference listed on 21 August 2017 was vacated, and the matter was listed for a compulsory conference on 13 September 2017.
- A Compulsory Conference was conducted on 13 September 2017 from 1:30pm to 3:05pm by a Member of the Tribunal. The tenant attended in person, and the owner took part by telephone. The matter was not resolved.
- By directions given at the Compulsory Conference on 13 September 2017:
- a)the tenant was to file an amended notice of dispute and statements of evidence by 4:00pm on 14 November 2017;
- b)the owner was to file material in response to the amended notice of dispute and statements of evidence by 4:00pm on 14 December 2017;
- c)the matter was listed for a directions hearing on 24 January 2018; and
- d)the matter was listed for a tribunal hearing on 29 January 2018.
- The tenant did not file material as directed, and the owner subsequently did not file material.
- At the directions hearing held on 24 January 2018 directions were given that:
- a)the tribunal hearing scheduled for 29 January 2019 was cancelled;
- b)the matter was listed for a tribunal hearing on 21 May 2018;
- c)the tenant was given extended time to file an amended notice of dispute in the material on which he intends to rely by 2 March 2018;
- d)the owner was to file a response to the amended notice of dispute by 23 March 2018, and the material upon which he intended to rely by 6 April 2018; and
- e)the tenant was to file statements of evidence in reply by 20 April 2018.
- The tenant filed an application for miscellaneous matters on 7 March 2018 seeking an extension of time to file his material, due to ill health as he had been unable to properly prepare documents, and had experienced trouble locating critical witnesses.
- By directions given on 13 March 2018 the time for the filing of materials was further extended so that:
- a)the tenant was given extended time to 23 March 2018 to file an amended notice of dispute and material on which he intended to rely;
- b)the owner was given extended time to 13 April 2018 to file a response to the amended notice of dispute;
- c)the owner was given extended time to file material to 13 April 2018;
- d)the tenant was given extended time to file material to 27 April 2018;
- e)the directions hearing set for 2 May 2018 was confirmed; and
- f)the tribunal hearing set for 21 May 2018 was confirmed.
- The tenant filed an application for miscellaneous matters on 29 March 2018 seeking an extension of time to file his material due to the difficulty in gathering witness statements because of the witness being in remote locations for work and therefore communications being hindered; and further that the principal solicitor dealing with the case had passed away, and the tenant was unable to access his computer and had to request original documents from the Tribunal.
- Directions were given on 10 April 2018 for the filing of submissions on the application for miscellaneous matters filed on 29 March 2018.
- At the directions hearing held on 2 May 2018, which was attended by the tenant and the owner (who was assisted by an interpreter in German), directions were given that:
- a)the time for the tenant to file an amended notice of dispute and materials in support was extended to 23 May 2018;
- b)if the tenant did not file material as directed, the proceeding would be dismissed;
- c)if the tenant did file material as directed, the owner was to file material by 20 June 2018;
- d)the tenant was to file material in response by 6 July 2018; and
- e)the matter was to be decided by a Member of the Tribunal on the papers not before 11 July 2018.
- By directions given on 4 May 2018, the tribunal hearing set for 21 May 2018 was cancelled.
- By directions given on 27 August 2018 the owner was directed to file statements of evidence by 6 September 2018, and that if he did not comply the matter would be determined by a Member of the Tribunal on the papers not before 13 September 2018. The owner did not comply with those directions.
- The matter was referred to a Member of the Tribunal for a decision on the papers on 21 June 2019. The Member advised that she considered that the matter was not suitable for an On the Papers hearing.
- A directions hearing was held before me on 22 July 2019. Neither party attended the directions hearing. I directed that the direction for an On the Papers hearing made on 27 August 2018 was cancelled, and the matter was to be set for a directions hearing to discuss the matter being set for an oral hearing.
- A further directions hearing was held before me on 19 August 2019. The tenant did not attend. Mr Hoyle, who advised that he is the owner’s attorney under an Enduring Power of Attorney, participated on behalf of the owner. Mr Hoyle said that the owner is an elderly man in his eighties, and it is very difficult to discuss matters with him.
- A Solicitor, Mr Peter Jones, had previously been involved in the transaction on behalf of the owner.
- I made directions, at the directions hearing held on 19 August 2019, for the matter to be finally determined on the papers, on the basis of the material that had been filed, in order to bring the matter to finality, as follows:
- The Submission attached to the Response Filed on 6 July 2017, and signed by Alfred Adolf Bland, is taken to be a statement of evidence of Alfred Adolf Bland.
- The Statement of Claim filed on 23 May 2018, and signed by Anthony-Ashley Jaason, is taken to be a statement of evidence of Anthony-Ashley Jaason.
- The Application is to be determined by an On the Papers Hearing by a single Member on the basis of the following documents:
- a)Notice of Dispute filed 9 March 2017
- b)Response and submission filed 6 July 2017
- c)Statement of claim filed 23 May 2018
- A copy of these directions, and of the decision in the matter, is to be sent to:
- (a)Mr Peter Jones – Alfred Adolf Band’s Solicitor, and to
- (b)Tim Hoyle - Alfred Adolf Band's Attorney appointed under an Enduring Power of Attorney, by email to:
(address set out)
- Section 102(2)(a) of the Retail Shop Leases Act 1994 (Qld) provides that if the amount, value or damages in dispute is less than the QCAT prescribed amount, QCAT may be constituted by a legally qualified Member. The prescribed amount as defined in Schedule 3 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) is $25,000.
- This matter is for a claim less than $25,000, and I am a legally qualified Member, and can therefore hear this matter and give a final decision in it.
- This is the decision on the papers in determination of the Notice of Dispute.
Versions of the Parties
- The Tenant attached a document headed ‘Statement of Claim – Magistrates Court of Queensland’ to the Notice of Dispute. He described the arrangements upon entering possession as follows:
- In or about September 2016, the (tenant) expressed to the (owner) an interest to rent that property situated at Lot 136 on RP 11939, parish of South Brisbane (106 – Deshon Street, Woolloongabba, 4102) (the property) to set up a café/diner.
- In October 2016, at the insistence of the (owner), the (tenant) took possession of the property in order to outfit it for opening. At about that time, the (tenant) paid to the (owner) a returnable bond in the amount of five thousand dollars ($5,000).
- The tenant then describes steps taken to negotiate a lease, and says that no lease was entered into or executed by the parties.
- The tenant describes the basis of his claim as follows:
- On 10 January 2017, the (tenant) gave notice to the (owner) in person and by letter of his intention to vacate the property. The (tenant) demanded that the (owner) repay the bond to the (tenant) within seven (7) days the amount of four thousand eight hundred dollars ($4800) (being the original amount of the bond ($5,000) less $200 by way of outstanding rent).
- In his response and/or counter-application, the owner denies that the amount paid of $5,000 was a bond and described it as a deposit. The owner denies that he ever agreed that the deposit was returnable, and notes that this was not stated in the deposit receipt document. He says that the amount of $5,000 was paid to him by the tenant to buy the business, as follows:
- Mr Jaason and his partner did not just lease the premises from me. They also bought the takeaway snack bar business that I had been running for a couple of months. This was a going concern business but was open for trading from 6 AM to 2 PM Monday to Friday. The payment that Mr Jaason made to me was to buy this business from me.
- For this payment he received the goodwill of the business, the plant and equipment that was in the shop and the stock that was in the shop, mainly a supply of soft drinks, as well as a supply of cooking oils and spices.
- When Mr Jaason and I discussed him taking over the shop he asked me how much I wanted for him to walk in. I told him $5,000 which to me was of value of the business. He agreed to pay me that amount of money. We also agreed that I give them a three-year lease with a rent reduction at the start.
- Mr Jaason prepared documents, including the deposit receipt document and a draft lease.
- Mr Jaason then paid me the $5,000, by a number of payments.
- The owner says in the response that he is not willing to repay the amount of $5,000 as follows:
- I’m willing to agree that the lease agreement has ended but am not willing to repay the $5,000 to Mr Jaason. He bought the business from me with that money and then ran the business badly so he could not continue running it. That is his fault, not mine.
- The tenant describes his version of events more fully in the statement of claim filed on 23 May 2018.
- The tenant says that the owner related the history of the café as having closed some months previously due to a food poisoning outbreak:
A conversation was had where the (owner) had stated that he had tried to run it as a café some months previously but had to close it down due to a food poisoning outbreak, whom the (owner) blames on meat he had purchased from the local Aldi store. He alleged meat was out of date when he purchased it causing a customer to get food poisoning
- The tenant said that he advised the owner that he did not want to purchase the business because of the previous food poisoning outbreak, and the fact that there was absolutely no goodwill in the business, and it was worthless:
Because of these past issues with the business owned by him known or [sic] the Deshon Street Carvery and Take Away, when expressed that he wanted to sell the business, we advised him that we did not want to purchase the business from him because of the previous food poisoning outbreak and that the fact that there was absolutely no goodwill in the business that Mr Band had tried to start quite some months before, making it worthless.
- The tenant says that the owner also tried to sell the stock from the former business, but that it was not made for resale, or was unusable.
- The tenant says that the owner understood that he did not want to purchase the business and agreed to lease just the premises.
Mr Band also tried to sell stock that was in the shop namely cans of Aldi branded soft drinks, purchased from Aldi that had ‘not for individual resale” printed on the side of the cans as they were never meant or licenced to be sold individually by the manufacturer.
These cans of soft drinks were also out of date along with the spices and all other foodstuffs that were on the premises. These foodstuffs were left up to us to throw out with all the rotten meat and mouldy bread and buns from a freezer that had been off for some months.
- The tenant says that he made the first $1,000 payment on 27 September 2016, which he described as a deposit payment, and took possession of the property on 1 October. He says that the owner was aware that the tenant had to have the premises fully cleaned and ready to open by 12 December as part of conditions of getting their funding support for suppliers and new stock from the NEIS government program, which was designed to assist people to start their own small business.
- The tenant describes the process of attempting to negotiate a lease in writing but the parties were unable to agree on several material terms of the lease.
- The tenant makes a reference to what appears to be payment of rent of $700 per week:
We had already been paying $700 per week from 12 December as we only had 4 weeks free rent to set up, but because of still no lease, could not open by 12 December.
- The tenant says that he gave notice the owner in person and by letter on 9 January 2017 of his intention to vacate the property, as his funding had been cut as no lease had been entered into, and as no agreement had been reached as to use of signage.
- The ‘Deposit Receipt’, which the parties referred to, is signed by Mr Band, and is dated 27 September 2016. For purposes of discussion it is best to set out the document in full as follows:
I, Alfred Band of 470 Old Cleveland Road, Camp Hill, Q, 4152 have received the sum of One Thousand Dollars ($1000)
From, Anthon-Ashley Jaason, located at 44 Carl Street, Woolloongabba
Part payment of Five Thousand Dollars ($5,000) deposit for 3 year lease on premises located at 106 Deshon Street Woolloongabba.
The remaining Four Thousand Dollars ($4,000) deposit will be paid at One Thousand Dollars ($1,000) per week till paid for in full by the first of November 1/11/2016.
3 Year Lease with the option to extend the lease by 3 x 3 x 3 years and lease to be signed by both parties on receivership of the last One Thousand Dollar ($1,000) payment of the Five Thousand Dollar ($5,000) deposit being received.
Name: A Band
Name: Elwood Cripps
- The central issue is as to what the payment of $5,000 as a ‘deposit’ was for.
- There is no evidence that the $5,000 was paid to the owner for purchase of a business apart from the contentions of the owner. The tenant has conflicting contentions. The question of credit arises as to whose contentions should be accepted.
- A question of credit would normally be resolved at an oral hearing by hearing the evidence of the parties. In this matter however, that is not a course that is available, as the owner is represented by a person exercising power under an Enduring Power of Attorney, which indicates that the owner, who is an elderly man, either lacks capacity to participate in legal proceedings, or would not be a competent or reliable witness to give evidence.
- In the absence of the ability to hear oral evidence from both parties, and to bring finality to this long-running matter, I will determine the matter on the basis of the material before me, as directed, on the civil standard of the balance of probabilities.
- The version of the owner, that he sold the café as a going concern some months after it was closed down, is inherently implausible:
- a)The café could not be described as a going concern when it was not functioning.
- b)The stock was said by the tenant to be unusable and unsaleable, and there is no evidence that he obtained a benefit from it.
- c)There is none of the usual indicia that would be expected to accompany a sale of a business as a going concern: there is no contract for the sale of a business, or list of fixtures or stock being transferred, or any financial statements as to the previous conduct of the business.
- d)The deposit receipt makes no reference to a sale of a business.
- I do not accept that the amount of $5,000 was paid for the purchase of the previous café business.
- The tenant drew up the ‘deposit receipt’ which is unclear as to its meaning. The tenant claims that this was in relation to a refundable deposit, but the document does not say that, and it is unclear what the terms of the deposit are.
- Not all deposits are refundable. As I noted in Hall v Freeman:
 This is a matter of contract law, and will be determined upon the actual agreement made between Mr Hall and Mr Freeman. That contract may contain terms as to payment of a deposit, and terms as to when it may be refunded or forfeited, but that will be a matter of consideration of the actual contract.
 The author of Breach of Contract makes this comment as to deposits generally:
 Uncertain Area
Contracts often provide for the payment of a sum of money described as a ‘deposit’. The fact that terms requiring such payments are so common makes it surprising that the authorities on accrued rights conflict to such an extent that they provide no authoritative guidance.
 The author goes on to say that the precise function of a payment described as a ‘deposit’ must depend on the terms of the contract.
- In the absence of the terms of the contract providing that the deposit is refundable, it cannot be assumed that it is refundable. There is no expression in the deposit receipt making the deposit refundable. The owner denies that the deposit is refundable.
- It is a practice in some leases of commercial property for the Lessor to require a ‘holding deposit’ which is refundable upon the entering into of a lease. The purpose of the holding deposit is to establish the genuineness of the tenant.
- If a deposit is refundable, there must be provisions as to when the deposit will be refunded – whether upon signing a Lease, or upon other event. There are no such provisions in the Deposit Receipt.
- I am not satisfied that the terms of the contract provide that the deposit is refundable. The claim by the tenant to be entitled to a refund of the deposit on the basis of the Deposit Receipt is therefore not made out.
- I am also not satisfied that the payment of $5,000 was to purchase a business, as discussed.
- If the $5,000 was not for the purchase of a business, and was not a refundable deposit, the only other option available is that the payment was a non-refundable deposit.
- A non-refundable deposit paid as a payment to secure the premises for the tenant, would come within the definition of ‘key money' as defined in the Schedule to the Act. That definition is as follows:
key money means –
- (a)an amount to be paid to, or at the direction of, a lessor by way of a premium, non-repayable bond or otherwise, for the granting, renewing or assigning of the lease; or
- (b)any benefit to be conferred on, or at the direction of a lessor for the granting, renewing or assigning of a lease.
- The payment of key money is prohibited under section 39(1) of the Act:
39 Payment of key money and amount for goodwill prohibited
- (1)A person must not, as lessor or for the lessor, under or in relation to a retail shop lease, seek or accept the payment of key money or any amount for the goodwill of the lessee’s business carried on in or from the leased shop.
- Where key money is paid, it may be recovered as a debt under section 39(3) of the Act:
- (3)If an amount is paid to, or a benefit accepted by, a person in contravention of subsection (1), the person who paid or conferred the benefit may recover the amount or value of the benefit as a debt.
- I consider that the owner did in fact seek and accept the amount of $5,000 as ‘key money’ within the meaning of the Act, as it was a ‘non-repayable bond or otherwise’ paid for the granting of a lease.
- The tenant is entitled to recover the key money as a debt under section 39(3) of the Act.
- The tenant has only claimed the amount of $4,800, as he has deducted an amount of $200 which he accepts is unpaid rent.
- The tenant is therefore entitled to recover the amount of $4,800, which he claims, as a debt owing under section 39(3) of the Act.
- I order that the owner pay to the tenant the amount of Four Thousand Eight Hundred Dollars ($4,800.00) pursuant to section 39(3) of the Act.
 Response, attachment .
 Ibid, .
 Notice of Dispute filed 9 March 2017, Statement of claim  and .
 Ibid, .
 Response and/or Counter Application, attachment  to .
 Ibid, .
 Statement of Claim, 1.
 Ibid, 2.
 Ibid, 3.
 Ibid, 2 .
 Ibid, 6.
  QCATA 159,  – .
 J W Carter, Breach of Contract (The Law Book Company Limited, Sydney, 1991) 476.
 Ibid, 477.
- Published Case Name:
Jaason v Band
- Shortened Case Name:
Jaason v Band
 QCAT 117
Member Paratz AM
14 Apr 2020