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RA Quality Meats Pty Ltd t/as RA Quality Meats v Nambour Property Investments Pty Ltd[2021] QCAT 281

RA Quality Meats Pty Ltd t/as RA Quality Meats v Nambour Property Investments Pty Ltd[2021] QCAT 281

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL

CITATION:

RA Quality Meats Pty Ltd t/as RA Quality Meats v Nambour Property Investments Pty Ltd [2021] QCAT 281

PARTIES:

RA QUALITY MEATS PTY LTD T/AS RA QUALITY MEATS

(applicant)

v

NAMBOUR PROPERTY INVESTMENTS PTY LTD

(respondent)

APPLICATION NO/S:

RSL108-21

MATTER TYPE:

Retail shop leases matter

DELIVERED ON:

16 August 2021

HEARING DATE:

10 August 2021

HEARD AT:

Brisbane

DECISION OF:

Senior Member Brown

ORDERS:

1. The amended application for interim order is refused. 

CATCHWORDS:

LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – OTHER MATTERS – where applicant lessee suffered financial difficulty – where financial difficult said to relate partially to COVID-19 pandemic – where lessee fell into rent arrears – where lessee and respondent lessor entered into a payment plan for rent arrears – where lessee defaulted under the payment plan – where lessor served a notice to remedy breach – where lessee did not remedy the breach and the lessor retook possession – where lessee claims that breach notice was defective – where lessee seeks interim relief to allow re-entry to the premises

Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 58, s 59

Retail Shop Leases Act 1994 (Qld), s 5C

Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020, s 21, s 26, s 27, s 41, s 42, schedule 1

Active Leisure (Sports) Pty Ltd v Sportsman's Australia Ltd [1991] 1 Qd R 301 

American Cyanamid Co v Ethicon Ltd [1975] AC 396

Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57

Chappell v TCN Channel 9 Pty Ltd (1988) 14 NSWLR 153

APPEARANCES &

REPRESENTATION:

Applicant:

Ms A Burton, solicitor, Everyday Justice

Respondent:

Mr J Gardiner, solicitor, Sparke Helmore

REASONS FOR DECISION

  1. [1]
    RA Quality Meats (the lessee) operated a butchers’ shop from commercial premises leased from Nambour Property Investments (the lessor). 
  1. [2]
    The lessor re-took possession of the premises after the lessee failed to pay rent and outgoings and subsequently failed to comply with a notice to remedy breach of covenant. The lessee says that the lessor was not entitled to re-take possession of the premises and seeks an interim order that it be entitled to continue trading from the premises. 
  1. [3]
    The lessee filed an amended application for interim order clarifying the basis upon which the relief was claimed. The application for interim order falls for determination. 
  1. [4]
    An oral hearing took place on 10 August 2021. Both parties were legally represented at the hearing and were given the opportunity to make oral submissions further to the written submissions filed by the parties. Despite this, neither party sought to make oral submissions other than a brief submission by the lessee regarding the nature of the interim relief sought.

Preliminary jurisdictional issues

  1. [5]
    I am satisfied as to the following and make findings that:
  1. (a)
    The parties entered into a lease on 22 September 2018 in respect of premises at Nambour;
  2. (b)
    The lease was for a period of 5 years ending on 21 September 2023 with no option period;
  3. (c)
    The lease provided:
    1. that the permitted use of the premises was the retail sale of fresh meat and poultry and cooked meat dishes plus value added side dishes; 
    2. the base rent payable by the lessee was $95,000.00 per annum plus GST;
    3. the lessee was required to pay to the lessor the tenant’s proportion of the outgoings in each accounting year;
  1. (iv)
    the lessee was required to pay service charges for services separately supplied to the premises and pay to the lessor in respect of bulk supplied electricity and trade waste services;
  1. (d)
    the business operated by the lessee from the premises was a retail business;[1]
  2. (e)
    the premises were a retail shop;[2]
  3. (f)
    the lease is a retail shop lease;[3]
  4. (g)
    the lease is an affected lease;[4]
  5. (h)
    the dispute between the parties is a retail tenancy dispute.[5]
  1. [6]
    The Tribunal is a creature of statute having only those powers conferred upon it by the Queensland Civil and Administrative Tribunal Act 2009 (Qld) and any relevant enabling Act. In order to consider more closely the jurisdiction of the Tribunal in respect of the present dispute it is necessary to say something about the relevant history.

The background to the dispute

  1. [7]
    The parties entered into the lease in September 2018. Mr Allchurch was, and is, a director of the lessee. During 2019 the lessee experienced financial difficulties which continued into 2020. Between November 2019 and March 2020 the number of people employed by the lessee reduced from six full time staff to no staff. Mr Allchurch was solely responsible for the operation of the lessee’s business. 
  1. [8]
    During 2020 the lessee, like many other companies and individuals, experienced adverse financial effects resulting from the COVID-19 pandemic. One of these adverse effects was that the lessee fell into rent arrears. 
  1. [9]
    On 21 April 2021 the lessor and the lessee agreed on a payment plan. The lessee says the plan was developed to permit the lessee to remain in the premises operating the business. The lessee says that the terms of the payment plan were:
  1. (a)
    The lessee would pay to the lessor $15,000.00 on the 20th of each month commencing on 20 May 2021 with the payment to be allocated against the most recent monthly invoice[6] and the remainder to be allocated against the lessee’s rent arrears;
  2. (b)
    The lessor would provide to the lessee a $5,000.00 credit against the lessee’s rent arrears;

(c)  The payment plan was to be reviewed in six months.

  1. [10]
    The lessee paid the following amounts to the lessor:
  1. (a)
    $15,000.00 on 19 May 2021;
  2. (b)
    $7,500.00 on 20 June 2021;
  3. (c)
    $3,000.00 on 28 June 2021; 
  4. (d)
    $2,932.34 on 30 June 2021.
  1. [11]
    On 22 June 2021 the lessor served a notice to remedy breach (the first notice). The notice was withdrawn by the lessor on 1 July 2021. On 7 July 2021 the lessor served a further notice to remedy breach (the second notice). The notice stated that the lessee had failed to pay rent, outgoings and the promotional levy, and for services for the months of January, February, March, April and June 2021. 
  1. [12]
    The lessee says it was surprised that the lessor was seeking the payment of rent arrears in view of the agreed payment plan. The lessee also says that it had ‘only been $1,567.66 short in June 2021.’[7] The lessee says that the payment plan did not provide for an escalation of the entire debt in the event of default and that the second notice is incorrect and should only claim the shortfall of $1,567.66.
  1. [13]
    On 27 July 2021 the parties attended a mediation at the office of the Queensland Small Business Commissioner (QSBC) in an unsuccessful attempt to resolve the dispute. 
  1. [14]
    On 27 July 2021 the lessee filed a Notice of Dispute and the application for interim order in the Tribunal. An amended application for interim order was filed on 28 July 2021. 
  1. [15]
    On 29 July 2021 the lessor re-entered the premises.

Jurisdiction in the present dispute

  1. [16]
    The tribunal has jurisdiction to hear and decide:
  1. (a)
    Retail tenancy disputes under the RSL Act;[8]
  2. (b)
    Eligible lease disputes under the COVID regulation;[9]
  3. (c)
    Applications in respect of prescribed action relating to an affected lease.[10]
  1. [17]
    I will address firstly (b) and (c). 
  1. [18]
    An eligible lease dispute means (i) an affected lease dispute; or (ii) a small business tenancy dispute.[11] An affected lease includes a retail shop lease.[12] I have found that the lease is an affected lease. An affected lease dispute means any dispute concerning the liabilities or obligations of the parties to an affected lease arising during the response period or extension period, and includes a dispute about negotiating, or a failure to negotiate, rent under part 2, division 3 of the COVID regulation.[13]
  1. [19]
    The response period is the period from 29 March 2020 to 30 September 2020. The extension period is the period from 1 October 2020 to 31 December 2020.
  1. [20]
    The present dispute arises out of the second notice and the action taken by the lessor to re-enter the premises. The second notice relies upon the failure by the lessee to meet its rent and related financial obligations for the period January 2021 to June 2021. The liabilities or obligations relied upon by the lessor did not arise during the response period or the extension period. Accordingly, although the lease is an affected lease, the dispute is not an affected lease dispute. 
  1. [21]
    Is the dispute a small business tenancy dispute? A small business tenancy dispute means a dispute about a small business lease, or about the use or occupation of the leased premises.[14] A small business lease means a lease under which the leased premises are to be wholly or predominantly used for carrying on a small business.[15] A small business means a business carried on by a sole trader or a business employing fewer than 20 full time or full time equivalent employees.[16] A business means an undertaking, whether or not for profit, including the manufacture, sale or supply of goods or services; and a trade or profession.[17] I am satisfied that the lessee employed fewer than 20 full time or full time equivalent employees. I find that the dispute between the parties is a small business tenancy dispute.
  1. [22]
    As I have observed, a small business tenancy dispute is an eligible lease dispute. A party to an eligible lease dispute may give notice of the dispute to the QSBC.[18] As soon as practicable after the QSBC receives a dispute notice, the commissioner must refer the matter to mediation.[19] 
  1. [23]
    A person may apply to the Tribunal to resolve a dispute if:
  1. (a)
    the parties to the dispute cannot reach a settlement agreement; or 
  2. (b)
    a party to the dispute does not attend the mediation conference for the dispute and does not have a reasonable excuse; or
  3. (c)
    the dispute is not settled within 30 days after the dispute notice is given to the QSBC; or 
  4. (d)
    a party to a settlement agreement claims that another party to the agreement has not complied with the agreement within the period stated in it or, if no period is stated, within 14 days after the agreement is signed; and
  5. (e)
    no more than 6 months has elapsed since (i) the affected lease or small business lease ended, whether by expiry, surrender or termination; or (ii) the last day the lessee was required, under an agreement, to pay deferred rent.[20]
  1. [24]
    It is readily apparent from the provisions of the RSL Act, the COVID Act[21] and the COVID regulation that a dispute may be both a retail tenancy dispute and small business tenancy dispute. In such circumstances, the dispute resolution provisions contained in Part 3 of the COVID regulation and not Part 8 of the RSL Act apply.[22] 
  1. [25]
    The effect of the operation of the statutory provisions to which I have referred is this: where a party to an eligible lease dispute has given a dispute notice to the QSBC which the commissioner accepts, and a mediation conducted under the auspices of the QSBC is unsuccessful, a party to the dispute may apply to the Tribunal for an order to resolve the dispute. 
  1. [26]
    I do not understand it to be contentious as between the parties that:
  1. (a)
    notice of the dispute was given to the QSBC;
  2. (b)
    a mediation was conducted by a mediator nominated by the commissioner;
  3. (c)
    the mediation did not result in a resolution of the dispute;
  4. (d)
    at the time of the filing of the notice of dispute, no more than 6 months elapsed since the lease was terminated or the lessee was required to pay deferred rent. 
  1. [27]
    I am satisfied that the Notice of Dispute filed by the lessee on 27 July 2021 is an application to the tribunal in accordance with s 41(2) of the COVID regulation and that the Tribunal has jurisdiction in respect of the dispute as a small business dispute and therefore an eligible lease dispute.
  1. [28]
    Although there is no evidence before me that a copy of the notice has been given to the QSBC as required by s 41(2)(b) of the COVID regulation, in the event of noncompliance I would in any event waive that procedural requirement pursuant to s 61(1)(c) of the QCAT Act.
  1. [29]
    I have found that the dispute is a retail tenancy dispute for the purposes of the Retail Shop Leases Act 1994 (Qld) (RSL Act). As I have observed, where a dispute is both a retail tenancy dispute and another type of eligible lease dispute, the dispute resolution provisions contained in Part 3 of the COVID regulation and not Part 8 of the RSL Act apply. I am satisfied that the proceedings by the lessee have been properly commenced and that the Tribunal has jurisdiction in respect of the dispute as a retail tenancy dispute. 

Orders sought by the lessee

  1. [30]
    The lessee seeks injunctive relief which would enable it to retake possession of the premises and continue to trade. The amended application refers to the lessee seeking ‘orders with section 124(2) restraining the lessor from re-entering the premises … and terminating the lease.’[23]
  1. [31]
    The reference to ‘section 124(2)’ would appear to be a reference to s 124(2) of the Property Law Act 1974 (Qld). The tribunal does not have jurisdiction to grant relief against forfeiture.[24] In any event such relief is a final order and not appropriately dealt with in an application for an interim injunction.
  1. [32]
    I will proceed however to deal with the application as one for interim injunctive relief in accordance with the powers conferred upon the tribunal by the QCAT Act to which I will refer in more detail shortly.
  1. [33]
    The nature of the relief may be seen as both prohibitory and mandatory: prohibitory in the sense that the lessor not be permitted to rely on the second notice and mandatory in the sense that the lessee be permitted to re-enter the premises and continue to operate its business. The consequence of the relief sought by the lessee would be to force the parties into an ongoing commercial relationship at least for the duration of the proceedings.
  1. [34]
    Before making a final decision in a proceeding, the tribunal may make an interim order it considers appropriate in the interests of justice, including, to protect a party’s position for the duration of the proceeding or to require or permit something to be done to secure the effectiveness of the exercise of the tribunal’s jurisdiction for the proceeding.[25] The tribunal may also, by order, grant an injunction, including an interim injunction, in a proceeding if it is just and convenient to do so.[26] If the tribunal makes an interim order or grants an interim injunction the tribunal may require an undertaking as to costs or damages to be provided.[27]
  1. [35]
    An applicant seeking interim injunctive relief must establish the following:
  1. (a)
    there is a serious question to be tried;
  2. (b)
    there is a matter of urgency;
  3. (c)
    damages will not be an adequate remedy; and
  4. (d)
    the balance of convenience favours granting an injunction.[28]
  1. [36]
    The distinction between mandatory and prohibitory injunctive relief sought in a particular case is not always entirely clear. In the application for interim order the lessee seeks, among other things, the following remedy: ‘Rescind Form 7 Notice to Remedy Breach issued 7 July 2021 and negotiate payment plan for balance of lease term considering COVID 19 recovery period.’ As I have previously observed it seems tolerably clear that the lessee is seeking an order that the lessor be prohibited from relying upon the second notice.
  1. [37]
    In Bingham v 7-Eleven Stores Pty Ltd[29] Muir J held: 

I do not accept the appellant's submission that the injunctions, although framed in prohibitive language, should be regarded as mandatory orders “for the continuation of the (franchise agreements) pending” trial. The orders are directed only to reliance by the appellant on the contested notices. They do not alter the status quo, as the appellant's arguments suggest. On the contrary, they seek to maintain it… 

Furthermore, the granting of the injunctions is supported by the desirability of preserving the agreements and, through their continual existence, the respondents' two businesses, until trial.

  1. [38]
    Insofar as the relief sought by the lessee relates to the reliance by the lessor on the second notice, Muir J’s statement is directly applicable here. As to whether any different test applied in respect of an application for a mandatory injunction or a prohibitory injunction, Muir J quoted the following passage from “Equity: Doctrines and Remedies”, 4th ed at paragraph 21-395:

In truth, a judge hearing an application for an interlocutory mandatory injunction must apply exactly the same tests as he would in the case of an application for an interlocutory prohibitory injunction, not some different or more exacting test; nor is the fact that the relief sought is mandatory a ground for refusing relief; but in the application of the normal tests, often, but not always, the fact that the relief sought is mandatory will tilt the balance of convenience in the defendant's favour.[30]

  1. [39]
    The ‘tilting of the balance’ as referred to by Muir J is a matter to which I will return later in these reasons.
  1. [40]
    I turn now to each of the considerations relevant to the granting of interim injunctive relief.

Does the lessee have a prima facie case?

  1. [41]
    An applicant for an interim injunction must satisfy the court or tribunal that the applicant has a prima facie case in the sense that there is a serious question to be tried as to the relief sought by the applicant and a sufficient likelihood of success to justify the preservation of the status quo pending the hearing.[31]
  1. [42]
    In its submissions the lessee identifies the following issues for determination:
  1. (a)
    The lessee says that the second notice is defective:
    1. The notice fails to identify the meaning of ‘services’ and it is therefore not clear to the lessee what services it has not paid. Section 124 of the Property Law Act 1974 (Qld) (PL Act) requires the notice to specify the particular breach complained of which the lessor has failed to do;
    2. The second notice has been signed by the solicitors for the ‘landlord’ which is a term not defined in the notice. ‘Landlord’ is not the same as ‘lessor’ with the result that the second notice has not been given by the lessor and therefore does not comply with s 124(1) of the PL Act;
    3. The second notice failed to allocate monies paid by the lessee against the rent arrears. The default amount for June 2021 failed to account for the amount of $13,432.34 paid by the lessee as part of the payment plan with the result that the payment amount referred to in the second notice is incorrect;
  2. (b)
    The lessor has engaged in unconscionable conduct:
    1. The lessor disregarded Leasing Principle 1 of the National Cabinet Mandatory Code of Conduct SME Commercial Leasing Principles During COVID-19: ‘Landlords must not terminate leases due to non-payment of rent during the COVID-19 pandemic period (or reasonable subsequent recovery period) which constituted unconscionable conduct pursuant to s 46B(g) of the RSL Act;
  1. (ii)
    The lessor failed to disclose to the lessee the decision to advertise the premises for lease to other businesses which constituted unconscionable conduct pursuant to s s46B(i) and s 46B(k) of the RSL Act.

The second notice

  1. [43]
    A notice in accordance with s 124(1) of the PL Act must:
  1. (a)
    specify the particular breach complained of; and
  2. (b)
    if the breach is capable of remedy, require the lessee to remedy the breach; and
  3. (c)
    in case the lessor claims compensation in money for the breach, require the lessee to pay the same.
  1. [44]
    The notice must be in the approved form.[32]
  1. [45]
    The second notice dated 7 July 2021:
  1. (a)
    Specified the various covenants in the lease requiring the lessee to pay rent, outgoings, services and the promotional levy;
  2. (b)
    Provided details of the lessee’s breach in failing to pay specified amounts for base rent, outgoings, promotional levy and services for the months of January, February, March, April and June 2021; 
  3. (c)
    Required the lessee to remedy the breach by paying to the lessor the sum of $67,876.57 by 21 days from the date of the notice.
  1. [46]
    It is not contended by the lessee that the second notice was not in the approved form. Nor is it contended by the lessee that the second notice did not provide a reasonable period for the lessee to remedy the asserted breach.
  1. [47]
    I am satisfied that the second notice stated with sufficient detail the amount payable by the lessee in respect of services. A notice given in accordance with s 124 of the PL Act  should make clear the amounts of arrears involved and the periods to which they relate. The notice given to the lessee satisfies these requirements. I do not consider that the lessor was required to provide specifics of each and every service to which the charges related.
  1. [48]
    Similarly, I do not consider that the reference in the second notice to ‘landlord’ rather than ‘lessor’ invalidates the notice. The lease defines ‘landlord’ as the lessor identified in the form 7 lease. It was transparently plain that it was the lessor giving the notice.
  1. [49]
    The lessee says that the amount claimed in the second notice failed to take into consideration the amounts paid by the lessee in June 2021 in accordance with the payment plan. In response the lessor says:
  1. (a)
    The lessee was in breach of the payment plan by failing to pay the agreed amount of $15,000.00 on 20 June 2021;
  2. (b)
    As a result of the lessee’s breach of the payment plan, the lessor was entitled to apply the amounts paid in June 2021 toward the rental arrears.
  1. [50]
    It is not disputed by the lessee that it failed to pay the June instalment in accordance with the payment plan. It is clear that, by June 2021, the lessee was in substantial rent arrears. It is reasonably clear from the limited evidence before the Tribunal that the lessor had displayed remarkable forbearance in the face of continued default by the lessee in observing its obligations under the lease to pay rent and outgoings. The evidence regarding the payment plan is limited to a series of email exchanges between the lessee and the lessor’s agent. The payment plan required the lessee to pay $15,000.00 per month commencing on 21 May 2021. The payment plan did not specify what would happen in the event of a default by the lessee in its obligations. The lessee complied with the payment plan in May 2021 however failed to do so in June 2021. There is nothing before me to suggest that the lessor had agreed to forebear further in the event the lessee failed to strictly comply with the payment plan.
  1. [51]
    In my view there is no great force in the lessee’s argument that the lessor was not entitled to treat the lessee as being in breach of the payment plan and thereby entitled to apply the June payments to the substantial rent arrears. However even if I am wrong about this, and as I outline later in these reasons, any arguable case the applicant may have does not tip the balance in its favour in granting the relief sought.  Unconscionable conduct
  1. [52]
    The lessee relies upon the National Cabinet Mandatory Code of Conduct SME Commercial Leasing Principles During COVID-19 as an applicable industry code for the purposes of s 46B of the RSL Act. The term ‘applicable industry code’ has the meaning given under the Competition and Consumer Act 2010 (Cth) (CCA), section 51ACA.  The CCA defines ‘applicable industry code’ as meaning:
  1. (a)
    the prescribed provisions of any mandatory industry code relating to the industry; and
  2. (b)
    the prescribed provisions of any voluntary industry code that binds the corporation.
  1. [53]
    Accepting for present purposes that the Code is an applicable industry code, in my view  the COVID regulation is the legislative implementation of the National Cabinet Mandatory Code of Conduct SME Commercial Leasing Principles. Support for this conclusion may be found in the explanatory note to the COVID regulation which states:

On 3 April 2020, National Cabinet agreed that states and territories would implement a mandatory code of conduct, including via legislation or regulation as appropriate, for the purpose of imposing a set of good faith leasing principles for application to commercial leases in response to the financial hardship being experienced by some tenants due to business disruption, closures, restrictions on movement and social distancing due to the COVID-19 emergency. The code would apply where the tenant is eligible for the Commonwealth Government’s JobKeeper assistance and is a small-medium sized enterprise with up to $50 million in annual turnover. Subsequently, on 7 April 2020, the Prime Minister announced the National Cabinet’s agreement on the National Cabinet Mandatory Code of Conduct – SME Commercial Leasing Principles (National Code), to be given effect through legislation or regulation as appropriate.

…

The Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (the Regulation) will implement the National Cabinet decision in relation to good faith leasing principles set out in the National Code for “affected leases” in Queensland. (emphasis added)

  1. [54]
    The lessee relies upon principle 1 of the Code that states landlords must not terminate leases due to non-payment of rent during the COVID-19 pandemic period or reasonable subsequent recovery period. This principle finds expression in s 12 of the COVID regulation. A lessor under an affected lease must not, during or after the response period or extension period, take a prescribed action on any of the following grounds: a failure to pay rent for a period occurring wholly or partly during the response period or extension period; a failure to pay outgoings for a period occurring wholly or partly during the response period or extension period; the business carried on at the leased premises not being open for business during the hours required under the lease during the response period or extension period.[33]
  1. [55]
    The lessee’s reliance upon s 46B(g) is misplaced for the following reasons. Firstly, and as I have explained, it is the COVID regulation and not the Code to which reference must be had in considering the requirements of any applicable industry code. Secondly, for the reasons previously set out, while the lease is an affected lease, the prescribed action taken by the lessor was not based upon the failure by the lessee to pay rent or outgoings during the response period or the extension period. Accordingly, s 12(1) of the COVID regulation does not apply in the present case.
  1. [56]
    As to the submission by the lessee that the lessor engaged in unconscionable conduct in advertising the premises for lease while the lessee was in possession it is difficult to apprehend how this could be said to be harsh or oppressive conduct on the part of the lessor.
  1. [57]
    The lessee’s arguments in relation to unconscionable conduct do not  compellingly point to a prima facie case.

Balance of convenience

  1. [58]
    Will the injury to the lessee occasioned by the refusal of the injunction outweigh the injury to the lessor if the injunction is granted?[34] Balance of convenience considerations include whether damages would otherwise be an adequate remedy (about which I will have something to say later in these reasons), the availability and sufficiency of the usual undertakings as to damages, and the risk of irreparable injury to a party if the injunction is granted or refused.[35]
  1. [59]
    The effect of granting the relief sought by the lessee would be to permit the lessee to re-take possession of the premises. If the injunction is not granted presumably the lessee will be unable to continue to trade and its business activities will cease. However there is no evidence of this nor any submissions by the lessee as to the consequences flowing from a refusal to grant the relief sought.
  1. [60]
    Attached to the lessee’s submissions is a letter from its legal representatives to the solicitors for the lessor in which the lessee proposes re-entering possession on the basis that it pays no rent for the months of August and September 2021, rent payments for October, November and December 2021 be reduced to $5,000.00 per month and rent payments in accordance with the lease will not resume until January 2022. The lessee also proposes that it will make no payments toward rent arrears during 2021. It is unsurprising that the proposal seemingly has no attraction for the lessor. The lessee’s proposal speaks of a clear inability to meet its obligations under the lease.
  1. [61]
    The lessee offers no undertaking as to damages and frankly, in light of the history of the matter and the proposal to which I have referred, it seems questionable that any undertaking given would have substance.
  1. [62]
    Given the lessee’s financial circumstances, there seems to me a very significant risk the lessee will not honour its obligations to pay rent, outgoings and services. The letter to which I have referred strongly indicates this. I am not persuaded that, if the relief was granted, the lessor would not incur further loss by way of unpaid rent which the lessor would have limited prospects of recovering from the lessee. To this extent, any further loss that might be suffered by the lessor would be irreparable given the lessee’s financial circumstances. This factor tells strongly against the making of the interim order.

Damages an adequate remedy?

  1. [63]
    The lessee in its submissions makes the bald assertion that if the interim relief is not granted it would suffer irreparable injury for which damages would not be an adequate remedy. The lessee offers no evidence in support of the assertion.
  1. [64]
    The lease expires in approximately two years with no option period. There is no suggestion that there will be any difficulty in assessing damages. Indeed the assessment of damages, should the lessee be successful, would seem relatively straightforward. Nor is there any suggestion that the lessor would be unable to satisfy an order for damages.
  1. [65]
    In Bowen Central Coal Pty Ltd v Aquila Coal Pty Ltd & Anor[36] Fraser JA referred to the decision of Lord Diplock in American Cyanamid Co v Ethicon Ltd:[37]

As to that, the governing principle is that the court should first consider whether, if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant’s continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff’s claim appeared to be at that stage.[38]

  1. [66]
    There is nothing before the tribunal to indicate that damages would not be an adequate remedy if the relief sought by the lessee is not granted.

Conclusion

  1. [67]
    Balancing all of the factors to which I have referred, noting that the lessee’s case is not a strong one, that the balance of convenience does not favour the granting of the relief sought and that the lessee has not demonstrated that damages would not be an adequate remedy, the application for interim order is refused.

Footnotes

[1]   Retail Shop Leases Act 1994 (Qld) (‘RSL Act’), s 5C and Regulation, schedule 1.

[2]   RSL Act, s 5B.

[3]   Ibid, s 5A(1).

[4] Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020, (COVID Regulation) s 5(1)(a)(i).

[5]   RSL Act, schedule 1, (“Definition of “retail tenancy dispute”)

[6]   Presumably the monthly invoice rendered by the lessor for rent, outgoings and services.

[7]    Lessee submissions at [32].

[8]    RSL Act, s 103

[9] COVID-19 Emergency Response Act 2020 (Qld), s 23, COVID Regulations s 42

[10]   COVID Regulations, s 42

[11]   Ibid, s 21, s 41

[12]   Ibid, s 5

[13]   Ibid, schedule 1, (Definition of “affected lease dispute”)

[14]   Ibid, Schedule 1 (Definition of “small business tenancy dispute”)

[15]   Ibid, Schedule 1 (Definition of “small business lease”).

[16]   Ibid, Schedule 1 (Definition of “small business”).

[17]   Ibid, Schedule 1 (definition of “business”).

[18]   COVID regulations, s 26(1).

[19]   Ibid, s 27.

[20]   Ibid, s 41(1).

[21]   COVID-19 Emergency Response Act 2020 (Qld). The Act authorises the making of the COVID regulation. For an analysis of the relevant provisions see for example: Brakar Pty Ltd v Sunshine Developments (Vic) Pty Ltd [2021] QCAT 217; Gillam v Wheatley [2021] QCAT 274.

[22]   Ibid, s 24.

[23]   Amended application for interim order dated 27 July 2021.

[24]   See for example Future Reflections Fitness Centre and Xamerg Pty Ltd v S Mohindra Pty Ltd [2014] QCAT 33; Pacific Lifestyle Financial Services Pty Ltd v. El Safty Enterprises Pty Ltd [2007] QRSLT 6; Gillam v Wheatley [2021] QCAT 274.

[25]   QCAT Act, s 58(1).

[26]   Ibid, s 59(1).

[27]   Ibid, s 58(3), s 59(6).

[28] Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57.

[29]   [2003] QCA 402, [103].

[30]   R. P. Meagher, et al. Equity: Doctrine and Remedies (LexisNexis Butterworths, 4th ed, 2002) 21-395.

[31] Australian Broadcasting Corporation v O'Neill (2006) 227 CLR 57.

[32]   PL Act, s 124(8).

[33]   COVID regulations, s 12(1).

[34] Chappell v TCN Channel 9 Pty Ltd (1988) 14 NSWLR 153

[35] Active Leisure (Sports) Pty Ltd v Sportsman's Australia Ltd [1991] 1 Qd R 301

[36]   [2011] QCA 334.

[37]   [1975] AC 396.

[38]   Ibid, 408.

Close

Editorial Notes

  • Published Case Name:

    RA Quality Meats Pty Ltd t/as RA Quality Meats v Nambour Property Investments Pty Ltd

  • Shortened Case Name:

    RA Quality Meats Pty Ltd t/as RA Quality Meats v Nambour Property Investments Pty Ltd

  • MNC:

    [2021] QCAT 281

  • Court:

    QCAT

  • Judge(s):

    Senior Member Brown

  • Date:

    16 Aug 2021

Appeal Status

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

Cases Cited

Case NameFull CitationFrequency
Active Leisure (Sports) Pty Ltd v Sportsmans Australia Ltd[1991] 1 Qd R 301; [1990] QSCFC 38
2 citations
Jump To
Cite 1 - [1991] 1 Qd R 301
Cite 2 - [1991] 1 Qd R 301
American Cyanamid Co v Ethicon Ltd (1975) AC 396
3 citations
Jump To
Cite 1 - (1975) AC 396
Cite 2 - (1975) AC 396
Cite 3 - (1975) AC 396
Australian Broadcasting Corporation v O'Neill (2006 ) 227 CLR 57
3 citations
Jump To
Cite 1 - (2006 ) 227 CLR 57
Cite 2 - (2006 ) 227 CLR 57
Cite 3 - (2006 ) 227 CLR 57
Bingham v 7-Eleven Stores Pty Ltd [2003] QCA 402
1 citation
Jump To
Cite 1 - [2003] QCA 402
Bowen Central Coal Pty Ltd v Aquila Coal Pty Ltd [2011] QCA 334
1 citation
Jump To
Cite 1 - [2011] QCA 334
Brakar Pty Ltd v Sunshine Developments (Vic) Pty Ltd [2021] QCAT 217
1 citation
Jump To
Cite 1 - [2021] QCAT 217
Chappell v TCN Channel Nine Pty Ltd (1988) 14 NSWLR 153
2 citations
Jump To
Cite 1 - (1988) 14 NSWLR 153
Cite 2 - (1988) 14 NSWLR 153
Future Reflections Fitness Centre and Xamerg Pty Ltd v S Mohindra Pty Ltd [2014] QCAT 33
1 citation
Jump To
Cite 1 - [2014] QCAT 33
Gillam v Wheatley [2021] QCAT 274
2 citations
Jump To
Cite 1 - [2021] QCAT 274
Cite 2 - [2021] QCAT 274
Pacific Lifestyle Financial Services Pty Ltd v El Safty Enterprises Pty Ltd [2007] QRSLT 6
1 citation
Jump To
Cite 1 - [2007] QRSLT 6

Cases Citing

Case NameFull CitationFrequency
Vanish Laser Clinic Pty Ltd v Gabba Nominees Pty Ltd [2023] QCAT 4032 citations
XAA and XAB v MSJ McFarland and CM Johnson-McFarland atf RBJ Collective Trust & Anor [2023] QCAT 1732 citations
1

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