Exit Distraction Free Reading Mode
- Unreported Judgment
Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust v Ruth Ann Beardsley QCAT 181
Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart v Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust  QCAT 181
Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart
Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust
Retail shop leases matters
On the papers
Dr Cullen, Member
1 March 2016
RETAIL SHOP LEASE –COSTS – whether retail shop lease validly exercised option to renew lease – application for costs – interests of justice.
Queensland Civil and Administrative Tribunal Act 2009 (Qld) ss 100, 102
Khadka v Chai and Anor  QCAT 654
Ralacom Pty Ltd v Body Corporate for Paradise Island Apartments (No 2)  QCAT 412
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
- This is an Application for costs pursuant to s 102 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (QCAT Act). The Applicant operates a newsagency, and rents premises from the Respondent. The Tribunal has received submissions from both parties in relation to the Application for costs.
Nature of the proceedings
- The proceedings were commenced in the Tribunal by the Applicant lessee after the Respondent Lessor refused to allow the Applicant to exercise its option to a new lease. The Respondent asserted that it was entitled to refuse, alleging that rent had been paid late on multiple occasions, in substantial breach of the lease.
- The Tribunal did not find that the there was a substantial breach by the Applicant in respect of its obligations to pay rent. On 2 March 2015, the Tribunal declared that the Applicant had validly exercised its option to renew its lease for a further five years, and ordered the Respondent to execute and deliver-up a lease in registrable form. There were other related orders made, the detail of which is not important here.
- As outlined by the Applicant in its submissions in support of the costs application:
The Tribunal was at pains to highlight to the Respondent during the proceeding that this was not a case where there had been significant periods of delay in paying the rent and furthermore there was not one single month that the Respondent was able to point to where the rent had not been received. Every single month of the previous term of the lease and since the expiry of the lease in October 2013, rent has been paid each month.
- The Tribunal considers that it should always have been apparent to the Respondent that the alleged late payment of rent, which at its highest was late by a few days, was never going to afford it a basis upon which to refuse to allow the Applicant to exercise its option to renew. The Respondent took an inflexible ‘counsel of perfection’ approach to its dealings with the Applicant. Having forced the Applicant’s hand to come to the Tribunal, the issues between the parties then expanded.
- The submissions filed by the Respondent in the costs application demonstrate a lack of insight about its own responsibility for the enlargement of the issues. The Respondent says that the Applicant should bear its own legal costs in relation to all of these other issues, as it did not raise these additional issues before filing in the Tribunal. The Tribunal does not accept that the Applicant did not, over the course of time, raise these matters with the Respondent. Regardless, having placed the operation of the Applicant’s business in peril, by refusing to allow it to exercise one of the most pivotal entitlements it had under the lease, the Respondent should not then be surprised when the Applicant chooses to raise its other lesser quarrels before the Tribunal.
The appeal by the Respondent
- The Respondent filed an Appeal in the Tribunal. This was hardly surprising as the Respondent repeatedly indicated throughout the hearing, before the Tribunal had even made a decision, that it intended to appeal if unsuccessful. This sort of conduct provides some insight into the difficulties that the Applicant would have experienced in endeavouring to negotiate some of the lessor issues that arose in relation to the lease with the Respondent outside a Tribunal context.
- The QCAT Appeal Tribunal reduced some of the amounts payable by the Respondent to the Applicant, for such things as toilet paper to the common area, electricity costs in relation a sump pump and air conditioner, and corrected an error made in the Orders in relation to the Respondent’s name. In its notice of appeal, the Respondent claimed that the Tribunal erred in deciding that lease option had not been validly rejected. Sensibly, the Respondent later abandoned this ground of appeal. The Tribunal notes that, at this juncture, the Respondent had the benefit of legal advice. The end result is that the primary basis upon which the Tribunal at first instance made its decision stands.
The QCAT Act and costs
- Section 100 of the QCAT Act provides that, other than as provided under the QCAT Act or an enabling Act, each party to a proceeding must bear their own costs. The Tribunal may, however, make an order for costs under s 102(1) if it considers the interests of justice require it. The Tribunal in determining whether to exercise its discretion to make an award for costs (under s 102(3) of the QCAT Act) may have regard to the nature and complexity of the dispute; the relative strengths of the claims made by each of the parties; and whether a party has acted in a way that unnecessarily disadvantages another party.
- The Respondent’s case before the Tribunal was doomed to fail, and misguided. The Applicant should not suffer the legal costs it incurred as a result. Together with submissions, the Applicant filed an affidavit in support of its application for costs, sworn to 16 March 2015 by Peter Lloyd, who operates the newsagency together with his wife. He explains that having to apply to the Tribunal, which included applying for injunctive relief to restrain the Respondent from locking the Applicant out of its premises, was stressful.
In considering the “the phrase ‘the interests of justice’” and whether to exercise its discretion to award costs the Tribunal should be satisfied that the particular circumstances of the case “point so compellingly to a costs award that they overcome the strong contra-indication against costs orders in s 100”.
Costs are warranted in these proceedings
- The Tribunal considers that the particular circumstances of this case compel an award of costs in favour of the Applicant.
- At the hearing, the Applicant was represented by two junior barristers engaged on Direct Brief Retainer Agreements. The second barrister acted at half the daily rate of the first, for purposes of providing her with an instructor in these circumstances. The total legal fees incurred by the Applicant were $7,000.00 plus GST. The Tribunal is satisfied that these fees were reasonable and necessary. In point of fact, they reflect a reduction from truly commercial counsel fees, in that this hearing was held across the course of 3-days in the Tribunal.
- As Mr Lloyd points out in his affidavit, this amount represents approximately just under 25% of the annual rent payable to the Respondent pursuant to the terms of the lease. The Applicant’s small, family run business should not suffer a financial loss of this magnitude, as a consequence of being forced to resolve this matter in the Tribunal.
- The Respondent to pay the legal costs of the Applicant, fixed in the amount of $7,700.00 (inclusive of GST) within 7-days of the date of this Order.
- Published Case Name:
Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust t/as Camp Hill News & Camp Hill Officesmart v Ruth Ann Beardsley and Richard Beardsley as trustee for the Orion Family Trust
- Shortened Case Name:
Rolloyd Pty Ltd as Trustee for the Peter Lloyd Family Trust v Ruth Ann Beardsley
 QCAT 181
Member Cullen, Member Judge, Member McBryde
01 Mar 2016