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- National Mutual Life Nominees Pty Limited as Custodian for Wholesale Australia Property Fund v Hatch & Co Group Pty Ltd atf MM Gas Trust & Ors[2022] QCAT 140
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National Mutual Life Nominees Pty Limited as Custodian for Wholesale Australia Property Fund v Hatch & Co Group Pty Ltd atf MM Gas Trust & Ors[2022] QCAT 140
National Mutual Life Nominees Pty Limited as Custodian for Wholesale Australia Property Fund v Hatch & Co Group Pty Ltd atf MM Gas Trust & Ors[2022] QCAT 140
QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL
CITATION: | National Mutual Life Nominees Pty Limited as Custodian for Wholesale Australia Property Fund v Hatch & Co Group Pty Ltd atf MM Gas Trust & Ors [2022] QCAT 140 |
PARTIES: | national mutual life nominees pty limited as custodian for wholesale australia property fund (applicant) v hatch & co group pty ltD as trustee for mm gas trust melham moubarek Moubment group pty ltd (respondents) |
APPLICATION NO/S: | RSL056-20 |
MATTER TYPE: | Retail shop leases matter |
DELIVERED ON: | 19 April 2022 |
HEARING DATE: | On the papers |
HEARD AT: | Brisbane |
DECISION OF: | Member Deane, Presiding Member Judge Member McBryde |
ORDERS: |
|
CATCHWORDS: | LANDLORD AND TENANT – RETAIL AND COMMERCIAL TENANCIES LEGISLATION – JURISDICTION, POWERS AND APPEALS OF COURTS AND TRIBUNALS – JURISDICTION GENERALLY – whether the Tribunal has power to award damages for misleading and deceptive conduct – whether the claim would be a minor civil dispute – whether the dispute is a retail tenancy dispute Australian Consumer Law (Queensland), s 2, s 18, s 236 Competition and Consumer Act 2010 (Cth), s 86, Schedule 2 Corporations Act 2001 (Cth), s 601AD District Court of Queensland Act 1967 (Qld), s 68 Fair Trading Act 1989 (Qld), s 15, s 16, s 50 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 6, s 9, s 12, s 47, s 60, s 164, Schedule 3 Retail Shop Leases Act 1994 (Qld), s 5A, s 5B, s 5C, s 55, s 56, s 63, s 83, s 103, schedule Retail Shop Leases Regulation 2016 (Qld), s 8, schedule 1 Owen v Menzies [2013] 2 Qd R 327 Real Management Solutions Pty Ltd v Brisbane City Council [2016] QCAT 370 Romano v Capitol Bikes Pty Ltd & Anor [2018] QCAT 108 Tamarin Pty Ltd & Otmoor Pty Ltd as trustee v Wicks [2021] QCATA 146 Yojocatering Pty Ltd v Mozart Holdings Pty Ltd [2018] QCAT 402 Yuan Company Pty Ltd v Golden Vision Biggera Waters GC Pty Ltd [2020] QCAT 37 |
APPEARANCES & REPRESENTATION: | 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
- [1]National Mutual Life Nominees Pty Limited as Custodian for Wholesale Australia Property Fund (National Mutual) leased premises to Hatch & Co Group Pty Ltd as trustee for MM Gas Trust (Hatch) from which Hatch conducted a restaurant.
- [2]
- [3]Mr Moubarak filed a Response seeking the Notice of dispute be dismissed as against Moubment Group Pty Ltd and himself.[3] The Response, on its face, was not filed on behalf of Hatch. Mr Moubarak admitted many of the factual matters set out in the Notice of dispute.
- [4]The Notice of dispute as against Moubment Group Pty Ltd was dismissed on 7 August 2020 and directions made for the parties to file statements and for the matter to be determined on the papers.
- [5]Upon becoming aware that Hatch may have been deregistered, the Tribunal sought submissions from the parties as to whether Hatch’s current status affected the terms of the order, which the Tribunal was asked to make and directed that the Notice of dispute would be determined on the papers unless a party requested an oral hearing.[4] No submissions have been received in response to those directions. We now proceed to determine the Notice of dispute.
- [6]National Mutual filed submissions and statements on 25 September 2020. National Mutual relies upon a statement from Leonie Deaves, an employee of AMP Capital Shopping Centres (AMP) employed in the role of Centre Manager, a statement from Julie Taylor, who acted as Interim Centre Manager while Ms Deaves was on annual leave and a statement from Briony Foxe, an associate employed by Gadens, lawyers, engaged by AMP to act on National Mutual’s behalf.
- [7]Mr Moubarak filed a statement on 18 September 2020 but did not file any statements responding to National Mutual’s statements.
- [8]An online ASIC search shows that Hatch & Co Group Pty Ltd was deregistered on 29 November 2020 and remained deregistered as of 11 April 2022.[5] Upon deregistration a company ceases to exist as a legal entity and therefore cannot be sued unless restored.[6] There is no evidence before us that any action is being taken to restore Hatch.
- [9]The Tribunal may on its own initiative dismiss a proceeding or part of a proceeding, which is lacking in substance.[7]
- [10]We dismiss the Notice of dispute as against Hatch, without making any substantive findings in relation to the claims made against it.
- [11]National Mutual contends, Mr Moubarak admitted[8] and we accept that:
- (a)Mr Moubarak was the sole director, secretary and shareholder of Hatch.
- (b)with effect from 1 July 2019 Hatch assigned the lease to an unrelated third party, which purchased its business.
- (c)prior to the assignment Hatch was in default under the lease by failing to pay rent and other monies owing under the lease (Occupancy Costs Arrears).
- (d)prior to the assignment Mr Moubarak communicated by email with employees of AMP, during which he made several promises to pay the Occupancy Costs Arrears. Despite those promises, payment of the Occupancy Costs Arrears was not made prior to the assignment. During the negotiation of the conditions of the assignment Mr Moubarak, by email, threatened to vacate and take the equipment if National Mutual did not consent, which would make the premises more costly to re-let. By email, Mr Moubarak offered and National Mutual agreed to accept $40,000 (Arrears Settlement Amount) together with National Mutual calling upon the Bank Guarantee provided by Hatch in the amount of $77,476.38 in satisfaction of the Occupancy Costs Arrears and any additional occupancy costs to the date of the assignment (Total Occupancy Costs Arrears) and to waive the balance of the amounts outstanding provided that payment of the Arrears Settlement Amount would be made from the proceeds of the sale of Hatch’s business conducted from the premises. In the Notice of dispute, the emails were referred to as the Relevant Emails.
- (e)It was a term of the Assignment Deed, which set out the terms of National Mutual’s consent to assign the lease, that it was a condition precedent to the consent that National Mutual receive payment of the Total Occupancy Costs Arrears prior to the assignment date of 1 July 2019.[9]
- (f)Hatch did not pay the Total Occupancy Costs Arrears nor the Arrears Settlement Amount prior to 1 July 2019 or at all.
- (g)National Mutual called on the Bank Guarantee in part satisfaction of the Total Occupancy Costs Arrears in accordance with its rights under the lease.
- (h)The balance of the Total Occupancy Costs Arrears less the Bank Guarantee is $128,893.33 (Final Occupancy Costs Arrears).
- (a)
- [12]National Mutual sought the Final Occupancy Costs Arrears from Hatch in these proceedings. There is nothing in the Assignment Deed limiting the Total Occupancy Costs Arrears to the Arrears Settlement Amount. The evidence is, and we accept, that National Mutual agreed to consent to the assignment and waive the balance of arrears (after calling upon the Bank Guarantee) upon the payment of the Arrears Settlement Amount.
- [13]The undisputed evidence is that:
- (a)National Mutual sought assurances from Mr Moubarak and the solicitors acting for Hatch in the assignment that the Arrears Settlement Amount would be paid on the day of settlement of the sale of the business.[10]
- (b)Mr Moubarak forwarded this email to the solicitors acting for Hatch the same day with a request ‘Please see below. Can we please make upon settlement of the 1st of July we can assign $40k to AMP’(sic).
- (c)The Interim Centre Manager sought ‘a commitment of some form to pay the $40,000 towards your outstanding rental of which is a condition of your assignment approval.’(sic)[11]
- (d)Mr Moubarak again forwarded this email to the solicitors acting for Hatch the same day with a request ‘Please see below email from Julie’.
- (e)Hatch’s solicitors emailed the Interim Centre Manager a few minutes later stating that:
- (a)
I am instructed that we will be receiving the adjusted purchase price via direct deposit into our trust account at settlement. Therefore, those funds will need to clear before we are able to transfer any monies to AMP Capital. Once the adjusted purchase price has been received as cleared funds in our trust account I will be able to transfer the $40,000 into the bank account below. Please be aware this may be 1 or 2 days following settlement depending on how and via which bank the purchaser transfers the funds.
- (f)despite these assurances the Arrears Settlement Amount was not paid by 1 July 2019 or at all.
- [14]National Mutual contends and Mr Moubarak disputes that:
- (a)Mr Moubarak personally procured the representations and assurances made in the Relevant Emails sent under his hand or on instructions by him to Hatch’s solicitors.
- (b)National Mutual relied upon the representations and assurances made in the Relevant Emails.
- (c)Subsequent to the assignment date of 1 July 2019, the solicitors acting on behalf of Hatch informed the solicitors acting on behalf of National Mutual that Mr Moubarak had withdrawn his instructions to have deposited into its trust account the proceeds of the sale of Hatch’s business and to pay National Mutual from the proceeds of sale the Arrears Settlement Amount.
- (d)Mr Moubarak did not notify National Mutual he had withdrawn the instructions and did not notify National Mutual that Hatch would not be paying the Total Occupancy Costs Arrears or the Arrears Settlement Amount.
- (e)Mr Moubarak engaged in misleading and deceptive conduct and National Mutual relied upon that conduct in consenting to the assignment and has suffered loss in the amount of $128,893.33 (the Final Occupancy Costs Arrears).
- (a)
- [15]The Notice of dispute sought orders requiring:
- (a)Hatch to pay the Final Occupancy Costs Arrears; or
- (b)Mr Moubarak to pay the Arrears Settlement Amount and Hatch to pay the Final Occupancy Costs Arrears less the Arrears Settlement Amount; or
- (c)Hatch and Mr Moubarak to pay the Arrears Settlement Amount.
- (a)
- [16]By submissions filed 25 September 2020 National Mutual sought the amounts in the Notice of dispute plus interest but did not set out the legal basis of its claim for interest.
- [17]Mr Moubarak contends that the Notice of dispute against him should be dismissed for the following reasons:[12]
- (a)at all times he was acting in the capacity of director of Hatch.
- (b)National Mutual’s claim against him for misleading and deceptive conduct is not a claim the subject of a retail lease but rather a minor civil dispute and the amount of damages claimed exceeds the Tribunal’s minor civil dispute monetary jurisdiction of $25,000.
- (a)
- [18]Mr Moubarak’s evidence is that in his dealings with National Mutual he was acting only in his capacity as a director of Hatch; that he never expressly or impliedly represented to National Mutual that he would personally procure the payment of $128,893.33 (the Debt) to National Mutual and that any assumption by it that he would personally pay the Debt is not reasonable. He says that as soon as he became aware that Hatch may become or may already be insolvent, he had Hatch enter into contracts for the sale of Hatch’s business, assignment of the lease and negotiated a settlement offer with National Mutual on behalf of Hatch.[13]
- [19]His statement of evidence does not:
- (a)deny that he represented to National Mutual that he would personally procure the payment of the Arrears Settlement Amount or contend that such an assumption was unreasonable;
- (b)seek to explain the circumstances surrounding the change of instructions to Hatch’s solicitors, why Hatch’s solicitors did not receive any sale proceeds, to whom the sale proceeds were directed and why the Arrears Settlement Amount was not paid.
- (a)
- [20]We accept that Mr Moubarak was the guiding mind of Hatch and the clear inference to be drawn from the evidence is that he gave instructions as to the payment of the sale proceeds and those changed instructions prevented Hatch’s lawyers from paying the Arrears Settlement Amount to National Mutual as agreed.
Does the Tribunal have jurisdiction to determine the claim against Mr Moubarak?
- [21]We find that the Tribunal does not have jurisdiction to determine the claim set out in the Notice of dispute against Mr Moubarak for $40,000.
- [22]National Mutual contends that the claim against Mr Moubarak is a retail tenancy dispute as it is a dispute about a retail shop lease and the amount claimed is less than $750,000.[14]
- [23]National Mutual contends that Mr Moubarak engaged in misleading and deceptive conduct under the Australian Consumer Law (ACL) or Australian Consumer Law (Queensland) (ACL (Queensland)), it relied upon that conduct and has suffered loss as a result.
- [24]National Mutual’s submissions do not detail the basis on which it is contended that the Tribunal in a retail tenancy dispute has power to exercise powers under the ACL, being Commonwealth legislation or the ACL (Queensland).
Does the Tribunal have jurisdiction for claims for damages for misleading and deceptive conduct under the ACL or ACL (Queensland)?
- [25]We find that the Tribunal has jurisdiction under the ACL (Queensland) if the claim would be a minor civil dispute.
- [26]
Is the Competition and Consumer Act 2010 (Cth) (CCA) an enabling Act?
- [27]We find that the CCA is not an enabling Act.
- [28]The CCA replaced the Trade Practices Act 1974 (Cth). The ACL is in Schedule 2 of the CCA.
- [29]Section 86 of the CCA confers jurisdiction on various Federal and State courts. However, section 86(3) provides that nothing in section 86(2), which confers federal jurisdiction on State and Territory courts:
shall be taken to enable an inferior court of a State or Territory to grant a remedy other than a remedy of a kind that the court is able to grant under the law of that State or Territory.
- [30]The Tribunal is an inferior court of the State of Queensland.[17]
- [31]We have been unable to identify any other Commonwealth law vesting federal jurisdiction under the CCA in the Tribunal.
- [32]We find that the Tribunal has no power to make orders under the ACL as federal jurisdiction has not been conferred on it and must find power to make any such orders under a law of Queensland.
Is the Fair Trading Act 1989 (Qld) (FTA) an enabling Act?
- [33]We find the FTA is an enabling Act.[18]
- [34]The ACL has been adopted by the FTA[19] and when applied is referred to as the ACL (Queensland). Section 15 of the FTA provides that the text of the ACL(Queensland) consists of Schedule 2 to the CCA.
- [35]The FTA confers original jurisdiction on the Tribunal where the proceeding is for the purposes of a provision in the table in section 50 of the FTA and the subject of the proceeding would be a minor civil dispute within the meaning of the QCAT Act.[20]
- [36]An action for damages under section 236(1) of the ACL (Queensland) is listed in the table in section 50 of the FTA.
- [37]Section 236 of the ACL (Queensland) provides:
Actions for damages
- (1)If:
- a person (the claimant) suffers loss or damage because of the conduct of another person; and
- the conduct contravened a provision of Chapter 2 or 3;
the claimant may recover the amount of the loss or damage by action against that other person, or against any person involved in the contravention.
- (2)An action under subsection (1) may be commenced at any time within 6 years after the day on which the cause of action that relates to the conduct accrued.
- [38]The ACL(Queensland) relevantly provides in chapter 2 at section 18:
Misleading or deceptive conduct
- (1)A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.
- [39]Section 2 of the ACL(Queensland) defines ‘involved’ as:
a person is involved, in a contravention of a provision of this Schedule or in conduct that constitutes such a contravention, if the person:
- (a)has aided, abetted, counselled or procured the contravention; or
- (b)has induced, whether by threats or promises or otherwise, the contravention; or
- (c)has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention; or
- (d)has conspired with others to effect the contravention.
- [40]A claim for damages for misleading and deceptive conduct may be made to the Tribunal if the subject of the proceeding would be a minor civil dispute within the meaning of the QCAT Act.
Would the subject of the proceeding be a minor civil dispute within the meaning of the QCAT Act?
- [41]We find that the proceeding would not be a minor civil dispute within the meaning of the QCAT Act because the amount claimed exceeds $25,000.
- [42]The Tribunal may exercise its jurisdiction for a minor civil dispute if a relevant person has, under the QCAT Act, applied to the tribunal to deal with the dispute.[21] ‘Relevant person’ is defined in section 12(4) of the QCAT Act.
- [43]
- [44]It follows that the Tribunal has jurisdiction under the FTA for an application by a relevant person for damages for breach of section 18 of the ACL (Queensland), if the claim is limited to $25,000.
- [45]We are not satisfied that the Tribunal in its retail shop leases jurisdiction has power to make orders for damages for misleading and deceptive conduct under the ACL (Queensland) where the amount claimed is in excess of the prescribed amount for a minor civil dispute and National Mutual has not agreed to limit its claim to that amount, even if the dispute could be regarded as a retail tenancy dispute.
Is the claim against Mr Moubarak a retail tenancy dispute?
- [46]We are not satisfied that this claim for damages for misleading and deceptive conduct against Mr Moubarak is a retail tenancy dispute.
- [47]The Tribunal has jurisdiction to hear certain retail tenancy disputes where the amount, value or damages in dispute does not exceed the monetary limit of the District Court of Queensland.[24] The monetary limit under the RSL Act is $750,000.[25] On the evidence before us none of the exclusions in section 103(1) of the RSL Act apply.
- [48]The RSL Act provides that the Tribunal may make orders including declaratory orders it considers to be just to resolve a retail tenancy dispute including an order requiring a party to the dispute to pay an amount to a specified person.[26]
- [49]A retail tenancy dispute is defined as ‘any dispute under or about a retail shop lease, or about the use and occupation of a leased shop under a retail shop lease’.[27] A ‘retail shop lease’ is defined as a ‘lease of a retail shop’ subject to exceptions, none of which appear to apply.[28] A ‘retail shop’ means premises situated in a retail shopping centre or used wholly or predominantly for the carrying on of a retail business.[29] Retail business is defined to mean a business prescribed by regulation.[30] Restaurant is prescribed as a retail business.[31] We are satisfied that the lease between Hatch and National Mutual is a retail shop lease.
- [50]The Tribunal has previously accepted that a retail tenancy dispute is not limited to claims under a retail shop lease but may be ‘about a retail shop lease’ where the claim was under a closely related agreement and is not limited to claims between parties to a retail shop lease.[32] Real, Romano and Tamarin related to claims against guarantors of the lessee’s obligations under a retail shop lease. Claims against guarantors are dependent upon the lessee’s obligations under the lease. Guarantees are closely related agreements to the lease and are often bound into the lease document.
- [51]The Tribunal has accepted that a claim in relation to a licence agreement to use equipment and an option agreement incorporated in a retail shop lease was a dispute about the occupation of a leased retail shop and were ‘at the very least, closely connected if not inextricably linked’[33] with the sub-lease and therefore a retail tenancy dispute.
- [52]The Tribunal has also accepted that a claim in relation to a licence agreement to occupy part of premises leased in a retail shopping centre was about a retail shop lease and therefore a retail tenancy dispute.[34]
- [53]
- [54]The dispute between Mr Moubarak and National Mutual relates to representations made by him during negotiation of the Assignment Deed, relevantly between Hatch and National Mutual. Mr Moubarak was not a party to the Assignment Deed. The representations were made during negotiation of the terms of the agreement upon which National Mutual agreed to waive some of the amounts owing under the retail shop lease and the Assignment Deed.
- [55]Although it is not necessary to decide, we accept that the dispute as between Hatch and National Mutual in relation to failing to pay the Final Occupancy Costs Arrears in breach of the Assignment Deed was a dispute about a retail shop lease. Such a dispute was closely connected with the retail shop lease, although a step removed from the lease.
- [56]The Assignment Deed did not contain an express obligation on Hatch to pay the Arrears Settlement Amount. The agreement to pay that amount is to be found in the Relevant Emails. The claim in respect of the failure of Hatch to pay the Arrears Settlement Amount is a further step removed from the lease but is also likely to be ‘about a retail shop lease’.
- [57]The claim in relation to the conduct of Mr Moubarak is another step removed from the retail shop lease. We are not satisfied, in the current circumstances, that the claim for misleading and deceptive conduct is sufficiently closely connected to the retail shop lease to constitute a retail tenancy dispute. In any event, we are not satisfied that Tribunal’s the monetary jurisdiction in the RSL Act takes precedence over the express monetary jurisdiction of the Tribunal under the FTA for damages for misleading and deceptive conduct.
- [58]The Tribunal may make a declaration about a matter in a proceeding instead of making an order it could make about the matter or in addition to an order it could make about the matter.[36]
- [59]We declare that the claim against Mr Moubarek set out in the Notice of dispute is not a retail tenancy dispute.
- [60]Where the Tribunal does not have jurisdiction, it may transfer a matter to a court of competent jurisdiction.[37]
Directions
- [61]Prior to making final orders in respect of the dispute as against Mr Moubarak, it is appropriate to provide the parties a short opportunity to make submissions as to:
- (a)whether the Tribunal ought to make orders transferring the Notice of dispute to a court of competent jurisdiction; or
- (b)whether National Mutual agrees to limit its claim to $25,000, whether it is a relevant person as defined in section 12 of the QCAT Act such that the matter would be a minor civil dispute and is to be decided by the Tribunal on that basis on the papers.
- (a)
Footnotes
[1]Retail Shop Leases Act 1994 (Qld), s 55 (RSL Act).
[2] Ibid, s 56, s 63.
[3] Response filed 6 May 2020.
[4] Directions 8 June 2021.
[5] Search undertaken by Tribunal on 11 April 2022.
[6]Corporations Act 2001 (Cth), s 601AD.
[7]Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 47(1), s 47(3) (QCAT Act).
[8] Response filed 6 May 2020.
[9] Assignment Deed, cl 3.1(a)(ix).
[10] Email 11 June 2019.
[11] Email 21 June 2019.
[12] Response filed 6 May 2020.
[13] Statement filed 18 September 2020.
[14] Submissions dated 25 September 2020; RSL Act, s 103(1)(c).
[15] QCAT Act, s 9(1).
[16] Ibid, s 9(3).
[17] QCAT Act, s 164; Owen v Menzies [2013] 2 Qd R 327.
[18] Ibid, s 6(2).
[19]Fair Trading Act 1989 (Qld), s 16 (FTA).
[20] Ibid, s 50.
[21] QCAT Act, s 12(1).
[22] Ibid, Schedule 3 (definition ‘prescribed amount’).
[23] Ibid, s 12(3).
[24]Retail Shop Leases Act 1994 (Qld), s 103 (RSL Act).
[25]District Court of Queensland Act 1967 (Qld), s 68(2).
[26] RSL Act, s 83(1), s 83(2)(b).
[27] RSL Act, schedule (definition ‘retail tenancy dispute’).
[28] Ibid, s 5A.
[29] Ibid, s 5B.
[30] Ibid, s 5C.
[31]Retail Shop Leases Regulation 2016 (Qld), s 8, schedule 1.
[32]Real Management Solutions Pty Ltd v Brisbane City Council [2016] QCAT 370, [38]-[39] (Real); Romano v Capitol Bikes Pty Ltd & Anor [2018] QCAT 108 (Romano); Tamarin Pty Ltd & Otmoor Pty Ltd as trustee v Wicks [2021] QCATA 146 (Tamarin).
[33]Yojocatering Pty Ltd v Mozart Holdings Pty Ltd [2018] QCAT 402, [40].
[34]Yuan Company Pty Ltd v Golden Vision Biggera Waters GC Pty Ltd [2020] QCAT 37.
[35]Real Management Solutions Pty Ltd v Brisbane City Council [2016] QCAT 370, [39].
[36] QCAT Act, s 60.
[37] Ibid, s 52.