Maxwell & Perandis Pty Ltd v Aztech Australia Pty Ltd
[2021] QCAT 234
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- Unreported Judgment
- Maxwell & Perandis Pty Ltd v Aztech Australia Pty Ltd[2021] QCAT 234
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Maxwell & Perandis Pty Ltd v Aztech Australia Pty Ltd[2021] QCAT 234
Maxwell & Perandis Pty Ltd v Aztech Australia Pty Ltd[2021] QCAT 234
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | Maxwell & Perandis Pty Ltd ATF v Aztech Australia Pty Ltd [2021] QCAT 234 |
PARTIES: | MAXWELL & PERANDIS PTY LTD ATF MAXWELL FAMILY TRUST t/as coastal pontoon and jetty repairs (applicant) v aztech australia pty ltd (respondent) |
APPLICATION NO/S: | RSL086-21 |
MATTER TYPE: | Retail shop leases matter |
DELIVERED ON: | 30 June 2021 |
HEARING DATE: | 25 June 2021 |
HEARD AT: | Brisbane |
DECISION OF: | Member Richard Oliver |
ORDERS: | Application filed on 19 June 2021 is dismissed. |
CATCHWORDS: | LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS – OTHER MATTERS – where parties entered into a commercial lease – where respondent issued the applicant with a Notice to Remedy Breach under the Property Law Act for non-payment of rent in 2021 – where the applicant sought and was granted an ex parte injunction restraining the respondent from entering into possession of the leased premises – where the applicant sought a final interlocutory injunction restraining the respondent from taking possession – where the arears of rent accrued during 2021 and not in 2020 – whether the QCAT has jurisdiction to grant the injunction pursuant to the Regulation made the Covid 19 Emergency Response Act 2020 – whether QCAT has jurisdiction under the QCAT Act to grant the injunction. COVID-19 Emergency Response Act 2020 (Qld), , s 23, s 25, Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 59; Retail Shop Leases Act 1994 (Qld), s 5B Retail Shop Lease and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld), s 5, s 6, s 9, s 12, , Schedule 1 Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Amendment Regulation 2020 (Qld) Brakar Pty Ltd v Sunshine Developments (Vic) Pty Ltd [2021] QCAT 217; Kirk & Anor v Sunshine Developments (Vic) Pty Ltd [2020] QCAT 493 |
APPEARANCES & REPRESENTATION: | |
Applicant: | Mr Maxwell appeared in person |
Respondent: | Mr Madden, Solicitor of AEKJ Lawyers |
REASONS FOR DECISION
- [1]In October 2019 the applicant and the respondent entered into a commercial lease in relation to premises at Molendinar. The term of the lease was for a period of 3 years commencing on 11 October 2019 and ending on 10 October 2022. The rent payable was $4,000/mth as noted on the agreement, with increases of 3%/year plus outlays. From January 2020 the rent was $4,741 including outlays.
- [2]Rent fell into arrears and the respondent issued Notices to Remedy Breach, one on 11 May 2021 and another on 2 June 2021. In fear of being evicted from the leased premises, and in reliance on the provisions of the COVID 19 Emergency Response Act (Covid 19 Act), the applicant filed a Notice of Dispute – Retail Shop Leases Act 1994, in the Tribunal on 10 June 2021 seeking “an interim order preventing the action of the PLA7 effective 16 June to be applied to allow time for a fair & correct procedure with QSBC (or QCAT) if required. I have lodged with QSBC claim no. QSBC-2366”.
- [3]The reference to PLA7 is the Form under the Property Law Act giving a notice to remedy a breach of a covenant under the lease. The notice required the applicant to remedy a breach of the commercial tenancy agreement by paying in full the total outstanding rent of $23,705, being unpaid rent from January to June 2021, within fourteen (14) days. If the breach was not remedied, the applicant was required to vacate the leased premises by 16 June 2021. The application for the interim order was heard by the Tribunal, ex parte, on 15 June 202. The Tribunal made the following order:
- Upon the usual undertaking as to damages having been given by Maxwell & Perandis Pty Ltd atf Maxwell Family Trust t/as Coastal Pontoon & Jetty Repairs, Aztech Australia Pty Ltd, by itself, its servants and agents:
- is restrained pending determination of the within proceedings at a hearing of the interim application filed 8 June 2021 or until further order from acting upon the eviction notice, dated 3 June 2021, given to Maxwell & Perandis …
- [4]The final orders sought in the application submitted to the Tribunal were, in summary, as follows:
- (a)determine a correct and fair amount of rent reduction for the Covid 19 response period and extension period to be applied;
- (b)monies paid in relation to the tenancy contract between the applicant and the respondent be acknowledged and reconciled. Monies has been paid to ReMax Realty, Scott’s initial agent;
- (c)terms in the tenancy contract be acknowledged and applied being 1st month charged at 0 for fit out period;
- (d)negotiated rent free period due to building damages upon tenancy commencing be applied.
- (a)
- [5]The Tribunal does not have jurisdiction to decide disputes under the Property Law Act in particular, in respect of a commercial lease. The lease the subject of this proceeding, is not a retail shop lease as defined in the Retail Shop Leases Act. If jurisdiction is conferred, it is under the Covid 19 Act which, by Part 7, s. 23, leases other than retail shop leases are incorporated into the emergency provisions which regulate, inter alia, the recovery of possession of premises during the operation of the Act which expired in December 2020.[1] The process for negotiation of disputes, generally rental, is set out in the Retail Shop Leases and Other Commercial Leases (COVID 19 Emergency Response) Regulation 2020[2] (“the Covid 19 Regulation). Also jurisdiction is conferred on QCAT under the Covid 19 Regulation.
- [6]On 25 June 2021 the Tribunal conducted a further hearing of the application for the injunction. It was opposed by the respondent. It contended that the Tribunal did not have jurisdiction to grant the interlocutory injunction or any final relief because the dispute was in relation to a commercial lease. Further the Covid 19 Act or the Covid 19 Regulation had no application to the dispute which arose after December 2020.
History
- [7]From the commencement of the lease, through to March 2020 the applicant paid the rent on a regular basis. After this the rent was paid, but not on time and not in a lump sum. Document 4 to Mr Wilson’s statement[3] sets out a schedule of the payments made. The Applicant has produced a schedule of payments, document 7, to his submissions,[4] which also show irregular payments.
- [8]In mid 2020 difficulties arose because of the consequence of the Covid 19 pandemic. The applicant sought to negotiate rent relief with the respondent. The Respondent voluntary gave a rent reduction for April, May and June 2020 of $800/mth. However Mr Maxwell, contends that the reduction was never agreed to as such because he wanted to negotiate an agreeable amount. He says Mr Wilson was not interested in seeing his financial figures so a figure could be negotiated as required by the Covid 19 Regulation. It seems this is where the disputation between the parties started.
- [9]It is accepted the rent fell into arrears, but the applicant contends it was potentially entitled to further rent relief and sought the intervention of the Queensland Small Business Commissioner (“QSBC”) to assist in the negotiation of an appropriate rent relief. However this did not occur until May 2021. This is ongoing.
- [10]By the end of 2020 the rental arrears were about $11,305 having regard to document 2 to Mr Wilsons statement. For the 2021 year to date the arrears are 23,455 according to document 3 to Wilson statement or at best, $15,973 on the Applicants submissions. What is clear is that from January 2021 to the date of the Notice to Remedy Breach there are arrears of rent. This is outside the operative timeframe for the Covid 19 Act which was until the end of December 2020.
- [11]The applicant contends, for the purposes of this application, that the amount of rent outstanding, if any, cannot be ascertained with any precision because there has not been a negotiation, to which it is entitled under the Covid 19 Regulation to determine the amount of rent relief it is entitled to. It may well be, the applicant submits, that there is a large enough credit, when carried over into 2021, that would offset the outstanding rent claimed by the respondent. In effect there would be no rent payable and it would not be in breach of the lease.
- [12]The respondent’s position is that the Notice to Remedy Breach is not based on any arrears of rent relating to the operational period of the Covid 19 Regulation, but only for the period from January 2021 to the date of the Notice. The applicant was contractually bound to pay the agreed rent, which it has not. The applicant’s rights are reserved to pursue the claim for rent relief for the response period with the QSBC in any event. The respondent therefore contends that the Notice is a valid notice issued under the Property Law Act, the applicant has not complied with the Notice and therefore the respondent is entitled to possession. This is not a case where the Tribunal has jurisdiction to grant relief against forfeiture, nor under the Covid 19 Regulation or at all.
Discussion
- [13]Although the Tribunal granted the interim injunction, the question for determination now is whether the Tribunal has jurisdiction to grant the interlocutory relief sought, that is a continuation of the injunction, it would seem until the reference to the QSBC has been exhausted. This seems to be consistent with the substantive relief the applicant has sought in the application. The applicant wants time to engage in the dispute resolution process under the Covid 19 Regulation and ascertain what further rent relief, if any, it is entitled to. After this, to then undertake an accounting of all rent paid to arrive at a final reconciliation. No other specific relief is sought. Effectively the applicant is seeking a permanent injuction.
- [14]The Covid 19 Regulation sets out in detail the obligations of parties to a lease where rent relief is sought or a dispute arises. The Covid 19 Regulation was operative between March 2020 and the end of September 2020[5] then extended to end of December 2021.
- [15]The Covid 19 Regulation applied if a lease was an ‘prescribed lease’ and ‘affected lease’ as defined under the Regulation, which was the case with this lease. Where a dispute arises the Covid 19 Regulation require that the parties must act in good faith in mitigating the effect of COVID 19 on the parties. The Regulation prevents the lessor under an affected lease from taking certain prescribed action which includes termination of a lease or eviction of a lessee. As part of the mutual engagement to resolve a dispute s 14 sets out the obligations of the parties of what they must do in attempting to negotiate rent and other conditions which includes providing true and accurate information about the financial circumstances, usually of the lessee. If the parties cannot reach agreement, there is a dispute resolution process under Part 3 of the Regulation including mediation. Division 4 sets out the obligations of mediators and the interaction and application of the Retail Shop Leases Act.
- [16]Jurisdiction is then conferred on QCAT under s. 42 of the Covid 19 Regulation to hear and decide eligible lease disputes. An eligible lease dispute is defined in s. 21 of the Act and is an “affected lease dispute and small business tenancy dispute”. However under s. 42 a person can only apply to QCAT not only if it is an eligible lease dispute, but also one of the following must apply, that is:
- (a)the parties to the dispute cannot reach a settlement agreement;
- (b)one party does not attend the mediation conference and does not have a reasonable excuse;
- (c)the dispute is not settled within 30 days after the dispute notice is given to the small business commissioner;
- (d)a party to a settlement agreement claims another party to the agreement has not complied with its terms.
- (a)
- [17]The only possible ground giving rise to jurisdiction here is that the parties to the dispute cannot reach a settlement agreement. The process of reaching a settlement has only just begun, so if the injunction was granted it would continue indefinitely. That is an unsatisfactory state of affairs and one which would go to the discretion.
- [18]The difficulty for the applicant is that although there were discussions about rent relief during 2020, and the respondent did in fact give relief of $800/mth for 3 months, it did not take any prescribed steps or action[6] during the response period[7] to activate the remedies available to it under the Covid 19 Regulation. The applicant did give a ‘dispute notice’ to the QBSC in accordance with Division 3, s 26 but this was not until May 2021.[8] This was after the ‘response period’ and when the Regulation ceased to have any force or effect, save for an ongoing dispute.
- [19]In addition to the above, the respondent has not sought to recover any arrears of rent during the operation of the Covid 19 Regulation. The arrears sought to be paid is confined to 1 January 2021 to the date of the Notice to Remedy Breach. For this period, there is no dispute between the parties that arrears of rent are due and payable.
- [20]The Tribunal’s jurisdiction to grant the relief sought in the application can only be derived from an enabling Act or in its original jurisdiction. The enabling Act sought to be relied upon is the Covid 19 Act and the Covid 19 Regulation which has no application to the respondents claim for rental areas in the Notice to Remedy Breach. Under the Queensland Civil and Administrative Act, no power is conferred on the Tribunal to make decisions about commercial leases, this is left to the general law.
Conclusion
- [21]In any application for an injunction the usual principles apply; is there an arguable case, where does the balance of convenience lie, and is damages an adequate remedy. Although the Tribunal has the power to grant an injunction under s 59 Of the QCAT Act, it must first have jurisdiction or power to make a decision about the subject matter of the injunction. For the reasons stated above, in the circumstances of this case it does not have that jurisdiction and therefore the usual principles have no application in the determination of the application.
- [22]The only order the Tribunal can make therefore is that the application be dismissed.
Footnotes
[1]Retail Shop Leases and Other Commercial Leases (Covid 19 Emergency Response) Amendment Regulation 2020.
[2]Made pursuant to s 23 of the Covid 19 Emergency Response Act 2020; Brakar Pty Ltd v Sunshine Developments (Vic) Pty Ltd [2021] QCAT 217; Kirk & Anor v Sunshine Developments (Vic) Pty Ltd [2020] QCAT 493.
[3]Exhibit 2.
[4]Exhibit 3.
[5]Retail Shop Lease Regulation s 23(6).
[6]The Regulation s 9.
[7]The Regulation Schedule 1 – definition.
[8]Exhibit 1 – attachment QSBS – 2366 dated 28 May 2021.