Gillam v Wheatley[2021] QCAT 274

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

REASONS FOR DECISION

1. [1]
   Mr Gillam leased premises from Mr Wheatley in November 2018 for a three-year term.  Various disputes have since arisen between them.  Mr Wheatley delivered a Notice to Remedy Breach (‘the Notice’).^[1]  He contends that Mr Gillam did not remedy the breaches within a reasonable time and took steps to retake possession including changing the locks to the premises and affixed Notice of Termination.^[2]  There is evidence before me that he offered to arrange a time for Mr Gillam to collect his personal property.
2. [2]
   Mr Gillam filed a Notice of Dispute^[3] seeking:

   1. (a)
      ‘lessor pays invoices for $2985.30.’
   2. (b)
      ‘lessor retraks invoices for unmetered electricity.’(sic)
   3. (c)
      ‘lessor repays all rates paid to date.’
   4. (d)
      ‘lessor stops harassing lessee to move and returns to 3 monthly billing of lease till term at 17 November 2021.’
3. [3]
   He says that the main points in dispute are:

   1. (a)
      ‘lessor is trying to terminate lease, has re entered the premises and trying to evict business.’
   2. (b)
      ‘lessor is claiming electricity for premises when only single meter for lessor and lessee.’
   3. (c)
      ‘lessor is charging rates where special conditions clause (4) where lessor agrees to pay all outgoings including council rates.’
   4. (d)
      ‘lessee is claiming Covid-19 Emergency Response Part 7, sec 23 (a,b,c).’
4. [4]
   A week or so later Mr Gillam filed an Application for interim order^[4] seeking:

   1. (a)
      ‘To return shed and all my property back to continue working.’
   2. (b)
      ‘Stop entering my shed and switching off power to my shed.’
   3. (c)
      ‘Suspend all further rent and outgoing invoices till after hearing or judgement.’
   4. (d)
      ‘Stop blocking entry to my shed with vehicles and building materials.’
   5. (e)
      ‘Stop harassing me to leave.’
   6. (f)
      ‘Not to approach me or come within 20 m of me while I at my shed.’
   7. (g)
      ‘Stop any further legal interference.’
5. [5]
   He says that these interim orders are to:

   1. (a)
      protect himself and his property from damage or harm;
   2. (b)
      allow him to continue to trade and make an income;
   3. (c)
      protect his privacy and to not feel threatened or bullied and to feel safe to access his property without conflict.
6. [6]
   On 9 July 2021, I conducted an urgent directions hearing and made directions for the delivery of submissions in relation to the Application for interim order and for the Application for interim order to be decided on the papers.  I raised the necessity to clearly outline the basis on which it was claimed that the Tribunal had jurisdiction to make the orders sought.
7. [7]
   On that occasion I ordered that Mr Wheatley be restrained from treating Mr Gillam’s property the subject of the dispute as abandoned under the terms of the lease pending determination of the Application for interim order. 
8. [8]
   Mr Gillam also sought an order that he be allowed to retake possession so that he could trade.  I specifically declined to make such an order because I was not satisfied that he had established that it was an order that the Tribunal was empowered to make as an interim order and indicated he would need to seek Mr Wheatley’s permission to access his property stored at the premises.  Mr Wheatley has provided evidence that Mr Gillam has, in the intervening time, without his agreement entered the premises despite no such order being made allowing him to do so.
9. [9]
   Submissions have been received.^[5]  I now proceed to determine the Application for interim order.  
10. [10]
    Before making a final decision, the Tribunal may make an interim order it considers appropriate in the interests of justice to protect a party’s position for the duration of the proceeding^[6] or to require or permit something to be done to secure the effectiveness of the exercise of the tribunal’s jurisdiction.  The reasons given for seeking the interim orders set out above^[7] are not clearly framed in this way.
11. [11]
    The Tribunal may grant an injunction including an interim injunction if it is just and convenient to do so.^[8] 
12. [12]
    Whether an interim order should be made depends upon:

    1. (a)
       whether the Tribunal is empowered to hear and determine the dispute and to make the orders ultimately sought; and
    2. (b)
       whether the interim order is in aid of that relief.
13. [13]
    Interim order (a) is in the nature of an order for relief against forfeiture and interim orders (b) – (g) are in the nature of restraining orders, including as I understand Mr Gillam’s claims, restraining alleged breaches of the usual obligation on the lessor to allow the lessee quiet enjoyment of the leased premises.
14. [14]
    The parties, who were self-represented, have not addressed in their submissions the usual factors for the making of an interim order such as:

    1. (a)
       why the order is required to protect a party’s position for the duration of the proceeding or is required to secure the effectiveness of a final decision;^[9]
    2. (b)
       whether Mr Gillam has an arguable case that may entitle him to final relief;
    3. (c)
       whether the balance of convenience favours the making of the order, including why damages are not an adequate remedy, if the lessor is found to have taken action contrary to law;
    4. (d)
       whether Mr Gillam offers an undertaking as to costs or damages^[10] and the value of any such undertaking. 
15. [15]
    These matters were raised during the directions hearing as potentially relevant matters to be addressed in the submissions to be filed.
16. [16]
    Mr Gillam is the applicant and bears the onus of satisfying me that it is appropriate to make the orders sought.  His submissions do not address these principles.
17. [17]
    In relation to whether Mr Gillam has an arguable case that may entitle him to final relief, Mr Gillam must show, as observed by SM Brown:

that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial.^[11]

18. [18]
    In relation to the balance of convenience, SM Brown observed:

The court should take whichever course appears to carry the lower risk of injustice if it should turn out to have been ‘wrong’, in the sense of granting an injunction to a party who fails to establish his right at the trial, or in failing to grant an injunction to a party who succeeds at trial.^[12]

19. [19]
    In weighing the balance of convenience, a significant factor is whether damages would be an adequate remedy for the applicant.^[13]
20. [20]
    In making such an order the Tribunal may require that Mr Gillam give an undertaking as to costs and damages.^[14]
21. [21]
    As indicated earlier in these reasons interim order (a) is seeking an order for relief against forfeiture rather than an order to preserve the status quo pending a final hearing as Mr Wheatley has already taken steps to terminate rather than threatening to do so. 

Does the Tribunal have power under the Property Law Act 1974 (Qld) (PLA) to make the orders sought?

22. [22]
    I find that the PLA does not confer power on the Tribunal to make an order for relief against forfeiture of Mr Gillam’s lease.
23. [23]
    Mr Gillam’s submissions set out the circumstances of the dispute.  He specifically relies upon s124 of the PLA.  As I understand his submissions, he contends that the Application for interim order is an application for relief.
24. [24]
    Section 124 of the PLA relevantly provides:

Restriction on and relief against forfeiture

1. (1)
   A right of re-entry or forfeiture under any proviso or stipulation in a lease, for a breach of any covenant, obligation, condition or agreement (express or implied) in the lease, shall not be enforceable by action or otherwise unless and until the lessor serves on the lessee a notice—

1. (a)
   specifying the particular breach complained of; and
2. (b)
   if the breach is capable of remedy, requiring the lessee to remedy the breach; and
3. (c)
   in case the lessor claims compensation in money for the breach, requiring the lessee to pay the same;

and the lessee fails within a reasonable time after service of the notice to remedy the breach, if it is capable of remedy, and, where compensation in money is required, to pay reasonable compensation to the satisfaction of the lessor for the breach.

3. (2)
   Where a lessor is proceeding by action or otherwise to enforce such a right of re-entry or forfeiture, or has re-entered without action the lessee may, in the lessor’s action (if any) or in proceedings instituted by the lessee, apply to the court for relief, and the court, having regard to the proceedings and conduct of the parties under subsection (1), and to all the other circumstances, may grant or refuse relief, as it thinks fit, and in case of relief may grant the same on such terms (if any) as to costs, expenses, damages, compensation, penalty or otherwise, including the granting of an injunction to restrain any like breach in the future, as the court in the circumstances of each case thinks fit.

25. [25]
    The Tribunal is a creature of statute and must finds its power either in the QCAT Act or an enabling Act.  The PLA is not an enabling Act.  The PLA does not confer power on the Tribunal.  The PLA defines ‘court’ for the purposes of section 124 as the Supreme Court.^[15]  The Tribunal has no power to make such an order under s 124 of the PLA. 

Does the Tribunal have any other relevant power to make the interim orders sought?

26. [26]
    I am not satisfied that it is arguable that the Tribunal has power to make the orders sought under the Retail Shop Leases Act 1994 (Qld) (‘RSL Act’) nor under s 12 of the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (‘the Regulations’). 
27. [27]
    Mr Gillam has commenced proceedings in the Retail Shop Leases jurisdiction of the Tribunal.  The Tribunal’s specific powers to hear and determine commercial tenancy disputes are found in the following enabling Acts:

    1. (a)
       the RSL Act; and
    2. (b)
       the COVID-19 Emergency Response Act 2020 (Qld) (‘COVID Act’) and the Regulations. 
28. [28]
    It is not disputed that the premises are one of two light industrial sheds.   It does not appear to be contended by Mr Gillam that he carries on a retail business^[16] from the premises nor that the premises are a retail shop.^[17]  On the evidence before me I am not satisfied that the dispute is a retail tenancy dispute, being a dispute under or about a retail shop lease or about the use or occupation of a retail shop lease.^[18]  I therefore find, for the purposes of the Application for interim order, that it is not arguable that the RSL Act confers jurisdiction on the Tribunal to make orders in respect of this dispute.^[19]
29. [29]
    Mr Gillam’s submissions attached a copy of the National Cabinet Mandatory Code of Conduct but do not clearly explain how that confers power on the Tribunal.  The Notice of dispute refers to ‘lessee is claiming Covid-19 Emergency Response Part 7, sec 23 (a,b,c).’  I understand that to be a reference to section 23(1)(a), (b) and (c) of the COVID Act.
30. [30]
    The COVID Act is part of the State Government’s response to the pandemic.  Section 23 of the COVID Act provides for the making of regulations in respect of relevant leases, including regulations prohibiting certain conduct by lessors (including prohibiting recovery of possession of premises under a relevant lease,^[20] prohibiting termination of a relevant lease,^[21] regulating the exercise or enforcement of another right of a lessor under a relevant lease^[22]) and providing for the conferral of jurisdiction to hear and decide disputes.^[23] 
31. [31]
    The COVID Act provides that such regulations were to be made before and expire on the COVID-19 legislation expiry day.^[24]  The COVID-19 legislation expiry day means the earlier of 30 September 2021 or another day prescribed by regulation.^[25]  The Regulations were made under the COVID Act.  The COVID Act and the Regulations have not yet expired.  The main purposes of the Regulations include to ‘mitigate the effects of the COVID-19 emergency on lessors and lessees under affected leases by giving effect to the good faith leasing principles set out in the National code.’^[26]
32. [32]
    The COVID Act defines:

    1. (a)
       ‘relevant lease’ to mean a retail shop lease under the RSL Act or a lease prescribed by regulation.^[27]
    2. (b)
       ‘lease’ to include a lease, sub-lease, licence or other agreement under which a person grants a right to another person to occupy premises, other than as a residence.^[28]

Is the lease a relevant lease and an affected lease?

33. [33]
    For the purposes of the Application for interim order, there is insufficient evidence before me upon which I could find that it is arguable that Mr Gillam’s lease is an affected lease.^[29] 
34. [34]
    The Regulations prescribe that a relevant lease is a lease, other than a retail shop lease, under which the leased premises are to be wholly or predominantly used for carrying on a business.^[30] 
35. [35]
    Business means an undertaking, whether or not for profit, including the manufacture, sale or supply of goods or services and a trade or profession.^[31]
36. [36]
    There is some evidence that the leased premises are used by Mr Gillam in relation to his electrical contracting business.  Mr Wheatley says the use is primarily for storage and disputes that this constitutes being used wholly or predominantly for carrying on a business. 
37. [37]
    Even if I accept that it is arguable that the lease is a prescribed lease and that Mr Gillam is an SME entity,^[32] as there is some evidence that he is a sole trader, there is no evidence before me that he is eligible for jobkeeper.^[33]

Is this a dispute seeking an order that the lessor of an affected lease comply with s12(1) of the Regulations?

38. [38]
    Even if I accepted that it is arguable that the lease is an affected lease, which I do not, I am not satisfied that it is arguable that section 12 of the Regulations applies to prohibit Mr Wheatley from taking a prescribed action in respect of the matters set out in the Notice.
39. [39]
    A lessee under an ‘affected lease’ may apply to the Tribunal or a court for an order requiring the lessor to comply with section 12(1) of the Regulations.^[34] That provision prohibits a lessor under an affected lease from taking a prescribed action on certain grounds including failure to pay rent or outgoings for a period occurring wholly or partly during the response period or the extension period. 
40. [40]
    The Regulations provide for a response period commencing on 29 March 2020 and ending 30 September 2020 and an extension period starting at the beginning of the day on 1 October 2020 ending at the end of the day on 31 December 2020.^[35] 
41. [41]
    A prescribed action is defined to include an action under a lease or the starting of a proceeding for recovery of possession, termination of the lease, exercising a right of re-entry and seizure of any property.^[36] 
42. [42]
    As I understand it, Mr Gillam contends that the giving of the Notice or at least the actions that Mr Wheatley has taken in reliance on the Notice constitute a prescribed action for the purposes of section 12(1) of the Regulations and that the Tribunal has power to order Mr Wheatley to comply with section 12(1) of the Regulations.^[37]
43. [43]
    The Notice upon which Mr Wheatley has relied to purport to terminate the lease and retake possession clearly does not rely upon a failure to pay rent or outgoings for a period occurring wholly or partly during the response period or the extension period. 

Is there any other basis on which the Tribunal may have power to make the interim orders sought?

44. [44]
    It is arguable that some disputes outlined in the Notice of dispute are disputes between a lessor and lessee under a small business tenancy dispute under the Regulations.  The dispute relating to the claimed failure of Mr Wheatley to pay Mr Gillam’s invoices does not appear to relate to the lease.
45. [45]
    Small business tenancy dispute is defined as a dispute about a small business lease or about the use and occupation of the leased premises.^[38]  Small business lease is defined as a lease of premises wholly or predominantly used for carrying on a small business.^[39]  Small business is defined to include a business carried on by a sole trader.^[40]
46. [46]
    As stated earlier, there is evidence that Mr Gillam is a sole trader and some evidence that Mr Gillam uses the premises in connection with his business. 
47. [47]
    Mr Gillam’s submissions seem to suggest that Mr Wheatley has failed to re-negotiate rent payable during the pandemic.  No claim in the Notice of dispute appears to relate to this contention.  In any event, the Regulations set out the obligations of parties to an affected lease.^[41]  The obligations arise where there is a written request to negotiate rent payable during the response or extension period.  For the purposes of the Application for interim order, on the evidence before me, not only am I not satisfied that the lease is an affected lease, but I am also not satisfied that Mr Gillam made such a written request. 
48. [48]
    In circumstances where Mr Wheatley has already taken steps to terminate the lease and re-enter into possession, I am not satisfied that the Tribunal has any power to make an order in the nature of relief against forfeiture where the Supreme Court has exclusive power to make such an order, if appropriate. 
49. [49]
    In the absence of a Supreme Court order for relief against forfeiture, Mr Gillam has not satisfied me that it is appropriate, in the interests of justice to protect his position for the duration of the small business tenancy dispute or to secure the effectiveness of the exercise of the tribunal’s jurisdiction in respect of the small business tenancy dispute^[42] to make any of the other interim orders in aid of the relief sought in the Notice of dispute, which primarily consist of monetary disputes.^[43] 
50. [50]
    In any event, I am not satisfied that the balance of convenience favours making the interim orders.  In particular, I am not satisfied that damages are not an adequate remedy in the event that it is proved that Mr Wheatley has acted contrary to law.
51. [51]
    Mr Gillam made no express submissions in relation to whether a restraining order in similar terms as made on 9 July 2021 should be continued.  I am not satisfied that it should be continued.
52. [52]
    In respect of the Notice of dispute, which was not filed at the same time as the Application for interim order, I observe that the Tribunal’s jurisdiction to entertain an eligible lease dispute,^[44] being an affected lease dispute or a small business tenancy dispute, as distinct from urgent interim relief, is dependent upon mandatory pre-proceeding dispute resolution processes through the Queensland Small Business Commissioner being attempted.^[45]  There is no evidence before me that such a process has been attempted.  It is appropriate to make directions to clarify whether the Notice of dispute is properly commenced or ought to be dismissed to allow the parties to undertake the mandatory pre-proceeding steps and to recommence if the dispute has not been resolved through those steps or alternatively to pursue claims in a court with appropriate jurisdiction. 
53. [53]
    If the Notice of dispute is determined to be properly before the Tribunal further directions will issue which are likely to include directions that the Notice of dispute be regarded as an ‘Application for an order to resolve a retail tenancy dispute’ (under s 41 of the Regulations) and for Mr Wheatley to file a Response.  If Mr Wheatley wishes to pursue claims against Mr Gillam in relation to the lease, including claims outlined in his submissions, he would be at liberty to file a Response and counter-application and pay the prescribed fee.